Am. Access Cas. Co. v. Tutson

• Decision Date: 22 April 2011
• Docket Number: No. 1–09–2566.,1–09–2566.
• Citation: 350 Ill.Dec. 240,409 Ill.App.3d 233,948 N.E.2d 309
• Parties: AMERICAN ACCESS CASUALTY COMPANY, Plaintiff–Appellee,v.Felicia TUTSON, Defendant–Appellant.
• Court: United States Appellate Court of Illinois

409 Ill.App.3d 233

948 N.E.2d 309

350 Ill.Dec. 240

AMERICAN ACCESS CASUALTY COMPANY, Plaintiff–Appellee,

v.Felicia TUTSON, Defendant–Appellant.

No. 1–09–2566.

Appellate Court of Illinois, First District, Sixth Division.

April 22, 2011.

James P. Crawley, Marc J. Shuman & Associates, Ltd., Chicago, for Appellant.Parillo, Weiss & O'Halloran, Chicago (Keely Hillison, of counsel), for Appellee.

[350 Ill.Dec. 241 , 409 Ill.App.3d 234] OPINION

Justice CAHILL delivered the judgement of the court, with opinion.

The core issue in this case is whether section 143.1 of the Illinois Insurance Code (Code) (215 ILCS 5/143.1 (West 2006)) tolls a contractual limitation provision when the insured, Felicia Tutson, supplied the insurer, American Access Casualty Company, with information sufficient to constitute a proof of loss and American Access did not deny her claim within the two-year limitation period. We find that it does and that Tutson's demand for arbitration was timely filed. We reverse the trial court's order granting American Access's cross-motion for summary judgment and remand with directions.

On January 28, 2006, Tutson was a passenger in a car driven by Ronald Gates, who was insured under American Access's policy. They were involved in a hit-and-run traffic accident. Tutson was injured in the accident. Gates provided her with his insurance information.

Tutson filed a claim with American Access on February 2, 2006, and received a claim number. She forwarded the claim number to her attorney, who on April 13, 2006, sent a lien letter to American Access, notifying it of the claim. On April 21, 2006, American Access sent a letter to Tutson's attorney, acknowledging receipt of the lien letter and including an “Accident Report Form” that sought basic information about Tutson's claim. American Access did not identify the “Accident Report

[350 Ill.Dec. 242 , 948 N.E.2d 311]

Form” as a proof of loss form. Tutson did not complete the “Accident Report Form” and return it to American Access.

About a year later, on March 19, 2007, American Access notified Tutson's attorney that it was in possession of the police report from the traffic accident. On May 14, 2007, Tutson's attorney provided American Access with her medical bills and records and made a written demand for payment of the policy's $20,000 limit. On May 23, 2007, American Access acknowledged receipt of the demand letter and asked Tutson to submit to an examination under oath required by the policy. American Access directed Tutson to contact the law firm of Parillo, Weiss & O'Halloran. On August 13, 2007, Tutson gave a sworn statement to an attorney from that firm.

On August 23, 2007, American Access sent a letter to Tutson's attorney, asking for the ambulance invoice and the name and unit numbers of the police officers and paramedics involved with Tutson's claim at the time of the accident. The letter said “[u]pon receipt of the requested information we will then be in a position to evaluate your client's personal injury claim.” The letter also said “[a]t this time we are unable to accept or reject your demand” for payment of the policy's limit.

On November 16, 2007, Tutson's attorney gave American Access an itemized ambulance bill, a paramedics report and an “Incident Detail” from the Chicago fire department. The police report in American Access's possession identified the police officers involved and their beat and star numbers. American Access did not ask for more information or for the “Accident Report Form” during the remainder of the two-year limitation period. American Access also did not deny Tutson's claim during those two years.

On June 9, 2008, Tutson's attorney made a demand for arbitration under the policy. The demand was made after the expiration of the policy's two-year limitation period, which provides:

“Legal Action Against the Company Under This Part B—‘Uninsured Motorists' Coverage. No suit, action or arbitration proceedings for recovery of any claim may be brought against this Company until the insured has fully complied with all the terms of this policy. Further, any suit, action or arbitration will be barred unless commenced within two (2) years after the date of the accident.”

The policy also provides:

“Arbitration. If any person making claim hereunder and the Company do not agree that both the vehicle(s) and the driver(s) of the vehicle(s) with which any person making claim has had an accident, or do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle because of bodily injury to an insured or damage to an automobile described in the policy or do not agree to the amount payable hereunder, then these matters shall be submitted to arbitration.”

