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Court of Appeal, First District, Division 4, California.

Victoria J. DAVIS et al., Plaintiffs and Respondents, v. BLUE CROSS OF NORTHERN CALIFORNIA, Defendant and Appellant.

Fred E. WARGO et al., Plaintiffs and Respondents, v. BLUE CROSS OF NORTHERN CALIFORNIA, Defendant and Appellant.

Civ. 40702, 40703.

Decided: March 30, 1978

White, Giambroni & Walters, A Professional Corp., Oakland, for defendant and appellant. Bruce A. Bailey, Burlingame, for plaintiffs and respondents.

In 1 Civil 40702, Blue Cross of Northern California, a nonprofit corporation (“Blue Cross”), appeals from an order denying its petition for arbitration in an action in which it is the defendant. In 1 Civil 40703, it appeals from an identical order in a companion action.

The two actions were commenced against Blue Cross at the same time. The trial court treated them as consolidated during proceedings upon petitions for arbitration which were simultaneously filed by Blue Cross in both. An independent record was otherwise made in each action, and the appeals are from separate orders entered in each. The appeals were subsequently consolidated, in this court pursuant to a stipulation of the parties. We treat them accordingly, but consider them separately because of the separate records and certain differences between them.

1 CIVIL 40703

The action underlying this appeal was commenced when respondents Wargo and Hatcher filed a verified complaint against Blue Cross. Respondents Guinasso, Beattie and Carmichael were added as plaintiffs in an amended complaint filed later. The amended complaint, which was also verified, was the one considered by the trial court when it acted upon the petition for arbitration filed by Blue Cross as hereinafter described. We therefore refer to it as the “complaint,” and summarize it as follows:

The plaintiffs alleged that they were the individual “beneficiaries” under five separate written contracts with Blue Cross. The contracts were pleaded, expressly (as exhibits to the complaint) or in substance. Each contract included provisions which obligated Blue Cross to pay certain expenses incurred by the respective contracting plaintiff for hospitalization and other defined “hospital services.” Each of the five plaintiffs alleged having incurred hospital expenses which were covered by his or her contract; that each had made a claim for payment; and that Blue Cross had denied the claims,1 as shown by letters attached to the complaint as exhibits.

The contracts included provisions for the arbitration of pertinent coverage disputes between the contracting parties. In eight counts stated in the complaint, the plaintiffs nevertheless joined in pleading separate causes of action in which they ignored the arbitration agreements or undertook to avoid their ostensible effect.2

Blue Cross did not demur or answer, but filed a petition for an order compelling arbitration (“Petition To Arbitrate”) pursuant to (1) the arbitration agreements in the respective plaintiffs' contracts and (2) sections 1281.2 and 1290 of the Code of Civil Procedure.3

The plaintiffs filed a “Response” to the petition pursuant to section 1290. The response incorporated the complaint. The allegations made in all eight counts of the complaint (see fn. 2, ante ), and its exhibits, were thus presented to the trial court as sworn or authenticated evidence which was “deemed controverted,” by Blue Cross, when the response was filed. (s 1290.) Thereafter, in support of its petition, Blue Cross filed a declaration executed by Richard D. Kline as one of its corporate officers. The declaration incorporated several items of correspondence which supplemented those pleaded, in the complaint, as to some of the plaintiffs' claims.

The trial court conducted a summary hearing (see s 1290.2) at which the parties argued the issues and the evidence presented by the petition, the response, the complaint filed in the action, and the Kline declaration. The court announced its intention to deny the petition, whereupon Blue Cross requested formal findings of fact and conclusions of law pursuant to section 1291. The court next received findings and conclusions proposed by the plaintiffs; received objections and proposed counterfindings presented by Blue Cross; conducted a hearing on findings; signed and filed findings and conclusions substantially as proposed by the plaintiffs; and, on December 13, 1976, filed a formal “Order Denying Petition To Arbitrate.”

Blue Cross had meanwhile moved for an order staying all proceedings “until arbitration is had or, in the alternative, until any order denying arbitration becomes final, including completion of any appeal process.” The court disposed of the motion in a formal “Order Severing Claim And Granting Stay Pending Appeal . . .” filed on December 31, 1976. This order (1) “severed” the first cause of action from the other seven alleged in the complaint (see fn. 2, ante ); (2) stayed further “proceedings under the first cause of action” pending an appeal by Blue Cross from the order denying arbitration; and (3) denied the motion for a stay as to the other seven counts.

