FIRST DIVISION
October 22, 2007
No. 1-06-3636
STANLEY CRAIG, SYBIL MASON, AND ) Appeal from the
CYNTHIA MASON, ) Circuit Court of
) Cook County.
Plaintiffs-Appellees, )
)
v. )
)
UNITED AUTOMOBILE INSURANCE COMPANY, ) Honorable
) Anthony L. Young,
Defendant-Appellant. ) Judge Presiding.
JUSTICE WOLFSON delivered the opinion of the court:
The plaintiffs, Stanley Craig, Sybil Mason, and Cynthia
Mason, filed an uninsured motorist claim under an insurance
policy issued by defendant, United Automobile Insurance Company
(United). The claim proceeded to arbitration. After the
plaintiffs filed an action in the circuit court to confirm the
arbitration award, United filed a counterclaim for breach of
contract. United alleged plaintiff Craig made material
misrepresentations in his insurance application, failed to
cooperate with the investigation of the claim, and failed to make
the vehicle available for inspection.
The trial court dismissed the counterclaim because United
failed to raise the issues prior to arbitration. The court also
entered summary judgment for plaintiffs on their complaint.
United appeals. We affirm the trial court’s order.
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FACTS
Plaintiff Stanley Craig was insured under a personal
automobile insurance policy issued by United. The policy was in
effect from October 27, 2001, through October 27, 2002. On
August 19, 2002, plaintiffs notified United of an uninsured
motorist claim resulting from an accident on August 4, 2002.
On February 11, 2003, plaintiffs filed a written demand for
arbitration and served notice on United. An arbitration hearing
was held on November 13, 2003. At the hearing, counsel for
United stated his objection to the proceedings based on
plaintiff’s failure to provide the vehicle for inspection as
required by the policy and as requested by United. The
arbitrator overruled the objection, and the parties proceeded
with the arbitration. An award was entered in the amount of
$7,500 for Stanley Craig, $7,500 for Sybil Mason, and $4,000 for
Cynthia Mason.
On March 11, 2004, plaintiffs filed a two-count complaint in
the circuit court. Count I sought confirmation of the
arbitration award pursuant to section 11 of the Uniform
Arbitration Act (710 ILCS 5/11 (West 2004)). Count II requested
attorneys’ fees for unreasonable delay in settling a claim.
Plaintiffs later voluntarily dismissed Count II.
On January 27, 2005, United filed a counterclaim for breach
of contract. United alleged Craig made false statements about
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his ownership of the vehicle on his insurance application on
October 26, 2001, and in a sworn statement on August 6, 2003.
United had discovered through a vehicle records search that Craig
was not the owner of the vehicle. United also alleged Craig
failed to make the vehicle available for inspection as required
by the policy and failed to cooperate with the investigation by
refusing to allow United to examine his medical records.
On December 6, 2005, plaintiffs filed a motion to dismiss
the counterclaim pursuant to section 2-619 of the Code of Civil
Procedure (735 ILCS 5/2-619(a)(9) (West 2004)). They contended:
(1) United waived its issues by failing to raise them prior to
arbitration; and (2) United’s claims were precluded by res
judicata. Plaintiffs also filed a motion for summary judgment on
their complaint to confirm the arbitration award.
On May 9, 2006, the trial court dismissed United’s
counterclaim with prejudice and entered summary judgment on Count
I of plaintiffs’ complaint.
DECISION
A section 2-619(a)(9) motion to dismiss allows for dismissal
of a cause of action when "the claim asserted against the
defendant is barred by other affirmative matter avoiding the
legal effect of or defeating the claim." 735 ILCS 5/2-619(a)(9)
(West 2004). We must decide "whether the existence of a genuine
issue of material fact should have precluded the dismissal or,
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absent such an issue of fact, whether dismissal is proper as a
matter of law." Kedzie & 103rd Currency Exchange, Inc. v. Hodge,
156 Ill. 2d 112, 116-17, 619 N.E.2d 732 (1993). When deciding a
2-619 motion, a court takes all well-pleaded facts in the
complaint as true. Tkacz v. Weiner, 368 Ill. App. 3d 610, 612,
858 N.E.2d 514 (2006). We review the granting of a 2-619 motion
de novo. Tkacz, 368 Ill. App. 3d at 612.
Any issue regarding the nonarbitrability of a dispute is
waived by participation in the arbitration proceedings. Tri-City
Jewish Center v. Blass Riddick Chilcote, 159 Ill. App. 3d 436,
439, 512 N.E.2d 363 (1987).
"Through the operation of waiver, a party may
become bound by an award which otherwise
would be open to attack*** Waiver occurs
whenever a party intentionally relinquishes a
known right, either expressly or by conduct
inconsistent with an intent to enforce that
right." Tri-City, 159 Ill. App. 3d at 440.
United did not raise the issue of Craig’s false statements
of vehicle ownership until January 27, 2005. We hold United
waived the issue of plaintiffs’ misrepresentations by failing to
raise it until more than two years after receiving the claim, and
more than one year after the arbitration award.
United contends it requested that the court vacate the award
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within a week of United’s discovery of Craig’s misrepresentations
that he owned the vehicle. On January 21, 2005, United
discovered through a public records vehicle search that the
vehicle belonged to "Betty Mason" and not to Stanley Craig. It
then filed its counterclaim on January 27, 2005. There is no
reason why United could not have conducted a vehicle records
search prior to arbitration of the plaintiffs’ claim. United
provides no justification for waiting nearly two years after the
arbitration hearing to file its claim.
United contends section 12 of the Uniform Arbitration Act
precludes dismissal of its counterclaim. That section provides
that, upon application of a party, a court shall vacate an
arbitration award where the award was "procured by corruption,
fraud, or undue means." 710 ILCS 5/12(a)(1) (West 2004). An
application to vacate an award must be made within 90 days of the
award, or, if predicated on corruption, fraud, or other undue
means, within 90 days after such grounds are known or should have
been known. 710 ILCS 5/12(b) (West 2004).
We reject United’s contention. First, United never raised
section 12 of the Arbitration Act in the court below. It merely
filed a separate counterclaim for breach of contract against the
plaintiffs. Second, United’s counterclaim alleged the plaintiffs
breached their obligations under the insurance policy and alleged
United was not obligated to pay under the policy. There are no
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allegations that the arbitration award was procured by
"corruption, fraud, or other undue means." Third, United could
have raised the claim prior to arbitration had it conducted a
vehicle records search.
As for the other claims regarding the medical records and
vehicle inspection, those issues are not for this court to
decide. The judicial review of an arbitral award is extremely
limited. American Federation of State, County & Municipal
Employees, AFL-CIO v. Department of Central Management Services,
173 Ill. 2d 299, 304, 671 N.E.2d 668 (1996). The Illinois
Uniform Arbitration Act contemplates judicial disturbance of an
award only in instances of fraud, corruption, partiality,
misconduct, mistake, or failure to submit the question to
arbitration. American Federation, 173 Ill. 2d at 304. United’s
remaining claims do not allege any fraud, corruption or other
means to justify reversing the arbitration award.
CONCLUSION
We affirm the circuit court’s order dismissing United’s
counterclaim and entering summary judgment in favor of the
plaintiffs.
Affirmed.
HOFFMAN, P.J., and SOUTH, J., concur.
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