American Access filed a complaint for declaratory judgment on August 12, 2008, arguing it was not obligated to arbitrate or settle Tutson's claim because she did not demand arbitration within two years of her accident as required by the policy. American Access sought a ruling that Tutson's claim was excluded under the terms of the policy and that it was not obligated to arbitrate or settle the claim. American Access did not raise Tutson's failure to return the “Accident Report Form” as a ground for the declaratory judgment.

Tutson filed a motion for summary judgment, arguing that she could not demand arbitration under the policy within the

[350 Ill.Dec. 243 , 948 N.E.2d 312]

two-year limitation period because none of the three conditions precedent for arbitration outlined in the “Arbitration” section of the policy occurred. Tutson claimed that American Access did not express that it disagreed that she was in an accident, legally entitled to recover damages or that she was entitled to an amount payable. In the alternative, she maintained that section 143.1 of the Code (215 ILCS 5/143.1 (West 2006)) tolled the policy's two-year limitation period.

American Access filed a cross-motion for summary judgment, arguing that the conditions precedent for arbitration were satisfied and did not prevent Tutson from demanding arbitration within two years of the accident. American Access also argued that the two-year limitation period was not tolled by section 143.1 of the Code because Tutson did not file a proof of loss, the “Accident Report Form,” as required by the policy.

The trial court denied Tutson's motion for summary judgment and granted American Access's cross-motion. Tutson appeals, raising the same two arguments she raised in her motion for summary judgment.

Summary judgment is appropriate if the pleadings, depositions and admissions on file show there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. 735 ILCS 5/2–1005(c) (West 2006). Summary judgment is a drastic measure and should be allowed only when the right of the moving party is clear and free from doubt. Mydlach v. DaimlerChrysler Corp., 226 Ill.2d 307, 311, 314 Ill.Dec. 760, 875 N.E.2d 1047 (2007). We review de novo a trial court order granting summary judgment. Mydlach, 226 Ill.2d at 311, 314 Ill.Dec. 760, 875 N.E.2d 1047.

Although Illinois law recognizes limitation periods as valid contractual provisions in an insurance contract (see, e.g., Affiliated FM Insurance Co. v. Board of Education, 23 F.3d 1261, 1264 (7th Cir.1994) (and cases cited therein)), section 143.1 of the Code is an important statutory restriction on such limitation provisions ( Hines v. Allstate Insurance Co., 298 Ill.App.3d 585, 588, 232 Ill.Dec. 690, 698 N.E.2d 1120 (1998)). Section 143.1 is designed to protect the consumer when an insurance policy contains a time limitation provision. Trinity Bible Baptist Church v. Federal Kemper Insurance Co., 219 Ill.App.3d 156, 160–61, 161 Ill.Dec. 729, 578 N.E.2d 1375 (1991). The intent of section 143.1 is to prevent an insurance company from sitting on a claim, allowing the limitation period to run and depriving an insured of the opportunity to litigate her claim in court. Trinity Bible Baptist Church, 219 Ill.App.3d at 160–61, 161 Ill.Dec. 729, 578 N.E.2d 1375.

Here, the policy's limitation provision requires that arbitration be “commenced within two (2) years after the date of the accident.” Section 143.1 provides that “the running of such [limitation] period is tolled from the date proof of loss is filed, in whatever form is required by the policy, until the date the claim is denied in whole or in part.” 215 ILCS 5/143.1 (West 2006).

The policy's proof of loss requirement provides:

“Notice. In the event of an accident or loss, written notice containing particulars sufficient to identify the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and address of the insured and of available witnesses, shall be given by or on behalf of the insured directly to the Company as soon as practicable.”

[948 N.E.2d 313 , 350 Ill.Dec. 244]

Tutson argues that her demand for arbitration was not untimely because the policy's two-year limitation period was tolled by section 143.1 of the Code either on: (1) May 14, 2007, the date she sent American Access her medical bills and records; (2) August 13, 2007, the date she gave her sworn statement to an attorney chosen by American Access; or (3) November 16, 2007, the date her attorney provided American Access with an itemized ambulance bill, a paramedics report and an “Incident Detail” from the Chicago fire department. Tutson claims that this information was sufficient for American Access to identify the “particulars” of her claim as required by the “ Notice” provision of the policy.

American Access responds that the policy's two-year limitation period was not tolled by section 143.1 of the Code because Tutson did not file a proof of loss, the “Accident Report Form,” as required by the policy. Tutson first replies that American Access has waived this argument by failing to raise it in its...