Fifth District affirms McGlynn's judgment over arbitration award

A split panel of the Fifth District Appellate Court has upheld a St. Clair County judgment on an arbitration award.

In an unpublished order released Friday, the majority of the appeals panel affirmed Circuit Judge Stephen McGlynn’s order that entered judgment in favor of the defendant, State Farm Insurance Co., and against the plaintiff, Warren Reagan.

Justice Stephen Spomer delivered the court’s order. Justice Thomas Welch concurred and Justice Melissa Chapman dissented, saying she would have vacated the award and remanded for a new arbitration.

The Rule 23 order stems from a suit brought over a 1994 automobile accident in which Reagan’s decedent, Michael Reagan, was killed.

Following the accident, Reagan sought benefits under his State Farm insurance policy that provided benefits for damages due to the negligence of underinsured drivers.

He claimed that Lloyd Searcy, the driver of the other vehicle in the fatal crash, was underinsured and that his negligence caused the accident.

In order to receive payment under this provision, the appellate court order states that the policy required the insured and the insurer to agree on whether the insured was entitled to damages from the uninsured and if so, the amount.

If an agreement couldn’t be reached, the policy called for arbitration, in which state court rules on procedure and evidence would be used.

In the appellate court order, Spomer wrote that the “procedural history of the subsequent arbitration and litigation is somewhat long and convoluted.”

Spomer wrote that an arbitration hearing was held in April 2009, after the appeals panel remanded the case following an earlier appeal.

The arbitrators ruled in favor of State Farm, determining that Reagan failed to meet his burden of proof when it came to the issue of liability.

The arbitrators, the order states, found that certain testimony failed to establish that Reagan’s decedent was less than 50 percent the cause of the fatal accident.

Reagan filed a petition to vacate the award, asserting the arbitrators used the wrong standard for contributory negligence.

McGlynn denied the motion and remanded the case back to the arbitrators to clarify their decision and award.

The arbitrators then filed a new award that restated their earlier decision, but added that Michael Reagan’s estate “is precluded from recovery against” the defendant.

McGlynn again remanded the award for clarification, saying that the award was not clear on whether Michael Reagan was equally at fault, more than 50 percent at fault or if the evidence failed to establish fault.

In their third and final award, the arbitrators again determined that Reagan failed to meet its burden of proof when it came to liability and found that his decedent was more than 50 percent of the cause of the accident, barring  from recovery from State Farm.

Reagan again petitioned to vacate the award, arguing that the arbitrators failed to follow Illinois law in Mileur v. Briggerman (1982) when they put the “burden to prove freedom from contributory negligence,” on him, the order states.

McGlynn denied the request, which spurred the appeal at issue in the court's unpublished order.

The appeals panel last week affirmed McGlynn’s decision, saying that “it is well-settled in Illinois that in action to determine if insurance coverage is present, ‘the burden is on the insured to prove that its claim falls within the coverage of an insurance policy.’”

“Accordingly, the plaintiff in the case at bar, as the insured under its policy with the defendant, had the burden to show that it was entitled to collect payment under the policy,” Spomer wrote. “There was no improper shifting of the burden of proof to the plaintiff.”

The majority of the Fifth District also rejected Reagan’s argument that McGlynn didn’t have the authority to remand the first or second award to the arbitrators for clarifications and instead should have vacated them.

Chapman, however, in her dissent wrote that she “cannot agree with the majority’s interpretation of the arbitration award.”

She wrote that she would have agreed with the majority if the award had just stated that the arbitrators found that Reagan had failed to meet his burden of proof when it came to liability.

“However, the award did not end there,” Chapman wrote, referring to how it went on to say the decedent was more than 50 percent of the cause of the accident and that Reagan was precluded from recovery against the insurance company.

“This is a gross mistake of the law because any issue as to plaintiff's contributory negligence arises only if the defendant has been determined to be a proximate cause of the plaintiff's injury,” Chapman wrote, citing the Mileur case that Reagan relied on in his appeal.

In addition, Chapman asserts in her dissent that it is the defendant, not the plaintiff, who bears the burden of proof on the issue of liability.

The fact that the arbitrators stated in the award that they looked at the plaintiff’s percentage of fault shows that they “were under a gross misapprehension of the law,” which is grounds for vacating an award.

“I find nothing in the majority's opinion that convinces me otherwise,” Chapman wrote. “I would vacate the award and remand for a new arbitration.”

The citation for the unpublished order is 2013 IL App (5th) 110251-U.

According to the Fifth District Appellate Court clerk’s office, George Ripplinger Jr. of Ripplinger & Zimmer in Belleville represented Reagan. Kristine Mack and her colleagues at Donovan, Rose, Nester in Belleville represented State Farm.