2017 IL
App (1st) 163157
App (1st) 163157
NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR
PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO
REVISION OR WITHDRAWAL.
PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO
REVISION OR WITHDRAWAL.
Appellate
Court of Illinois,
Court of Illinois,
First
District.
District.
Sana
SWEIS, Plaintiff–Appellant,
SWEIS, Plaintiff–Appellant,
v.
FOUNDERS
INSURANCE COMPANY, Defendant–Appellee.
INSURANCE COMPANY, Defendant–Appellee.
No.
1–16–3157
1–16–3157
December 28, 2017
Appeal from the Circuit Court of Cook County.
No. 14 L 006110, The Honorable Thomas P. Mulroy, Judge, Presiding.
No. 14 L 006110, The Honorable Thomas P. Mulroy, Judge, Presiding.
OPINION
JUSTICE GORDON delivered the judgment of the
court, with opinion.
court, with opinion.
*1 ¶ 1 The instant appeal arises from a
lawsuit filed by plaintiff Sana Sweis against defendant Founders Insurance
Company concerning underinsured motorist coverage1 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.
lawsuit filed by plaintiff Sana Sweis against defendant Founders Insurance
Company concerning underinsured motorist coverage1 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
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.
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.
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.”
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.”
*2 ¶ 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.
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.”
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:
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.”
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:
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.”
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:
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?”
Do you think we can get it settled w/o you having to file suit?”
¶ 12 II. Motion for
Summary Judgment
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.”
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.”
*3 ¶ 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.”
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.”
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.
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.”
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.
testified that it was common practice to try to negotiate a settlement prior to
filing suit.
*4 ¶ 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.
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 that he “general[ly]” reviewed demand for
arbitration forms before they were sent out.
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 that he “general[ly]” reviewed demand for
arbitration forms before they were sent out.
¶ 21 The attorney
testified that he had “never seen it happen before” that an insurance adjustor
would continue to attempt to reach a settlement on a claim after the potential
for liability had expired. The adjustor never expressed to him that the time to
file suit had expired, and the attorney “would have” expected the adjustor to
do so. The attorney further testified that it was possible that there were
other communications with the adjustor that were not memorialized in the Tort
Pro notes. The attorney testified that it was his understanding that the
adjustor was an agent of defendant and that, based on their conversations, “a
lawsuit did not need to be filed until [he] and [the adjustor] reached an
impasse in [the] negotiations.” That impasse occurred on May 28, 2014, and the
attorney instructed his associate to file suit at that point.
testified that he had “never seen it happen before” that an insurance adjustor
would continue to attempt to reach a settlement on a claim after the potential
for liability had expired. The adjustor never expressed to him that the time to
file suit had expired, and the attorney “would have” expected the adjustor to
do so. The attorney further testified that it was possible that there were
other communications with the adjustor that were not memorialized in the Tort
Pro notes. The attorney testified that it was his understanding that the
adjustor was an agent of defendant and that, based on their conversations, “a
lawsuit did not need to be filed until [he] and [the adjustor] reached an
impasse in [the] negotiations.” That impasse occurred on May 28, 2014, and the
attorney instructed his associate to file suit at that point.
¶ 22 During further
examination by defendant’s counsel, the attorney admitted that, as an attorney,
he did not rely on adjustors to interpret the language of an insurance policy
and testified that “I didn’t rely on * * * his interpretation of the policy. I
relied on his representations to me that we would make an effort to try to
resolve the case prior to us filing a lawsuit.” The attorney was unable to
provide a specific date in which the adjustor had made that representation to
him and admitted that he never confirmed in writing that plaintiff was not
required to file a lawsuit until negotiations had ceased. The attorney
testified that he was aware that the insurance policy stated that it could not
be changed unless it was in writing and admitted that “regardless of what [the
adjustor] may have said, [a change in the policy] had to be in writing in order
for it to be effectuated.”
examination by defendant’s counsel, the attorney admitted that, as an attorney,
he did not rely on adjustors to interpret the language of an insurance policy
and testified that “I didn’t rely on * * * his interpretation of the policy. I
relied on his representations to me that we would make an effort to try to
resolve the case prior to us filing a lawsuit.” The attorney was unable to
provide a specific date in which the adjustor had made that representation to
him and admitted that he never confirmed in writing that plaintiff was not
required to file a lawsuit until negotiations had ceased. The attorney
testified that he was aware that the insurance policy stated that it could not
be changed unless it was in writing and admitted that “regardless of what [the
adjustor] may have said, [a change in the policy] had to be in writing in order
for it to be effectuated.”
¶ 23 One of the
deposition exhibits, attached to the transcript, was a letter dated September
9, 2013, from the associate to the adjustor. The letter states, “Enclosed
please find an AAA Demand for Arbitration relative to the above referenced
case,” and is followed by an AAA arbitration demand form. Also attached as a
deposition exhibit was a letter dated September 19, 2013, from the adjustor to
the attorney.2 The letter provided:
deposition exhibits, attached to the transcript, was a letter dated September
9, 2013, from the associate to the adjustor. The letter states, “Enclosed
please find an AAA Demand for Arbitration relative to the above referenced
case,” and is followed by an AAA arbitration demand form. Also attached as a
deposition exhibit was a letter dated September 19, 2013, from the adjustor to
the attorney.2 The letter provided:
“Please allow this correspondence to act as a
response to your letter dated September 9, 2013, wherein you enclosed an AAA
Demand for Arbitration.
response to your letter dated September 9, 2013, wherein you enclosed an AAA
Demand for Arbitration.
We ask that you withdraw your demand for
arbitration as our policy states under Part V—Uninsured Motorist, Action
Against Company:
arbitration as our policy states under Part V—Uninsured Motorist, Action
Against Company:
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.
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.
*5 Please forward me a copy of the complaint,
once filed, to my attention.
once filed, to my attention.
Feel free to contact me directly * * * with any
questions.”
questions.”
¶ 24 Also attached to
the motion for summary judgment was the transcript of the discovery deposition
of the adjustor, who testified that he was a claims specialist with defendant.
The adjustor testified that he would receive a claim through defendant’s electronic
system, review the claim, and discuss it with his manager, who would give him
certain authority. At that point, he would attempt to settle the claim. In
plaintiff’s case, the adjustor dealt with the attorney to attempt to settle
plaintiff’s claim. The adjustor recalled that defendant had received a request
to authorize plaintiff to accept a tender from the underinsured motorist’s
insurance company, which the adjustor reviewed with his manager, and the
manager granted the authority to accept the tender. It was the adjustor’s
understanding that plaintiff did, in fact, settle with the tortfeasor for
$25,000.
the motion for summary judgment was the transcript of the discovery deposition
of the adjustor, who testified that he was a claims specialist with defendant.
The adjustor testified that he would receive a claim through defendant’s electronic
system, review the claim, and discuss it with his manager, who would give him
certain authority. At that point, he would attempt to settle the claim. In
plaintiff’s case, the adjustor dealt with the attorney to attempt to settle
plaintiff’s claim. The adjustor recalled that defendant had received a request
to authorize plaintiff to accept a tender from the underinsured motorist’s
insurance company, which the adjustor reviewed with his manager, and the
manager granted the authority to accept the tender. It was the adjustor’s
understanding that plaintiff did, in fact, settle with the tortfeasor for
$25,000.
¶ 25 The adjustor
testified that there was a note in plaintiff’s file that the adjustor was
authorized to offer plaintiff $12,500 in fresh money. The adjustor recalled
that the attorney had demanded $50,000 to settle the claim and testified that
he had offered the attorney $10,000.
testified that there was a note in plaintiff’s file that the adjustor was
authorized to offer plaintiff $12,500 in fresh money. The adjustor recalled
that the attorney had demanded $50,000 to settle the claim and testified that
he had offered the attorney $10,000.
¶ 26 The adjustor
testified that he sent a copy of the policy to the attorney on April 3, 2013.
The adjustor further testified that he sent a letter to the attorney on
September 19, 2013, in response to a demand for arbitration and quoted a
portion of the policy. The adjustor admitted that the quoted portion of the
policy did not include the language about the one-year time limitation. He
testified that the letter was a form letter drafted by using a template.
testified that he sent a copy of the policy to the attorney on April 3, 2013.
The adjustor further testified that he sent a letter to the attorney on
September 19, 2013, in response to a demand for arbitration and quoted a
portion of the policy. The adjustor admitted that the quoted portion of the
policy did not include the language about the one-year time limitation. He
testified that the letter was a form letter drafted by using a template.
¶ 27 The adjustor
admitted that he sent an e-mail to the attorney on April 25, 2014, asking if
“we can get [the case] settled without you having to file suit?” The adjustor
testified that the purpose of this e-mail was “[t]o try to get a response to
[the September 19, 2013,] letter that I had sent to [the attorney].” The
adjustor was then asked:
admitted that he sent an e-mail to the attorney on April 25, 2014, asking if
“we can get [the case] settled without you having to file suit?” The adjustor
testified that the purpose of this e-mail was “[t]o try to get a response to
[the September 19, 2013,] letter that I had sent to [the attorney].” The
adjustor was then asked:
“Q. When you asked that question on April 25th
of 2014, was it your understanding that [the attorney] would still be able to
continue on with the claim by filing suit in the event you were unable to get
the claim settled?
of 2014, was it your understanding that [the attorney] would still be able to
continue on with the claim by filing suit in the event you were unable to get
the claim settled?