Blue Cross states in its notice of appeal that it appeals (1) from the “order denying defendant's petition to arbitrate entered . . . on December 13, 1976,” and (2) from the first and third portions of the order filed on December 31.4

A. The Order Denying Arbitration

The findings of fact and conclusions of law indicate at least two grounds upon which the trial court denied arbitration. One pertained to the language of the arbitration agreements which Blue Cross sought to enforce; the other, to Blue Cross having waived the right to enforce them. We consider these grounds in succession.

(1) The Language Of The Arbitration Agreements

In its finding of fact no. 3, the court cited some of the plaintiffs' Blue Cross contracts by reference to exhibits in the record. In finding no. 4, the court found that each of the cited contracts “contains a clause relevant (sic ) to arbitration.” In finding no. 5, the court stated that “(s)aid clause has the same text in each of the contracts” and purported to quote it.5 As pertinent, the court further found: “11. The above clause . . . is ambiguous, unclear and uncertain in its scope, application and procedure.”

In its conclusions of law based on finding no. 11, the court stated (emphasis added):

“2. Said clause in reference to arbitration . . . is not an agreement to arbitrate and is not a binding contract provision based on its lack of certainty, intelligibility and reasonable clarity . . . .

“3. Said clause . . . is revocable within the meaning of Code of Civil Procedure section 1281.2 on the ground that it is uncertain, unintelligible and does not clearly set out the agreement between the parties in a manner reasonably certain and clear . . . .”

The trial court reached this interpretation of the arbitration “clause” upon its face as quoted in finding No. 5 (see fn. 5, ante ), and not upon extrinsic evidence. The interpretation is therefore not binding upon this court. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865-866, 44 Cal.Rptr. 767, 402 P.2d 839; 6 Witkin, California Procedure (2d ed. 1971) Appeal, ss 259-260, pp. 4249-4250.) We nevertheless agree with it, and reach the same interpretation of the arbitration clause independently (see Parsons v. Bristol Development Co., supra, at p. 866, 44 Cal.Rptr. 767, 402 P.2d 839), for the following reasons among others (referring in each instance to the clause quoted in footnote 5 and to the text of the various Blue Cross contracts in which that clause appears):

The clause purports to provide for arbitration of a dispute relative to the “determination as to whether the limitations set forth herein apply so as to preclude benefits otherwise provided . . .. ” (Emphasis added.) The term “limitations set forth” is not defined anywhere in the contract. One section of the contract is entitled “Limitations,” and enumerates several situations in which hospitalization or related “services” are excluded from coverage. Another section, however, specifies “conditions” of coverage which may or may not constitute “limitations.” Various other provisions of the contract might reasonably be construed as “limitations” upon coverage but do not say so.

The language of the clause provides no procedure whereby a disaffected Blue Cross subscriber may exercise the right to arbitrate pursuant to its provisions. It does not state whether a demand for arbitration shall be in writing. It does not state how (nor when, nor where) a demand may be made upon Blue Cross. It does not state whether (nor how, nor when, nor where) a demand may be made upon the “committee,” or the alternative arbitrators, to whom it refers. If a demand may be made upon the “committee” in the first instance, the subscriber has no way of ascertaining whether there is “such committee in the area.” The language does not identify any “local medical association” under whose “auspices” such “committee” may be functioning. Lacking precision and definition among its terms, it raises material questions without answering them.6 These deficiencies support our independent determination that, as the trial court put it in finding no. 11, the arbitration clause is “ambiguous, unclear and uncertain in its scope, application and procedure.”

