Opinion
For Opinion on Hearing see 103 Cal.Rept. 919, 500 P.2d 1119
Opinion on pages 225 to 231 omitted
HEARING GRANTED
See 7 Cal.3d 988 for Supreme Court opinion.
Ollie Marie-Victoire, San Francisco, for appellant.
Bledsoe, Smith, Cathcart, Hohnson & Rogers, Lawrence E. Curfman, III, San Francisco, for respondent.
MOLINARI, Presiding Justice.
This is an appeal by plaintiff from a judgment in favor of defendant following the granting of a motion for summary judgment in an action to compel arbitration under the uninsured motorist endorsement in a policy of insurance issued to plaintiff by defendant insurance company as required by Insurance Code section 11580.2.
Unless otherwise indicated, all statutory references are to the Insurance Code.
Section 11580.2, in pertinent part, provides: '(a) No policy of bodily injury liability insurance . . . shall be issued or delivered in this state to the owner or operator of a motor vehicle . . . unless the policy contains, or has added to it by endorsement, a provision with coverage limits . . . for all sums within such limits which he . . . shall be legally entitled to recover as damages for bodily injury [101 Cal.Rptr. 587] . . . from the owner or operator of an uninsured motor vehicle. . . . [p] (b) . . . The term 'uninsured motor vehicle' means a motor vehicle with respect to the ownership, maintenance or use of which there is no bodily injury liability insurance or bond applicable at the time of the accident . . . or a motor vehicle . . . the owner or operator thereof be unknown, provided that, with respect to an 'uninsured motor vehicle' whose owner or operator is unknown: (1) The bodily injury has arisen out of a physical contact of such automobile with the insured or with an automobile which the insured is occupying. . . . [p] (f) The policy or an endorsement added thereto shall provide that the determination as to whether the insured shall be legally entitled to recover damages, and if so entitled, the amount thereof, shall be made by agreement between the insured and the insurer or, in the event of disagreement, by arbitration. . . .' (Emphasis added.)
Pursuant to section 11580.2 defendant issued to plaintiff a policy of bodily injury liability insurance substantially complying with the provisions provided for in the statute.
On or about July 24, 1967, plaintiff was injured when a truck owned and operated by him went off a highway. Plaintiff had no recollection of the events or details occurring before or after the accident. An eyewitness testified, however, that plaintiff swerved his truck in order to avoid hitting an automobile identified only as a 'Rambler'; that the closest the two vehicles came together was from three to then feet; and that there definitley was no contact between the two vehicles. Plaintiff made a claim for his personal injuries to defendant under the uninsured motorist provisions of the subject policy. Defendant denied liability for the claim and plaintiff then sought to have his clam for personal injuries determined by arbitration under the policy provisions, but defendant declined to arbirtate the controversy. This action then ensued and defendant's motion therein for a summary judgment was granted on the basis that under the uninsured motorist statutes defendant had no liability because there was no physical contact between plaintiff's truck and the Rambler.
We advert, first, to plaintiff's contention that the court erred in denying his petition to comple arbitration because the issue of physical contact must be decided by arbitration and not by the court. We here observe that there is no issue as to whether the adverse motorist was an uninsured motorist, it being conceded and agreed by the parties that such vehicle was an unknown vehicle under the provisions of section 11580.2
Turning to the arbitration provisions of the instant policy we observe that, in pertinent part, they provide as follows: 'If any person making claim hereunder and the company do not agree that such person is not legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, . . . then each party shall, upon written demand of eigher, select a competent and disinterested arbitrator. The two arbitrators so named shall select a third arbitrator, . . . The arbitrators shall then hear and determine the question or questions so in dispute, and the decision in writing of any two arbitrators shall be binding upon the insured and the company, . . .'
