Safeway Ins. Co. v. Ebijimi

2018 IL App (1st) 170862

117 N.E.3d 1227

427 Ill.Dec. 290

SAFEWAY INSURANCE COMPANY, Plaintiff and Counterdefendant-Appellee,

v.Beatrice EBIJIMI and Dada Ebijimi, Defendants, Counterplaintiffs, and Third-Party Plaintiffs-Appellants

(Parillo, Weiss & O'Halloran, Third-Party Defendant-Appellee).

No. 1-17-0862

Appellate Court of Illinois, First District, FIRST DIVISION.

September 10, 2018

Robert A. Langendorf, Lisa J. Vedral, and David B. Gorodess, of Robert A. Langendorf, P.C., of Chicago, for appellants.

Keely Hillison and Molly E. Mackey, of Parrillo Weiss LLC, of Chicago, for appellee.

PRESIDING JUSTICE MIKVA delivered the judgment of the court, with opinion.

¶ 1 Beatrice Ebijimi demanded arbitration under her mother Dada Ebijimi's policy with Safeway Insurance Company (Safeway) after Beatrice was injured by an uninsured motorist. Safeway sued Beatrice and Dada (the Ebijimis), seeking a stay of arbitration and a declaration that it had no obligation to settle or arbitrate the Ebijimis' uninsured motorist claim. The trial court denied the Ebijimis' motion for substitution of judge, struck the affidavit of the Ebijimis' attorney attached to their opposition to summary judgment, and granted summary judgment to Safeway, finding that the Ebijimis failed to satisfy several conditions of the policy.

¶ 2 We find no error in the trial court's denial of the motion for substitution of judge. But we find that the trial court erred in striking all of defense attorney's affidavit filed in support of the Ebijimis' response to Safeway's motion for summary judgment. When we consider those portions of the affidavit that should not have been struck, we do not agree that Safeway was entitled to summary judgment. We also find the trial court should not have dismissed the Ebijimis' counterclaim or third-party complaint. We affirm in part, reverse in part, and remand for further proceedings.

¶ 3 I. BACKGROUND

¶ 4 The Ebijimis allege that, on January 20, 2006, Beatrice was hit by Patricia Tyson's car, and that Ms. Tyson was not insured. Beatrice submitted a claim to Safeway on March 13, 2006, for uninsured motorist coverage through her mother, Dada Ebijimi, who was the named insured on the Safeway policy. The record is unclear as to whether Beatrice was hit as a pedestrian or she was driving a car, but counsel for the Ebijimis advised us at argument that she was a pedestrian.

¶ 5 A. The Policy

¶ 6 Part II of the policy defines "uninsured motor vehicle" as "a motor vehicle or trailer [for which] there is no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile." Part II also provides for arbitration of uninsured motorist claims. Safeway denied coverage on the basis of the following provisions:

"[Condition] 3. Notice. In the event of an accident, occurrence or loss, written notice containing particulars sufficient to identi[fy] the insured and also reasonably obtainable information with respect to the time, place and circumstances thereof, and the names and address of the injured and of available witnesses, shall be given by or for the insured to the Company as soon as practicable.

* * *

[Condition] 10. Proof of Claim; Medical Report—Part II, III and IV. As soon as practicable, the insured or other person making claim shall give to the Company written proof, under oath, if required, including full particulars of the nature and extent of the injuries, treatment, and other details entering into the determination of the amount payable. The insured and every other person making claim shall submit to examinations under oath by any person named by the Company and subscribe the same, as often as may reasonably be required. Proof of claim shall be made upon forms furnished by the Company unless the Company shall have failed to furnish such forms within 15 days after receiving notice of claim.

The injured person shall submit to physical examinations by physicians selected by the Company when and as often as the Company may reasonably require * * *."

¶ 7 The policy also provides: "No action shall lie against the company unless, as a condition precedent thereof, there shall have been full compliance with the terms of this policy * * *."

¶ 8 B. The Arbitration Demands and the Parties' Correspondence

¶ 9 In a March 13, 2006, letter, the Ebijimis advised Safeway of the accident, told Safeway that the office of Robert A. Langendorf & Associates represented them, and demanded arbitration of their uninsured motorist claim. On March 16, 2006, Safeway sent an accident report form to the Ebijimis to complete and return. On March 17, 2006, Safeway sent uninsured motorist forms to the Ebijimis and requested that the Ebijimis comply with the policy by (1) completing and returning the uninsured motorist claim forms, (2) presenting Beatrice for an independent medical exam (IME), and (3) giving statements under oath. On March 31, 2006, Safeway requested proof from the Ebijimis that the "alleged tortfeasor," Patricia Tyson, "was in fact uninsured at the time of the occurrence."