The interpretation remits us to the two conclusions of law quoted above. In no. 3, the trial court determined in effect that the uncertainty in the language of the arbitration clause was such that “(g)rounds exist” for its “revocation” within the meaning of subdivision (b) of section 1281.2. (See fn. 3, ante.) Such “grounds” for the “revocation” of an arbitration agreement, as the basis for denying its enforcement pursuant to an earlier version of section 1281.2, were equated with the statutory grounds upon which any contract might be rescinded. (Drake v. Stein (1953) 116 Cal.App.2d 779, 783, 254 P.2d 613, disapproved on another point in Brink v. Allegro Builders, Inc. (1962) 58 Cal.2d 577, 580, 25 Cal.Rptr. 556, 375 P.2d 436; See Bianco v. Superior Court (1968) 265 Cal.App.2d 126, 129, 71 Cal.Rptr. 322.) Those grounds do not include mere uncertainty in the language of a contract. (See Civ.Code, s 1689, subd. (b); 1 Witkin, Summary of California Law (8th ed. 1973) Contracts, s 689, p. 581; 3 Witkin, Procedure, op. cit. supra, Pleading, ss 413-426, pp. 2069-2083.) Consequently, it does not appear that the uncertainties in the language of the Blue Cross arbitration clause are “grounds” for its “revocation,” within the meaning of section 1281.2, which will support the order denying its enforcement.

However, a proceeding under the statute, “although in form a special proceeding, is in substance a suit in equity for specific performance of a contract to arbitrate.” (Trubowitch v. Riverbank Canning Co. (1947) 30 Cal.2d 335, 347, 182 P.2d 182, 190 (emphasis added). Cf. Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 479, 121 Cal.Rptr. 477, 535 P.2d 341.) A court of equity will not order specific performance of any contract if its material terms are so uncertain that the intent of the contracting parties cannot be ascertained. (Civ.Code, s 3390, subd. 5; Reymond v. Laboudigue (1906) 148 Cal. 691, 694, 84 P. 189; Buckmaster v. Bertram (1921) 186 Cal. 673, 676, 200 P. 610; Lawrence v. Schutt (1969) 269 Cal.App.2d 749, 761, 75 Cal.Rptr. 533, 540; 7 Witkin, Summary, op. cit. supra, Equity, s 41, p. 5266.) “In order for a court of equity to decree that an obligation is specifically enforceable the terms of the contract must be complete and certain in all particulars essential to its enforcement. (Citations.) The agreement must not only contain all the material terms but also express each in a reasonably definite manner. (Citations.)” (Lawrence v. Schutt, supra.)

The controlling statute required the trial court to determine whether the right to compel arbitration had been “waived by the petitioner” (Blue Cross), or whether “(g)rounds exist” for the “revocation” of the arbitration clause, only after it had first determined “if . . . an agreement to arbitrate . . . exists.” (s 1281.2, quoted in fn. 3, ante.) The court answered this threshold question by stating in conclusion of law no. 2 that the Blue Cross arbitration clause “is not an agreement to arbitrate and is not a binding contract provision” because of its uncertainty, unintelligibility and lack of clarity. In context, the statement that it “is not a binding contract provision” expressed the determination that it is not specifically enforceable for the same reasons. The determination comports with Civil Code section 3390, subdivision 5, and the other authorities cited above. Conclusion of law no. 2 therefore supports the order denying arbitration.

Blue Cross contends that section 1281.6 permitted the trial court to appoint an arbitrator “if neither method for selecting arbitrators set forth in the agreement was to succeed.” (We here quote the opening brief.) Section 1281.6 first requires that “(i)f the arbitration agreement provides a method of appointing an arbitrator, such method shall be followed.”7 The problem here is that the Blue Cross arbitration clause does provide a “method,” but in language which is so uncertain that it cannot be “followed.” Section 1281.6 does not permit a court to appoint an arbitrator in that event. (See fn. 7, ante.) If it did, the court could make an appointment only “on petition of a party to the arbitration agreement.” (See ibid.) Blue Cross explicitly requested in its petition that the court order the plaintiffs “to arbitrate . . . in the manner provided” in the arbitration clause; it did not request the appointment of an arbitrator. Section 1281.6 therefore had no application, in any event, because Blue Cross did not comply with it procedurally.

The Carmichael Arbitration Clause

We have pointed out that the trial court did not quote respondent Carmichael's Blue Cross contract in finding no. 5. (See fn. 5, ante.) Her contract has an arbitration clause, but its language is substantially different from the “text” there quoted. It was expressly pleaded in the complaint as part of her contract, incorporated into the plaintiffs' joint response to the Blue Cross petition, and became squarely subject to the petition when the response was filed. It was nevertheless overlooked in the findings: the court did not cite it in finding no. 3 and did not quote it at all. In consequence, it is not literally reached by the omnibus language of finding no. 11 and conclusion of law no. 2.

