Norris v. National Union Fire Ins. Co.

• Decision Date: 17 October 2006
• Docket Number: No. 1-05-3132.,1-05-3132.
• Citation: 857 N.E.2d 859
• Parties: Thadeus NORRIS and Nicolette Norris, as special administrators of the Estate of Tommy J. Norris, Deceased, Plaintiffs-Appellees, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 859

857 N.E.2d 859

Thadeus NORRIS and Nicolette Norris, as special administrators of the Estate of Tommy J. Norris, Deceased, Plaintiffs-Appellees, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Defendant-Appellant.

No. 1-05-3132.

Appellate Court of Illinois, First District, Second Division.

October 17, 2006.

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Clausen Miller P.C., Chicago (Edward M. Kay, Paul Bozych, Melissa A. Murphy-Petros, and Paul V. Esposito, of counsel), for Appellant.

Topper and Weiss, Ltd., Chicago (Barry Weiss, of counsel), for Appellees.

Presiding Justice WOLFSON delivered the opinion of the court:

This is the second time this case has come before the appellate court. The defendant National Union Fire Insurance Co. of Pittsburgh, PA. (National Union) contends the uninsured motorist coverage limits rulings against it the first time were wrong and asks us to change them. National Union also contends the statutorily required arbitration based on the first decision is not binding on the parties and should not have been confirmed by the trial court. We adhere to the rulings in the first Norris decision and we affirm the trial court's judgment on the arbitration award.

FACTS

A clear understanding of the issues before us requires us to recount the history of this case.

Plaintiffs Thadeus and Nicolette Norris are special administrators of the estate of Tommy J. Norris, a truck driver employed by Jones Truck Lines, Inc. (Jones). Jones was insured under a commercial fleet general liability policy issued by National Union. On October 4, 1989, Tommy Norris was involved in a fatal accident with an uninsured motorist while working for Jones. The National Union policy had personal injury limits of $2 million per accident but did not include uninsured motorist coverage. Norris' estate received $200,000 in workers' compensation benefits as a result of his death.

Plaintiffs filed suit seeking a declaration that National Union's policy should be reformed to include uninsured motorist coverage equal to the policy's bodily injury liability limits of $2 million. On cross-motions for summary judgment, the trial court granted plaintiffs' motion to reform the policy, but ordered the policy reformed to the minimum statutory limits of $20,000 per person and $40,000 per occurrence. Because Norris' estate received $200,000 in workers' compensation benefits, the trial court held the workers' compensation set-off provision in the policy barred recovery under any possible uninsured motorist claim. Plaintiffs appealed.

In Norris v. National Union Fire Insurance Co. of Pittsburgh, Pa., 326 Ill. App.3d 314, 260 Ill.Dec. 62, 760 N.E.2d 141 (2001) (Norris I), this court considered: (1) whether the trial court correctly reformed the commercial trucking policy to require the insured to provide uninsured motorist benefits only in the amount of the statutory minimum requirements; (2) whether plaintiffs' receipt of workers' compensation benefits in excess of the statutory minimum for uninsured motorist coverage served as a set-off, barring plaintiffs' uninsured motorist claim; (3) whether the exclusive remedy afforded by the Workers' Compensation Act barred plaintiffs' claim for uninsured motorist coverage against the decedent's employer or its insurer; and (4) whether plaintiffs' claim for uninsured motorist coverage was barred because the National Union policy specifically excluded employees who are injured during the course of employment and covered by workers' compensation coverage.

The court reversed the trial court's order and remanded the cause for further proceedings, finding the National Union policy should have been reformed to include uninsured motorist coverage up to the personal injury limits of the policy, $2 million. Norris, 326 Ill.App.3d at 322, 260 Ill.Dec. 62, 760 N.E.2d 141. Since the reformation should have included uninsured motorist coverage up to $2 million, the court concluded consideration of whether workers' compensation benefits in excess of the statutory minimum uninsured motorist coverage act as a set-off against any recovery was "rendered unnecessary." Norris, 326 Ill.App.3d at 322, 260 Ill.Dec. 62, 760 N.E.2d 141.

The court rejected National Union's argument that the exclusive remedy provision of the Workers' Compensation Act (820 ILCS 305/5(a) (West 2000)) barred plaintiffs' claims, finding "[t]he category of third parties liable in tort to an injured employee is conspicuously absent from the language of the Workers' Compensation Act." Norris, 326 Ill.App.3d at 323, 260 Ill.Dec. 62, 760 N.E.2d 141. The court also held the employee exclusion contained in the National Union policy was "unenforceable as a matter of public policy in this situation." Norris, 326 Ill.App.3d at 323, 260 Ill.Dec. 62, 760 N.E.2d 141. National Union filed a petition for leave to appeal to the Illinois Supreme Court, which was denied. Norris v. National Union Fire Insurance Co. of Pittsburgh, PA., 198 Ill.2d 618, 264 Ill.Dec. 326, 770 N.E.2d 220 (2002).

