Goble v. Central Sec. Mut. Ins. Co.

• Citation: 125 Ill.App.2d 298,260 N.E.2d 860
• Decision Date: 13 July 1970
• Docket Number: Gen. No. 69--218
• Parties: , 56 A.L.R.3d 809 Nelda J. GOBLE, Plaintiff-Appellee, v. CENTRAL SECURITY MUTUAL INSURANCE COMPANY, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 860

260 N.E.2d 860

125 Ill.App.2d 298, 56 A.L.R.3d 809

Nelda J. GOBLE, Plaintiff-Appellee, v. CENTRAL SECURITY MUTUAL INSURANCE COMPANY, Defendant-Appellant.

Gen. No. 69--218.

Appellate Court of Illinois, Second District.

July 13, 1970.

Milton O. Gordon, Rolling, Meadows, for defendant-appellant.

Popejoy, Nelson, Lucas & Speer, Wheaton, for plaintiff-appellee.

DAVIS, Presiding Justice.

This is an appeal by the defendant from a judgment confirming an arbitrator's award to the plaintiff in the sum of $7,500, under the provisions of the uninsured motorist clause in her insurance policy with the defendant. The trial court also awarded the plaintiff a judgment in the sum of $500 as attorneys' fees, pursuant to the provisions of Section 155(b) of the Illinois Insurance Code (Ill.Rev.Stat.1969, ch. 73, par. 767(b)).

The defendant contends that the trial court erred in entering the judgment because the arbitrator's award was made more than thirty days after submission of briefs and proof, contrary to the policy provisions that the arbitration proceedings shall be held under the Accident Claim Tribunal Rules of the American Association. The defendant further urges that the trial court erred in awarding attorneys' fees in that the refusal of the defendant to pay the plaintiff was not vexatious and without reasonable cause.

In 1967, the plaintiff was involved in an automobile accident with an uninsured motorist. The plaintiff was insured by the defendant, and the policy of insurance contained an uninsured motorist coverage clause which provided for arbitration of any disputes thereunder in accordance with the rules of the American Arbitration Association, and further provided that the insured and the company would be bound by any award of the arbitrator. Section 32 of the Accident Claims Tribunal Rules of the American Arbitration Association provided:

'D. Arbitrator shall render his Award promptly and, unless otherwise agreed by the parties, or specified by law, not later than thirty days from the date of the close of the hearing, or if oral hearings have been waived, from the date of transmitting of the final statements and proofs to the Arbitrator.'

The proofs before the arbitrator were closed on February 3, 1969. The award was entered by the arbitrator on March 10, 1969, which was more than thirty days after the closing of proofs.

Section 8(b) of the Uniform Arbitration Act (Ill.Rev.Stat.1969, ch. 10, par. 108(b)) provides:

'An award shall be made within the time fixed therefor by the agreement or, if not so fixed, within such time as the court orders on application of a party. The parties may extend the time in writing either before or after the expiration thereof. A party waives the objection that an award was not made within the time required unless he notifies the arbitrators of his objection prior to the delivery of the award to him.'

It is conceded by the defendant that it made no objection prior to the delivery of the award to it. The issue before this court thus is whether the language of the statute, relating to waiver, is binding upon the defendant in view of the provisions of the insurance contract.

The defendant contends that the language of the insured's contract clearly provides that arbitration is to be in accordance with the rules of the American Arbitration Association, and that it is the duty of this court to enforce the contract as written and not to make a new contract for the parties. We have no quarrel with the contention of the defendant in regard to the general rules governing the construction of contracts and the interpretation of insurance contracts in particular. However, the defendant's contention, as framed, begs the question and does not meet the issue of the effect and relationship of the statutes with reference to the insurance agreement.

It is well settled in this State that the law existing at the time and place of the making of a contract is deemed a part of that contract, to the same extent as though expressly referred to or incorporated in the contract. Schiro v. W. E. Gould & Co., 18 Ill.2d 538, 544, 165 N.E.2d 286 (1960). In Schiro, at page 544, 165 N.E.2d 286, the court answered the challenge raised by the defendant in this case, and stated that the rationale for this basic rule is that the parties to the contract would have expressed that which the law expressly provides had they not supposed that it was unnecessary to do so. Thus, the court in construing the existing law as a part of the express contract, is not reading into it provisions which are different from those expressed and intended by the parties; it is merely construing the contract in accordance with their intent. The law of the State that is referred to is the law as expressed in the constitution, statutes, codes, ordinances and court decisions. Schiro v. W. E. Gould & Co., supra 545, 165 N.E.2d 286; Illinois Bankers Life Ass'n v. Collins, 341 Ill. 548, 551, 552, 173 N.E. 465 (1930).

The application of this rule is more apparent in this than in most cases. Prior to the adoption of the Uniform Arbitration Act in 1961, Illinois followed the common law rule that parties could not by agreement bind themselves to arbitrate future disputes or controversies; and that such an agreementwas contrary to the public policy of the State. Cocalis v. Nazlides, 308 Ill. 152, 156, 157, 139 N.E. 95 (1923); Ramonas v. Kerelis, 102 Ill.App.2d 262, 269, 243 N.E.2d 711 (1968); School Dist. No. 46 Kane, Cook, and Du Page Counties v. Del Bianco, 68 Ill.App.2d 145, 153, 215 N.E.2d 25 (1966). The statute gave viability to the agreement to arbitrate future as well as existing disputes.

Our courts uniformly have followed the principle set forth in Schiro in its application to the Uniform Arbitration Act, and have held that insofar as the interpretation or construction of arbitration agreements are concerned, they are subject to the same rules which apply to all other contracts, and the statutory law is deemed a part of the contract, the same as though expressly incorporated therein. Ramonas v. Kerelis, supra, 102 Ill.App.2d at 270, 243 N.E.2d 711; Flood v. Country Mut. Ins. Co., 89 Ill.App.2d 358, 361, 232 N.E.2d 32 (1968), rev'd other grounds, 41 Ill.2d 91, 242 N.E.2d 149 (1968); School Dist. No. 46. 46 Kane, Cook, and Du Page Counties v. Del Bianco, supra, 68 Ill.App.2d at 157, 215 N.E.2d 25.

Section 8(b) of the Uniform...