A. Not necessarily. I would say that he could
file suit—he could file suit whenever—I mean, it’s up to him if he wants to
file suit or not. I don’t know.”
file suit—he could file suit whenever—I mean, it’s up to him if he wants to
file suit or not. I don’t know.”
¶ 28 During examination
by defendant’s counsel, the adjustor testified that he did not have the
authority as a claims specialist to modify the terms of an insurance policy,
and he never indicated to the attorney that he had the authority to do so. The
adjustor further testified that he never indicated that they could delay filing
a lawsuit until a future date.
by defendant’s counsel, the adjustor testified that he did not have the
authority as a claims specialist to modify the terms of an insurance policy,
and he never indicated to the attorney that he had the authority to do so. The
adjustor further testified that he never indicated that they could delay filing
a lawsuit until a future date.
*6 ¶ 29 Attached to the adjustor’s deposition
transcript was a letter dated April 3, 2013, from the adjustor to the attorney,
which provided:
transcript was a letter dated April 3, 2013, from the adjustor to the attorney,
which provided:
“Per your request, enclosed please find a copy
of our Insured’s declaration page and copy of the policy. Please feel free to
contact me with any questions.”
of our Insured’s declaration page and copy of the policy. Please feel free to
contact me with any questions.”
¶ 30 In response to
defendant’s motion for summary judgment, plaintiff argued that the insurance
policy was ambiguous. Plaintiff claimed that the policy did not state expressly
that payment from the tortfeasor’s insurance company would suffice to trigger
the one-year time limitation for filing suit. Plaintiff further claimed that
the policy did not specify the point at which an impasse occurs between the
insurer and the insured, creating an ambiguity as to when the one-year time
period began. Finally, plaintiff claimed that the adjustor’s representations
and continued negotiations led plaintiff to reasonably believe that the
one-year time limit had not yet begun to run.
defendant’s motion for summary judgment, plaintiff argued that the insurance
policy was ambiguous. Plaintiff claimed that the policy did not state expressly
that payment from the tortfeasor’s insurance company would suffice to trigger
the one-year time limitation for filing suit. Plaintiff further claimed that
the policy did not specify the point at which an impasse occurs between the
insurer and the insured, creating an ambiguity as to when the one-year time
period began. Finally, plaintiff claimed that the adjustor’s representations
and continued negotiations led plaintiff to reasonably believe that the
one-year time limit had not yet begun to run.
¶ 31 On September 21,
2016, the trial court entered a written order granting defendant’s motion for
summary judgment. The court found:
2016, the trial court entered a written order granting defendant’s motion for
summary judgment. The court found:
“The contract between Plaintiff and Defendant is
clear and unambiguous. It provides that if there is a disagreement between the
parties about underinsured motorist coverage, then dispute may be resolved
through legal action. Next, the contract provides a one year time limit within
which the Plaintiff could file her lawsuit, and the one year limit began
on December 21, 2012 because
that was the last time Plaintiff received a payment from the underinsured
motorist. Plaintiff had until December 21,
2013 to file her lawsuit, but waited until June 2014.
clear and unambiguous. It provides that if there is a disagreement between the
parties about underinsured motorist coverage, then dispute may be resolved
through legal action. Next, the contract provides a one year time limit within
which the Plaintiff could file her lawsuit, and the one year limit began
on December 21, 2012 because
that was the last time Plaintiff received a payment from the underinsured
motorist. Plaintiff had until December 21,
2013 to file her lawsuit, but waited until June 2014.
Additionally, the contract states that any
modifications to its terms must be memorialized in writing and signed by
Defendant’s representative. Therefore, Plaintiff could not have relied on any
oral representations from [the adjustor].
modifications to its terms must be memorialized in writing and signed by
Defendant’s representative. Therefore, Plaintiff could not have relied on any
oral representations from [the adjustor].
Because the facts presented by the parties are
not in dispute and the contract at issue is not ambiguous, Defendant’s motion
for summary judgment is granted.”
not in dispute and the contract at issue is not ambiguous, Defendant’s motion
for summary judgment is granted.”
¶ 32 On October 20,
2016, plaintiff filed a motion for reconsideration, which was denied on October
31, 2016. This appeal follows.
2016, plaintiff filed a motion for reconsideration, which was denied on October
31, 2016. This appeal follows.
¶ 33
ANALYSIS
ANALYSIS
¶ 34 On appeal,
plaintiff argues that summary judgment should not have been granted.
Plaintiff’s arguments on appeal have some overlap but generally fall into three
categories: (1) the language of the policy demonstrates that plaintiff timely
filed suit; (2) plaintiff detrimentally relied on defendant’s actions in
failing to file suit within one year from the date of disbursement of the
settlement from the underinsured motorist’s insurance company; and (3) the
inclusion of the one-year time limitation in the insurance policy violates
public policy.
plaintiff argues that summary judgment should not have been granted.
Plaintiff’s arguments on appeal have some overlap but generally fall into three
categories: (1) the language of the policy demonstrates that plaintiff timely
filed suit; (2) plaintiff detrimentally relied on defendant’s actions in
failing to file suit within one year from the date of disbursement of the
settlement from the underinsured motorist’s insurance company; and (3) the
inclusion of the one-year time limitation in the insurance policy violates
public policy.
¶ 35 A trial court is
permitted to grant summary judgment only “if the pleadings, depositions, and
admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law.” 735 ILCS 5/2–1005(c) (West 2014). The trial
court must view these documents and exhibits in the light most favorable to the
nonmoving party. Home Insurance Co. v. Cincinnati Insurance Co.,
213 Ill. 2d 307, 315, 290 Ill.Dec. 218, 821 N.E.2d 269 (2004). We review a
trial court’s decision to grant a motion for summary judgment de novo. Outboard
Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102, 180
Ill.Dec. 691, 607 N.E.2d 1204 (1992). De novo consideration
means we perform the same analysis that a trial judge would perform. Khan
v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578, 350 Ill.Dec. 63, 948 N.E.2d
132 (2011). “ ‘The construction of an insurance policy and a determination of
the rights and obligations thereunder are questions of law for the court which
are appropriate subjects for disposition by way of summary judgment.’ ” Steadfast
Insurance Co. v. Caremark Rx, Inc., 359 Ill. App. 3d 749, 755, 296 Ill.Dec.
537, 835 N.E.2d 890 (2005) (quoting Crum & Forster Managers Corp.
v. Resolution Trust Corp., 156 Ill. 2d 384, 391, 189 Ill.Dec. 756, 620
N.E.2d 1073 (1993)).
permitted to grant summary judgment only “if the pleadings, depositions, and
admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law.” 735 ILCS 5/2–1005(c) (West 2014). The trial
court must view these documents and exhibits in the light most favorable to the
nonmoving party. Home Insurance Co. v. Cincinnati Insurance Co.,
213 Ill. 2d 307, 315, 290 Ill.Dec. 218, 821 N.E.2d 269 (2004). We review a
trial court’s decision to grant a motion for summary judgment de novo. Outboard
Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102, 180
Ill.Dec. 691, 607 N.E.2d 1204 (1992). De novo consideration
means we perform the same analysis that a trial judge would perform. Khan
v. BDO Seidman, LLP, 408 Ill. App. 3d 564, 578, 350 Ill.Dec. 63, 948 N.E.2d
132 (2011). “ ‘The construction of an insurance policy and a determination of
the rights and obligations thereunder are questions of law for the court which
are appropriate subjects for disposition by way of summary judgment.’ ” Steadfast
Insurance Co. v. Caremark Rx, Inc., 359 Ill. App. 3d 749, 755, 296 Ill.Dec.
537, 835 N.E.2d 890 (2005) (quoting Crum & Forster Managers Corp.
v. Resolution Trust Corp., 156 Ill. 2d 384, 391, 189 Ill.Dec. 756, 620
N.E.2d 1073 (1993)).
*7 ¶ 36 “Summary judgment is a drastic
measure and should only be granted if the movant’s right to judgment is clear
and free from doubt.” Outboard Marine Corp., 154 Ill. 2d at 102,
180 Ill.Dec. 691, 607 N.E.2d 1204. However, “[m]ere speculation, conjecture, or
guess is insufficient to withstand summary judgment.” Sorce v.
Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328, 242 Ill.Dec. 738,
722 N.E.2d 227 (1999). The party moving for summary judgment bears the initial
burden of proof. Nedzvekas v. Fung, 374 Ill. App. 3d 618, 624, 313
Ill.Dec. 448, 872 N.E.2d 431 (2007). The movant may meet his burden of proof
either by affirmatively showing that some element of the case must be resolved
in his favor or by establishing “ ‘that there is an absence of evidence to
support the nonmoving party’s case.’ ” Nedzvekas, 374 Ill. App. 3d
at 624, 313 Ill.Dec. 448, 872 N.E.2d 431 (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). “ ‘The
purpose of summary judgment is not to try an issue of fact but * * * to
determine whether a triable issue of fact exists.’ ” Schrager v. North
Community Bank, 328 Ill. App. 3d 696, 708, 262 Ill.Dec. 916, 767 N.E.2d 376
(2002) (quoting Luu v. Kim, 323 Ill. App. 3d 946, 952, 256 Ill.Dec.
667, 752 N.E.2d 547 (2001)). We may affirm on any basis appearing in the
record, whether or not the trial court relied on that basis or its reasoning
was correct. Ray Dancer, Inc. v. DMC Corp., 230 Ill. App. 3d 40,
50, 171 Ill.Dec. 824, 594 N.E.2d 1344 (1992).
measure and should only be granted if the movant’s right to judgment is clear
and free from doubt.” Outboard Marine Corp., 154 Ill. 2d at 102,
180 Ill.Dec. 691, 607 N.E.2d 1204. However, “[m]ere speculation, conjecture, or
guess is insufficient to withstand summary judgment.” Sorce v.
Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328, 242 Ill.Dec. 738,
722 N.E.2d 227 (1999). The party moving for summary judgment bears the initial
burden of proof. Nedzvekas v. Fung, 374 Ill. App. 3d 618, 624, 313
Ill.Dec. 448, 872 N.E.2d 431 (2007). The movant may meet his burden of proof
either by affirmatively showing that some element of the case must be resolved
in his favor or by establishing “ ‘that there is an absence of evidence to
support the nonmoving party’s case.’ ” Nedzvekas, 374 Ill. App. 3d
at 624, 313 Ill.Dec. 448, 872 N.E.2d 431 (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). “ ‘The
purpose of summary judgment is not to try an issue of fact but * * * to
determine whether a triable issue of fact exists.’ ” Schrager v. North
Community Bank, 328 Ill. App. 3d 696, 708, 262 Ill.Dec. 916, 767 N.E.2d 376
(2002) (quoting Luu v. Kim, 323 Ill. App. 3d 946, 952, 256 Ill.Dec.
667, 752 N.E.2d 547 (2001)). We may affirm on any basis appearing in the
record, whether or not the trial court relied on that basis or its reasoning
was correct. Ray Dancer, Inc. v. DMC Corp., 230 Ill. App. 3d 40,
50, 171 Ill.Dec. 824, 594 N.E.2d 1344 (1992).
¶ 37 I. Terms of Policy
¶ 38 Plaintiff’s first
arguments concern the interpretation of the insurance policy itself.
Specifically, plaintiff argues that the insurance policy is ambiguous as to
when the time for filing suit begins to run. “An insurance policy is a
contract, and the general rules governing the interpretation of contracts also
govern the interpretation of insurance policies.” Standard Mutual
Insurance Co. v. Lay, 2013 IL 114617, ¶ 24, 371 Ill.Dec. 1, 989 N.E.2d 591.
“A court’s primary objective is to ascertain and give effect to the intention of
the parties as expressed in the agreement.” Nicor, Inc. v. Associated
Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407, 416, 307
Ill.Dec. 626, 860 N.E.2d 280 (2006). “Where the provisions of a policy are
clear and unambiguous, they will be applied as written [citation] unless doing
so would violate public policy [citation].” Nicor, 223 Ill. 2d at
416, 307 Ill.Dec. 626, 860 N.E.2d 280.
arguments concern the interpretation of the insurance policy itself.
Specifically, plaintiff argues that the insurance policy is ambiguous as to
when the time for filing suit begins to run. “An insurance policy is a
contract, and the general rules governing the interpretation of contracts also
govern the interpretation of insurance policies.” Standard Mutual
Insurance Co. v. Lay, 2013 IL 114617, ¶ 24, 371 Ill.Dec. 1, 989 N.E.2d 591.
“A court’s primary objective is to ascertain and give effect to the intention of
the parties as expressed in the agreement.” Nicor, Inc. v. Associated
Electric & Gas Insurance Services Ltd., 223 Ill. 2d 407, 416, 307
Ill.Dec. 626, 860 N.E.2d 280 (2006). “Where the provisions of a policy are
clear and unambiguous, they will be applied as written [citation] unless doing
so would violate public policy [citation].” Nicor, 223 Ill. 2d at
416, 307 Ill.Dec. 626, 860 N.E.2d 280.
¶ 39 “Whether an
ambiguity exists turns on whether the policy language is subject to more than
one reasonable interpretation.” Hobbs v. Hartford Insurance Co. of the
Midwest, 214 Ill. 2d 11, 17, 291 Ill.Dec. 269, 823 N.E.2d 561 (2005). “That
a term is not defined by the policy does not render it ambiguous, nor is a
policy term considered ambiguous merely because the parties can suggest
creative possibilities for its meaning.” Nicor, 223 Ill. 2d at 417,
307 Ill.Dec. 626, 860 N.E.2d 280. “[W]e will not strain to find an ambiguity
where none exists.” Hobbs, 214 Ill. 2d at 17, 291 Ill.Dec. 269, 823
N.E.2d 561. “Although policy terms that limit an insurer’s liability will be
liberally construed in favor of coverage, this rule of construction only comes
into play when the policy is ambiguous.” Hobbs, 214 Ill. 2d at 17,
291 Ill.Dec. 269, 823 N.E.2d 561.
ambiguity exists turns on whether the policy language is subject to more than
one reasonable interpretation.” Hobbs v. Hartford Insurance Co. of the
Midwest, 214 Ill. 2d 11, 17, 291 Ill.Dec. 269, 823 N.E.2d 561 (2005). “That
a term is not defined by the policy does not render it ambiguous, nor is a
policy term considered ambiguous merely because the parties can suggest
creative possibilities for its meaning.” Nicor, 223 Ill. 2d at 417,
307 Ill.Dec. 626, 860 N.E.2d 280. “[W]e will not strain to find an ambiguity
where none exists.” Hobbs, 214 Ill. 2d at 17, 291 Ill.Dec. 269, 823
N.E.2d 561. “Although policy terms that limit an insurer’s liability will be
liberally construed in favor of coverage, this rule of construction only comes
into play when the policy is ambiguous.” Hobbs, 214 Ill. 2d at 17,
291 Ill.Dec. 269, 823 N.E.2d 561.
¶ 40 In the case at bar,
the provision of the insurance policy at issue was entitled “Action Against
Company” and provided, in full:
the provision of the insurance policy at issue was entitled “Action Against
Company” and 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.”
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.”
¶ 41 Plaintiff argues
that this provision is ambiguous in two ways. First, plaintiff claims that the
policy is unclear as to whether the time to bring suit is triggered by a payment
by the tortfeasor himself or if a payment by the tortfeasor’s insurance company
is sufficient. Second, plaintiff claims that the policy is unclear as to when
exactly the insurer and the insured will be deemed to reach an “impasse” as to
payment so as to trigger the requirement that the insured file suit. We find
both of these arguments unpersuasive.
that this provision is ambiguous in two ways. First, plaintiff claims that the
policy is unclear as to whether the time to bring suit is triggered by a payment
by the tortfeasor himself or if a payment by the tortfeasor’s insurance company
is sufficient. Second, plaintiff claims that the policy is unclear as to when
exactly the insurer and the insured will be deemed to reach an “impasse” as to
payment so as to trigger the requirement that the insured file suit. We find
both of these arguments unpersuasive.
*8 ¶ 42 Plaintiff’s first argument concerns
the policy language providing that “[a]ny 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.” (Emphasis added.) Plaintiff argues that this
language may be construed to mean that the payment must come from the
underinsured motorist himself, rather than from his insurance company. This
argument strains all credulity. By definition, an underinsured motorist is
covered under an insurance policy. It is axiomatic—if one lacks insurance at
all, he is “uninsured,” not “underinsured.” Indeed, the policy at issue in the
instant case defines an “underinsured motor vehicle” as “a land motor vehicle
or trailer of any type with respect to the ownership, maintenance or use to
which bodily injury bonds or insurance policies apply at the time of the
accident, but their limits for bodily injury liability are less than the
limits of liability for this coverage.” (Emphasis added.) Similarly, the
Insurance Code defines an “underinsured motor vehicle” as “a motor vehicle
whose ownership, maintenance or use has resulted in bodily injury or death of
the insured, as defined in the policy, and for which the sum of the limits of
liability under all bodily injury liability insurance policies or under bonds
or other security required to be maintained under Illinois law applicable to
the driver or to the person or organization legally responsible for such
vehicle and applicable to the vehicle, is less than the limits for underinsured
coverage provided the insured as defined in the policy at the time of the
accident.” 215 ILCS 5/143a–2(4) (West 2010). Thus, there is necessarily an
insurance company involved in order for the uninsured-motorist coverage to
apply. In some cases, the tortfeasor may also contribute with his insurance
company so the policy provision covers that instance in addition.
the policy language providing that “[a]ny 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.” (Emphasis added.) Plaintiff argues that this
language may be construed to mean that the payment must come from the
underinsured motorist himself, rather than from his insurance company. This
argument strains all credulity. By definition, an underinsured motorist is
covered under an insurance policy. It is axiomatic—if one lacks insurance at
all, he is “uninsured,” not “underinsured.” Indeed, the policy at issue in the
instant case defines an “underinsured motor vehicle” as “a land motor vehicle
or trailer of any type with respect to the ownership, maintenance or use to
which bodily injury bonds or insurance policies apply at the time of the
accident, but their limits for bodily injury liability are less than the
limits of liability for this coverage.” (Emphasis added.) Similarly, the
Insurance Code defines an “underinsured motor vehicle” as “a motor vehicle
whose ownership, maintenance or use has resulted in bodily injury or death of
the insured, as defined in the policy, and for which the sum of the limits of
liability under all bodily injury liability insurance policies or under bonds
or other security required to be maintained under Illinois law applicable to
the driver or to the person or organization legally responsible for such
vehicle and applicable to the vehicle, is less than the limits for underinsured
coverage provided the insured as defined in the policy at the time of the
accident.” 215 ILCS 5/143a–2(4) (West 2010). Thus, there is necessarily an
insurance company involved in order for the uninsured-motorist coverage to
apply. In some cases, the tortfeasor may also contribute with his insurance
company so the policy provision covers that instance in addition.
