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Sweis v. Founders Insurance Co.

Court of Appeals of Illinois, First District, Fourth Division

December 28, 2017

SANA SWEIS, Plaintiff-Appellant,

         Appeal from the Circuit Court of Cook County. No. 14 L 006110 The Honorable Thomas P. Mulroy, Judge Presiding.

          GORDON JUSTICE delivered the judgment of the court, with opinion. Presiding Justice Burke and Justice Ellis concurred in the judgment and opinion.



         ¶ 1 The instant appeal arises from a lawsuit filed by plaintiff Sana Sweis against defendant Founders Insurance Company concerning underinsured motorist coverage [1] on plaintiff's automobile. The trial court granted summary judgment in favor of defendant, finding that plaintiff's suit was time-barred because the insurance policy required plaintiff to file her lawsuit within one year from receiving payment from the at-fault motorist. For the reasons that follow, we affirm the judgment of the trial court.

         ¶ 2 BACKGROUND

         ¶ 3 I. Complaint

         ¶ 4 On June 9, 2014, plaintiff filed suit against defendant; the complaint was amended three times, and it is the third amended complaint that is at issue on appeal. The complaint alleged that plaintiff was an insured under an automobile policy issued by defendant, which contained underinsured motorist coverage with limits of $100, 000 for each person and required defendant "to pay all sums which the insured or her legal representative shall be legally entitled to recover as damages from the owner or operator of an underinsured motor vehicle, because of bodily injury sustained by the insured." The policy required defendant to pay the difference between the insured's compensatory damages received and the applicable policy limits.

         ¶ 5 The complaint alleged that on June 9, 2011, plaintiff was involved in a motor vehicle collision in which she sustained severe personal injuries. The at-fault motorist was covered for liability by an automobile insurance policy with a limit of $25, 000, which was tendered on December 21, 2012. Beginning in January 2013, plaintiff's attorney and defendant's adjustor, entered into negotiations. According to the complaint, "the adjustor *** represented to [the] attorney for Plaintiff *** that he had actual authority to negotiate all aspects of the claim including but not limited to extending the time to file suit as required under the policy as well as the dollar amount of the policy." The complaint alleged that plaintiff's attorney relied on the adjustor's authority based upon those representations.

         ¶ 6 The complaint alleged that "prior to December of 2013, [the] adjuster *** and Plaintiff's attorney agreed to extend the time to file any lawsuits as required under the policy until such time as Plaintiff and [defendant], by and through their actual and/or ostensible agent [the adjustor], no longer could finalize a settlement amount based upon Plaintiff's alleged injuries." The complaint further alleged that "after September 19, 2013, [the] Adjuster *** did in fact tell Plaintiff's attorney that a suit against [defendant] would not need to be filed before December 21, 2013 in order to continue efforts to resolve the claim." According to the complaint, "it was agreed between Plaintiff/Plaintiff's attorney and [the] Adjuster *** that once an impasse on settlement negotiations occurred, Plaintiff would then have one year to file suit."

         ¶ 7 The complaint alleged that, on February 10, 2014, the adjustor made an offer "with no indication that it was a final offer or that an impasse had been reached." According to the complaint, "Plaintiff did not file suit based on the representations of [the] Adjuster *** based upon the agreement that the parties had not reached an impasse in negotiations as agreed." The adjustor e-mailed plaintiff's counsel on April 25, 2014, "and inquired through email whether the case could be settled without Plaintiff filing the underlying complaint." According to the complaint, "[a]gain, Plaintiff relied on [the adjustor's] authority to enter into and continue negotiations on behalf of [defendant] with out [sic] having to file a lawsuit." Settlement negotiations continued until May 28, 2014, when the adjustor made a final offer, which plaintiff rejected. Plaintiff then filed her complaint on June 9, 2014.

         ¶ 8 The complaint alleged that plaintiff was entitled to her legally compensable damages between the $25, 000 paid by the at-fault motorist and the underinsured motorist policy limits and that she timely filed suit due to the "tolling/waiver of the one year provision to file suit from the time of disbursement of the underlying tortfeasor settlement."

         ¶ 9 Attached to the complaint was a copy of the insurance policy. Part V of the policy concerned underinsured motorist coverage and contained a section entitled "Action Against Company, " which provided, in full:

"If any person making claim hereunder and the Company do not agree that such person is legally entitled to recover damages from the owner or operator of the underinsured motor vehicle because of bodily injury to the Insured, or do not agree as to the amount of payment which may be owing under this Part, then the matter or matters upon which such person and the Company do not agree shall be determined by legal action in a court of competent jurisdiction located in the county and state in which the Insured resides. Any action brought against the Company must be filed within one year from the date that the person claiming under this Part receives the last payment from an underinsured motorist or person at-fault in this occurrence."

         ¶ 10 The policy also contained a provision titled "Changes, " which provided:

"Notice to any agent or knowledge possessed by any agent or by any person shall not effect a waiver or a change in any part of this policy or stop the Company from asserting any right under the terms of this policy, nor shall the terms of this policy be waived or changed, except by endorsement issued to form a part of this policy, signed by a duly authorized representative of the Company."

         ¶ 11 Also attached to the complaint was a copy of an e-mail sent from the adjustor to plaintiff's attorney. The e-mail was dated April 25, 2014, and provided:

"Hi Pete,
Just wanted to check on the status of this case. Do you think we can get it settled w/o you having to file suit?"