So far as appears from the briefs, this egregious discrepancy has gone entirely unnoticed by the parties. The distinct language of the Carmichael arbitration clause was not cited at the summary hearing on the petition for arbitration. Its omission was not mentioned in the objections or the proposed counterfindings presented by Blue Cross, nor at the hearing at which the findings and conclusions were settled.

In sum, Blue Cross did not bring the omission to the attention of the trial court in timely fashion or at all. (See Code Civ.Proc., s 634.) We therefore infer, in support of the order denying arbitration, that the trial court made any and all pertinent findings in favor of respondent Carmichael as to the unenforceability of her arbitration clause by Blue Cross. (4 Witkin, Procedure, op. cit. supra, Trial, ss 339 (pp. 3140-3141), 341 (par. (b), p. 3143), 342 (p. 3144).) In addition, and as an alternative ground of decision relative to that clause alone, we treat any conceivable point as having been waived by the failure of Blue Cross to raise one in its briefs. (6 Witkin, op. cit., Appeal, s 425, p. 4391.)

(2) Waiver By Blue Cross

The trial court made findings of fact relative to each plaintiff (with some variations, but in substance) as follows: The respective Blue Cross contract of each had been in effect at all pertinent times. Each had been admitted to a named hospital as an inpatient, and had subsequently been discharged, on specified dates. Each had “duly filed a claim for all benefits payable” under his or her Blue Cross contract. Blue Cross had refused to pay each claim. According to documents which the court cited from the record, each plaintiff had been “informed” of a “determination” of noncoverage reached by Blue Cross and each had “communicated” to it his or her “disagreement with such determination.”

The court next found that Blue Cross had not demanded arbitration from any plaintiff, pursuant to the arbitration clause in his or her contract, at any time between its knowledge of the plaintiff's “disagreement” with its “determination” and the filing of its petition for arbitration in the action; and that it had “failed to demand arbitration within a reasonable time” in all instances. In a conclusion of law, the court stated that “(b)y virtue of . . . (its) . . . failure to demand arbitration within a reasonable time,” Blue Cross had “waived any right to arbitration which might otherwise have existed” in its favor.

The separate findings relative to each plaintiffs' hospitalization and claim, and the finding that Blue Cross had never demanded arbitration in any case, are supported by the documentary evidence received by the court in the sworn allegations of the complaint, its exhibits, and the Kline declaration and its exhibits. Blue Cross does not contend to the contrary, but challenges the court's determination that it had “waived” the right to arbitrate by failing to demand arbitration from any plaintiff “within a reasonable time.”

This determination resolved “the preliminary factual question of waiver of the right to compel arbitration” which had been posed by the demand for findings of fact and conclusions of law pursuant to section 1291. (Gustafson v. State Farm Mut. Auto. Ins. Co. (1973) 31 Cal.App.3d 361, 366, fn. 3, 107 Cal.Rptr. 243, 246.) The question having been answered in favor of the plaintiffs, the trial court properly denied arbitration upon the independent basis of waiver by Blue Cross as found. (s 1281.2, subd. (a). See fn. 3, ante.) Upon our review of the result, the following language applies:

“(1) A party to an arbitration agreement can waive his right to arbitrate. (2) Whether there has been a waiver of a right to arbitrate is ordinarily a question of fact, and a finding of waiver, if supported by sufficient evidence, is binding on an appellate court. (3) Where an arbitration agreement does not specify a time within which arbitration must be demanded, a reasonable time is allowed, and what constitutes a reasonable time is a question of fact, depending upon the situation of the parties, the nature of the transaction, and the facts of the particular case.” (Sawday v. Vista Irrigation Dist. (1966) 64 Cal.2d 833, 836, 52 Cal.Rptr. 1, 3, 415 P.2d 816, 818 (citations omitted).) This language has been construed “as in effect equating ‘a reasonable time’ with the period of time before one party improperly causes prejudice to the other and thus becomes guilty of laches.” (California State Auto. Ass'n Inter-Ins. Bureau v. Cohen (1975) 44 Cal.App.3d 387, 393, 118 Cal.Rptr. 890, 894.)