¶ 43 The purpose of such
an insurance policy is to pay in the event of a collision for which the insured
is liable. “Unlike other assets, a liability insurance policy exists for the
single purpose of satisfying the liability that it covers. It has no other
function and no other value.” People ex rel. Terry v. Fisher, 12
Ill. 2d 231, 238, 145 N.E.2d 588 (1957); see also Brown v. Advocate
Health & Hospitals Corp., 2017 IL
App (1st) 161918, ¶ 16, –––Ill.Dec. ––––, ––– N.E.3d –––– (quoting Fisher ); Progressive
Universal Insurance Co. of Illinois v. Liberty Mutual Fire Insurance Co.,
215 Ill. 2d 121, 129, 293 Ill.Dec. 677, 828 N.E.2d 1175 (2005) (“The principal
purpose of this state’s mandatory liability insurance requirement is to protect
the public by securing payment of their damages.”). An argument that plaintiff
did not “receive[ ] * * * payment from an underinsured motorist” because the
funds came from the other driver’s insurance policy rather than from the
driver’s own bank account is thus not persuasive.
an insurance policy is to pay in the event of a collision for which the insured
is liable. “Unlike other assets, a liability insurance policy exists for the
single purpose of satisfying the liability that it covers. It has no other
function and no other value.” People ex rel. Terry v. Fisher, 12
Ill. 2d 231, 238, 145 N.E.2d 588 (1957); see also Brown v. Advocate
Health & Hospitals Corp., 2017 IL
App (1st) 161918, ¶ 16, –––Ill.Dec. ––––, ––– N.E.3d –––– (quoting Fisher ); Progressive
Universal Insurance Co. of Illinois v. Liberty Mutual Fire Insurance Co.,
215 Ill. 2d 121, 129, 293 Ill.Dec. 677, 828 N.E.2d 1175 (2005) (“The principal
purpose of this state’s mandatory liability insurance requirement is to protect
the public by securing payment of their damages.”). An argument that plaintiff
did not “receive[ ] * * * payment from an underinsured motorist” because the
funds came from the other driver’s insurance policy rather than from the
driver’s own bank account is thus not persuasive.
¶ 44 Furthermore, such
an argument is especially disingenuous in the instant case. Plaintiff executed
a release dated September 20, 2012, in which she acknowledged the receipt of
$25,000 in consideration for releasing the other motorist from all liability
relating to the collision. Plaintiff cannot accept $25,000 in exchange for
releasing all liability against the other driver while, in the next breath,
arguing that she did not actually “receive[ ]” any money from the motorist. It
is clear that the payment from the insurance company was made on behalf of the
underinsured tortfeasor and this payment triggered the running of the one-year
time period. In determining whether a policy contains an ambiguity, “[a]lthough
‘creative possibilities’ may be suggested, only reasonable interpretations will
be considered.” Hobbs, 214 Ill. 2d at 17, 291 Ill.Dec. 269, 823
N.E.2d 561. Plaintiff’s argument is certainly creative, but it is not
reasonable. This policy language is simply not ambiguous and must therefore be
applied as written. Accordingly, the one-year time period began running no
later than December 21, 2012,
when plaintiff received payment on behalf of the tortfeasor.
an argument is especially disingenuous in the instant case. Plaintiff executed
a release dated September 20, 2012, in which she acknowledged the receipt of
$25,000 in consideration for releasing the other motorist from all liability
relating to the collision. Plaintiff cannot accept $25,000 in exchange for
releasing all liability against the other driver while, in the next breath,
arguing that she did not actually “receive[ ]” any money from the motorist. It
is clear that the payment from the insurance company was made on behalf of the
underinsured tortfeasor and this payment triggered the running of the one-year
time period. In determining whether a policy contains an ambiguity, “[a]lthough
‘creative possibilities’ may be suggested, only reasonable interpretations will
be considered.” Hobbs, 214 Ill. 2d at 17, 291 Ill.Dec. 269, 823
N.E.2d 561. Plaintiff’s argument is certainly creative, but it is not
reasonable. This policy language is simply not ambiguous and must therefore be
applied as written. Accordingly, the one-year time period began running no
later than December 21, 2012,
when plaintiff received payment on behalf of the tortfeasor.
¶ 45 We do not find
plaintiff’s argument about the other purported ambiguity to be any more
persuasive than the first. Plaintiff argues that the policy does not specify
the point at which it would be determined that there was a “disagreement” as to
the amount owed to plaintiff such that plaintiff would be required to initiate
an action against defendant. The relevant policy language provides that “[i]f
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.” (Emphasis
added.) Plaintiff argues that the parties did not “disagree” over the amount
owed under the policy until May 28, 2014, when the adjustor made a final offer
that plaintiff rejected. We do not find this argument persuasive.
plaintiff’s argument about the other purported ambiguity to be any more
persuasive than the first. Plaintiff argues that the policy does not specify
the point at which it would be determined that there was a “disagreement” as to
the amount owed to plaintiff such that plaintiff would be required to initiate
an action against defendant. The relevant policy language provides that “[i]f
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.” (Emphasis
added.) Plaintiff argues that the parties did not “disagree” over the amount
owed under the policy until May 28, 2014, when the adjustor made a final offer
that plaintiff rejected. We do not find this argument persuasive.
*9 ¶ 46 There is nothing in the policy to
suggest that parties “do not agree as to the amount of payment which may be
owing” only at the final point at which all settlement negotiations have been
exhausted, and we cannot read such a restriction into the policy without any
basis for doing so. “That a term is not defined by the policy does not render
it ambiguous, nor is a policy term considered ambiguous merely because the
parties can suggest creative possibilities for its meaning.” Nicor,
223 Ill. 2d at 417, 307 Ill.Dec. 626, 860 N.E.2d 280. The language here is
plain and unambiguous—plaintiff was required to file suit within one year of
receiving payment from the tortfeasor if she and defendant did not agree as to
the amount she was owed under the insurance policy.
suggest that parties “do not agree as to the amount of payment which may be
owing” only at the final point at which all settlement negotiations have been
exhausted, and we cannot read such a restriction into the policy without any
basis for doing so. “That a term is not defined by the policy does not render
it ambiguous, nor is a policy term considered ambiguous merely because the
parties can suggest creative possibilities for its meaning.” Nicor,
223 Ill. 2d at 417, 307 Ill.Dec. 626, 860 N.E.2d 280. The language here is
plain and unambiguous—plaintiff was required to file suit within one year of
receiving payment from the tortfeasor if she and defendant did not agree as to
the amount she was owed under the insurance policy.
¶ 47 Furthermore, in the
case at bar, the record shows that the parties staked out their positions with
respect to the amount owed to plaintiff early in the negotiations and deviated
little from those positions—plaintiff sought $50,000, while the adjustor was
authorized to offer only up to $12,500. There is no indication that the parties
grew any closer to settlement throughout the course of the negotiations such
that avoidance of a “disagreement” as to the amount owed would be likely. Thus,
the claim that the parties did not “disagree” until May 28, 2014, is not
supported by the record. Finally, there is evidence in the record that
plaintiff’s counsel recognized that the parties were not moving towards an
agreement well before the expiration of the limitations period—plaintiff
demanded arbitration on September 9, 2013, over three months before the December 21, 2013, deadline to file suit.
It is impossible to reconcile plaintiff’s claim that the parties did not
“disagree” over the amount owed to her when she sought arbitration over the
dispute. In the case at bar, we cannot find that there was any ambiguity over
when plaintiff was required to file an action against defendant. Accordingly,
we find no basis for invalidating the one-year limitation for filing an action
under the policy.
case at bar, the record shows that the parties staked out their positions with
respect to the amount owed to plaintiff early in the negotiations and deviated
little from those positions—plaintiff sought $50,000, while the adjustor was
authorized to offer only up to $12,500. There is no indication that the parties
grew any closer to settlement throughout the course of the negotiations such
that avoidance of a “disagreement” as to the amount owed would be likely. Thus,
the claim that the parties did not “disagree” until May 28, 2014, is not
supported by the record. Finally, there is evidence in the record that
plaintiff’s counsel recognized that the parties were not moving towards an
agreement well before the expiration of the limitations period—plaintiff
demanded arbitration on September 9, 2013, over three months before the December 21, 2013, deadline to file suit.
It is impossible to reconcile plaintiff’s claim that the parties did not
“disagree” over the amount owed to her when she sought arbitration over the
dispute. In the case at bar, we cannot find that there was any ambiguity over
when plaintiff was required to file an action against defendant. Accordingly,
we find no basis for invalidating the one-year limitation for filing an action
under the policy.
¶ 48 As a final matter,
we note that at oral argument, plaintiff’s counsel’s ambiguity argument
centered on a third purported ambiguity, namely, that the policy was ambiguous
because it was not clear whether the time began running at the time of the
settlement with the tortfeasor, at the time plaintiff’s attorney received the
payment on plaintiff’s behalf, or when the payment was actually disbursed to
plaintiff herself. This argument appears nowhere in plaintiff’s brief and was
made for the first time at oral argument. It is well settled that “[p]oints not
argued [in the appellant’s brief] are waived and shall not be raised in the reply
brief, in oral argument, or on petition for rehearing.” Ill. S. Ct. R.
341(h)(7) (eff. Jan. 1, 2016). Moreover, the only date contained in the record
concerning payment indicates that the tortfeasor’s insurance company tendered
$25,000 on December 21, 2012.
