Foran Glennon founding shareholder Thomas Orlando achieved an appellate win for his auto insurance client when the Appellate Court of Illinois, First District upheld the Circuit Court of Cook County’s ruling to dismiss the plaintiff’s complaint that the insurance company mishandled her policy claim.
In March 2015, the plaintiff was involved in a car accident and allegedly suffered significant personal injury. She filed a claim against the responsible driver’s policy, then entered into settlement with the driver’s insurance company in January 2017 while also filing an underinsured motorist claim with her insurance company.
In May 2019, the plaintiff demanded arbitration on her underinsured claim, however her insurance company denied the claim because it determined that she had failed to demand arbitration within the time limitation provided in her policy.
Filing a complaint, the plaintiff sought an order from the circuit court declaring that the insurance company must proceed to arbitration on her underinsured motorist claim, and she also sought attorney fees pursuant to section 155 of the Illinois Insurance Code based on the insurance company’s “unreasonable and vexatious conduct.”
The insurance company filed a motion to dismiss this complaint on the basis that she failed to demand arbitration within two years of her settlement with the responsible driver’s insurance company. In reponse, the plaintiff maintained that the insurance company:
- Erred in choosing to treat the initial issuance of settlement checks from the other driver’s insurance company as the triggering date for the running of the limitations period because those checks were never cashed and were reissued in 2018
- Waived the limitations provision by leading her to believe that her period to demand arbitration had not lapsed
The insurance company’s motion to dismiss was granted by the Circuit Court. The plaintiff filed a motion for reconsideration and contended that the court failed to adequately consider a letter from the insurance company to her counsel which showed that the company was continuing to handle the claim and did not reference intention to consider the claim closed for failure to demand arbitration. She also argued the court erred in finding that the tolling provision in section 143.1 of the Insurance Code was applicable only to lawsuits.
The court denied the plaintiff’s motion for reconsideration, noting that the letter:
- Had been previously mentioned in both the complaint and her response to the motion to dismiss
- Was neither an express nor implied waiver of the limitations provision because it did not suggest that the insurance company considered her claim as “pending”
The First District Appellate Court held that the two-year limitation period for demanding arbitration is unambiguous because it clearly provides that any one of three events—exhaustion of other insurance coverage “by payment or judgment or settlement”—triggers the limitations period for demanding arbitration. Here, settlement of the claim with the other insurance company in January 2017 triggered the two-year limitation period even though the settlement checks were later reissued in 2018.
The Court declined to resolve the question of whether the tolling principles of section 143.1 of the Illinois Insurance Code apply to arbitration demands in addition to suits:
- But found that even if tolled, plaintiff’s arbitration demand was still untimely
- And concluded that the lower court properly rejected the plaintiff’s waiver claim because there was no evidence of an intention to waive the limitation period
Finally, the Court affirmed the dismissal of the claim for attorney’s fees under section 155 of the Illinois Insurance Code because an insurer cannot be liable for section 155 relief where no insurance benefits are owed.
Focusing his practice in insurance and appellate law in both insurance and non-insurance disputes, Tom has experience representing both appellants and appellees in several state and federal courts nationwide. He is well-seasoned in a range of insurance coverage disputes, including property and liability coverage and litigation matters involving commercial and personal insurance.