Willis v. United Equitable Insurance Company
2017 IL App (1st) 162308
| Ill. App. Ct. | 2017Background
- On August 5, 2008 Valentina Willis was injured in a collision with a stolen Hertz rental car; her vehicle was insured by United Equitable Insurance Company (UEIC). Kathy Dobson Willis was a passenger.
- UEIC’s policy contained an uninsured/underinsured motorist arbitration clause and a contractual limitations provision requiring that “suit, arbitration or appraisal be commenced against the Company more than two years after the date of accident.”
- Valentina’s counsel sent letters to UEIC on August 26, 2009 and September 11, 2009 stating: “We hereby make demand for arbitration if this claim is not resolved within two years/one year after the accident,” i.e., conditional demands tied to settlement deadlines.
- Counsel renewed the request in February 2011 and filed with the AAA on September 18, 2012 — more than two years after the accident; UEIC denied coverage September 25, 2012.
- Plaintiffs sued for breach of contract and bad faith and sought a declaratory judgment compelling arbitration; UEIC counterclaimed that arbitration was time-barred because no arbitration was commenced or arbitrator named within two years.
- The trial court granted summary judgment compelling arbitration; the appellate court reversed, holding the 2009 letters did not constitute an unequivocal arbitration demand within the policy’s two-year limitation period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitration was "commenced" within the 2-year contractual limitations period by counsel’s 2009 letters | Willis: the 2009 letters (and later AAA filing) show intent to arbitrate; letters satisfied policy's request/demand requirement | UEIC: the letters were conditional/insufficient and no unequivocal demand was made within two years | Held: No. The 2009 letters were contingent and not an unequivocal demand within two years, so arbitration was not commenced under the policy |
| Whether a conditional request can be "unequivocal" for purposes of commencing arbitration | Willis: a request tied to settlement timeframes still notifies insurer and can be unequivocal | UEIC: conditional phrasing fails to satisfy clear demand requirement | Held: Court held these particular conditional demands were not unequivocal; (Justice Mikva concurred in result but criticized categorical equation of "conditional" with "equivocal") |
| Whether policy required naming/selecting an arbitrator within two years to commence arbitration | Plaintiffs: selection not mandatory to commence arbitration under policy | UEIC: policy requires selection and naming within two-year period | Held: Court did not decide this issue as unnecessary given its ruling on the demand question |
Key Cases Cited
- Buchalo v. Country Mut. Ins. Co., 83 Ill. App. 3d 1040 (1980) (an early decision holding an attorney’s equivocal letter did not constitute a timely written demand for arbitration)
- Arangold Corp. v. Zehnder, 204 Ill. 2d 142 (2003) (standard for summary judgment review)
- Hobbs v. Hartford Ins. Co. of the Midwest, 214 Ill. 2d 11 (2005) (insurance policy construction principles; unambiguous policy language controls)
- Rein v. State Farm Mut. Auto. Ins. Co., 407 Ill. App. 3d 969 (2011) (appellate review of policy interpretation and summary judgment is de novo)
- St. John v. Stephenson, 90 Ill. 82 (1878) (discusses that a promise may be conditional yet still be unequivocal)