Plaintiff did not file her complaint until June 9, 2014, nearly one year and
six months after that date. Plaintiff’s counsel acknowledged at oral argument
that it was unlikely that it would have taken another six months for the actual
disbursement of the funds to plaintiff herself. Thus, even assuming that the
time began running only when the funds were deposited into plaintiff’s bank
account, plaintiff’s complaint was filed well over a year after that date.
Consequently, any purported ambiguity would nevertheless result in an untimely
complaint.
we note that at oral argument, plaintiff’s counsel’s ambiguity argument
centered on a third purported ambiguity, namely, that the policy was ambiguous
because it was not clear whether the time began running at the time of the
settlement with the tortfeasor, at the time plaintiff’s attorney received the
payment on plaintiff’s behalf, or when the payment was actually disbursed to
plaintiff herself. This argument appears nowhere in plaintiff’s brief and was
made for the first time at oral argument. It is well settled that “[p]oints not
argued [in the appellant’s brief] are waived and shall not be raised in the reply
brief, in oral argument, or on petition for rehearing.” Ill. S. Ct. R.
341(h)(7) (eff. Jan. 1, 2016). Moreover, the only date contained in the record
concerning payment indicates that the tortfeasor’s insurance company tendered
$25,000 on December 21, 2012.
Plaintiff did not file her complaint until June 9, 2014, nearly one year and
six months after that date. Plaintiff’s counsel acknowledged at oral argument
that it was unlikely that it would have taken another six months for the actual
disbursement of the funds to plaintiff herself. Thus, even assuming that the
time began running only when the funds were deposited into plaintiff’s bank
account, plaintiff’s complaint was filed well over a year after that date.
Consequently, any purported ambiguity would nevertheless result in an untimely
complaint.
¶ 49 II. Equitable
Estoppel
Estoppel
¶ 50 Plaintiff also
argues that the one-year time limitation should not apply because her attorney
relied on the representations of the adjustor to conclude that the time for
filing suit had not yet passed. Plaintiff’s argument is based on the theory of
equitable estoppel. “The general rule is where A, by his or her statements and
conduct, leads B to do something that B would not have done but for such
statements and conduct, A will not be allowed to deny his or her words or acts
to the damage of B. Equitable estoppel may be defined as the effect of A’s
conduct whereby A is barred from asserting rights that might otherwise have
existed against B who, in good faith, relied upon such conduct and has been
thereby led to change his or her position for the worse.” In re
Parentage of Scarlett Z.–D., 2015 IL 117904, ¶ 24, 390 Ill.Dec. 123, 28
N.E.3d 776. “ ‘An insurer will be estopped from raising a limitations defense
where its actions during negotiations are such as to lull the insured into a
false sense of security, thereby causing him to delay the assertion of his
rights.’ ” Mitchell v. State Farm Fire & Casualty Co., 343 Ill.
App. 3d 281, 285–86, 277 Ill.Dec. 531, 796 N.E.2d 617 (2003) (quoting Hermanson
v. Country Mutual Insurance Co., 267 Ill. App. 3d 1031, 1035, 204 Ill.Dec.
956, 642 N.E.2d 857 (1994).
argues that the one-year time limitation should not apply because her attorney
relied on the representations of the adjustor to conclude that the time for
filing suit had not yet passed. Plaintiff’s argument is based on the theory of
equitable estoppel. “The general rule is where A, by his or her statements and
conduct, leads B to do something that B would not have done but for such
statements and conduct, A will not be allowed to deny his or her words or acts
to the damage of B. Equitable estoppel may be defined as the effect of A’s
conduct whereby A is barred from asserting rights that might otherwise have
existed against B who, in good faith, relied upon such conduct and has been
thereby led to change his or her position for the worse.” In re
Parentage of Scarlett Z.–D., 2015 IL 117904, ¶ 24, 390 Ill.Dec. 123, 28
N.E.3d 776. “ ‘An insurer will be estopped from raising a limitations defense
where its actions during negotiations are such as to lull the insured into a
false sense of security, thereby causing him to delay the assertion of his
rights.’ ” Mitchell v. State Farm Fire & Casualty Co., 343 Ill.
App. 3d 281, 285–86, 277 Ill.Dec. 531, 796 N.E.2d 617 (2003) (quoting Hermanson
v. Country Mutual Insurance Co., 267 Ill. App. 3d 1031, 1035, 204 Ill.Dec.
956, 642 N.E.2d 857 (1994).
*10 ¶ 51 “To establish equitable estoppel, the
party claiming estoppel must demonstrate that: (1) the other party
misrepresented or concealed material facts; (2) the other party knew at the
time the representations were made that the representations were untrue; (3)
the party claiming estoppel did not know that the representations were untrue
when they were made and when they were acted upon; (4) the other party intended
or reasonably expected the representations to be acted upon by the party
claiming estoppel or by the public generally; (5) the party claiming estoppel
reasonably relied upon the representations in good faith to his or her detriment;
and (6) the party claiming estoppel has been prejudiced by his or her reliance
on the representations.” Scarlett Z.–D., 2015 IL 117904, ¶ 25, 390
Ill.Dec. 123, 28 N.E.3d 776 (citing Parks v. Kownacki, 193 Ill. 2d
164, 180, 249 Ill.Dec. 897, 737 N.E.2d 287 (2000)). “The test is whether,
considering all the circumstances, conscience and the duty of honest dealing
should deny one the right to repudiate the consequences of his or her
representations or conduct.” Scarlett Z.–D., 2015 IL 117904, ¶ 25,
390 Ill.Dec. 123, 28 N.E.3d 776 (citing Ceres Illinois, Inc. v.
Illinois Scrap Processing, Inc., 114 Ill. 2d 133, 148, 102 Ill.Dec. 379,
500 N.E.2d 1 (1986)).
party claiming estoppel must demonstrate that: (1) the other party
misrepresented or concealed material facts; (2) the other party knew at the
time the representations were made that the representations were untrue; (3)
the party claiming estoppel did not know that the representations were untrue
when they were made and when they were acted upon; (4) the other party intended
or reasonably expected the representations to be acted upon by the party
claiming estoppel or by the public generally; (5) the party claiming estoppel
reasonably relied upon the representations in good faith to his or her detriment;
and (6) the party claiming estoppel has been prejudiced by his or her reliance
on the representations.” Scarlett Z.–D., 2015 IL 117904, ¶ 25, 390
Ill.Dec. 123, 28 N.E.3d 776 (citing Parks v. Kownacki, 193 Ill. 2d
164, 180, 249 Ill.Dec. 897, 737 N.E.2d 287 (2000)). “The test is whether,
considering all the circumstances, conscience and the duty of honest dealing
should deny one the right to repudiate the consequences of his or her
representations or conduct.” Scarlett Z.–D., 2015 IL 117904, ¶ 25,
390 Ill.Dec. 123, 28 N.E.3d 776 (citing Ceres Illinois, Inc. v.
Illinois Scrap Processing, Inc., 114 Ill. 2d 133, 148, 102 Ill.Dec. 379,
500 N.E.2d 1 (1986)).
¶ 52 In the case at bar,
plaintiff argues that her attorney reasonably relied on the adjustor’s representations
that plaintiff could delay filing suit. The adjustor denied that he made these
representations and there is no documentary evidence to support it. There are a
number of problems with this argument. First, with respect to the first element
of equitable estoppel, plaintiff must demonstrate that “the other party
misrepresented or concealed material facts.” Scarlett Z.–D., 2015
IL 117904, ¶ 25, 390 Ill.Dec. 123, 28 N.E.3d 776. “The representation need not
be fraudulent in the strict legal sense or done with an intent to mislead or
deceive. Although fraud is an essential element, it is sufficient that a
fraudulent or unjust effect results from allowing another person to raise a
claim inconsistent with his or her former declarations.” Scarlett Z.–D.,
2015 IL 117904, ¶ 25, 390 Ill.Dec. 123, 28 N.E.3d 776. In the insurance
context, “ ‘[c]ases in which an insurer’s conduct is found to amount to
estoppel typically involve a concession of liability by the insurer, advance
payments by the insurer to the plaintiff in contemplation of eventual
settlement, and statements by the insurer which encourage the plaintiff to
delay filing his action.’ ” Mitchell, 343 Ill. App. 3d at 286, 277
Ill.Dec. 531, 796 N.E.2d 617 (quoting Foamcraft, Inc. v. First State
Insurance Co., 238 Ill. App. 3d 791, 795, 179 Ill.Dec. 705, 606 N.E.2d 537
(1992)). However, “ ‘[t]he mere pendency of negotiations conducted in good
faith is insufficient to give rise to estoppel.’ ” Griffin v.