The identical or substantially the same arbitration clause has been considered in several cases relative to the question whether the issue of physical contact must be decided by the arbitrators or by the court. In Esparza v. State Farm Mut. Auto. Ins. Co., 257 Cal.App.2d 496, 499-501, 65 Cal.Rptr. 245, the clause was determined to be so broad as to require the issue of physical contact to be decided by the arbitrators, and that an order to arbitrate the controversy may not be refused on the ground that the petitioner's contentions [101 Cal.Rptr. 588] lack substantial merit. The same determination was made in American Ins. Co. v. Gernand, 262 Cal.App.2d 300, 304-305, 68 Cal.Rptr. 810, and in Felner v. Meritplan Ins. Co., 6 Cal.App.3d 540, 543-544, 86 Cal.Rptr. 178. In Felner, the court stated as follows: 'On examining the Felner polich we conclude that its arbitration submission is broad enough to cover a dispute over the meaning of the term uninsured automobile (which for a hit-and-run-automobile requires a finding of physical contact). We view the agreement to submit to the arbitrator the question whether the insured was 'legally entitled to recover damages from the owner or operator of an uninsured automobile' as sufficiently comprehensive to include the subordinate question whether the vehicle with caused the accident was an uninsured automobile within the meaning of the policy. 'It is for the arbitrators to determine which issues were actually 'necessary' to the ultimate decision. [Citation.]'' (At p. 543, 86 Cal.Rptr. at p. 179.)
A petition for a hearing by the Supreme Court was denied.
A contrary determination was reached in Pacific Automobile Ins. Co. v. Lang, 265 Cal.App.2d 837, 71 Cal.Rptr. 637, and in Rodgers v. State Farm Mutual Auto. Ins. Co., 13 Cal.App.3d 641, 91 Cal.Rptr. 678. Pacific Automobile dealt with substantially the same arbitration clause as that in the present case. The Rodgers decision does not indicate the specific arbitration provisions of the policy there involved. The holding in Pacific Automobile is that there must be an independent judicial determination as to whether or not the insured automobile had any physical contact with the unknown vehicle and that such determination must precede the determination of the issue of law whether the arbitrator has jurisdiction to proceed. (265 Cal.App.2d at pp. 842-834, 71 Cal.Rptr. 637.) Rodgers relies on the same rationale, as does Pacific Automobile, particularly in view of the concession there made that there was no physical contact. (13 Cal.App.3d at pp. 645-646, 91 Cal.Rptr. 678.)
It is apparent that the decisions are not fully harmonious with one another. In Hernandez v. State Farm Ins. Co., 272 Cal.App.2d 255, 77 Cal.Rptr. 196, a case holding that the parties were bound by the award of the arbitrators because they had voluntarily submitted an uninsured motor vehicle dispute to arbitration, including the question of physical contact, the reviewing court suggested that the disharmony lies in the distinction between broad and narrow arbitration clauses and observed that the arbitration clause in Esparza was of the 'broader' variety, i. e., broader than is required by section 11580.2. (At p. 257, 77 Cal.Rptr. 196.) The disharmony among the intermediate court decisions and their lack of consistency 'with any single theory of judicial governance over arbitration' is bemoaned in Felner where the court earnestly srges that clarification be made by the Supreme Court in order to alleviate the confusion the has grown up in the procedural law dealing with uninsured motorist coverage. (6 Cal.App.3d at pp. 546-547, 86 Cal.Rptr. 178.) The same entreaty is made in Rodgers. (13 Cal.App.3d at p. 643, 91 Cal.Rptr. 678.) In each ease the party adversely affected by the decision declined to petition for a hearing by the Supreme Court. The high court has not, therefore, expressly passed on the question except for the implication that it agrees with the rationale of Esparza by virture of its denial of the petition for a hearing. Of all the intermediate court cases which have decided the subject issue, Esparza is the only one in which a hearng by the Supreme Court was sought.