The periods of time involved here are the intervals which elapsed between (1) the point at which Blue Cross acquired “knowledge” of each plaintiff's “disagreement” with its determination of noncoverage in their respective cases and (2) the point at which it first claimed the right to arbitrate by filing its petition in their action. The precise length of each period is not clear in every instance, because the date Blue Cross acquired “ knowledge” is not. The record nevertheless establishes that the periods fell within a perceptible range between not less than five months in one case (respondent Beattie) and not less than fourteen months in another (respondent Wargo). It also establishes that each plaintiff had incurred a substantial hospital bill when the respective period commenced, and that the question of uninsured liability for it remained unresolved throughout the period. We have no difficulty in concluding that the evidence supports the factual finding that Blue Cross “failed to demand arbitration within a reasonable time” (Sawday v. Vista Irrigation Dist., supra, 64 Cal.2d 833 at p. 836, 52 Cal.Rptr. 1, 415 P.2d 816), and that the delay in resolving the question of uninsured liability necessarily prejudiced each plaintiff. These conclusions sustain the trial court's determination that Blue Cross waived the right to compel arbitration. (Sawday v. Vista Irrigation Dist., supra; California State Auto. Ass'n Inter-Ins. Bureau v. Cohen, supra, 44 Cal.App.3d 387 at p. 393, 118 Cal.Rptr. 890.)

The order denying arbitration is therefore to be affirmed upon the bases (1) that the arbitration agreements (or “clauses”) are unenforceable by Blue Cross because of their uncertain language and (2) that Blue Cross had waived the right to compel the arbitration it sought in its petition. We cite each basis as an alternative ground of affirmance. Other grounds upon which the trial court may have made the order are suggested in its findings and conclusions, but need not be discussed.

B. The Order Severing And Staying The First Count

We have noted that the purported appeal from this order must be dismissed because it is not appealable, but that it is reviewable on the appeal from the order denying arbitration. (See fn. 4, ante.) In light of our affirmance of the latter order, there is no occasion to review the former. Moreover, we have ascertained by informal inquiry (which may be substantiated by judicial notice) that the unstayed counts in the action are still in a pretrial stage in the superior court. The one count which was stayed, pending the appeal, may readily be interpolated among the others and tried with them. The order severing and staying it is therefore moot at this point. For all these reasons, we need not discuss the order further.

1 CIVIL 40702

The problems with the findings of fact in 1 Civil 40703, involving the omission of one of the plaintiffs' Blue Cross contracts, are not duplicated in the record in 1 Civil 40702. The two appeals are otherwise identical in substance, and we reach an identical disposition of 1 Civil 40702 upon the two grounds previously discussed.

In 1 Civil 40702, the “Order Denying Petition To Arbitrate” is affirmed and the purported appeal from the order entered on December 31, 1976, is dismissed. In 1 Civil 40703, the “Order Denying Petition To Arbitrate” is affirmed and the purported appeal from the order entered on December 31, 1976, is dismissed.


1.  The language of these allegations, and various insurance-related terms used throughout the record and the briefs (e. g., “policies” and “coverage”), tend to identify Blue Cross as an insurer under the contracts. The various contracts pleaded support the inferences that it is a “nonprofit hospital service corporation,” that it operates a “hospital service plan for rendering hospital services to its subscribers,” and that the plaintiffs were “subscribers” to the plan at pertinent times, all as permitted and described by statute. (See Ins.Code, div. 2, pt. 2, ch. 11a (“Nonprofit Hospital Service Plans”) commencing with s 11491. See, particularly, ss 11493, 11493.5, 11495, 11496.) Blue Cross may therefore be providing “services” without transacting “insurance” as such. (See California Physicians' Service v. Garrison (1946) 28 Cal.2d 790, 803-811, 172 P.2d 4; 20 Ops.Cal.Atty.Gen. 145, 149-151 (1952).) If so, it is regulated as if it were an insurer in fact and law. (See Ins.Code, ss 11504-11517.) We may treat it as one, and use the insurance-related terms, for pertinent purposes.

