Burgo v. Illinois Farmers Insurance , 8 Ill. App. 3d 259 ( 1972 )

Mr. JUSTICE BURMAN

dissenting:

I would affirm. The sole issue is whether the condition precedent contained in the policy is to be enforced. As set forth in the majority opinion, liability of the insurer under the uninsured motorist provisions of the policy is dependent upon the insured (a) filing suit against the uninsured motorist, (b) reaching agreement with the insurer as to the amount due under Part II (the uninsured motorist coverage) of the policy, or (c) formally instituting arbitration within one year from the date of the accident. The parties agree that none of these three steps was taken within the one year period.

It is a well established rule that a court has the duty to enforce contracts as made by the parties thereto and not to rewrite the unambiguous terms agreed upon. The cotut cannot make for the parties better agreements than they themselves have been satisfied to conclude. (Green County v. Quinlan, 211 U.S. 582, 596.) In the present case there is no claim that the language of the condition precedent is ambiguous, doubtful or unclear. There is also no contention that the insurer waived the time limitation or that the insured misapprehended the terms of the agreement.

Illinois courts have long held that conditions in an insurance policy which require that suits be filed within a shorter period of time than that provided by the appropriate statute of limitations are valid and binding on the parties. In Peoria Marine & Fire Insurance Co. v. Whitehall, 25 Ill. 382, 392, the Supreme Court held that such limitations do not violate public policy and that speedy resort to the courts while facts are fresh in the minds of the parties and witnesses is a strong reason for including such a condition in an insurance contract. This holding is still followed. McMahon v. Millers National Insurance Co., 131 Ill.App.2d 339, 341; Rethy v. Country Mutual Insurance Co., 271 N.E.2d 385.

Uninsured motorist coverage is no exception to this rule. In Hartford Accident & Indemnity Co. v. Holada, 127 Ill.App.2d 472, cited by the majority as holding that, as the statute requiring uninsured motorist coverage is silent as to the time in which the insured may exercise his rights, the statute of limitations for filing suits on contracts must govern. There the insurer argued that the insured’s demand for arbitration was not timely because it was filed after the statutory period of limitation for filing personal injury actions had run. In rejecting this contention, the court said:

“Despite numerous time limits set forth in various parts of the policy, there is no time limit stated for the filing of a demand for arbitration by either party. It is only if the claimant and the company do not agree, that resort will be had to arbitration, and we conclude from this policy language that the company itself did not wish to be bound by any statute of limitation (other than the ten year limitation for contract actions) in working out a settlement before proceeding with arbitration.”

127 Ill.App.2d at 480 (Emphasis added.) Thus the parties to an insurance contract are free to impose such conditions as they see fit regarding the time within winch claims must be submitted to litigation or arbitration. In the present case, the parties chose to impose the condition that claims under the uninsured motorist coverage should be submitted to litigation or arbitration within one year. The terms of the condition are clear, and I fail to see how the majority can decline to give them effect.

The majority concludes that to enforce the condition would result in a dilution or diminution of the protection afforded by the Uninsured Motorist Act. This conclusion rests on the belief that the effect of the condition precedent is to impose a one year statute of limitations of an action against an uninsured tortfeasor, while the normal period of limitations for such an action is two years. However, the present case is not an action against the tortfeasor. It is an action on the insurance contract against the insurer. Even if such a suit is brought within the period of limitation, it cannot be maintained if all of the conditions precedent have not been performed. In the present case it is undisputed that the plaintiffs failed to perform the conditions precedent imposed by the policy.

In Dreher v. Aetna Casualty & Surety Co., 83 Ill.App.2d 141, the Appellate Court considered whether the public policy embodied in the Uninsured Motorist Act required that coverage be extended to injuries caused by a motorist who was insured at the time of the accident, but whose insurance carrier subsequently became insolvent. The policy defined an uninsured automobile as one with respect to which no policy of insurance was in effect at the time of the accident. The court concluded: “[W]e find nothing either in the statute or the case law to sustain tire contention that the public policy of this state * * * [requires] that an insurance company extend coverage beyond the terms of the contract * * (83 Ill.App.2d at 143.) In the present case, the policy specified in unambiguous terms that the insured should comply with certain conditions precedent before the insurer would be liable on the uninsured motorist coverage. The insured did not comply with these conditions and to allow it recovery in spite of this could be to extend the uninsured motorist coverage beyond the terms of the policy.

The Uninsured Motorist Act is silent with respect to conditions which may be imposed upon uninsured motorist coverage. (Ill. Rev. Stat. 1969, ch. 73, sec. 755a.) If conditions such as the ones in the present case are thought to be against the public policy of this State, such a determination should be made by the legislature and not this court. The terms of the contract are clear, and they should be enforced as written. The judgment of the trial court should be affirmed.