NO. 5-01-0955

	IN THE

	APPELLATE COURT OF ILLINOIS

	FIFTH DISTRICT

________________________________________________________________________

MARK A. HALE,					)  Appeal from the

							)  Circuit Court of

     Plaintiff-Appellant,				)  Washington County.

							)

v.							)  No. 01-MR-2

							)

COUNTRY MUTUAL INSURANCE		)

COMPANY,						)  Honorable	

							)  Lloyd A. Karmeier,

     Defendant-Appellee.				)  Judge, presiding.

________________________________________________________________________

	JUSTICE KUEHN delivered the opinion of the court:

	The plaintiff, Mark A. Hale, appeals from the trial court's November 20, 2001, order

dismissing his amended complaint with prejudice on the basis that he had failed to comply

with an arbitration provision contained within an insurance policy written by the defendant,

Country Mutual Insurance Company.  We reverse.

	Country Mutual Insurance Company (Country Mutual) issued a policy to Mark A.

Hale that, in addition to other coverages, provided $100,000 in underinsured-motorist

coverage.  That policy was in effect on April 11, 1997, when Hale was in a motor vehicle

accident resulting from the negligence of a man named Earl Raymond.  Earl Raymond was

insured by Allstate Insurance Company with $50,000 in liability coverage.  Country Mutual's

policy provision at issue in this case is as follows:

	"Legal Action Against Us: No suit, action[,] or arbitration proceedings for recovery

of any claim may be brought against us until the insured has fully complied with all

the terms of this policy.  Further, any suit, action, or arbitration will be barred unless

commenced within 2 years after the date of the accident.  Arbitration proceedings will not commence until we receive your written demand for arbitration."

	On March 22, 1999, Hale's attorney sent a letter to Country Mutual stating the

following:

	"I have been retained to represent your insured, Mark Hale, for injuries sustained in

a motor vehicle accident on April 11, 1997.  It appears that we have an underinsured

claim.  At this time I ask that you disclose the underinsured motorist and medical

payments policy limits of Mr. Hale."

More than four months later, Country Mutual responded to this notification.  In its August

4, 1999, letter to Hale's attorney, Country Mutual assigned his claim an internal number and

included an "Underinsured Motorist Notice of Claim" form.  Country Mutual asked Hale's

attorney to complete and return this form.  On August 13, 1999, Hale's attorney sent the

completed form to Country Mutual.  

	Receipt of the claim form and its contents apparently triggered some sort of a review

process at Country Mutual, because on August 27, 1999, a liability specialist employed by

Country Mutual wrote to Hale's attorney and stated that the file had been assigned to him. 

He advised that Country Mutual was denying coverage because arbitration had not been

demanded on or before April 11, 1999.  

	Hale filed a declaratory judgment action against Country Mutual.  The action sought

to have the trial court determine that his underinsured-motorist claim was timely made. 

Country Mutual sought to dismiss the complaint on the basis that Mark Hale had not

complied with the limitations clause of its policy by expressly demanding arbitration.  The

trial court eventually granted this motion but granted Hale leave to file an amended

complaint.  The amended complaint contained a second count alleging damages for Country

Mutual's breach of duty of good faith and fair dealing.  Country Mutual again sought to have

the complaint dismissed, pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 2000)).  On November 20, 2001, the trial court

entered its order dismissing Hale's amended complaint with prejudice.

	When the trial court is presented with a motion to dismiss a case for the failure to

state a cause of action pursuant to section 2-615 of the Code of Civil Procedure, the court

must determine whether the complaint sets forth sufficient facts that, if established, could

entitle the plaintiff to relief.  Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 86, 672 N.E.2d 1207, 1214 (1996).  The trial court must accept all well-pleaded facts in the

complaint as true and draw reasonable inferences from those facts that are favorable to the

plaintiff.  Bryson, 174 Ill. 2d at 86, 672 N.E.2d at 1213.  On appeal from a trial court's involuntary dismissal of a complaint pursuant to section 2-619 of the Code of Civil

Procedure, we must determine "whether the existence of a genuine issue of material fact

should have precluded the dismissal or, absent such an issue of fact, whether dismissal is

proper as a matter of law."  Doyle v. Holy Cross Hospital, 186 Ill. 2d 104, 109-10, 708 N.E.2d 1140, 1144 (1999).  In both situations, because the trial court was not called upon

to judge any witness's credibility or weigh facts, we review the matter de novo on appeal.  Jackson v. Michael Reese Hospital & Medical Center, 294 Ill. App. 3d 1, 9, 689 N.E.2d 205, 211 (1997); In re Estate of Mayfield, 288 Ill. App. 3d 534, 542, 680 N.E.2d 784, 789 (1997).

	We start with the language utilized by Country Mutual in its policy.  The language

has been challenged over the years and has consistently been upheld.  The language is not

contrary to public policy, and it is clear and unambiguous.  See Buchalo v. Country Mutual Insurance Co., 83 Ill. App. 3d 1040, 404 N.E.2d 473 (1980); Coyne v. Country Mutual Insurance Co., 39 Ill. App. 3d 279, 349 N.E.2d 485 (1976); Shelton v. Country Mutual Insurance Co., 161 Ill. App. 3d 652, 515 N.E.2d 235 (1987).  

