Summary
In Schramm, the defendant consistently moved to dismiss the action claiming that the plaintiff's failure to arbitrate was a bar to its proceeding with trial.
Summary of this case from Fleet Mortg. Corp. v. LyntsOpinion
April 1, 1964 —
April 28, 1964.
APPEAL from a judgment of the circuit court for Milwaukee county: LEO B. HANLEY, Circuit Judge. Affirmed.
For the appellant there was a brief by Hoffman, Cannon, McLaughlin Herbon, attorneys, and Peter W. Bunde of counsel, all of Milwaukee, and oral argument by Mr. Bunde.
For the respondent there was a brief by Donald F. Konle, attorney, and Ray T. McCann and Richard J. Murphy of counsel, all of Milwaukee, and oral argument by Mr. McCann.
Action by an insured to recover under uninsured motorist coverage in his insurance policy.
Defendant, Badger Mutual Insurance Company, issued an automobile insurance policy to plaintiff, George L. Schramm, in which it agreed to pay all sums which the insured "shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile. . . ." The policy provided that determination of whether the insured is legally entitled to recover such damages and if so, the amount thereof shall be made by agreement between the insured and the company "or, if they fail to agree, by arbitration." Under the heading "Arbitration" the policy provided:
"If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this Part, then, upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this Part."
The policy contained clauses prohibiting action against the company unless the insured had fully complied with all the terms of the policy.
The accident occurred on November 4, 1959. Plaintiff's automobile collided with an automobile driven by Irma Lucille Dotz, an uninsured motorist. The company and the insured engaged in negotiations, but no agreement was reached.
The insured commenced this action by service of a summons and complaint on the insurer on September 5, 1961. Irma Dotz was named a party defendant, but never appeared.
On January 4, 1962, the defendant company served its first pleading, a demurrer to the complaint for failure to state a cause of action. Later, by stipulation, defendant was permitted to withdraw its demurrer and to plead.
In an answer, served September 7th, the insurer set forth the clause providing that liability and amount of damages be determined by arbitration if the parties fail to agree; stated that the policy contained additional agreements and conditions all of which were conditions precedent to defendant's liability under the contract; denied that the uninsured motorist was negligent; and, denied that plaintiff insured had been damaged. Judgment of dismissal was demanded.
The trial was set for February 5th. On February 1st, defendant obtained an order to show cause why the affirmative defense raised by the answer (with respect to the clause requiring arbitration) should not be tried separately. By accompanying affidavit defendant's attorney alleged that no demand for arbitration had been made and that therefore a question of law existed which should properly be tried separately from the issue of defendant's tort liability. The motion was denied. Defendant's motion at the close of plaintiff's case to dismiss the action for failure to comply with the arbitration provisions was denied, as was a motion for directed verdict at the close of the testimony.
Plaintiff proved that he suffers from rheumatoid arthritis and contended that the disabling condition was precipitated by the accident. The jury attributed 95 percent of the causal negligence to the uninsured motorist and awarded damages $12,432.20, including $7,500 for permanent disability. Defendant moved for judgment dismissing the complaint notwithstanding the verdict and in the alternative for a new trial or change of answers as to damages. The motions were denied and judgment was entered on the verdict, limited to the amount of coverage, on May 29, 1963. Defendant appealed.
It is conceded that no demand for arbitration has been made by either party.
Other facts will be referred to in the opinion.
1. Arbitration. Defendant contends that the action cannot be maintained because the insured failed to resort to arbitration before bringing action. In a well-reasoned and helpful opinion, the learned circuit judge decided that ch. 298, Stats., has created exclusive remedies for the enforcement of agreements to arbitrate, which were enforceable at common law; and that defendant, by its conduct in intentionally and consistently seeking a dismissal of this action rather than a statutory stay for the purpose of arbitration, had waived its right to insist on arbitration as a condition precedent to recovery.
Ch. 298, Stats., is the Wisconsin Arbitration Act. Sec. 298.02 provides.
"If any suit or proceeding be brought upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration."
By providing for a stay pending arbitration, the statute implicitly denies the validity of a provision that no action may be brought until arbitration has been had and the dismissal which defendant consistently sought at every stage of the action. Defendant had a clear right to a stay for the purpose of arbitration if it applied for it and was not itself in default in proceeding with arbitration. Defendant at no time moved the court for a statutory stay. It consistently and repeatedly sought dismissal for failure to arbitrate. It maintained this position for an extended period and has in no way indicated a desire to proceed promptly with arbitration. Under these circumstances, the circuit court correctly held that the insurer waived its right to arbitration.
2. The finding of permanent disability. The parties and medical witnesses agree that the plaintiff suffers from rheumatoid arthritis and that medical science to this date has been unable to determine the cause of this disease. Plaintiff contends, however, not that the accident caused the disease, but that the accident precipitated or activated a pre-existing but dormant rheumatoid arthritis.
Dr. Slotnik examined the plaintiff twelve days after the accident. He testified that in his opinion the plaintiff had a predisposition or propensity to rheumatoid arthritis prior to the accident. He believed the accident "was a sufficient cause in this patient to act as a precipitating factor in the development of the subsequent rheumatoid arthritis." On cross-examination he stated that the accident was a precipitating cause of plaintiff's condition.
Dr. Bernhard, a specialist in rheumatology, testified that he was of the opinion to a reasonable degree of medical probability that the plaintiff had a predisposition or propensity for rheumatoid arthritis and that the accident was a sufficient precipitating cause to activate his condition. In the absence of the jury he testified that the accident activated the condition On cross-examination he stated that various factors put forth by appellant's counsel would not cause him to alter his opinion as to whether or not the accident was the precipitating factor of the rheumatoid arthritis.
Dr. Treacy, also specially trained in rheumatology, called by the defendant, testified that a bruised person may become upset over the trauma. In this sense trauma may be a precipitating factor of rheumatoid arthritis, He testified that in his opinion the accident in which plaintiff was involved was not alone a sufficient producing cause of the plaintiff's rheumatoid arthritis.
We think the medical testimony with conflicts therein resolved in favor of the verdict will sustain a finding that the accident in question precipitated the disabling phase of plaintiff's rheumatoid arthritis. If that be true, the amount of damages awarded is not excessive.
By the Court. — Judgment affirmed.
HALLOWS, J., took no part.