dissenting:
I must respectfully dissent. Unlike my colleagues in the majority, I do not believe that provisions in automobile insurance policies relating to underinsured-motorist coverage which allow either the insured or the insurer to reject arbitration awards above a certain threshold and demand a trial de novo violate public policy.
The two cases which have directly addressed the precise issue present in this case, and upon which the majority relies, are Fireman’s Fund Insurance Cos. v. Bugailiskis, 278 Ill. App. 3d 19, 662 N.E.2d 555 (1996) (hereinafter referred to as Bugailiskis), and Parker v. American Family Insurance Co., 315 Ill. App. 3d 431, 734 N.E.2d 83 (2000). According to Bugailiskis and Parker, clauses in automobile insurance policies which govern underinsured-motorist coverage and which bind the parties to accept an arbitration award below the minimum liability amount but which allow either party to reject an award in excess of that amount and demand a trial (hereinafter referred to as “trial de novo clauses”) are void as against public policy because they unfairly favor the insurer. Parker, 315 Ill. App. 3d at 433-35; Bugailiskis, 279 Ill. App. 3d at 22-23. The rationale for such a holding seems to be that both parties are bound to a low award, which an insurance company is unlikely to reject, and not bound to a high award, which the insurance company is more likely to reject. However, as Justice Holdridge pointed out in his dissent in Parker, this reasoning is based upon pure speculation and the unsupported assumption that only an insurance company would seek to avoid an arbitration award above the minimum liability amount. Parker, 315 Ill. App. 3d at 436 (Holdridge, J., dissenting). I have yet to find any argument which supports the proposition that an insured is not likely to reject an award which, although in excess of the minimum liability amount, is far below the amount to which he believes himself entitled. In point of fact, one need look no further than the case of Kost v. Farmers Automobile Insurance Ass’n, 328 Ill. App. 3d 649, 766 N.E.2d 676 (2002), to verify the assertion that insureds do reject arbitration awards in excess of the minimum liability amount when they feel that they have not been justly compensated. I wish to be clear, however, that my reference to the Kost opinion should not be interpreted as my agreement with either the result reached in that case or the reasoning employed to reach that result.
In Reed v. Farmers Insurance Group, 188 Ill. 2d 168, 720 N.E.2d 1052 (1999), the supreme court held that a similar provision in an automobile insurance policy covering arbitration of uninsured-motorist claims did not violate public policy and was fully enforceable. Admittedly, the supreme court’s decision in Reed rested upon the fact that the clause in issue was mandated by statute. Reed, 188 Ill. 2d at 174-75. However, I find it somewhat anomalous for the judiciary of this state to find a contractual provision relating to the arbitration of underinsured-motorist claims to be contrary to public policy when, at the same time, an almost identical provision relating to the arbitration of uninsured-motorist claims is mandated by the legislature. As the supreme court has acknowledged, the legislature occupies a superior position in determining public policy (Reed, 188 Ill. 2d at 175), and I can conceive of no difference in the public and private interest factors which are relevant to a determination as to the propriety of permitting trial de novo clauses to be included in arbitration provisions governing uninsured-motorist coverage as compared to those governing underinsured-motorist coverage.
Based on the foregoing analysis, I would decline to follow Bugailiskis and Parker, hold that trial de novo clauses included in arbitration provisions governing underinsured-motorist coverage do not violate public policy, and reverse the judgment of the circuit court in this matter.