         ¶ 12 II. Motion for Summary Judgment

         ¶ 13 On May 26, 2016, defendant filed a motion for summary judgment, arguing that plaintiff's claim was time-barred by the one-year time limit set forth in part V of the insurance policy. Defendant argued that plaintiff's arguments concerning estoppel and tolling were unpersuasive because the evidence demonstrated that defendant had made no offer to toll the one-year limitations period set forth in the policy. Defendant claimed that defendant had made an offer to settle the matter in March 2013 to which plaintiff responded by filing a demand for arbitration. Defendant further noted that on September 19, 2013, the adjustor sent plaintiff's attorney a letter quoting the applicable provision of the insurance policy in response to plaintiff's demand for arbitration and asked that plaintiff forward a copy of any complaint that plaintiff filed. Thus, defendant argued that "[p]laintiff's obligations under the policy of insurance were highlighted and expressed three months prior to the expiration of the time to file suit in this matter. [Plaintiff] was clearly not relying on this offer to delay proceeding in this matter. [Plaintiff's] action in filing a claim [with the American Arbitration Association (AAA)] shows [plaintiff's] intention to litigate this matter despite the offer to settle."

         ¶ 14 Attached to the motion for summary judgment was the transcript of the discovery deposition of plaintiff's attorney, who testified that he was unaware of when his office first received a copy of the insurance policy but that he read it for the first time the day before the deposition. Reading the applicable provision at the deposition, plaintiff's attorney admitted that plaintiff had received payment from the tortfeasor's insurance company but testified that plaintiff never received any payment from the underinsured motorist himself, so "there's still plenty of time to file the action." Plaintiff's attorney further testified that "based upon representations that [the adjustor] made to me, I was unaware of this one-year period of time at the time that I was trying to settle this matter with [him], and it was my understanding, based upon representations made to me, that if settlement negotiations broke down, that we would have to file a lawsuit. Now that I read this and I see this, and I didn't draft this. I think this was drafted by [defendant]. And I would say that there's plenty of time to file this lawsuit."

         ¶ 15 Plaintiff's attorney testified that plaintiff executed a release releasing the tortfeasor in exchange for payment of $25, 000, which had been prepared by the tortfeasor's insurance company. Plaintiff's attorney further testified that he was the attorney who settled plaintiff's claim against the tortfeasor and that he initiated the claim for underinsured motorist coverage against defendant. When asked how he could do so without having a copy of plaintiff's insurance policy, plaintiff's attorney testified that he would have sent an "underinsured motorist notice" to the insurance company, which would typically respond by informing him of what the company needed in order to evaluate the claim. He was aware of the typical procedures for filing such claims through his experience "handling a lot of these cases for a long time."

         ¶ 16 With respect to his communications with the adjustor, plaintiff's attorney testified that his communications were memorialized through contemporaneous notes made by using Tort Pro software. The first time he had a conversation with the adjustor would have been on November 16, 2012, prior to the disbursement of the funds from the tortfeasor's insurance company. He again spoke with the adjustor on December 6, 2012, and then on January 30, 2013. According to the Tort Pro note from that day, plaintiff's attorney "demanded 50, 000 fresh" and the adjustor indicated that he would call him back; the note also indicated that "[w]e will probably go through Triple A." Plaintiff's attorney testified that during that conversation, they "spoke about the value of the case, and we spoke about Triple A arbitration." The attorney next communicated with the adjustor on March 12, 2013, when he left the adjustor a voicemail in response to a call that he had received; the Tort Pro note associated with the voicemail indicated that the attorney "made a demand of $50, 000." The attorney testified that the Tort Pro note was the only item in plaintiff's file that memorialized a $50, 000 demand and that there was no written demand sent to defendant.

         ¶ 17 The next conversation between the attorney and adjustor occurred on February 19, 2014. The attorney testified that the Tort Pro note associated with that conversation disclosed that "[a]djustor is offering 10, 000 fresh and then it's two dollar signs. He says: UIM policy requires lawsuit against them, not Triple A." The attorney and adjustor engaged in e-mail correspondence on April 25, 2014, when the adjustor sent the attorney a message reading: "Just wanted to check on status of case. Do you think you can get it settled without having to file suit[?]" His next communication with the adjustor occurred on May 28, 2014, and the attorney testified that the Tort Pro note memorializing that conversation indicated that the "[a]djustor *** called and has only 11-12, 000 in fresh money. Ben will file suit per policy."

         ¶ 18 The attorney testified that it was common practice to try to negotiate a settlement prior to filing suit.

         ¶ 19 The attorney testified that he was a supervisor of an associate attorney in the firm, and that by the time of filing suit, plaintiff's case was assigned to the associate; the attorney was unaware of the exact date on which the case was assigned to the associate but, looking at the file jacket of the plaintiff's file, observed that there was a handwritten note stating that the case was assigned to him on April 2, 2013. Plaintiff's attorney testified that he sent the April 25, 2014, e-mail from the adjustor to his assistant with instructions to forward the e-mail to the associate in his firm who was now handling the case.

         ¶ 20 The attorney identified a letter dated September 9, 2013, to defendant that was signed by the associate attorney, as well as a AAA demand for arbitration form. The attorney admitted that the arbitration demand form "was being filed because [the firm] intended on seeking recovery for [plaintiff] through Triple A arbitration." The attorney testified ...

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