SPEAR v. CALIFORNIA STATE AUTOMOBILE ASSOCIATION

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Court of Appeal, First District, Division 2, California.

William Sunday SPEAR, Plaintiff and Appellant, v. CALIFORNIA STATE AUTOMOBILE ASSOCIATION, Defendant and Respondent.

No. A051591.

Decided: October 17, 1991

William G. Lewis, Safire and Lewis, San Francisco, for plaintiff and appellant. Michael R. Chambers, Law Offices of Lawrence E. Kern, San Francisco, for defendant and respondent. Richard W. Younkin, William B. Donohoe, Thomas J. McBirnie, W.C.A.B., San Francisco, for amicus curiae.

William Sunday Spear appeals from the denial of his petition to compel arbitration of an uninsured motorist claim and motion for reconsideration of this denial.   He contends that the filing of his lawsuit against the uninsured driver tolled the statute of limitations for filing of a petition to compel arbitration while he pursued a workers' compensation claim for the same accident.   Alternatively, he contends the statute of limitations should have been equitably tolled due to the conduct of his insurance company.

STATEMENT OF THE CASE AND FACTS

On April 18, 1990, appellant filed a petition to compel arbitration of uninsured motorist insurance claim (petition) against respondent California State Automobile Association.   The petition alleges that on or about November 13, 1984, while acting in the course and scope of his employment, appellant was rear-ended by an uninsured drunk driver.   Appellant filed a complaint for property damage, personal injury and punitive damages against the driver on November 12, 1985.1

According to the allegations of the petition, respondent was notified that appellant was going to pursue a claim for benefits under his uninsured motorist insurance policy, sent him to a doctor for an independent medical examination, and was willing to settle the insurance claim until October 1988, when it learned that appellant had a pending claim for workers' compensation.   Respondent then refused to settle the insurance claim until completion of the workers' compensation claim.   After the workers' compensation case was settled in January 1990, respondent informed appellant that it would not settle the claim for any amount, he should file whatever action he felt necessary to compel arbitration and it would file an action to dismiss the claim.

Appellant's petition to compel arbitration was denied on July 11, 1990.   A motion for reconsideration was filed on July 18 and denied by order filed October 12.   Appellant filed a timely notice of appeal on November 9, 1990.

DISCUSSION

The applicable statute of limitations for an action to compel arbitration is the four years provided in Code of Civil Procedure section 337 for actions on contract.  (Meyer v. Carnow (1986) 185 Cal.App.3d 169, 173, 229 Cal.Rptr. 617.)   The date of accrual of a cause of action against an insurer for uninsured motorist coverage is determined by reference to Insurance Code section 11580.2, subdivision (i):  “No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless one of the following actions have been taken within one year from the date of the accident:  [¶](1) Suit for bodily injury has been filed against the uninsured motorist, in a court of competent jurisdiction.  [¶](2) Agreement as to the amount due under the policy has been concluded.  [¶] (3) The insured has formally instituted arbitration proceedings.” 2  The cause of action against the insurer accrues, and the statute of limitations for demanding arbitration begins to run, when and if one of the contingencies specified in section 11580.2, subdivision (i), occurs within one year of the date of the accident.  (California State Auto. Assn. Inter–Ins. Bureau v. Cohen (1975) 44 Cal.App.3d 387, 395, 118 Cal.Rptr. 890.)

In the present case, appellant filed his action against the uninsured motorist on November 12, 1985, within one year of the date of the accident, and his cause of action against respondent accrued on that date.  (Id., at p. 396, 118 Cal.Rptr. 890.)   The petition was filed on April 18, 1990, well more than four years after the date the lawsuit was instituted.   Accordingly, appellant's claim was barred unless the statute of limitations was tolled during some part of this period.

 Appellant first claims the statute of limitations was tolled during the pendency of his workers' compensation action because the Insurance Code requires that workers' compensation claims be resolved before arbitration of uninsured motorist claims.   He relies upon the provision of section 11580.2, subdivision (f), that:  “Any demand or petition for arbitration shall contain a declaration, under penalty of perjury, stating whether (i) the insured has a workers' compensation claim;  (ii) the claim has proceeded to findings and award or settlement on all issues reasonably contemplated to be determined in that claim;  and (iii) if not, what reasons amounting to good cause are grounds for the arbitration to proceed immediately.”