Willoughby, 369 Ill. App. 3d 405, 414, 311 Ill.Dec. 21, 867 N.E.2d 1007
(2006) (quoting Viirre v. Zayre Stores, Inc., 212 Ill. App. 3d 505,
515, 156 Ill.Dec. 622, 571 N.E.2d 209 (1991)).
plaintiff argues that her attorney reasonably relied on the adjustor’s representations
that plaintiff could delay filing suit. The adjustor denied that he made these
representations and there is no documentary evidence to support it. There are a
number of problems with this argument. First, with respect to the first element
of equitable estoppel, plaintiff must demonstrate that “the other party
misrepresented or concealed material facts.” Scarlett Z.–D., 2015
IL 117904, ¶ 25, 390 Ill.Dec. 123, 28 N.E.3d 776. “The representation need not
be fraudulent in the strict legal sense or done with an intent to mislead or
deceive. Although fraud is an essential element, it is sufficient that a
fraudulent or unjust effect results from allowing another person to raise a
claim inconsistent with his or her former declarations.” Scarlett Z.–D.,
2015 IL 117904, ¶ 25, 390 Ill.Dec. 123, 28 N.E.3d 776. In the insurance
context, “ ‘[c]ases in which an insurer’s conduct is found to amount to
estoppel typically involve a concession of liability by the insurer, advance
payments by the insurer to the plaintiff in contemplation of eventual
settlement, and statements by the insurer which encourage the plaintiff to
delay filing his action.’ ” Mitchell, 343 Ill. App. 3d at 286, 277
Ill.Dec. 531, 796 N.E.2d 617 (quoting Foamcraft, Inc. v. First State
Insurance Co., 238 Ill. App. 3d 791, 795, 179 Ill.Dec. 705, 606 N.E.2d 537
(1992)). However, “ ‘[t]he mere pendency of negotiations conducted in good
faith is insufficient to give rise to estoppel.’ ” Griffin v.
Willoughby, 369 Ill. App. 3d 405, 414, 311 Ill.Dec. 21, 867 N.E.2d 1007
(2006) (quoting Viirre v. Zayre Stores, Inc., 212 Ill. App. 3d 505,
515, 156 Ill.Dec. 622, 571 N.E.2d 209 (1991)).
¶ 53 In the case at bar,
even if the adjustor made representations to the attorney that plaintiff could
delay filing suit, it would not change our result because the attorney did not
provide any evidence that the representations occurred prior to the termination
of the limitations period or how long the alleged extension for the filing of a
suit would occur. The attorney was asked during his deposition to provide the
date of any such representations made to him and was unable to do so and also
admitted that he was aware that “regardless of what [the adjustor] may have
said, [a change in the policy] had to be in writing in order for it to be
effectuated.” Plaintiff makes much of the continued communication with the
adjustor after the expiration of the limitations period, including a $10,000
offer, but the issue is whether there were representations made that prevented
plaintiff from filing suit, and the evidence demonstrated that nothing
prevented plaintiff from filing a timely lawsuit or obtaining a written
agreement that the limitations period was to be extended. Consequently, we must
consider communications between the parties that occurred prior to the
expiration of the limitations period on December 21,
2013. Any communications made after that date would have no effect on whether
plaintiff should have filed suit earlier. Since the attorney was unable to
provide a time period when the adjustor told him that the limitations period
was to be extended, there is simply no evidence in the record that the adjustor
made any representations to plaintiff or her counsel prior to December 21, 2013, indicating that
plaintiff was not required to file suit in accordance with the terms of the
policy.
even if the adjustor made representations to the attorney that plaintiff could
delay filing suit, it would not change our result because the attorney did not
provide any evidence that the representations occurred prior to the termination
of the limitations period or how long the alleged extension for the filing of a
suit would occur. The attorney was asked during his deposition to provide the
date of any such representations made to him and was unable to do so and also
admitted that he was aware that “regardless of what [the adjustor] may have
said, [a change in the policy] had to be in writing in order for it to be
effectuated.” Plaintiff makes much of the continued communication with the
adjustor after the expiration of the limitations period, including a $10,000
offer, but the issue is whether there were representations made that prevented
plaintiff from filing suit, and the evidence demonstrated that nothing
prevented plaintiff from filing a timely lawsuit or obtaining a written
agreement that the limitations period was to be extended. Consequently, we must
consider communications between the parties that occurred prior to the
expiration of the limitations period on December 21,
2013. Any communications made after that date would have no effect on whether
plaintiff should have filed suit earlier. Since the attorney was unable to
provide a time period when the adjustor told him that the limitations period
was to be extended, there is simply no evidence in the record that the adjustor
made any representations to plaintiff or her counsel prior to December 21, 2013, indicating that
plaintiff was not required to file suit in accordance with the terms of the
policy.
*11 ¶ 54 In fact, the evidence in the record
shows just the opposite. The record shows that the adjustor sent the attorney a
copy of plaintiff’s policy on April 3, 2013, which would have included the
relevant policy language. Furthermore, the adjustor sent a letter to the
attorney on September 19, 2013, expressly informing him that filing a complaint
was the required method for dispute resolution, not arbitration.3 While
that letter did not contain the one-year limitation language, it did quote and
highlight the language from the policy concerning the requirement of filing of
a lawsuit and also asked the attorney to “forward * * * a copy of the
complaint, once filed.” Thus, the adjustor expressly brought up the subject of
filing suit three months prior to the expiration of the limitations period.
shows just the opposite. The record shows that the adjustor sent the attorney a
copy of plaintiff’s policy on April 3, 2013, which would have included the
relevant policy language. Furthermore, the adjustor sent a letter to the
attorney on September 19, 2013, expressly informing him that filing a complaint
was the required method for dispute resolution, not arbitration.3 While
that letter did not contain the one-year limitation language, it did quote and
highlight the language from the policy concerning the requirement of filing of
a lawsuit and also asked the attorney to “forward * * * a copy of the
complaint, once filed.” Thus, the adjustor expressly brought up the subject of
filing suit three months prior to the expiration of the limitations period.
¶ 55 Furthermore,
plaintiff cannot establish equitable estoppel because the record affirmatively
contradicts any claims of detrimental reliance on the adjustor’s purported
misrepresentations. To establish equitable estoppel, plaintiff must demonstrate
that her attorney “reasonably relied upon the representations in good faith to
his or her detriment.” Scarlett Z.–D., 2015 IL 117904, ¶ 25, 390
Ill.Dec. 123, 28 N.E.3d 776. In the case at bar, plaintiff’s attorney filed a
demand for arbitration while purportedly “relying” on the adjustor’s
representations that her attorney could continue negotiations without filing
suit. Plaintiff does not explain how she can claim detrimental reliance in the
face of such clear evidence that her attorney was not merely
waiting for settlement negotiations to conclude before initiating dispute
resolution proceedings. Moreover, as noted, in response to this demand for
arbitration, the adjustor expressly informed plaintiff’s attorney that
he was using the incorrect dispute resolution procedure and that he needed to
file suit. Again, this occurred several months before the expiration of the
limitations period. “The party claiming equitable estoppel has the burden of
proving it by clear and convincing evidence.” Scarlett Z.–D., 2015
IL 117904, ¶ 26, 390 Ill.Dec. 123, 28 N.E.3d 776. Here, we cannot find any
evidence that equitable estoppel should apply.
plaintiff cannot establish equitable estoppel because the record affirmatively
contradicts any claims of detrimental reliance on the adjustor’s purported
misrepresentations. To establish equitable estoppel, plaintiff must demonstrate
that her attorney “reasonably relied upon the representations in good faith to
his or her detriment.” Scarlett Z.–D., 2015 IL 117904, ¶ 25, 390
Ill.Dec. 123, 28 N.E.3d 776. In the case at bar, plaintiff’s attorney filed a
demand for arbitration while purportedly “relying” on the adjustor’s
representations that her attorney could continue negotiations without filing
suit. Plaintiff does not explain how she can claim detrimental reliance in the
face of such clear evidence that her attorney was not merely
waiting for settlement negotiations to conclude before initiating dispute
resolution proceedings. Moreover, as noted, in response to this demand for
arbitration, the adjustor expressly informed plaintiff’s attorney that
he was using the incorrect dispute resolution procedure and that he needed to
file suit. Again, this occurred several months before the expiration of the
limitations period. “The party claiming equitable estoppel has the burden of
proving it by clear and convincing evidence.” Scarlett Z.–D., 2015
IL 117904, ¶ 26, 390 Ill.Dec. 123, 28 N.E.3d 776. Here, we cannot find any
evidence that equitable estoppel should apply.
¶ 56 III. Public Policy
¶ 57 Finally, plaintiff
argues that the imposition of a one-year time limitation violates public policy
because such a time limitation is not statutorily imposed and defendant does
not highlight its inclusion to its insureds. While plaintiff frames both
arguments as “public policy” arguments, the latter appears instead to be an
unconscionability argument. “Although related, a finding that a contract
provision is unenforceable because it is unconscionable is distinct from a
finding that a contract provision is invalid because it violates public
policy.” Phoenix Insurance Co. v. Rosen, 242 Ill. 2d 48, 60, 350
Ill.Dec. 847, 949 N.E.2d 639 (2011). Thus, we discuss the two arguments
separately.
argues that the imposition of a one-year time limitation violates public policy
because such a time limitation is not statutorily imposed and defendant does
not highlight its inclusion to its insureds. While plaintiff frames both
arguments as “public policy” arguments, the latter appears instead to be an
unconscionability argument. “Although related, a finding that a contract
provision is unenforceable because it is unconscionable is distinct from a
finding that a contract provision is invalid because it violates public
policy.” Phoenix Insurance Co. v. Rosen, 242 Ill. 2d 48, 60, 350
Ill.Dec. 847, 949 N.E.2d 639 (2011). Thus, we discuss the two arguments
separately.
¶ 58 Plaintiff first
argues that the imposition of a limitations period that is not prescribed by
statute is against public policy. “If the policy language is unambiguous, the
policy will be applied as written unless it contravenes public policy.” Lay,
2013 IL 114617, ¶ 24, 371 Ill.Dec. 1, 989 N.E.2d 591. “In deciding whether an
agreement violates Illinois public policy, we must determine whether the
agreement is so capable of producing harm that its enforcement would be
contrary to the public interest.” Country Preferred Insurance Co. v.
