United Automobile Insurance Company v. Wilson

No. 1-09-3061
SECOND DIVISION
JANUARY 18, 2011
UNITED AUTOMOBILE INSURANCE )
COMPANY, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County
)
v. ) No. 07 CH 14380
)
SIDNEY WILSON and WOODROW WILSON, ) Honorable
) Daniel A. Riley,
Defendants-Appellees. ) Judge Presiding.
JUSTICE CONNORS delivered the judgment of the court, with opinion.
Presiding Justice Cunningham and Justice Karnezis concur in the judgment and opinion.
OPINION
This appeal arises from plaintiff United Automobile Insurance Company's attempt to vacate an
arbitration award that was entered in favor of defendants Sidney Wilson and Woodrow Wilson. The
circuit court granted defendants' motion to dismiss plaintiff's complaint pursuant to section 2-619(a) of
the Code of Civil Procedure (735 ILCS 5/2-619(a) (West 2008)). We affirm.
BACKGROUND
Defendants were involved in a hit-and-run car accident on February 2, 2004, and they
subsequently filed a claim under the uninsured motorist provision of their auto insurance policy, which
had been issued by plaintiff. However, the vehicle was later stolen before plaintiff could inspect it for
purposes of evaluating the claim. Although the vehicle was later recovered, it was junked prior to
being inspected.
On January 27, 2005, plaintiff filed a declaratory judgment action in the circuit court of Cook
County, which asked the circuit court to find that defendants' claim was not covered under the policy
and that the policy was void due to defendants' alleged spoliation of evidence. However, the insurance
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policy contained an arbitration provision, as required by section 143a(1) of the Illinois Insurance Code
(215 ILCS 5/143a(1) (West 2002)). Plaintiff moved to stay arbitration pending resolution of the
declaratory judgment action. The circuit court denied plaintiff's motion to stay and ordered that the
parties proceed to arbitration on all issues, notably including the issue of coverage.
Plaintiff appealed the trial court's order declining to stay arbitration, and we reversed. See
United Automobile Insurance Co. v. Wilson, No. 1-05-0372 (Mar. 16, 2005) (unpublished order under
Supreme Court Rule 23). We found that the circuit court had erred by ordering the parties into
arbitration before deciding whether the policy covered the 2004 accident. We noted that this issue is
controlled by State Farm Fire & Casualty Co. v. Yapejian, 152 Ill. 2d 533 (1992), which held that
arbitration under section 143a(1) is limited to only “disputes concerning covered claims, once coverage
was established.” Id. at 541. Under Yapejian, whether or not coverage exists is an issue for the circuit
court to determine. Once the circuit court finds that a particular claim is covered, section 143a(1)
mandates that any disputes over that claim be arbitrated. We consequently reversed and remanded
“with instructions to stay arbitration pending resolution of the coverage issues by the trial court.”
United Automobile Insurance Co., slip op. at 4.
Plaintiff did not move for a stay of the arbitration during the appeal, and while the appeal was
pending the arbitration had commenced. The arbitrator heard evidence on all issues, including
coverage, but the arbitrator had not issued a ruling by the time we resolved the appeal. After receiving
our mandate, the circuit court stayed arbitration and proceeded to a bench trial on the coverage issue.
On February 1, 2007, the circuit court issued a written memorandum opinion and order. The
circuit court found that no spoliation of evidence had occurred and that the uninsured motorist
provision of the insurance policy covered the 2004 accident. Having found that coverage existed, the
circuit court compelled arbitration on the remaining disputes. Plaintiff appealed the circuit court's
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ruling, and we affirmed. See United Automobile Insurance Co. v. Wilson, No. 1-07-0424 (Sept. 4,
2007) (unpublished order under Supreme Court Rule 23).