On remand, the trial court ordered the matter to arbitration pursuant to the 1989 version of section 143a-1 of the Insurance Code. Ill.Rev.Stat.1989, ch. 73, par. 755a-1 ("any dispute with respect to uninsured motorist coverage shall be submitted for arbitration to the American Arbitration Association.") The defendant did not attempt to appeal the trial court's order. The arbitrator entered a $2 million award for plaintiffs, which was reduced to $1,575,500 based on the decedent's contributory negligence and the workers' compensation benefits received by decedent's estate. On June 3, 2005, plaintiffs filed a motion to confirm the arbitration award. National Union filed a rejection of the arbitration award and requested a trial, relying on Supreme Court Rule 95 (134 Ill.2d R. 95). National Union did not file a motion to vacate the arbitration award. On August 19, 2005, the trial court confirmed the award, noting:

"The law in effect at the time the policy was issued provided for mandatory and binding arbitration. If mandatory and binding arbitration means anything, it means that the losing party does not have a right to a trial de novo."

DECISION

National Union contends this court's decision in Norris I should be overturned because it is palpably erroneous and works a manifest injustice against both insurers and insureds. National Union contends the law of the case doctrine does not bar reconsideration of the issues raised and decided in Norris I.

Plaintiffs contend National Union forfeited its right to challenge Norris I as palpably erroneous because it failed to raise the issue on remand in the trial court. We fail to see how National Union could have raised such a challenge in the trial court. On remand, the trial court was bound to follow this court's directions. See Harris Trust & Savings Bank v. Otis Elevator Co., 297 Ill.App.3d 383, 387, 231 Ill.Dec. 401, 696 N.E.2d 697 (1998) ("When a judgment of the circuit court is reversed and the cause is remanded by this court with specific directions as to the action to be taken, it is the duty of the trial court to follow those directions.") Any argument to the contrary would have been futile. We find forfeiture does not apply here.

Under the law of the case doctrine, questions of law decided on a previous appeal are binding on the trial court on remand as well as on the appellate court on a subsequent appeal. Martin v. Federal Life Insurance Co., 268 Ill.App.3d 698, 701, 205 Ill.Dec. 826, 644 N.E.2d 42 (1994). However, the doctrine "merely expresses the practice of courts generally to refuse to reopen what has been decided; it is not a limit on their power." People v. Patterson, 154 Ill.2d 414, 468, 182 Ill.Dec. 592, 610 N.E.2d 16 (1992).

The law of the case doctrine's purpose is "to protect settled expectations of the parties, ensure uniformity of decisions, maintain consistency during the course of a single case, effectuate proper administration of justice, and bring litigation to an end." Petre v. Kucich, 356 Ill.App.3d 57, 63, 291 Ill.Dec. 867, 824 N.E.2d 1117 (2005). The law of the case doctrine is also intended to maintain the prestige of the courts. Emerson Electric Co. v. Aetna Casualty and Surety Co., 352 Ill.App.3d 399, 417, 287 Ill.Dec. 280, 815 N.E.2d 924 (2004). "[I]f an appellate court issues contrary opinions on the same issue in the same case, its prestige is undercut." Emerson Electric Co., 352 Ill.App.3d at 417, 287 Ill.Dec. 280, 815 N.E.2d 924. "When an appellate court reverses and remands the cause with a specific mandate, the only proper issue on a second appeal is whether the trial court's order is in accord with the mandate." Petre, 356 Ill.App.3d at 63, 291 Ill.Dec. 867, 824 N.E.2d 1117.

There are two recognized exceptions to the law of the case doctrine's application: (1) when a higher reviewing court, subsequent to the lower court's decision, makes a contrary ruling on the same issue; and (2) when a reviewing court finds its prior decision was palpably erroneous. Martin, 268 Ill.App.3d at 701, 205 Ill.Dec. 826, 644 N.E.2d 42; Stallman v. Youngquist, 152 Ill.App.3d 683, 105 Ill. Dec. 635, 504 N.E.2d 920 (1987).

I. Section 143a-2 of the Insurance Code

National Union contends the Norris I court erroneously held National Union's offer of uninsured motorist benefits to Jones was invalid under section 143a-2 of the Insurance Code.

The 1989 version of section 143a-2(1) of the Insurance Code provides:

"No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be renewed or delivered or issued for delivery in this State * * * unless uninsured motorist coverage as required in Section 143a of this Code is offered in an amount up to the insured's bodily injury limits." Ill.Rev.Stat., 1989, ch. 73, par 755a-2(1).

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