	Whether or not Hale was "underinsured" could not be determined until the underlying

liability case was resolved by settlement or judgment.  However, Country Mutual's policy language does not require a demand for arbitration within two years of the "loss," as would

require a different construction.  See McCray v. Merit Insurance Co., 233 Ill. App. 3d 36, 598 N.E.2d 366 (1992); Whiting v. Prestige Casualty Co., 238 Ill. App. 3d 376, 606 N.E.2d 397 (1992).  Because Country Mutual's policy contained the word "accident" as the limiting

occurrence, we must determine whether Hale sought arbitration within two years of the

accident.

	Did Hale's attorney's letter constitute an unequivocal demand for arbitration?  If the

test requires precise verbiage, then his letter would surely fail.  His attorney's letter merely

indicated that he had an underinsured-motorist claim.  Hale's attorney could not possibly

know for certain whether he had such a claim, because at the time of the writing the

underlying liability suit had not been concluded.  

	This contractual limitations period is not unlike a statutory limitations period in that

their purposes are identical.  A limitations period requires necessary litigation to be brought

within such time so that the facts of the case can still be established with the utmost certainty

before that proof becomes stale or completely lost.  Leitch v. New York Central R.R. Co., 388 Ill. 236, 245, 58 N.E.2d 16, 20 (1944).  Similarly, the insurance company requires

notification of a claim in a timely fashion.  Its ability to defend the claim would be greatly

diminished if there was no time frame in which such claims had to be filed or be barred.

	Keeping this notification purpose in mind, we address the facts of this case.  In the

absence of a settlement agreement between Country Mutual and its insured, arbitration is the

only means by which the insured could collect underinsured-motorist benefits.  The policy

required arbitration proceedings to be commenced within two years of the accident date. 

The policy further stated that the arbitration process would begin when the insured

demanded arbitration in writing. 

	The language utilized by Hale's attorney was not perfect but served the purpose of notifying Country Mutual of the underinsured-motorist claim.  Country Mutual obviously

received this notification, because it acknowledged the letter by sending Hale's attorney an

underinsured-motorist claim form.  By establishing a claim number, setting up its file, and

sending out the claim form, Country Mutual invoked its claim-handling process.  We do not

mean to imply that Country Mutual's act of sending out the form resulted in an estoppel. 

The act of sending out the claim form does not fit the factual scenerioscenario seen in estoppel cases. 

However, Country Mutual's actions do acknowledge notification–the purpose of the

contractual limitations period at issue.

	Because there is no way for an insured to make an underinsured-motorist claim absent

an arbitration proceeding, we conclude that timely notification of a claim is sufficient. 

Because arbitration is the formal means by which the underinsured individual can recover

from his or her own company, notification of the claim serves as notice of an impending

arbitration.  The purpose of the limitations clause is notification–not a trap for insureds

failing to use the precise wording suggested by the insurer.  To hold otherwise would mean

that with every minor claim, the attorney would need to formally request arbitration or fear

malpractice for failing to do so.  The insurance industry could not desire that outcome

because its companies would be inundated with premature arbitration demands.  Use of the

exact words should not dictate coverage or lack thereof.  The form of filing an underinsured-

motorist claim, which necessitates an arbitration demand, should not dictate the substance

of the request.  To the extent that other cases are contrary to our holding, we disagree with

those cases. 

	Because of our holding on this issue, we do not reach the issues of estoppel and

Country Mutual's history of dealings with other insureds, also raised by Hale on appeal.

	For the foregoing reasons, the judgment of the circuit court of Washington County

is hereby reversed.

	Reversed.

	MAAG, P.J., and CHAPMAN, J., concur.

                                     	NO. 5-01-0955

	IN THE

	APPELLATE COURT OF ILLINOIS

	FIFTH DISTRICT

___________________________________________________________________________________

MARK A. HALE,					)  Appeal from the

							)  Circuit Court of

     Plaintiff-Appellant,				)  Washington County.

							)

v.							)  No. 01-MR-2

							)

COUNTRY MUTUAL INSURANCE		)

COMPANY,						)  Honorable	

							)  Lloyd A. Karmeier,

     Defendant-Appellee.				)  Judge, presiding.

___________________________________________________________________________________

Opinion Filed:		October 16, 2002	

___________________________________________________________________________________

Justices:	Honorable Clyde L. Kuehn, J.

	Honorable Gordon E. Maag, P.J., and

	Honorable Melissa A. Chapman, J.,

	Concur

___________________________________________________________________________________

Attorney	John D. Alleman, Alleman & Hicks, 310 East Main Street, Carbondale, IL 62901

for	

Appellant	

___________________________________________________________________________________

Attorneys	Stephen C. Mudge, Dominique N. Beggs, Reed, Armstrong, Gorman, Mudge &

for	Morrissey, P.C., 115 N. Buchanan Street, Edwardsville, IL 62025

Appellee	

___________________________________________________________________________________