No. 2--00--0511

_________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

__________________________________________________________________

RUTH D. LUNDY, on Behalf		)	Appeal from the Circuit Court

of Herself and All Others	)	of Du Page County.

Similarly Situated,			)

						)

	Plaintiff-Appellee,		)

						)	No. 99--CH--288

v.						)

						)

FARMERS GROUP, INC.,		)

d/b/a Farmers Underwriters	)

Association; FARMERS INSURANCE	)

EXCHANGE; AND ILLINOIS FARMERS	)

INSURANCE COMPANY,			)	Honorable

						)	John W. Darrah,

	Defendants-Appellants.	)	Judge, Presiding.

_________________________________________________________________

	JUSTICE BOWMAN delivered the opinion of the court:

	Plaintiff, Ruth Lundy, filed a class action lawsuit against

defendants, Illinois Farmers Insurance Company, Farmers Insurance

Exchange, and Farmers Group, Inc. (collectively, Farmers), alleging

that Farmers acted fraudulently in requiring its authorized repair

shops to use inferior-quality replacement parts on automobiles that

were covered under Farmers insurance policies.  Farmers moved to

dismiss plaintiff's second amended complaint or stay the cause of

action pursuant to section 2--619 of the Code of Civil Procedure

(Code) (735 ILCS 5/2--619 (West 1998)) on the ground that plaintiff

had failed to comply with the appraisal clause contained in the

policy at issue. The trial court denied Farmers' motion and this

appeal ensued.  The only issue before us is whether the trial court erred in denying Farmers' motion to dismiss or stay plaintiff's

cause of action.

	We have jurisdiction over this case under Supreme Court Rule

307(a)(1) (166 Ill. 2d R. 307(a)(1)), which provides that an appeal

may be taken from an interlocutory order granting, modifying,

refusing, dissolving, or refusing to dissolve or modify an

injunction.  Courts have treated the denial of a motion to stay as

a denial of a request for a preliminary injunction.  Beard v. Mount Carroll Mutual Fire Insurance Co., 203 Ill. App. 3d 724, 727 (1990).

	In her second amended complaint, plaintiff alleged that she

purchased an automobile insurance policy from Farmers.  The policy

provided that Farmers would pay for a loss to the insured vehicle

caused by accidental means, minus any applicable deductible.  The

policy limited the amount of its liability for a loss to "[t]he

cost to repair or replace damaged or stolen property with other of

like kind or quality, or with new property less an adjustment for

physical deterioration and/or depreciation."  The policy contained

an appraisal provision that stated as follows:

	"You or we may demand appraisal of the loss.  In that event,

we will each appoint and pay a competent and disinterested

appraiser and will equally share other appraisal expenses. 

The appraisers, or judge of a court having jurisdiction, will

select an umpire to decide any differences.  We will share

equally the expense of the umpire.  Each appraiser, and the

umpire if needed, will state separately the actual cash value

of the property before the accident and the amount of loss.  An award in writing by any two of the appraisers and umpire

will determine the amount payable, which shall be binding

subject to the terms of this insurance."

The policy further provided that the insured could not sue the

insurer unless there was full compliance with the terms of the

policy.

	In May 1997, plaintiff's car was damaged in a collision. 

Plaintiff alleged that Farmers required her to take her car to

Village Pontiac-GMC for repairs.  Village Pontiac-GMC was in the

Farmers network of body shops, known as the "Circle of

Dependability" or "Select Shops," that were authorized to write

repair estimates for Farmers.  A document attached to plaintiff's

second amended complaint and entitled "SECTION TWO: CIRCLE OF

DEPENDABILITY FACILITY" states:

	"In a mutual effort to maintain quality repairs at the lowest

cost, the repair facility will use cost-saving techniques

including but not limited to Salvage Parts, Rebuilt Parts,

After Market Parts and plastic repair.  Farmers upholds any

state laws that prohibit the use of some specified savings

techniques."

	Plaintiff alleged that Village Pontiac-GMC's estimates

required the installation of an "imitation" radiator and condenser

and a used wheel.  In addition, the estimate did not include a seat

belt check; color, sand, and buff; tinting; or corrosion

protection.  According to plaintiff, all of the above were

necessary in order to return her car to its preloss condition.  Farmers paid $6,186.64 to repair the car based on the estimates

from Village Pontiac-GMC.

