Illinois Appellate Court Resolves Under-Insured Motorist Claim and Demand for Arbitration

Vanity Mack was injured in 2010 and submitted an under-insured motorist claim to Allstate Insurance Co. In addition to the claim, Mack filed a demand for arbitration under the rules of the Federal Arbitration Act.

In December 2010, Allstate informed Mack that she was required to execute the Health Insurance Portability and Accountability Act (HIPAA) authorizations as well as appear for an oral examination under oath.

These requirements were covered under Allstate’s insurance policy. Mack did not complete the HIPAA authorizations, and she did not appear for her oral examination despite multiple requests for her to do so.

Allstate then filed for declaratory judgment seeking a ruling that Mack’s choosing not to comply with the request effectively barred her from pursuing her claim for under-insured motorist coverage. Mack moved to dismiss the declaratory judgment, arguing that the rules of the arbitration act supersede the terms of the insurance policy and that she was acting in compliance with the act. As a result, she argued she had no obligation to complete Allstate’s discovery requests.

The Circuit Court judge denied her motion to dismiss. Mack then moved for summary judgment, which was also denied. Allstate applied for summary judgment, which was granted by the Circuit Court judge. Mack’s motion to reconsider was denied. She appealed.

On appeal, Mack argued that Allstate lacked authority to order discovery. Mack cited the arbitration act’s rules, wherein she stated that because she instituted arbitration proceedings, only the arbitrator had the appropriate authority to order discovery.

Allstate maintained that the issue was not one of discovery, but instead Mack’s failure to comply with the terms of the insurance agreement. As a result, Allstate claimed the dispute was one of breach of contract regarding the health insurance act (HIPAA).

The policy in question required that, in order to file an under-insured motorist claim, Mack must present Allstate with written proof of the medical claim and submit it to an examination under oath and sign the transcript as well as submit it to medical examinations at Allstate’s request.

Allstate argued that it instructed Mack of these requirements to review her claim, but she refused, thereby breaching her insurance contract.

Mack argued that the contract provided for arbitration “under the rules of the American Arbitration Association” if Allstate and Mack do not agree on Mack’s right to receive damages.

The appellate court noted that the language of the contract of insurance provides for arbitration if “the parties [are] unable to come to an agreement prior to the instituting the arbitration process.” The appellate court found that no such disagreement occurred because no review was ever made of the under-insured motorist claim.

In order for the parties to disagree, Allstate would have had to review the claim and offer a resolution that Mack found unsatisfactory. Because the review of the claim was never completed due to Mack’s failure to comply with the terms of the claims submission, no resolution was offered by Allstate. This means that there was no disagreement upon which to institute arbitration proceedings. Accordingly, the appellate court affirmed the trial judge’s decision granting summary judgment in favor of Allstate.

Allstate Insurance Co. v. Vanity Mack, 2016 IL App (1^st) 141171 (June 30, 2016).

Kreisman Law Offices has been handling automobile accident lawsuits, automobile insurance claims, car accidents, truck accidents, bicyclist injury lawsuits, pedestrian injury lawsuits and motorcycle crash cases for individuals and families for more than 40 years, in and around Chicago, Cook County and its surrounding areas, including Evergreen Park, Blue Island, Harwood Heights, Park Ridge, Highland Park, Highwood, Hillside, Calumet Park, Dolton, Oak Forest, Orland Park, Crestwood and Forest Park, Ill.