Whitehead, 2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35. “[T]he
power to declare a private contract invalid on public policy grounds is
exercised sparingly.” Whitehead, 2012 IL 113365, ¶ 28, 365 Ill.Dec.
669, 979 N.E.2d 35. “Those who would invalidate an agreement carry a heavy
burden of demonstrating a violation of public policy.” Whitehead,
2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35. “An agreement will not
be invalidated unless it is clearly contrary to what the constitution, the
statutes, or the decisions of the courts have declared to be the public policy
of Illinois, or unless it is manifestly injurious to the public welfare.” Whitehead,
2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35. Such a determination
depends on the particular facts and circumstances of the case. Whitehead,
2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35.
argues that the imposition of a limitations period that is not prescribed by
statute is against public policy. “If the policy language is unambiguous, the
policy will be applied as written unless it contravenes public policy.” Lay,
2013 IL 114617, ¶ 24, 371 Ill.Dec. 1, 989 N.E.2d 591. “In deciding whether an
agreement violates Illinois public policy, we must determine whether the
agreement is so capable of producing harm that its enforcement would be
contrary to the public interest.” Country Preferred Insurance Co. v.
Whitehead, 2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35. “[T]he
power to declare a private contract invalid on public policy grounds is
exercised sparingly.” Whitehead, 2012 IL 113365, ¶ 28, 365 Ill.Dec.
669, 979 N.E.2d 35. “Those who would invalidate an agreement carry a heavy
burden of demonstrating a violation of public policy.” Whitehead,
2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35. “An agreement will not
be invalidated unless it is clearly contrary to what the constitution, the
statutes, or the decisions of the courts have declared to be the public policy
of Illinois, or unless it is manifestly injurious to the public welfare.” Whitehead,
2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35. Such a determination
depends on the particular facts and circumstances of the case. Whitehead,
2012 IL 113365, ¶ 28, 365 Ill.Dec. 669, 979 N.E.2d 35.
*12 ¶ 59 Our supreme court has noted that
“[t]he parties to a contract may agree to a shortened contractual limitation
period to replace a statute of limitations, so long as it is reasonable.” Whitehead,
2012 IL 113365, ¶ 29, 365 Ill.Dec. 669, 979 N.E.2d 35. Thus, in Whitehead,
the supreme court upheld an uninsured-motorist provision in an insurance policy
that required that the insured make a demand for arbitration within two years
from the date of the accident, even though the accident occurred in Wisconsin,
which had a three-year statute of limitations for personal injury
actions. Whitehead, 2012 IL 113365, ¶ 39, 365 Ill.Dec. 669, 979
N.E.2d 35. The supreme court noted that “the critical consideration, as we see
it, is whether the two-year time limitation to which the insured and insurer
agreed for dispute resolution procedures between them—which happens to
correspond precisely with Illinois’ two-year statute of limitations for filing
a personal injury action—allows the insured sufficient time to ascertain the
basis for, and dimensions of, her uninsured-motorist claim, and, if necessary,
to take the steps, in accordance with the terms of the policy, to initiate
dispute resolution procedures.” Whitehead, 2012 IL 113365, ¶ 34,
365 Ill.Dec. 669, 979 N.E.2d 35.
“[t]he parties to a contract may agree to a shortened contractual limitation
period to replace a statute of limitations, so long as it is reasonable.” Whitehead,
2012 IL 113365, ¶ 29, 365 Ill.Dec. 669, 979 N.E.2d 35. Thus, in Whitehead,
the supreme court upheld an uninsured-motorist provision in an insurance policy
that required that the insured make a demand for arbitration within two years
from the date of the accident, even though the accident occurred in Wisconsin,
which had a three-year statute of limitations for personal injury
actions. Whitehead, 2012 IL 113365, ¶ 39, 365 Ill.Dec. 669, 979
N.E.2d 35. The supreme court noted that “the critical consideration, as we see
it, is whether the two-year time limitation to which the insured and insurer
agreed for dispute resolution procedures between them—which happens to
correspond precisely with Illinois’ two-year statute of limitations for filing
a personal injury action—allows the insured sufficient time to ascertain the
basis for, and dimensions of, her uninsured-motorist claim, and, if necessary,
to take the steps, in accordance with the terms of the policy, to initiate
dispute resolution procedures.” Whitehead, 2012 IL 113365, ¶ 34,
365 Ill.Dec. 669, 979 N.E.2d 35.
¶ 60 “[U]nder Illinois
law liability, uninsured-motorist, and underinsured-motorist coverage
provisions are ‘inextricably linked.’ ” Rosen, 242 Ill. 2d at 58,
350 Ill.Dec. 847, 949 N.E.2d 639 (quoting Schultz v. Illinois Farmers
Insurance Co., 237 Ill. 2d 391, 404, 341 Ill.Dec. 429, 930 N.E.2d 943
(2010)). “[U]nderinsured-motorist coverage * * * serves the same goal as
uninsured-motorist coverage, ‘i.e., to place the insured in the same
position he would have occupied if the tortfeasor had carried adequate
insurance.’ ” Rosen, 242 Ill. 2d at 69, 350 Ill.Dec. 847, 949
N.E.2d 639 (quoting Sulser v. Country Mutual Insurance Co., 147
Ill. 2d 548, 555, 169 Ill.Dec. 254, 591 N.E.2d 427 (1992)). Thus, our supreme
court’s analysis in Whitehead is helpful in our analysis,
despite concerning uninsured-motorist coverage.
law liability, uninsured-motorist, and underinsured-motorist coverage
provisions are ‘inextricably linked.’ ” Rosen, 242 Ill. 2d at 58,
350 Ill.Dec. 847, 949 N.E.2d 639 (quoting Schultz v. Illinois Farmers
Insurance Co., 237 Ill. 2d 391, 404, 341 Ill.Dec. 429, 930 N.E.2d 943
(2010)). “[U]nderinsured-motorist coverage * * * serves the same goal as
uninsured-motorist coverage, ‘i.e., to place the insured in the same
position he would have occupied if the tortfeasor had carried adequate
insurance.’ ” Rosen, 242 Ill. 2d at 69, 350 Ill.Dec. 847, 949
N.E.2d 639 (quoting Sulser v. Country Mutual Insurance Co., 147
Ill. 2d 548, 555, 169 Ill.Dec. 254, 591 N.E.2d 427 (1992)). Thus, our supreme
court’s analysis in Whitehead is helpful in our analysis,
despite concerning uninsured-motorist coverage.
¶ 61 In the case at bar,
plaintiff does not argue that the time period—namely, one year from the date of
disbursement—is impermissibly short. Instead, she simply argues that the
imposition of a contractual limitations period at all, where the
legislature has not prescribed one by statute, violates public policy.4 First,
we note that while neither the Insurance Code (215 ILCS 5/143a–2 (West 2010))
nor the Illinois Safety and Family Financial Responsibility Law (625 ILCS
5/7–203 (West 2010)) provides for a statute of limitations, that does not mean
that no statute of limitation applies. “In the absence of specific and clear
provisions limiting the period within which suits must be filed, the 10–year
statute of limitations for actions on written contracts is applicable to
actions by insureds against their insurers based on insurance policies.” Whitehead,
2012 IL 113365, ¶ 29, 365 Ill.Dec. 669, 979 N.E.2d 35. Moreover, plaintiff’s
argument has been expressly rejected by our supreme court in Whitehead.
Accordingly, we find no basis in the record in this case for concluding that
the imposition of a contractual limitations period is against public policy.
plaintiff does not argue that the time period—namely, one year from the date of
disbursement—is impermissibly short. Instead, she simply argues that the
imposition of a contractual limitations period at all, where the
legislature has not prescribed one by statute, violates public policy.4 First,
we note that while neither the Insurance Code (215 ILCS 5/143a–2 (West 2010))
nor the Illinois Safety and Family Financial Responsibility Law (625 ILCS
5/7–203 (West 2010)) provides for a statute of limitations, that does not mean
that no statute of limitation applies. “In the absence of specific and clear
provisions limiting the period within which suits must be filed, the 10–year
statute of limitations for actions on written contracts is applicable to
actions by insureds against their insurers based on insurance policies.” Whitehead,
2012 IL 113365, ¶ 29, 365 Ill.Dec. 669, 979 N.E.2d 35. Moreover, plaintiff’s
argument has been expressly rejected by our supreme court in Whitehead.
Accordingly, we find no basis in the record in this case for concluding that
the imposition of a contractual limitations period is against public policy.
¶ 62 Furthermore,
plaintiff provides no reason that the one-year time limit should be considered
impermissibly short. Unlike other situations in which contractual time
limitations have been enforced even though they require initiation of dispute
resolution procedures triggered by the date of the accident, the time limit
provided by the insurance policy in the instant case does not begin until “the
date that the person claiming under this Part receives the last payment from an
underinsured motorist or person at-fault in this occurrence.” Thus, the time
does not begin to run until the insured, in fact, knows that the payment by the
other motorist is less than that provided by her own insurance policy. This
adds a layer of protection to the insured that is not present in other cases in
which time limitations have been upheld. See, e.g., Parish
v. Country Mutual Insurance Co., 351 Ill. App. 3d 693, 699, 286 Ill.Dec.
516, 814 N.E.2d 166 (2004) (affirming dismissal of complaint where the insured
did not become aware of the extent of her damages until after the two-year
period for beginning dispute resolution proceedings against the insurer had
expired); Vansickle v. Country Mutual Insurance Co., 272 Ill. App.
