State Farm Fire and Cas. Co. v. Yapejian, 72486

• Decision Date: 22 October 1992
• Docket Number: No. 72486,72486
• Parties: , 178 Ill.Dec. 745 STATE FARM FIRE AND CASUALTY COMPANY, Appellant, v. Sahak YAPEJIAN et al., Appellees.
• Court: Illinois Supreme Court

Page 539

605 N.E.2d 539 152 Ill.2d 533, 178 Ill.Dec. 745 STATE FARM FIRE AND CASUALTY COMPANY, Appellant,
v.
Sahak YAPEJIAN et al., Appellees. No. 72486. Supreme Court of Illinois. Oct. 22, 1992.

Page 540

[152 Ill.2d 535] [178 Ill.Dec. 746] James J. Hoffnagle and Frank C. Stevens, Taylor, Miller, Sprowl, Hoffnagle & Merletti, Chicago, [152 Ill.2d 536] Richard M. Furgason, Dreyer, Foote, Streit, Furgason & Slocum, P.A., Aurora, for appellant.

Law Offices of R.L. Huszagh, Wheaton, for appellees.

Chief Justice MILLER delivered the opinion of the court:

The plaintiff, State Farm Fire and Casualty Company, brought the present action in the circuit court of Du Page County seeking a declaration of its obligations under an automobile insurance policy issued to its insureds, defendants Sahak and Anahid Yapejian. In its complaint, State Farm contended that a claim previously submitted to it by the Yapejians under their uninsured motorist coverage was not within the terms of that coverage. The circuit court granted the insureds' motion for dismissal of State Farm's complaint on the ground that section 143a(1) of the Illinois Insurance Code (Ill.Rev.Stat.1987, ch. 73, par. 755a(1)) requires arbitration of all disputes relating to uninsured motorist coverage. The appellate court affirmed. (217 Ill.App.3d 516, 161 Ill.Dec. 196, 578 N.E.2d 323.) We allowed State Farm's petition for leave to appeal (134 Ill.2d R. 315(a)), and we now reverse the judgments of the courts below.

The procedural facts of this case are not in dispute. The Yapejians submitted to State Farm a claim for personal injuries they allegedly sustained in a collision with a hit-and-run driver during the evening of March 17, 1989. According to the insureds, at the time of the accident they were traveling southbound on Illinois Route 53 in Du Page County when a northbound vehicle crossed the center line of the roadway and struck the left side of their car. The driver of the other vehicle then proceeded onward without stopping, and his identity remains unknown. Because the policy defined the term "uninsured [152 Ill.2d 537] motorist" to include hit-and-run drivers, the insureds submitted the claim under the uninsured motorist coverage of their policy.

Following an investigation, State Farm concluded that the insureds had not been involved in a collision on the date alleged and accordingly denied the claim. The insureds then requested arbitration of the matter. State Farm filed the present action in response, seeking a judicial declaration that the Yapejians' claim did not fall within the uninsured motorist coverage of their policy.

The insureds moved to dismiss State Farm's action, arguing that section 143a(1) of the Insurance Code requires that all disputes relating to uninsured motorist coverage be determined through arbitration. Following a hearing, the trial judge granted the defendants' motion and dismissed the action. The trial judge later denied State Farm's request for reconsideration.

State Farm appealed, and the appellate court affirmed. (217 Ill.App.3d 516, 161 Ill.Dec. 196, 578 N.E.2d 323.) The appellate court held that section 143a(1) unambiguously requires arbitration of all disputes

Page 541

[178 Ill.Dec. 747] relating to uninsured motorist coverage. The court thus declined to follow several other appellate court decisions that had reached the opposite conclusion. We granted State Farm's petition for leave to appeal (134 Ill.2d R. 315(a)).

Section 143a(1) of the Illinois Insurance Code requires that insurers make available to automobile insurance policyholders uninsured motorist coverage. At the time of the accident alleged here, section 143a(1) also provided, in pertinent part:

"No such policy shall be renewed or delivered or issued for delivery in this State after July 1, 1978 unless it is provided therein that any dispute with respect to such coverage shall be submitted for arbitration to the American Arbitration Association or for determination in the following manner: Upon the insured requesting arbitration,[152 Ill.2d 538] each party to the dispute shall select an arbitrator and the two arbitrators so named shall select a third arbitrator. If such arbitrators are not selected within 45 days from such request, either party may request that such arbitration be submitted to the American Arbitration Association." (Ill.Rev.Stat.1987, ch. 73, par. 755a(1).)

The arbitration requirement found in section 143a(1) was added to the statute by Public Act 80-1135 and has been in force since July 1, 1978. 1977 Ill. Laws 3386; Ill.Rev.Stat.1979, ch. 73, par. 755a(1).

State Farm argues that the statutory language requires arbitration with respect to questions of damages and liability only. Citing the legislative history of the amendment, State Farm contends that the...