On the basis of the implication we derive from the Supreme Court's denial of a hearing in Esparza, and more particularly because we are persuaded by the rationale in Esparza and Felner, we hold that the issue of physical contact in the instant case in one that must be decided by the arbitrators and not by the court. Each of these cases rationalizes that if the issue is one for the court to be decided at a preliminary hearing before arbitration can be completed, the insured is deprived of the value of arbitration as a speedy remedy for which the parties to the insurance policy [101 Cal.Rptr. 589] have contracted. As indicated in Felner, to require that a court preliminarily decide the 'jurisdictional facts' in a case where the parties have expressly agreed to submit to the arbitrators the question whether the insured is "legally entitled to recover damages from the owner or operator of an uninsured automobile" (6 Cal.App.3d p. 543, 86 Cal.Rptr. p. 179; emphasis added), has the effect of 'turning a procedure designed to furnish prompt, continuous, expert, and inexpensive resolution of controversy into one carrying all the burdens and delays of civil litigation, overlaid by jurisdictional uncertainty between successive tribunals.' (6 Cal.App.3d at p. 546, 86 Cal.Rptr. at p. 181.) It is settled, moreover, that an arbitration agreement may by its express terms confer upon the arbitrator the unusual power of determining his own jurisdiction where such an intent clearly appers. (McCarroll v. L. A. County etc. Carpenters, 49 Cal.2d 45, 65-66, 315 P.2d 322; Key Ins. Exch. v. Biagini, 250 Cal.App.2d 143, 147, 58 Cal.Rptr. 408; Allstate Ins. Co. v. Orlando, 262 Cal.App.2d 858, 866, 69 Cal.Rptr. 702.) In the present case the agreement to submit to the arbitrators the question whether the insured was 'legally entitled to recover damages from the owner of operator of the insured automobile' clearly confers upon them the power to determine the jurisdictional facts, i. e., whether the vehicle which caused the accident was an uninsured automobile within the meaning of the policy, which, in the case of an unknown vehicle, requires a finding of physical contact.
'Under the rule of broad construction an arbitrator is authorized to determine all questions which he needs to determine in order to resolve the controversy submitted to him, and the arbitrator himself decides which questions need to be determined. [Citations.]' (Felner v. Meritplan Ins. Co., supra, 6 Cal.App.3d 540, 546, 86 Cal.Rptr. 178, 182; see Code Civ.Proc., §§ 1280, subd. (c), 1283.4; and see Lesser Towers, Inc. v. Roscoe-Ajax Constr. Co., 271 Cal.App.2d 675, 702, 77 Cal.Rptr. 100.) When the issues before the arbitrators are determined by them and the merits of the award, eigher on questions of fact or of law, may not be reviewed, in the absence of some limiting clause in the agreement, except as provided in Code of Civil Procedure section 1286.2. (Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 186, 260 P.2d 156; B. S. B. Constr. Co v. Rex Constr. Co., 200 Cal.App.2d 327, 334, 19 Cal.Rptr. 167; Lesser Towers, Inc. v. Roscoe-Ajax Constr. Co., supra, 271 Cal.App.2d at pp. 696, 701-702, 77 Cal.Rptr. 100; Jones v. Kvistad, 19 Cal.App.3d 836, 840, 97 Cal. Rptr. 100.)
Section 1286.2 provides:
In view of the foregoing, we hold that the instant arbitration provisions require that the issue whether plaintiff was 'legally entitled to recover damages from the owner or operator of the uninsured automobile because of bodily injury' to plaintiff insured should be submitted to arbitration. Accordingly, the trial court should have granted the petition for a order that such arbitration proceed in the manner provided for in the insurance policy. [101 Cal.Rptr. 590] (Code Civ.Proc., § 1282.) Having so concluded, we need not the other issues raised by plaintiff. The question whether the 'physical contact' requirement is applicable to the factual situation here presented is for the arbitrators, nor need we decide the constitutional question raised with respect to this requirement since we are not obliged to decide questions of constitutional rights in order to make a proper disposition of this cause. (Whitson v. City of Long Beach, 200 Cal.App.2d 486, 507, 19 Cal.Rptr. 668; Palermo v. Stockton Theatres, Inc., 32 Cal.2d 53, 65, 195 P.2d 1.)
The judgment is reversed with directions to the trial court to enter its order directing that arbitration proceed in the manner provided for in the subject insurance policy.
SIMS and ELKINGTON, JJ., concur.
'Subjeet to Section 1286.4, the court shall vacate the award if the court determines that:
'(a) The award was procured by corruption, fraud or other undue means;
'(b) There was corruption in any of the arbitrators;
'(c) The rights of such party were substantially prejudiced by misconduct of a neutral arbitrator;
'(d) The arbitrators exceeded their powers and the award cannot be corrected without affecting the merits of the decision upon the controversy submitted; or
'(e) The rights of such party were substantially prejudiced by the refusal of the arbitrators to postpone the hearing upon sufficient cause being shown therefore or by the refusal of the arbitrators to hear evidence material to the controversy or by other conduct of the arbitrators contrary to the provisions of this title.'