	Plaintiff alleged that Farmers engaged in deceptive practices

by representing in its policies that it would restore covered

vehicles to their pre-loss condition but requiring body shops to

use substandard "imitation" parts rather than more expensive

original equipment manufacturer parts for the repairs.  Plaintiff's

second amended complaint included claims on behalf of herself and

the alleged class members under the Consumer Fraud and Deceptive

Business Practices Act (815 ILCS 505/1 et seq. (West 1998)), the Uniform Deceptive Trade Practices Act (815 ILCS 510/1 et seq. (West 1998)), common-law fraud, fraudulent inducement, breach of

fiduciary duty, and breach of contract.  Plaintiff also sought

declaratory and injunctive relief.

	In response to plaintiff's first amended complaint, Farmers

filed a motion to dismiss pursuant to section 2--615 of the Code

(735 ILCS 5/2--615 (West 1998)) and a motion for involuntary

dismissal pursuant to section 2--619 of the Code.  Farmers argued

in its section 2--615 motion that the first amended complaint

failed to state a cause of action under any of plaintiff's

theories.  In its section 2--619 motion, Farmers contended that the

Illinois Department of Insurance, rather than the circuit court,

had primary jurisdiction over the dispute.  The trial court denied

the section 2--619 motion and denied the majority of the relief

Farmers sought in its section 2--615 motion. 

	Farmers demanded appraisal for the first time in a letter

dated January 18, 2000.  The following day, Farmers filed a motion pursuant to section 2--619 to dismiss or stay plaintiff's cause of

action and compel arbitration.  The trial court denied Farmers'

motion on the grounds that the authority Farmers relied on

regarding the enforceability of arbitration agreements did not

apply to the facts of this case and that an appraisal would not

address the issues raised in the complaint.  Farmers filed a timely

notice of appeal from the trial court's judgment.

	Before we address the merits of this appeal, we feel compelled

to comment on both parties' excessive use of footnotes in their

briefs.  Supreme Court Rule 341(a) (177 Ill. 2d R. 341(a)) states

that "[f]ootnotes, if any, shall be used sparingly."  Supreme Court

Rule 344(b) (155 Ill. 2d R. 344(b)) also indicates that

"[f]ootnotes are discouraged."  Plaintiff's 20-page brief contains

16 single-spaced footnotes and Farmers' 27-page reply brief

contains 15 single-spaced footnotes.  Both parties' footnotes, for

the most part, contain substantive material that should have been

presented in the body of the briefs.  Moreover, in the case of

Farmers' reply brief, had the footnotes been integrated into the

body of the brief, the brief would have exceeded the page

limitation set forth in Rule 341(a). 

	We have previously noted that "[a]dherence to the page

limitations and guidelines for footnote usage is not an

inconsequential matter," and parties who ignore these rules do so

at their peril.  Kerger v. Board of Trustees of Community College District No. 502, 295 Ill. App. 3d 272, 275 (1997). Consequently, on our own motion, we strike all of the footnotes from Farmers' reply brief.  We also admonish both parties to comply with Rule

341(a) in the future.

	Turning to the merits, we consider whether the trial court

erred in denying Farmers' motion to dismiss or stay plaintiff's

cause of action and compel arbitration.  The only question a

reviewing court must decide in an interlocutory appeal is whether

there was a sufficient showing to sustain the trial court's order

granting or denying the relief sought.  J&K Cement Construction, Inc. v. Montalbano Builders, Inc., 119 Ill. App. 3d 663, 667 (1983).  We conclude that there was sufficient evidence to sustain

the trial court's order denying Farmers' motion.

	Farmers advances several reasons why it believes the trial

court was required to dismiss or stay plaintiff's cause of action. 

First, Farmers argues that the federal Arbitration Act (9 U.S.C.A.

§1 et seq. (West 1999)) and the state Uniform Arbitration Act (710 ILCS 5/1 et seq. (West 1998)) required the trial court to compel plaintiff to submit to an appraisal.  However, Farmers has not

cited a single case that has applied either act to appraisal

clauses, much less to a situation similar to that in the case at

bar.  Accordingly, like the trial court, we reject the argument

that the federal Arbitration Act and THE the Uniform Arbitration Act

compelled the trial court to dismiss or stay plaintiff's cause of

action. 

