Posted on January 30, 2012 by Mark T. McAndrew

"Cooperation" and Failure to Appear at Arbitration

United Automobile Insurance Company (United)www.unitedautoinsurance.com insured Rodney Buckley whose car collided with Hal Haywood’s car. Haywood filed a personal injury suit. After Buckley did not appear at an arbitration hearing, an award was entered in Haywood’s favor. The decision stated that Buckley “did not participate in good faith.” United filed a notice to reject the award arguing that Buckley’s failure to appear was inadvertent. Ultimately, Buckley was barred from rejecting the arbitration award against him for failure to appear at the arbitration hearing.

To collect his judgment, Haywood brought garnishment proceedings against United. United filed a declaratory judgment arguing that Buckley was not covered under the policy because he breached the assistance and cooperation policy provision by failing to appear at the arbitration hearing.  Haywood then counter-argued that Buckley’s failure to appear was inadvertent and that Buckley cooperated. The court found that Buckley had not breached his contractual duty to cooperate. United appealed.The appellate court affirmed.  United Automobile Insurance Company v. Buckley, et al. 2011 IL App (1st) 103666.  To show breach of a cooperation clause, the general rule is that the insurer must show that it exercised a reasonable degree of diligence in seeking the insured’s participation. The insurer will not be relieved unless it proves its defense was substantially prejudiced by the insured actions or conduct. 

 

The Appellate Court looked at the record which showed that Buckley participated in the court proceedings, assisted in the discovery process, and regularly commnunicated with counsel. And thus the trial court's decision that Mr. Buckley did not wilfully refuse to cooperate was not against the weight of the evidence.  More so, United was not substantially prejudiced because Buckley’s absence did not prevent United from challenging damages evidence or from cross-examining Haywood.  

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Posted on October 3, 2011 by Mark T. McAndrew

The Power of Supreme Court Rule 237

 

The Illinois Appellate Court for the First District, Third Division, has affirmed a ruling by Judge Laurence J. Dunford of the Cook County Circuit Court. In Interstate Bankers Casualty Company a/s/o Michael Porter v. Waites,No. 1-10-2963, July 27, 2011,  the plaintiff, Interstate Bankers Casualty Company , brought a property damage action against defendant, Waites.  Interstate filed a Rule 237 motion, which required Waites’ appearance at the arbitration hearing.  The day before the hearing Waites filed an emergency motion to admit negligence and to be excused from appearing at arbitration.  The plaintiff objected.

The circuit court denied the motion.  The judge reasoned it was “standard practice” because “when a plaintiff…[objects] to the admission of negligence..., I deny the motion...”  Rule 237 creates a duty upon the party to appear.   The next day, Waites never appeared at the arbitration hearing.  The arbitrator awarded Interstate $3,912.  Waites rejected the award.  However, the circuit court granted Interstate’s motion to debar Waites’ rejection of the award.  Waites appealed. 

The appellate court stated that, despite the circuit court’s seemingly arbitrary rationale, its conclusion was correct.   Illinois Supreme Court Rule 90(g) provides that a party’s presence at an arbitration hearing may be excused by “court order for good cause shown not less than seven days prior to hearing.”  In this case, the defense counsel knew about the hearing two months in advance, filed the motion the day before, and admitted not having communicated with the client.  Furthermore, Waites provided no extenuating reason for excusal or for the delay, and violated Rule 237 by not attending the hearing.  Therefore, Waites did not comply with Rule 90(g).

The court also affirmed the circuit court’s order that debarred Waites from rejecting the arbitration award.  Rule 90(g) provides that a party whose absence is not waived by stipulation or excused by the trial court may be debarred from rejecting the award.  Even though Waites’ attorney was present at the arbitration hearing, Waites’ failure to show violated Rule 237.  Further, she did not communicate with counsel and did not provide any extenuating reasons for her unexcused absence.  The appellate court said that the sanction was appropriate under the circumstances. 
 

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