Country Preferred Insurance Company v. Whitehead
979 N.E.2d 35
Ill.2012Background
- Whitehead, Wisconsin accident with an uninsured motorist in July 2007; Illinois insurer Country Preferred provided uninsured-motorist coverage under an Illinois policy with a two-year limitation to file arbitration after the accident.
- Policy provision: no suit or arbitration may be brought until full compliance and claims must be commenced within two years from the date of the accident.
- Whitehead first advised Country Preferred of a claim on October 6, 2009, with ongoing communications through 2009–2010.
- Circuit court denied Whitehead’s motion to compel arbitration; appellate court reversed, saying the two-year limit violated Illinois public policy.
- Illinois Supreme Court granted Country Preferred’s appeal and held the two-year contract provision did not violate public policy under the circumstances, affirming the circuit court and reversing the appellate court.
- Court remanded for further action on remaining counts of Whitehead’s counterclaim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a two-year arbitration limitation violates public policy given Wisconsin’s longer limit. | Whitehead (plaintiff) argues the two-year limit shortens the Wisconsin three-year period. | Country Preferred (defendant) argues the two-year limit aligns with Illinois public policy and is reasonable. | No; two-year limit does not violate public policy under the facts. |
| Whether Illinois public policy should incorporate foreign-law limitations in this context. | Whitehead asserts Wisconsin law should govern, rendering two-year limit invalid. | Country Preferred contends Illinois policy controls the contract and time limits. | Not accepted; court reasons partially via Illinois policy framework. |
| Whether Severs governs the result in this case. | Whitehead relies on Severs to bar the two-year limit for a minor. | Court distinguishes Severs due to competency and jurisdictional differences. | Severs not controlling here; two-year limit reasonable given facts. |
| Whether the two-year limit advances the uninsured-motorist statute’s purpose. | Whitehead asserts risk of under-protection when accident occurs out of state. | Two-year period allows timely ascertainment of claims and aligns with Illinois law. | Yes; limit consistent with statutory purpose and public policy. |
Key Cases Cited
- Severs v. Country Mutual Insurance Co., 89 Ill.2d 515 (1982) (two-year limit unconstitutional for a minor; protects uninsured-motorist rights)
- Phoenix Insurance Co. v. Rosen, 242 Ill.2d 48 (2011) (public policy review; contract terms limited only if contrary to public policy)
- Rein v. State Farm Mutual Automobile Insurance Co., 407 Ill.App.3d 969 (2011) (no authority suggests two-year policy limit contravenes public policy)
- Illinois Farmers Insurance Co. v. Cisco, 178 Ill.2d 386 (1997) (uninsured-motorist coverage cannot circumvent statute's intent)
- State Farm Mutual Automobile Insurance Co. v. Illinois Farmers Insurance Co., 226 Ill.2d 395 (2007) (policy terms cannot defeat statutory purpose)
- Dial Corp. v. Marine Office of America, 318 Ill.App.3d 1056 (2001) (10-year contract statute implied where no other provisions)
- Travelers Casualty & Surety Co. v. Bowman, 229 Ill.2d 461 (2008) (shortening limitation periods may be valid if reasonable)