However, plaintiff again did not obtain a stay of arbitration pending appeal, so arbitration
resumed after trial. On May 24, 2007, the arbitrator issued an award in favor of defendants in the
amount of $11,000 to Woodrow Wilson and $9,000 to Sidney Wilson. Six days later, on May 30,
2007, plaintiff filed the instant declaratory judgment action in the circuit court of Cook County seeking
to vacate the arbitration award. Defendants filed a motion to dismiss the complaint, which was granted
on October 13, 2009. The circuit court subsequently confirmed the arbitration award and entered
judgment in favor of defendants on October 29, 2009. Plaintiff timely appealed, and this case is now
before us for the third time.
ANALYSIS
Plaintiff's brief on appeal leaves a great deal to be desired in terms of clarity of argument and
legal support. Despite the brief's convoluted drafting and sparse legal citation, we perceive that
plaintiff's primary argument is that the arbitration award is void because arbitration commenced before
the circuit court determined the issue of coverage.
We review an order of dismissal under section 2-619(a) of the Code of Civil Procedure de novo,
accepting as true all well-pled facts contained in the complaint and in any uncontradicted affidavits
attached to the motion. See Coady v. Harpo, Inc., 308 Ill. App. 3d 153, 158-59 (1999). The question
on review is “ ' whether the existence of a genuine issue of material fact should have precluded the
dismissal or, absent such an issue of fact, whether dismissal is proper as a matter of law.' ” Doyle v.
Holy Cross Hospital, 186 Ill. 2d 104, 110 (1999) (quoting Kedzie & 103rd Currency Exchange, Inc. v.
Hodge, 156 Ill. 2d 112, 116-17 (1993)).
Judicial review of a binding arbitration award is more limited than review of a decision of the
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trial court (Rauh v. Rockford Products Corp., 143 Ill. 2d 377, 394 (1991)), and we will construe an
award so as to uphold it whenever possible (Garver v. Ferguson, 76 Ill. 2d 1, 10 (1979)). Under
section 143a of the Illinois Insurance Code, “[a]ny decision made by the arbitrators shall be binding for
the amount of damages not exceeding $50,000 for bodily injury to or death of any one person,
$100,000 for bodily injury to or death of 2 or more persons in any one motor vehicle accident, or the
corresponding policy limits for bodily injury or death, whichever is less.” 215 ILCS 5/143a (West
2008). A binding arbitration award under section 143a is subject to only limited judicial review under
section 12 of the Uniform Arbitration Act (710 ILCS 5/12 (West 2008)). See Reed v. Farmers
Insurance Group, 188 Ill. 2d 168, 172 (1999).
Because the total arbitration award in favor of both defendants was only $20,000, it is binding
and subject to only limited judicial review. Under the Uniform Arbitration Act, a binding award may
only be vacated where
“(1) The award was procured by corruption, fraud or other undue means;
(2) There was evident partiality by an arbitrator appointed as a neutral or
corruption in any one of the arbitrators or misconduct prejudicing the rights of any party;
(3) The arbitrators exceeded their powers;
(4) The arbitrators refused to postpone the hearing upon sufficient cause
being shown therefor or refused to hear evidence material to the controversy or
otherwise so conducted the hearing, contrary to the provisions of Section 5 [(710
ILCS 5/5 (West 2008))], as to prejudice substantially the rights of a party; or
(5) There was no arbitration agreement and the issue was not adversely
determined in proceedings under Section 2 [(710 ILCS 5/2 (West 2008))] and the
party did not participate in the arbitration hearing without raising the objection; but
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the fact that the relief was such that it could not or would not be granted by the
circuit court is not ground for vacating or refusing to confirm the award.” 710 ILCS
5/12 (West 2008)
Illinois case law has also established that an award may be vacated “if it results in the contravention of
a paramount consideration of public policy [citation], where a gross error of law or fact appears on the
face of the award [citation], or where the award fails to dispose of all matters properly submitted to the
arbitrators [citation].” Edward Electric Co. v. Automation, Inc., 229 Ill. App. 3d 89, 98 (1992).
