Rein v. State Farm Mutual Automobile Insurance
407 Ill. App. 3d 969
| Ill. App. Ct. | 2011Background
- Rein injured in a hit-and-run on April 5, 2007; State Farm insured uninsured motorist coverage including hit-and-run scenarios.
- Policy provision: any arbitration or suit for uninsured motorist coverage must be commenced within two years after the accident.
- Counsel sent a letter March 30, 2009 (fax) and April 2, 2009 (certified mail) stating intention to pursue an uninsured/underinsured motorist claim, but did not mention arbitration.
- Rein filed a July 9, 2009 declaratory judgment to compel arbitration.
- State Farm moved for summary judgment December 1, 2009, asserting the two-year bar and that Rein’s letter did not commence arbitration.
- Circuit court granted summary judgment for State Farm; Rein appeals, and the appellate court affirms, rejecting Hale and following Buchalo and Shelton.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hale controls over Buchalo and Shelton | Rein argues Hale controls and supports timely arbitration | State Farm argues Buchalo/Shelton control and Hale is disapproved | Hale rejected; Buchalo and Shelton apply |
| Whether Rein's letter commenced arbitration within two years | Letter implicitly commenced arbitration | Letter did not expressly request arbitration or select an arbitrator | Letter did not commence arbitration under policy terms |
| Whether enforcing the two-year limit contravenes public policy | Application of two-year cap to UM claims is against public policy | Policy provision not contrary to public policy; Hale rejected argument | Policy provision not contrary to public policy |
Key Cases Cited
- Buchalo v. Country Mutual Insurance Co., 83 Ill. App. 3d 1040 (1980) (unequivocal demand and naming arbitrator required to commence arbitration)
- Shelton v. Country Mutual Insurance Co., 161 Ill. App. 3d 652 (1987) (two-year limit binding; explicit action needed to commence arbitration)
- Hale v. Country Mutual Insurance Co., 334 Ill. App. 3d 751 (2002) (notice of claim not sufficient; must have written demand for arbitration and select arbitrator)
- Pasalka v. American Service Insurance Co., 363 Ill. App. 3d 385 (2006) (public policy supports uninsured motorist coverage; not undermining limitations clause in this context)