American & Foreign Ins. Co. v. Reichert
| Decision Date | 08 July 2004 |
| Docket Number | No. 29060.,29060. |
| Citation | 94 P.3d 699,140 Idaho 394 |
| Parties | AMERICAN FOREIGN INSURANCE COMPANY, Plaintiffs-Counterdefendant-Respondent, v. Marvin E. REICHERT, Defendant-Counterclaimant-Appellant, and Luedean Reichert, Defendant-Appellant. |
| Court | Idaho Supreme Court |
L. Clyel Berry, Chtd., Twin Falls, for appellants. L. Clyel Berry argued.
Moffatt, Thomas, Barrett, Rock & Fields, Boise, for respondent. Mark S. Prusynski argued.
This case arises from personal injuries suffered by Marvin Reichert ("Reichert") while acting within his employment as a result of an uninsured motorist. At the time of the accident, Reichert's employer had an uninsured motorist coverage policy issued by American & Foreign Insurance Co. ("American"). The insurance policy contained a provision to offset the amount payable under the policy with any worker compensation benefits paid or payable. Reichert began processing his worker's compensation claim. Years after the accident and before Reichert completed the worker's compensation proceedings, Reichert and American agreed to arbitrate the uninsured motorist claim. After the arbitrator rendered his decision, Reichert refused to pursue the worker's compensation claim further. Because of Reichert's refusal several issues arose including whether the offset provision was void, whether the arbitrator exceeded his authority when he modified the award, whether Reichert was required to complete the worker's compensation hearing before the arbitration award would be confirmed by the district court, and whether there should be attorney fees ordered. The district court heard the parties' motions, stayed confirmation of the arbitrator's award, and issued a rule 54(b) certificate, by which Reichert appeals.
An uninsured motorist rear-ended Reichert during the course of his employment and while driving a vehicle insured by his employer. Reichert's employer carried liability insurance, including coverage for uninsured motorist, with American. Reichert received some worker's compensation benefits from his employer's carrier, for his injuries. The insurance policy authorizes an offset from the amount "payable" under the contract for any worker's compensation benefits paid or payable. Prior to Reichert completing the worker's compensation proceedings, Reichert and American agreed and stipulated to arbitrate the uninsured motorist claim. Once the parties arbitrated the claim Reichert refused to pursue the worker's compensation claim any further.
Prior to the arbitration, the arbitrator conducted a preliminary scheduling conference, wherein the parties agreed to the following:
The arbitrator will disregard any potential Worker's Compensation claim and issues of subrogation. The parties will address the issues of worker compensation claims and possible subrogation subsequent to the arbitration in an Industrial Commission proceeding.
The arbitrator awarded Reichert the sum of $699,234.37 for compensatory damages and pre-award interest accrued to February 17, 2001. Until the award was fully paid, interest would continue to accrue at the rate of $119.41 per diem. The arbitrator reserved jurisdiction to award attorney fees and costs upon receipt of further evidence and written arguments from the parties.
American filed an application to modify the award based on a theory that the award contained a miscalculation in that it required American to pay prejudgment interest on amounts that may be paid by the worker's compensation carrier. The arbitrator agreed and modified the award authorizing any lawful offsets to be deducted from the compensatory damages prior to calculating the prejudgment interest. The compensatory damages award was confirmed for the sum of $363,210.43.
Reichert then submitted an application to the arbitrator requesting the award be modified or corrected pursuant to I.C. §§ 7-909 and 7-913(a)(1) and (3). Before the arbitrator denied Reichert's application, American filed a complaint for declaratory relief and breach of contract with the district court because Reichert refused to pursue the worker's compensation claim further.
In the district court, Reichert filed an application and motion for modification or correction of award and in the alternative a motion to partially vacate award of arbitrator and for attorney fees. In addition Reichert filed a motion for partial summary judgment and a motion to dismiss the complaint for declaratory relief and breach of contract. American also filed a motion for summary judgment.
The district court would not modify, correct, or vacate the arbitrator's award nor would it confirm the arbitrator's award until the worker's compensation amount had been determined. The court held that in order for Reichert to receive the benefits of the uninsured motorist policy he must first obtain a determination of the amount of worker's compensation. Once the worker's compensation benefits were determined the court would calculate the offset for other benefits received and the prejudgment interest and then confirm the award. The court concluded that the uninsured motorist policy language was not unconscionable or void. Furthermore, the court ruled that American's attempts to alter the arbitrator's decision were not done in bad faith. Finally, the district court reserved the attorney fees and costs issues until the determination of worker's compensation had been resolved.
Reichert filed a motion to alter or to amend judgment, motion for reconsideration, and for certificate of final judgment. The district court issued an opinion denying Reichert's motions, except to the extent of clarifying American's right of offset, and granted a Rule 54(b) certification. Reichert appeals.
The standard of review of a trial court's ruling on a motion for summary judgment is the same as that required of the trial court when ruling on the motion. Sun Valley Potatoes, Inc. v. Rosholt, Robertson & Tucker, 133 Idaho 1, 3, 981 P.2d 236, 238 (1999). Summary judgment is proper "if the pleadings, depositions, and admission on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." I.R.C.P. 56(c). Summary judgment is appropriate, despite the possibility of conflicting inferences, when the evidentiary facts are undisputed and the trial court rather than a jury will be the trier of fact. Pinehaven Planning Bd. v. Brooks, 138 Idaho 826, 828, 70 P.3d 664, 666 (2003).
Judicial review of an arbitrator's decisions is limited to an examination of the award to determine whether any of the grounds for relief stated in Idaho Code §§ 7-912 and 7-913 exists. Pacific Alaska Seafoods, Inc. v. Vic Hoskins Trucking, Inc., 139 Idaho 472, 474, 80 P.3d 1073, 1075 (2003); Landmark v. Mader Agency, Inc., 126 Idaho 74, 76, 878 P.2d 773, 775 (1994); Bingham County Comm'n v. Interstate Elec. Co., 105 Idaho 36, 42-43, 665 P.2d 1046, 1052-53 (1983). An arbitrator's rulings as to questions of law and fact are binding unless one of the grounds for relief set forth in I.C. §§ 7-912 or 7-913 is present. Pacific Alaska Seafoods, Inc., 139 Idaho at 474, 80 P.3d at 1075; Chicoine v. Bignall, 127 Idaho 225, 227, 899 P.2d 438, 440 (1995); Bingham County Comm'n, 105 Idaho at 41-42, 665 P.2d at 1051-52.
An order granting partial summary judgment may be certified as a final order pursuant to Rule 54(b), if the order resolves one or more of the claims between some or all of the parties. