our third and final case called the docket for the january term two thousand and eleven is agenda number twelve case number one one zero six seven nine phoenix insurance company appellant versus martha rosen happily counsel  good morning in may please the court counsel my name is michael rhesus and i'm here today on behalf of phoenix insurance company as plaintiff appellant the issue in this case is whether an arbitration provision allowing the parties to reject under insured motorists awards above the minimum wage it's a financial responsibility of twenty thousand dollars is valid and enforceable the same clause as been home to express the public policy of illinois as part of the statutorily mandated uninsured motorist coverage we were specular submit that a clause that is part of the insurance code for uninsured motorist coverage cannot be void when the parties voluntarily contract for as part of under insured motorist are patrician in either case up under insured or uninsured motorist coverage their right to reject is mutual both the twenty thousand dollars threshold for rejection and below twenty thousand dollars binding arbitration is reasonably related to the same public policies of reducing litigation costs and promoting the resolution of claims that lead this court to uphold the statutorily mandated clause for uninsured motorist coverage in reverse is only farms and with me i think the defendant here makes an argument that there's a great incentive for the insurance company to be able to reject the award if it's large and would not want to have that small and so that operates in favor of the insurance company is that same that you can really distinguish between the two clauses i mean granted in one case it's legislatively required and in the other instance it's a matter of country but i don't believe there's any way really that you can distinguish between how the clause operates between the two types of coverage to me there is no you can't it would  for the court to uphold that the clause expressed as public policy when it relates to the one uninsured motorist coverage if you know happenstance the insured is involved in an accident with someone who doesn't have insurance yet invalidate the same clause as against public policy when it so happens that the insured is involved in an accident with someone who has you know is under insured but that's something as a matter of contract but what i'm suggesting is that if it's not against public policy when it's part of a statute the same then the same way that the clause works can't be against public policy when the parties reach that same agreement voluntarily as a matter of their country it shouldn't be different between the two cases and to be consistent we submit the clause legislature didn't change the clause after may one was decided in one nine hundred eighty nine so you're correct they didn't change it after but go like this which invalidated the clause they didn't change the code after m loss there are some slightly different policy considerations right there with respect to uninsured and under insured i think the claim was made with uninsured for example to make the person whole as to whether that person had the minimum insurance very broaches under insured when you're dealing with your own policy how do you address those arguments well i think i think you most like us the author of that decision  disappointed but to go to your point it's true that in the case of under insured motorists coverage if there is no warning twenty thousand dollars  loss and this clause operates the insured will not cover under his policy which is different from uninsured motorist coverage that was have servatius that was made but that's only because as a result of policy is not unfair in a warning that is less than twenty thousand dollars or less simply means that the other driver the tortfeasor was never under insured and remember we're talking about the arbitration process here whether we're talking about uninsured or underinsured it's the exact same process arbitration under the under insured motorists coverage tracks the stat mandated arbitration process of uninsured motorist coverage and we would submit that if the process is fair as to the one type of coverage it's also not unfair to the insured with respect to the other type of coming  twenty it may be something that both sides can live with and that happens both sides can live with the award above one well then the benefit to being short is he has gotten a resolution  without having to go through the court system and of course under counsel's argument since the cost would be invalidated when the i'm sorry when the when the insurer would not have a right to reject for an award above twenty thousand dollars the result would be an insurance company would no longer have this provision of policy and we would have all types of claims for under insured motorist coverage but through the court coverages into one coverage the insurers recognizes that if the insured opts for coverage above twenty thousand dollars he has to take the under insured motorist coverage in the same amount and then another provision of code allows the insured to combine the two coverages if you have to cover just you can have one agreement so i don't necessarily agree that you can simply say well there is something the ferry is going on here suppose what you're saying is true what you're saying is true that there is perhaps the lack of bargaining power you have to realize that the un does this clause as part of the it had confidence in the courts to construe the statute and up hold the clause in reading and that the courts would be getting to the supreme court would be able to resolve  issue as as as you've raised it so yes definitely i think there may be one of the nation for why there's been this inactivity by the general assembly going back to may not going back for twenty for cases where the wording is twenty thousand dollars or less it does do what this court and read recognize which is to resolve claims  perhaps to the insurance disappointment but the claim is resolved because by virtue of the arbitration award he has already been fully compensated from the proceeds of the tortfeasor policy now both twenty thousand dollars ok well we're talking about is the there it there is either side can reject it's none binding the right trajectory is much mutual if you were to prevent insurance companies from exercising their right of rejection which is really the remedy that the defendant has been arguing for and which admittedly some appellate courts have  d i think the remedy would be a mismatch for the awards above twenty thousand dollars i think you have to distinguish between cases below twenty twenty or below above above twenty thousand dollars  above twenty thousand dollars the defendant would have this court create a lack of mutuality that does not exist in the clause for ninth for non binding awards by allowing only the insured to reject such awards the effect of defendant's argument would be to remedy one sidedness that does not exist presently by unfairly creating a rule by judicial fia that allows only insurers to reject the words that are above twenty thousand dollars and with the award now in this case it happens to be the insurance company the thought that the award was too high and other cases might be that it's the insurance right to reject and you need look no further for that than to a public case is zappia and cost one from the first and the other from the fifth district where in each case it was the insured which exercised the same right of rejection argument is well the insured may feel that the claim was worth more than one hundred thousand dollars and if the award is one hundred thousand dollars maybe it would be the insurer that decides they have a trial right sure and there's mutuality there will  too but the insurer would never agree to that clause right i'm just trying to show you right this argument that there is mutuality for the insured i mean yeah i guess technically there is i uninsured motorist coverage to raise the level of rejection from twenty to fifty but it hasn't repealed and i'm binding arbitration it has been found that there is something just so unfair about it all right they haven't done it and al adjusting and i think it's made and part of the briefs is that if it's public policy in the one case well it would be anomalous to say it's unconscionable or it's unfair or needs to be voided when i happenstance the other driver instead of being uninsured simply is under insured that if an insurance company cannot project awards that are above twenty thousand dollars because of the sense of a lack of mutuality for awards below twenty thousand dollars insurance companies simply won't have these clauses in their under insured motorists provisions of their contracts and the result will be that all these claims now will simply be put through the court system that is the logic at the end of the argument presented by the defendant and we submit that it's difficult to see how public policy is advanced by the introduction of a new class of claims into the court system defendant's argument would be certain to delay the resolution of all cases rather than speed the resolution of under insured motor claims there is some mention in the briefs about some of the out of state cases that have addressed the clause these cases were not looked to in read i submit because the because result for which the defendant is arguing that the clause is not against public policy when it is part of an interim motorist coverage but against public policy when it is part of under insured motors coverage is not the law anywhere theresa's yes your time ok to conclude by way of summary we believe that the clause is valid we think that the usual rules of construction should is my name is alvin becker i'm privileged here to argue on behalf of martha rosen so in a mythical sense when mrs rosen first purchased  policy of insurance she she bought this policy and it contained this provision for a strange thing called under insured motorists coverage  order to exercise those rights and remedies if she could understand the policies or found out that she needed to go to arbitration and she understood because it kind of said so if she could understand it that policy issued in the state of illinois at the time she purchased her policy at the time or for injury at the time of the arbitration at the time of the judicial proceedings contained exactly the same clause it's so much for freedom of contract you can't simply buy such a policy that provides otherwise i was very interested in the observations that in the question that the justice thomas put t the inexpensive and efficient resolution of a controversy considering that the average trace in process from the day the accident to the day of the award took approximately seven years and this is not finger pointing not saying the insurance company stalled this that's not my argument it's an inherent nature of the process it took seven years it doesn't provide the  policy yes because they're much more likely to be of use by the insurer to be town the insurers if there is award for twenty thousand dollars or more a very minimal amount considering somebody but covered year for up to five hundred thousand dollars clearly this is a contract of adhesion a contract of adhesion sure not be that you don't go to jail because there's a contract and whether or not it meets the goal it's intended to you can answer though that you cannot realistically answer that honorably in correctly the way the insurance company has it defeats all of those opponent suggesting that it did come to the court in yeah and uninsured motorist is simply not under insured motorists it's a different kind of a coverage and if i can spend just fifteen or twenty seconds on that in illinois you must have uninsured motorist coverage you don't have the privilege to say i don't we should if you hear of unshared motorists cover excuse me if you have the coverage for more than twenty thousand dollars i financial responsibility amounts then you go to a nother section of the insurance code not the uninsured motorist section called the it's not the same section it's got a different number it was an accident different time and it's so simple as to how it works if you put public liability insurance for more than twenty thousand dollars then unless you are the insur reject that you don't it's not even yesterday you were less you reject that you automatically get uninsured motorist coverage equal to your public liability insurance coverage m d if you have on insured motorists coverage for that because the amount that you purchase is to determined to buy a bundle insured is determined by what you bought for uninsured motorist you cannot buy more in under insured and you brought  uninsured but the process happens to be very different they cover different kinds of wrongs to cover different kinds of damages remember the uninsured is somebody to satisfy section one forty three hey you're simply buying protection that this person doesn't have coverage equal to the financial responsibility amount the other coverage is covered so that you will be fully in d so that the at fault driver has you'll be entitled to recover that your damages are up to months of your coverage it's interesting to note that it's been thirty years or longer since section one forty three a the uninsured motorists section required not permitted that all uninsured motorist disputes be resolved by arbitration all no exceptions that means you can't enter the judicial system and it doesn't enter the system it's interesting to note that the under insured motorists section statutes ne insured motorists coverage when this court decided to reach this court made clear that the reason that the difference between the statutes he is th since then but what is interesting is what happened with this court right after the law because excuse me read was decided your honors were presented with the parker case which was court after it again and this court this time denied the petition for leave to appeal so was the state of the law for at least ten years after both the rockets including a decision in the this decision where another panel with the first district declined to follow samak some of the ag humans that are made here by very good lawyer my opponent in this case  he has told you that these are contracts and i try to address that that they're voluntarily entered into their clearly not voluntarily into the only game in town you can't do any good by any place else this is what you get he says that it will be a bad thing because it'll floodgate the court system i don't know why insurance companies always make that argument for this if huge if if there is an influx because they delete the arbitration clause well they have to the lead of the average duration clause just as the general assembly did in uninsured motorists cases they could once required that there be arbitration and they've never put in a kick out clause i might be able opponent says well the first case you should be considering here is mayor with all due respect he's man never considered the public policy argument with regard to non binding arbitration it simply said that non binding arbitration it's not per se filing to have a public policy that is the only guy virtue of the substantially disappearance well of course it's not you know every case and nor has any argument been made that in every facts scenario it works in firstly to the insured but the fact of the matter is easier so they act and insurer will never permit a higher award in the answer to that question is why should they if they have decided but if they have this right with all due respect to make the first wrong a dress rehearsal or a mulligan why on earth should they accept it why on earth should say pay them money today if they can delay it three or four years later and say that's freedom of contract it's right in  contract i generally assembly just never approved such a provision they had every opportunity to approve of it with one exception every court had this considered the question in the state reviewing court has rejected that argument think in connecticut delaware new york minnesota for a month and california which doesn't mean that every other court has rejected yes there are two or three courts that have sustained the validity of this and we're not counting numbers here because that's not a qualitative answer but the fact of the murder is there have been fifteen when i was viewing court judges who have said this clause is invalid there have been five who said it's not  insured was rejected so so how do we balance that into our analysis about mutuality well if you look at the first such case would be chaos you were a kid s just a fifth district case and it was in fact the insured who made the argument and what the court said was we are punishing you insurance company because you put in a clause my word just punishment doesn't specifically say that brought one of the consequences i maybe i can tone that down a little bit one of the consequences of your insertion of a clearly unv that we're going to give the insured the benefit of the bargain that said that every award over twenty thousand dollars you decide may reject with all respect that really doesn't answer the question it's simply is we're giving you the benefit of the contract bargain because the insurance company put in a cause that it should not have put in to begin with but certainly as an example of a fax that in each and every case whatever the hypothesis be that it will only work for the benefit of the insurer there are cases where it would work in the benefit of the insured frankly that recognized the right of rejection by the insured i think the point it behind those what those cases illustrate and i think what justice types this question illustrates is that you simply cannot now what's high in one case may be alone another case and vice versa an insurer which evaluates the case as one of no liability may believe that any award in the case is too high where is another case and insured who believes th case is worth three hundred thousand dollars maybe disappointed by a low award of one hundred fifty thousand dollars i think that's the cost case in a nutshell and in that case it would be the is not hypothetical and it's not the loser re the way some courts have merely assumed the question was asked i think by justice garman as far as as counsel says that one way in which they are inextricably intertwined has to do with how the limits follow so that if the insured opts for more than twenty thousand to consider and that is that under some paragraph for some paragraph five of one forty three a dash to the insurance company is able to combine those two coverage into one coverage didn't happen in this case but the code contemplates they can do that and they can do that without anything the fairy s going on and despite the fact that there may be certain your marks of  which we know is a fact of modern life and there's nothing wrong with that and if they can combine the two coverages into one coverage they can have one agreement we have any and we've been talking a lot of local like  signal that i just was correctly decided because the supreme court went out of its way to leave that decision and ted you know is it as simple as saying that that was just picked in that case or do you not even go that far i think i think that the supreme court got to write and read it addressed and answer the question those before us and didn't go out one on a whim and didn't go and issue dicta about whether to approve or appeal is not presidential it's not a ruling on the merits so the fact that the court didn't take parker is not presidential just as the fact if you go back to may one the very first case the grandaddy ca mic you can't read anything into there isn't any signal there isn't any smoke signal or some a for that's being put out i think by the court  and maybe that you know sometimes lawyers because it's so let's face it it's very hard to get here and it may be that lawyers want and appellate judges and every  many of you were public just before your supreme court years you were looking at the few decisions of court decided the supreme court decided you want to try to read something into it and so i think justice wilson was doing in print in his special concurrence  sentiment but i don't think you can do that so i don't think there's any principle of stere decisis that you can draw on either from the denial of p l in one case or the fact that the supreme court that issue no one would have been asking the court for him to to to pronounce on that and i don't think today that the court if faced in the same situation would if it had read it was addressing about the different jurisdictions which of address the issue and thing i find most notable is i don't know of any other  know that i may have overstayed my welcome when i first got up to the first time so i will conclude by once more with time still on the clock asking the court to reverse the appellate or and affirm the trial court other cases are under advisement mr marshall the almost supreme court stands in the