¶ 10 At some point in 2006 or 2007, counsel for the Ebijimis, Robert Langendorf, forwarded a letter to Safeway issued by the Illinois Department of Transportation (IDOT), dated August 24, 2006, stating that Ms. Tyson was insured by Affirmative Insurance Company (Affirmative Insurance) at the time of the accident. On December 18, 2007, Mr. Langendorf forwarded a letter addressed to Safeway, issued by Affirmative Insurance on November 9, 2006, which stated that Ms. Tyson's Affirmative Insurance policy had been cancelled before the accident due to nonpayment of premiums and had not been reinstated.

¶ 11 Safeway's attorneys responded with three letters—dated January 31, 2008, June 17, 2008, and July 18, 2008—requesting that the Ebijimis supply proof that Ms. Tyson was uninsured at the time of the accident, complete the accident forms that Safeway sent them, and schedule and submit to statements under oath and an IME. In the June 17, 2008, letter, counsel for Safeway specifically renewed the demand for IDOT certification of Ms. Tyson's uninsured status, saying that "[t]he fact that Ms. Tyson may or may not have been insured through [Affirmative Insurance] does not preclude the fact that insurance may have been purchased elsewhere."

¶ 12 According to the affidavit of Mr. Langendorf submitted by the Ebijimis in response to Safeway's motion for summary judgment, the Ebijimis filed a demand for arbitration with the American Arbitration Association (AAA) on February 14, 2008, and sent the demand to Safeway. Mr. Langendorf states that Safeway "refused and would not pay its share of the AAA administration fee despite numerous requests" and that AAA ultimately closed its file on June 27, 2008, as a result of this lack of payment.

¶ 13 For nearly five years, the record reveals no action by either party regarding the Ebijimis' claim. According to Mr. Langendorf's affidavit, on February 7, 2013, he "reopened the claim with AAA and again demanded arbitration," but "Safeway did not respond to the demand for arbitration or pay its share of the AAA administration fee (which [he] eventually paid)."

¶ 14 C. Procedural History

¶ 15 On May 7, 2013, Safeway filed this lawsuit seeking an order staying arbitration and declarations that no coverage existed under the policy for the January 20, 2006, accident and that, due to her failure to comply with the policy terms, Safeway was "not obligated to settle or arbitrate the uninsured motorist claim of Beatrice Ebijimi." The trial court stayed the arbitration of the Ebijimis' claim on July 8, 2014, pending the outcome of this declaratory judgment action.

¶ 16 On August 5, 2014, the Ebijimis answered the complaint and filed a counterclaim against Safeway, asking the trial court to find that (1) Safeway was not entitled to a stay of arbitration and was instead compelled to participate in that proceeding and reimburse the Ebijimis for its share of the AAA administration fee, (2) Safeway acted in "bad faith" under section 155 of the Illinois Insurance Code (Insurance Code) ( 215 ILCS 5/155 (West 2006) ), (3) Safeway breached the terms of the policy, (4) Safeway violated the Illinois Consumer Fraud and Deceptive Business Practices Act ( 815 ILCS 505/1 et seq. (West 2006) ), (5) Safeway was estopped from disputing or denying coverage, and (6) a class ought to be certified for those injured by Safeway's bad faith. On that date, the Ebijimis also moved for class certification and filed affirmative defenses to Safeway's complaint, including that Safeway was estopped from raising policy defenses because of its conduct and that it was similarly barred from denying coverage under the doctrine of laches . Safeway never responded to the affirmative defenses.

¶ 17 On September 17, 2014, the Ebijimis were granted leave to withdraw their counterclaim and file an amended counterclaim by October 14, 2014. They did not file an amended counterclaim, but instead filed a third-party complaint against the law firm Parillo, Weiss & O'Halloran (PWO), which represented Safeway in the declaratory judgment suit. In their third-party complaint, the Ebijimis made class action allegations against PWO and sought to recover against the firm under section 155 of the Insurance Code ( 215 ILCS 5/155 (West 2006) ) for PWO's "aiding and abetting" of Safeway's allegedly vexatious conduct.

¶ 18 On November 12, 2014, Safeway moved for summary judgment, arguing that the Ebijimis did not satisfy the conditions of the policy and Safeway was therefore not required to arbitrate. The Ebijimis moved to disqualify PWO as Safeway's attorneys, but the trial court denied that motion.

¶ 19 On March 12, 2015, the Ebijimis filed a motion for discovery and, shortly thereafter, were granted leave to issue written discovery as to the issues raised in Safeway's motion for summary judgment. Also on March 12, the Ebijimis filed a ...