3d 841, 842–43, 209 Ill.Dec. 528, 651 N.E.2d 706 (1995) (affirming dismissal of
complaint where the other driver tendered payment more than two years after the
accident, after the two-year time limitation for beginning dispute resolution
proceedings under the insurance policy had expired); Hannigan v.
Country Mutual Insurance Co., 264 Ill. App. 3d 336, 343, 201 Ill.Dec. 465,
636 N.E.2d 897 (1994) (affirming dismissal of complaint where the insured did
not become aware that the other motorist was underinsured until after the
two-year contractual time limitation for beginning dispute resolution
proceedings had expired). In the absence of any argument as to why the
limitations period in this case was too short, we cannot find that it violated
public policy.
plaintiff provides no reason that the one-year time limit should be considered
impermissibly short. Unlike other situations in which contractual time
limitations have been enforced even though they require initiation of dispute
resolution procedures triggered by the date of the accident, the time limit
provided by the insurance policy in the instant case does not begin until “the
date that the person claiming under this Part receives the last payment from an
underinsured motorist or person at-fault in this occurrence.” Thus, the time
does not begin to run until the insured, in fact, knows that the payment by the
other motorist is less than that provided by her own insurance policy. This
adds a layer of protection to the insured that is not present in other cases in
which time limitations have been upheld. See, e.g., Parish
v. Country Mutual Insurance Co., 351 Ill. App. 3d 693, 699, 286 Ill.Dec.
516, 814 N.E.2d 166 (2004) (affirming dismissal of complaint where the insured
did not become aware of the extent of her damages until after the two-year
period for beginning dispute resolution proceedings against the insurer had
expired); Vansickle v. Country Mutual Insurance Co., 272 Ill. App.
3d 841, 842–43, 209 Ill.Dec. 528, 651 N.E.2d 706 (1995) (affirming dismissal of
complaint where the other driver tendered payment more than two years after the
accident, after the two-year time limitation for beginning dispute resolution
proceedings under the insurance policy had expired); Hannigan v.
Country Mutual Insurance Co., 264 Ill. App. 3d 336, 343, 201 Ill.Dec. 465,
636 N.E.2d 897 (1994) (affirming dismissal of complaint where the insured did
not become aware that the other motorist was underinsured until after the
two-year contractual time limitation for beginning dispute resolution
proceedings had expired). In the absence of any argument as to why the
limitations period in this case was too short, we cannot find that it violated
public policy.
*13 ¶ 63 Plaintiff also argues that the time
limitation is against public policy because it “is only mentioned once in the
entirety of the * * * policy pamphlet, is never discussed with the claimant at
any time, and * * * is not specific as to when the time restraints would be
imposed.”5 As noted, this represents a procedural
unconscionability argument, not a public policy argument. “Procedural
unconscionability consists of some impropriety during the process of forming
the contract depriving a party of meaningful choice.” (Internal quotation marks
omitted.) Rosen, 242 Ill. 2d at 60, 350 Ill.Dec. 847, 949 N.E.2d
639. “Factors to be considered in determining whether an agreement is
procedurally unconscionable include whether each party had the opportunity to
understand the terms of the contract, whether important terms were hidden in a
maze of fine print, and all of the circumstances surrounding the formation of
the contract.” (Internal quotation marks omitted.) Rosen, 242 Ill.
2d at 60, 350 Ill.Dec. 847, 949 N.E.2d 639.
limitation is against public policy because it “is only mentioned once in the
entirety of the * * * policy pamphlet, is never discussed with the claimant at
any time, and * * * is not specific as to when the time restraints would be
imposed.”5 As noted, this represents a procedural
unconscionability argument, not a public policy argument. “Procedural
unconscionability consists of some impropriety during the process of forming
the contract depriving a party of meaningful choice.” (Internal quotation marks
omitted.) Rosen, 242 Ill. 2d at 60, 350 Ill.Dec. 847, 949 N.E.2d
639. “Factors to be considered in determining whether an agreement is
procedurally unconscionable include whether each party had the opportunity to
understand the terms of the contract, whether important terms were hidden in a
maze of fine print, and all of the circumstances surrounding the formation of
the contract.” (Internal quotation marks omitted.) Rosen, 242 Ill.
2d at 60, 350 Ill.Dec. 847, 949 N.E.2d 639.
¶ 64 In the case at bar,
plaintiff provides no reason for finding the time limit procedurally
unconscionable. The provision is located in the part of the policy concerning
underinsured motorist coverage, not added later as an exclusion, policy change,
or endorsement, meaning that an insured would not need to search through the
policy to find it. The provision concerning actions against defendant is also
set off in a separate paragraph, not buried in a block of text, and is headed
with a boldfaced heading stating “Action Against Company.” This provision is
also a single paragraph in length, not inordinately lengthy. As our supreme
court has noted, this type of contract, which could be characterized as a
contract of adhesion, is “a fact of modern life. * * * It cannot reasonably be
said that all such contracts are so procedurally unconscionable as to be
unenforceable.” Kinkel v. Cingular Wireless LLC, 223 Ill. 2d 1, 26,
306 Ill.Dec. 157, 857 N.E.2d 250 (2006). Plaintiff also provides no authority
for the proposition that an insurer is under an obligation to discuss every
provision of the insurance contract with the insured. See Babiarz v.
Stearns, 2016 IL App (1st) 150988, ¶ 43, 404 Ill.Dec. 880, 57 N.E.3d 639
(“It is well settled that plaintiffs bear the burden of knowing the contents of
their insurance policies.”). In short, plaintiff has not demonstrated anything
about this particular policy provision that would render it unconscionable, and
as a result, we cannot find that it is.
plaintiff provides no reason for finding the time limit procedurally
unconscionable. The provision is located in the part of the policy concerning
underinsured motorist coverage, not added later as an exclusion, policy change,
or endorsement, meaning that an insured would not need to search through the
policy to find it. The provision concerning actions against defendant is also
set off in a separate paragraph, not buried in a block of text, and is headed
with a boldfaced heading stating “Action Against Company.” This provision is
also a single paragraph in length, not inordinately lengthy. As our supreme
court has noted, this type of contract, which could be characterized as a
contract of adhesion, is “a fact of modern life. * * * It cannot reasonably be
said that all such contracts are so procedurally unconscionable as to be
unenforceable.” Kinkel v. Cingular Wireless LLC, 223 Ill. 2d 1, 26,
306 Ill.Dec. 157, 857 N.E.2d 250 (2006). Plaintiff also provides no authority
for the proposition that an insurer is under an obligation to discuss every
provision of the insurance contract with the insured. See Babiarz v.
Stearns, 2016 IL App (1st) 150988, ¶ 43, 404 Ill.Dec. 880, 57 N.E.3d 639
(“It is well settled that plaintiffs bear the burden of knowing the contents of
their insurance policies.”). In short, plaintiff has not demonstrated anything
about this particular policy provision that would render it unconscionable, and
as a result, we cannot find that it is.
¶ 65
CONCLUSION
CONCLUSION
¶ 66 For the reasons set
forth above, the trial court properly granted summary judgment in defendant’s
favor. The language of the insurance policy was clear and unambiguous and
required plaintiff to file suit against defendant by December 21, 2013. Since she did not do
so, plaintiff’s suit was time-barred and summary judgment was properly entered.
forth above, the trial court properly granted summary judgment in defendant’s
favor. The language of the insurance policy was clear and unambiguous and
required plaintiff to file suit against defendant by December 21, 2013. Since she did not do
so, plaintiff’s suit was time-barred and summary judgment was properly entered.
¶ 67 Affirmed.
Presiding Justice Burke
and Justice Ellis concurred in the judgment and opinion.
and Justice Ellis concurred in the judgment and opinion.
Footnotes
1
Underinsured motorist
coverage is insurance coverage on an insured’s vehicle that provides coverage
when the tortfeasor’s insurance coverage is not sufficient to pay for the
injuries sustained by the insured or passengers in the insured’s vehicle.
coverage is insurance coverage on an insured’s vehicle that provides coverage
when the tortfeasor’s insurance coverage is not sufficient to pay for the
injuries sustained by the insured or passengers in the insured’s vehicle.
2
We note that the
salutation of the letter was directed to the attorney. However, the address
block simply states the name of the firm and its Chicago address. The attorney
testified that the associate worked out of their Chicago office, while the
attorney worked out of the firm’s south suburban office.
salutation of the letter was directed to the attorney. However, the address
block simply states the name of the firm and its Chicago address. The attorney
testified that the associate worked out of their Chicago office, while the
attorney worked out of the firm’s south suburban office.
3
The attorney who
testified he had not read the policy may have been of the belief that the
underinsurance issue had to be resolved through arbitration. At that point in
time, most insurance policies provided that disputes under underinsurance
coverage could only be resolved in that manner.
testified he had not read the policy may have been of the belief that the
underinsurance issue had to be resolved through arbitration. At that point in
time, most insurance policies provided that disputes under underinsurance
coverage could only be resolved in that manner.
4
Plaintiff makes this
argument without obtaining evidence from the Illinois Department of Insurance
as to whether they approved this policy.
argument without obtaining evidence from the Illinois Department of Insurance
as to whether they approved this policy.
5
We addressed plaintiff’s
arguments about the purported ambiguity of the language earlier in our
analysis. Supra ¶¶45–47.
arguments about the purported ambiguity of the language earlier in our
analysis. Supra ¶¶45–47.