In its brief on appeal plaintiff repeatedly asserts that the award was “void ab initio” because
arbitration proceedings commenced before the circuit court determined the coverage issue. It appears
that plaintiff intends to base its argument on section 12(a)(3) of the Uniform Arbitration Act (710 ILCS
5/12(a)(3) (West 2008)), on the ground that the arbitrator exceeded his authority by hearing evidence
before coverage was determined by the circuit court.
We presume that arbitrators act within their authority, and the scope of an arbitrator’s powers is
expressed by the arbitration agreement. See Rauh v. Rockford Products Corp., 143 Ill. 2d 377 (1991).
However, plaintiff does not appear to have included a copy of the insurance policy or relevant
arbitration clause in the record, nor has plaintiff directed our attention to where it might be found if it
exists. It is the appellant’s burden to provide a complete record for the appeal. See Altaf v. Hanover
Square Condominium Ass’n No. 1, 188 Ill. App. 3d 533, 539 (1989); see also Mielke v. Condell
Memorial Hospital, 124 Ill. App. 3d 42, 48-49 (1984) (noting that we are “not obligated to search the
record for evidence supporting reversal of the trial court”); Ill. S. Ct. R. 341(h)(7) (eff. July 1, 2008).
Absent a complete record, “[a]ny doubts which may arise from the incompleteness of the record will be
resolved against the appellant.” Foutch v. O’Bryant, 99 Ill. 2d 389, 392 (1984). Because the
arbitration agreement does not appear to be part of the record, we must presume that the arbitrator
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acted within the scope of his powers when issuing the award.
To the extent that plaintiff asserts that our reversal of the circuit court's arbitration order voided
all later arbitration proceedings and any award based on them, we reject this contention. Our mandate
to the circuit court in that order was “to stay arbitration pending resolution of the coverage issues by
the trial court.” (Emphasis added.) United Automobile Insurance Co. v. Wilson, No. 1-05-0372, slip
op. at 4 (Mar. 16, 2005) (unpublished order under Supreme Court Rule 23). We did not vacate any
portion of the arbitration proceedings that had occurred prior to that point, but rather ordered that the
proceedings be stayed until the coverage issue had been resolved. A stay does not vacate anything, but
it is instead only the “postponement or halting of a proceeding, judgment, or the like.” Black's Law
Dictionary 1425 (7th ed. 1999); cf. 7-Eleven, Inc. v. Dar, 363 Ill. App. 3d 41, 45 (2005) (“The
substantive effect of our order vacating the entire arbitration award was to restore the parties to their
original status in the case, i.e., as though the arbitration award had never been entered.”). Plaintiff
misreads the plain meaning of our order, and its reliance on that decision in support of vacating the
arbitration award is misplaced.
Moreover, the only case that plaintiff cites in support of this argument is Yapejian, which held
merely that the issue of coverage is not subject to arbitration. See Yapejian, 152 Ill. 2d at 541.
Yapejian did not hold that arbitration proceedings may not begin before the coverage issue is
determined. Regardless of whether the arbitrator may have heard evidence on the coverage issue, the
record is clear that he did not decide whether coverage existed. Yapejian consequently has no bearing
on the question of whether the award should be vacated.
There is no indication in the record before us that the arbitrator exceeded his authority, and
therefore any argument that the award should be vacated on that ground fails. Plaintiff does not raise
on appeal any additional basis to vacate the award, and we therefore affirm the orders of the circuit
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court dismissing the complaint and confirming the arbitration award.
We note that plaintiff asks in its brief that if we find that the award should be vacated, then we
should order that the arbitrator be replaced on remand due to alleged bias against plaintiff. Because
plaintiff has not raised this issue as a reason to vacate the award and we find that the award should be
confirmed, we do not reach this argument. See Ill. S. Ct. R. 341(h)(7) (eff. July 1, 2008) (“Points not
argued are waived and shall not be raised in the reply brief, in oral argument, or on petition for
rehearing.”).
CONCLUSION
For the foregoing reasons, the judgment of the circuit court dismissing the complaint and
confirming the arbitration award is affirmed.
Affirmed.
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