2.  In the first count, they alleged (1) that Blue Cross had breached the contracts by refusing to pay the various claims, and that they were entitled to recover damages in the amounts claimed.In the second through the seventh counts, they alleged causes of action for (2) a declaratory judgment to the effect that their claims were covered by the contracts; (3) damages for the breach, by Blue Cross, of an “implied . . . covenant of fair dealing” in each contract; (4) injunctive relief, and attorneys' fees, by reason of Blue Cross having “falsely advertised its health plan” in violation of Civil Code section 1770, subdivision (i); (5) damages for its breach of “oral contracts,” made through representations by its “agents,” that its written contracts covered the hospital expenses incurred by the plaintiffs; (6) damages upon the theory that its denial of their claims had breached a “fiduciary obligation” it owed them under the written contracts; and (7) damages for its having “misrepresented” the contracts, for the purpose of inducing the plaintiffs to “lapse, forfeit, or surrender” them, in violation of section 790.03 of the Insurance Code.The eighth count was directly addressed to each arbitration agreement. The plaintiffs alleged that “(s)aid arbitration clause is not applicable to bar judicial determination of this case” for several reasons, including these: It does not apply to “causes of action Two through Seven” in any event. It is unenforceable because it is “ambiguous” and does not specify any “manner of proceeding with arbitration” pursuant to its provisions. Finally, Blue Cross had “waived” the right to invoke it by “failing to claim arbitration.”

3.  Hereinafter, except where otherwise indicated, all “section” (or “s”) references are to the provisions of the Code of Civil Procedure which relate to arbitration (pt. 3, tit. 9, commencing with s 1280). The two sections here cited provide, each in pertinent part:“1281.2. On the petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement. . . .” (Emphasis added.)“1290. A proceeding under this title in the courts of this State is commenced by filing a petition. Any person named as a respondent in a petition may file a response thereto. . . . The allegations of a response are deemed controverted or avoided.”

4.  The “Order Denying Petition To Arbitrate” is appealable as such. (s 1294, subd. (a).) The December 31 order and its several parts are not (s 1294; Berman v. Renart Sportswear Corp. (1963) 222 Cal.App.2d 385, 388, 35 Cal.Rptr. 218), which means that the purported appeal from its first and third portions must be dismissed. Both parts remain reviewable, on the appeal from the earlier order, because each may be deemed an “intermediate . . . order . . . which . . . affects the order . . . appealed from, or which substantially affects the rights of a party.” (s 1294.2; Berman v. Renart Sportswear Corp., supra.)

5.  The “same text” was quoted in finding no. 5 as follows:“ ‘. . . The initial determination as to whether the limitations set forth apply so as to preclude benefits otherwise provided herein shall be made by Blue Cross; however, if the Subscriber does not agree, then such determination shall be made by arbitration under the laws of the State of California. Such arbitration shall be held before a designated and proper committee under the auspices of the local medical association where the hospital services and benefits in dispute were provided. In the event that there is no such committee in the area, or the committee declines to sit as arbitrator, then and in that event the same shall be submitted to the arbitration of three competent and disinterested Physicians and Surgeons actually engaged in their profession in the said area.’ ”It must be mentioned here that the arbitration clauses have the “same text” in all of the Blue Cross contracts except respondent Carmichael's, which the court did not quote here. The consequent problem with findings 3, 4 and 5 is described and resolved later in the text.

6.  Typical questions presented by some of its terms, but not answered, include these: Does “arbitration under the laws of the State of California” mean “arbitration in a lawful manner” or “arbitration pursuant to statute”? What statute? The “committee” to which the language refers must be “designated and proper”: “designated” by whom, “proper” by whose and what standards? Do “local” and “area” refer to a county? A city? A neighborhood? What is “the” local medical association if there is more than one “where the hospital services and benefits in dispute were provided”? Where is “where”? What is a “medical association”? Does “competent . . . Physicians and Surgeons” mean practitioners who are “licensed,” or who are “proficient”? Must they be “competent” to practice medicine, or “competent” to act as arbitrators?

7.  Section 1281.6 provides in pertinent part: “If the arbitration agreement provides a method of appointing an arbitrator, such method shall be followed. If the arbitration agreement does not provide a method for appointing an arbitrator, the parties to the agreement . . . may agree on a method of appointing an arbitrator and that method shall be followed. In the absence of an agreed method, or if the agreed method fails or for any reason cannot be followed, . . . the court, on petition of a party to the arbitration agreement, shall appoint the arbitrator.” (Emphasis added.)

RATTIGAN, Associate Justice.

CALDECOTT, P. J., and CHRISTIAN, J., concur.

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