Opinion ID: 2087265
Heading Depth: 1
Heading Rank: 6

Heading: selection of arbitrator

Text: Initially, Country Mutual had argued that we should not address the Bruders' argument as to the selection of James Bleyer as the company's arbitrator. Country Mutual pointed out that the Bruders' objection constitutes cross-relief, but that the cover of the Bruders' brief did not reflect that fact as required by Supreme Court Rule 315(g) (134 Ill.2d R. 315(g)). We note that the Bruders subsequently amended the cover of their brief to indicate the nature of the relief sought. We note also that Country Mutual responded to the Bruders' argument in its reply brief as allowed in Rule 315(g) despite pointing out the initial nonconformity of the cover of the Bruders' brief. For those reasons, we see no impediment to addressing the issue. The personal vehicle and business auto policies contain substantially similar provisions governing the arbitration of unresolved disputes regarding nonpayment of uninsured motorist coverage claims. The provisions provide that, upon a written demand for arbitration by the insured or the insurer, each is to select one of three arbitrators. A third arbitrator is to be selected by the other two. If there is disagreement in the selection of the third arbitrator, either the insured or the insurer may request that the entire arbitration be submitted to the American Arbitration Association for resolution. The rules governing procedures and admission of evidence in courts of law are expressly made applicable to arbitration under the policies. Pursuant to those provisions, Country Mutual selected Bleyer. The Bruders selected John Womick, also an attorney, who has been and is presently involved in the representation of clients who have claims pending against either or both Country Mutual and its insureds. The question of whether Country Mutual should have been permitted to select Bleyer as an arbitrator can be resolved properly only by keeping in mind the procedural context within which the question was presented. While the Uniform Arbitration Act, the provisions of which are applicable here, permits an arbitration award to be challenged based on corruption or misconduct with respect to an arbitrator not appointed as a neutral (Ill.Rev.Stat.1987, ch. 10, par. 112), the issue here does not arise from such a challenge. No arbitration has taken place. In fact, the objection to the selection of Bleyer preceded even the selection of a third arbitrator. Instead, the objection to the selection of Bleyer was made as part of the declaratory relief the Bruders sought in their action to have the right to stack coverage under the policies judicially determined. Like resolution of the question of stacking, the judicial determination as to Country Mutual's right to select Bleyer is a matter governed by the terms of the policies to the extent what is there provided does not conflict with law or prevailing public policy. In the hearing on the issue, Country Mutual took the position that, because of its preemptive nature, the Bruders' objection should be rejected as premature. While that contention has initial appeal, it misapprehends the Bruders' argument. The Bruders' position is that a person who enjoys an established and valued association with an insurer, providing legal representation for a fee, and who expects the association to continue, cannot participate as an arbitrator. That is so, the Bruders offer, because the association creates a bias undermining the concept of impartiality which must be read into the policy provisions at issue here. We note that that argument is not grounded on the duty to disclose dealings that might create an impression of bias as recently addressed in Drinane v. State Farm Mutual Automobile Insurance Co. (1992), 153 Ill.2d 207, 180 Ill.Dec. 104, 606 N.E.2d 1181, involving attempts to vacate an award. It is the appearance of bias that the Bruders contend is all important because proving bias is practically impossible. The Bruders' contentions have merit, to a point. Any effort to police bias (see Commonwealth Coatings Corp. v. Continental Casualty Co. (1968), 393 U.S. 145, 149, 89 S.Ct. 337, 339, 21 L.Ed.2d 301, 305) at this stage in the arbitration process must yield, however, to a recognition of what is permitted under the policy provisions to which the parties have assented and the Uniform Arbitration Act (see Drinane, 153 Ill.2d at 211, 180 Ill.Dec. 104, 606 N.E.2d 1181). Neither of the policies here constrains the insured's or insurer's choice of arbitrator to persons having no past or present business relationship or financial association with either or both parties. In fact, it may be inferred that the policies were drafted in anticipation that the insured and the insurer would choose arbitrators having some tie to, or harboring some sympathy for the plight of, each, respectively. That is evident in what the policies provide in relation to the selection of a third arbitrator and what is permitted if disagreement prevents that selection. Further, the Uniform Arbitration Act permits the parties to agree to the method of selecting arbitrators. (Ill.Rev.Stat.1987, ch. 10, par. 103.) Nothing in the Act can be read to preclude a person having a pre-existing business relationship or financial association with either or both parties involved from serving as an arbitrator. See Ill.Rev. Stat.1987, ch. 10, par. 103 (providing that the arbitration agreement controls the method of appointment of arbitrators). Safeguards provided in arbitration provisions to insure impartiality in the process like those here relating to the selection of a third arbitrator must be given the opportunity to operate without judicial intrusion. (See Drinane, 153 Ill.2d at 212, 180 Ill.Dec. 104, 606 N.E.2d 1181 (noting that the parties willingly accept the absence of safeguards associated with trial proceedings in return for the final and speedy resolution of matters arbitration is designed to provide).) It must be enough that the obligation of frank disclosure of interests has been met to address the fear of impartiality of any one arbitrator in the stages of the arbitration process preceding the actual determination of the award. ( Drinane, 153 Ill.2d at 214, 215, 216, 180 Ill.Dec. 104, 606 N.E.2d 1181.) Barring success of those safeguards to insure impartiality in the arbitration process, the Uniform Arbitration Act remains sin avenue of relief by providing circumstances for an award's vacation based on evident partiality by an arbitrator appointed as a neutral or corruption in any one of the arbitrators or misconduct prejudicing the rights of any party. Ill. Rev.Stat.1987, ch. 10, par. 112(a)(2). Finally, we would note that, as with respect to the Bruders' right to stack coverage, the declaration of Country Mutual's rights with respect to the selection of an arbitrator presented a question of law. (See State Farm Fire & Casualty Co. v. Shelton (1988), 176 Ill.App.3d 858, 864-65, 126 Ill.Dec. 286, 531 N.E.2d 913.) The trial judge, however, did allow evidence to be presented in the form of Bleyer's testimony that he could be fair and impartial. Such testimony was unnecessary here both because there was no dispute creating an issue of fact as to the meaning of the terms used in the arbitration provisions and because Bleyer's testimony was irrelevant to the determination of Country Mutual's right to select him. Because neither the policies nor the Uniform Arbitration Act precludes either party from selecting a person with whom the party enjoys a business relationship or financial association, the Bruders must be satisfied, at this point, with the promise that efforts in rendering the award be as that intended under the policies. We therefore affirm the decision to permit Country Mutual to select Bleyer as an arbitrator. For the reasons stated, the judgments of the appellate and circuit courts are affirmed in part and reversed in part, and the cause is remanded to the circuit court. Appellate court affirmed in part and reversed in part; circuit court affirmed in part and reversed in part; cause remanded.