Insured Debarred from Rejecting Arbitration Award Since Failed to Appear at Arbitration Hearing
Rodney Buckley (“Buckley”), who was in a car accident with Hal Haywood (“Haywood”), had an automobile insurance policy with United Automobile Insurance Company (“United Auto”). Haywood filed a personal injury action against Buckley, and a judgment on an arbitration award was entered against Buckley. Buckley was debarred from rejecting the award because of his failure to appear at the arbitration hearing. Haywood brought garnishment proceedings against United Auto in an effort to collect the award. United Auto then filed a declaratory action that there was no coverage under the policy due to Buckley’s breach of the assistance and cooperation provision of his policy. The trial court found that Buckley had not breached his contractual duty to cooperate by not showing up to his arbitration hearing, and United Auto appealed.
The appellate court affirmed the trial court’s decision. First, the court held that judicial estoppel did not prevent Haywood from arguing that Buckley did not willfully refuse to cooperate. Because in the arbitration hearing or motion to bar rejection of the award, United Auto did not set forth any facts made under oath by Haywood. Second, the Court held that collateral estoppel did not apply because the issues litigated, as to the motion to bar the rejection, were not identical to those issues surrounding litigation of the cooperation provision, which would be unfair. Third, the Court held that the trial court’s finding that Buckley did not willfully refuse to cooperate was not against the manifest weight of the evidence, because all of the evidence shows that he cooperated up until he missed the arbitration hearing. The evidence shows it was an inadvertent mistake that he missed the arbitration hearing. Fourth, the Court held that United Auto was not prejudiced by Buckley failing to show up to the arbitration because there were multiple witnesses in the police report which it did not attempt to use and Buckley admitted his fault in the accident, so negligence was not an issue. Haywood’s medical bills were produced before the arbitration hearing and were not extensive, and United never demonstrated that it was dependent on Buckley for full and complete disclosure of the facts or preparation of the defense of Haywood’s personal injury suit. Fifth, the Court held that United Auto did not have standing to challenge the debarring rejection of the arbitration award, because it was not a party to the personal injury suit. In addition, it failed to cite any authority to support the specific contention that an insurer has standing to appeal an adverse decision against its insured in a personal injury suit.
United Auto. Ins. Co. v. Buckley, 2011 WL 6117005, —N.E.2d —- (Ill.App. 1 Dist., 2011).