The language of this statute does not, in itself, preclude any arbitration before conclusion of a workers' compensation case;  on the contrary, it expressly allows for immediate arbitration in cases where “good cause” is shown.   An insurer does not have an unqualified right to await final resolution of the insured's workers' compensation claim prior to paying uninsured motorist benefits and in some circumstances may have an obligation to pay such benefits prior to final resolution of the workers' compensation claim.  (Rangel v. Interinsurance Exchange of the Automobile Club of Southern California (1991) 233 Cal.App.3d 1073, 285 Cal.Rptr. 131.)   As noted by amicus Worker's Compensation Appeals Board, the filing of a petition for arbitration gives the court jurisdiction to determine, among other things, whether there is good cause for immediate arbitration or whether the arbitration should be stayed.   Additionally, the filing of a petition for arbitration requires the insured to give the insurer prompt notice of the existence of workers' compensation claims arising from the accident without which the insurer might be unaware of its right to credit for sums paid through workers' compensation (§ 11580.2, subds. (h), (i)), thereby helping to avoid improper double recovery.   More fundamentally, even to the extent the statute requires that workers' compensation cases ordinarily be concluded before arbitration proceeds, it does not preclude filing of a demand for arbitration.   Whether or not it is determined appropriate to stay arbitration proceedings pending the outcome of a workers' compensation case, the filing of a petition to compel arbitration is not an idle act precisely because such filing protects the insured's claim.

Appellant's argument is not aided by his reliance on the principle that workers' compensation coverage is primary to other coverage (Bailey v. Interinsurance Exchange (1975) 49 Cal.App.3d 399, 405, 122 Cal.Rptr. 508) and that losses payable under uninsured motorist insurance policies must be reduced by amounts paid or payable through workers' compensation.  (§ 11580.2, subds. (h), (1);  Interinsurance Exchange v. Marquez (1981) 116 Cal.App.3d 652, 656–657, 172 Cal.Rptr. 263;  Rankin v. West American Ins. Co. (1978) 84 Cal.App.3d 829, 836, 149 Cal.Rptr. 57.)   Again, these rules do not preclude the initial act of instituting arbitration proceedings.3  Appellant's argument that public policy is served by delaying arbitration proceedings until workers' compensation claims have been resolved addresses problems that might result from simultaneous pursuit of workers' compensation and uninsured motorist claims but do not suggest how public policy is harmed by requiring an insured to demand arbitration within the four-year statute of limitations.4  In sum, a claimant may not stand idly by.   His or her failure to file a petition for arbitration within the period of the statute of limitations is fatal notwithstanding the fact that a workers' compensation proceeding is still pending.

 Appellant also contends respondent should be equitably estopped from asserting the statute of limitations because of its conduct in administering the uninsured motorist claim.   He states that respondent indicated throughout the pendency of his claim that it was awaiting the outcome of the workers' compensation case so as to claim credit for the workers' compensation award, that respondent obtained his agreement to await this outcome before attempting to resolve the insurance claim, that he was entitled to rely upon the “implicit corollary of the agreement” that respondent would attempt to resolve the insurance claim in good faith once the workers' compensation case was over and that respondent unfairly changed its mind when it became beneficial to do so.

Appellant's brief contains no citations to evidence supporting his assertions.   The parties' trial court papers reveal a factual dispute as to whether respondent took any action which could serve as the basis for an estoppel.   Appellant's attorneys filed declarations stating that respondent's insurance adjusters led them to believe the case could not proceed to settlement or arbitration until the workers' compensation case had concluded and, therefore, that appellant was not expected to make a formal demand for arbitration.   Respondent submitted declarations from two insurance adjusters stating they never informed either of appellant's attorneys not to file a petition to compel arbitration until after the end of the workers' compensation case.   Appellant conceded at the hearing on his motion for reconsideration that respondent had never said it would settle the claim after conclusion of the workers' compensation case but only that it would not settle before then.   The trial court determined there was no estoppel and the evidence certainly supports this conclusion.

The judgment is affirmed.

FOOTNOTES

1.   Although the complaint refers to an accident date of November 13, 1985, this is obviously an error as the complaint was filed on November 12, 1985.   The petition to compel arbitration alleges an accident date of November 12, 1984, and respondent uses this date in its brief.   Appellant's reference in his opening brief and certain papers below to an accident date of May 25, 1984, also appears to be an error;  the petition alleges this date as the one upon which the parties entered their insurance contract.

2.   All further statutory references are to the Insurance Code unless otherwise specified.

3.   Appellant cites State Farm Mut. Auto. Ins. Co. v. Lykouresis (1977) 72 Cal.App.3d 57, 139 Cal.Rptr. 827, which held that the statute of limitations set out in section 11580.2, subdivision (i), is tolled if the insurer does not comply with the requirement of section 11580.2, subdivision (k), that it give written notice of the statute of limitations.   Appellant does not develop any argument that a lack of notice tolled the Code of Civil Procedure section 337 statute of limitations here (see Gefrich v. State Farm Mut. Auto. Ins. Co. (1980) 109 Cal.App.3d 500, 502–504, 166 Cal.Rptr. 516).   No such argument would be possible on the facts of the present case, as section 11580.2, subdivision (k), expressly provides that “[t]he notice shall not be required if the insurer has received notice that the insured is represented by an attorney.”

4.   We note in this regard that appellant has not attempted to explain why it took more than four years to resolve his workers' compensation claim.

KLINE, Presiding Justice.

SMITH and PETERSON, JJ., concur.

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