	Farmers next relies upon the plain language of the policy in

insisting that, once it established the existence of the appraisal

clause, the trial court had no choice but to enforce it.  Courts

have held that an appraisal clause is analogous to an arbitration clause, "which is enforceable in a court of law and with which a

court may compel compliance."  Beard, 203 Ill. App. 3d at 727.  However, contrary to Farmers' assertion, the trial court's analysis

does not end with whether an arbitration or appraisal clause

existed.  The court must also determine whether the parties'

dispute is covered by the particular clause.  See Montalbano, 119 Ill. App. 3d at 669 ("In addition to ascertaining the existence of

an agreement to arbitrate, a court should order arbitration only if

the dispute is arbitrable").

	Here, the appraisal process provided for in the policy was

designed solely to resolve disputes over the amount of the loss. 

Farmers argues that the amount of the loss is the threshold issue

for each of plaintiff's claims, but that argument oversimplifies

the issues raised in plaintiff's second amended complaint.  The

resolution of plaintiff's claims will require a determination of

whether Farmers misrepresented to its policyholders the quality of

repair parts that Farmers would pay for under its policies.  This

question requires an interpretation of the policy language, in

particular, the phrase "like kind and quality."  These issues

cannot be resolved through the appraisal process.  Consequently, we

agree with the trial court that the issues plaintiff raised in her

second amended complaint were not subject to the appraisal clause.

	In light of our determination that plaintiff's claims were not

subject to appraisal, we reject Farmers' argument that plaintiff

failed to satisfy a condition precedent of the policy prior to

filing suit.  Because plaintiff was not required to participate in the appraisal process for these claims, she fully complied with the

terms of the policy prior to filing suit.    

	Last, we address plaintiff's argument that Farmers waived its

right to an appraisal.  Our research has not revealed any Illinois

case that addresses waiver of an appraisal clause.  Courts from

other jurisdictions, however, have held that, like an arbitration

clause, an appraisal clause may be waived.  See J. Wise Smith &  Associates, Inc., v. Nationwide Mutual Insurance Co., 925 F. Supp. 528, 530 n.8 (W.D. Tenn. 1995) (and cases cited therein). 

Generally, waiver is disfavored because of the public policy

preference for conserving judicial resources through arbitration or

appraisal.  Smith, 925 F. Supp. at 530-31.   The court in Smith correctly noted that in Illinois waiver of the right to arbitration

occurs when a party's conduct is so inconsistent with the

arbitration clause as to demonstrate abandonment of that right

(Smith, 925 F. Supp. at 531, citing WorldSource Coil Coating, Inc. v. McGraw Construction Co., 946 F. 2d 473, 477 (6th Cir. 1991); see also TDE Ltd. v. Israel, 185 Ill. App. 3d 1059, 1067 (1989)), or when the party submits arbitrable issues to the court for a

decision (Smith, 925 F. Supp. at 531, citing WorldSource Coil Coating, Inc. v. McGraw Construction Co., 946 F. 2d at 477; see also Cencula v. Keller, 152 Ill. App. 3d 754 (1987)).  Like the court in Smith, we conclude that these principles apply to appraisal clauses as well as arbitration clauses.   

	In our view, Farmers' conduct was so inconsistent with the

appraisal clause as to demonstrate the abandonment of its right to

an appraisal.  In Smith, the court found that the failure to seek an appraisal until after the defendant paid part of the plaintiff's

claim, the plaintiff filed suit, the defendant answered, and the

parties answered discovery was so inconsistent with the right to

appraisal as to constitute waiver of that right.  Smith, 925 F. Supp. at 532.  Similarly, in Atkins v. Rustic Woods Partners, 171 Ill. App. 3d 373, 379 (1988), this court found that the defendants

had waived their right to arbitration by filing motions to dismiss

that did not raise the arbitration claim, failing to raise the

arbitration issue during the first appeal of the case, filing

petitions that manifested their intent to pursue litigation rather

than arbitration, and failing to raise the arbitration issue until

more than three years after the plaintiffs had filed their cause of

action.

	Here, Farmers demanded an appraisal for the first time years

after it paid plaintiff's claim and ten10 months after plaintiff 

filed suit.  Farmers also filed and lost a motion to dismiss for

failure to state a claim, filed and lost a motion to dismiss

arguing that the Department of Insurance was the proper forum for

adjudicating this dispute, and served plaintiff with discovery.  As

in Atkins, Farmers' participation in the litigation was not merely responsive, and its pleadings were not filed solely to protect its

rights from litigation.  Farmers' failure to invoke the appraisal

clause in a timely manner caused unnecessary delay and expense for

both parties.

	Accordingly, for the reasons stated we affirm the judgment of

the circuit court of Du Page County.

	Affirmed. 

	HUTCHINSON, P.J., and MCLAREN, J., concur.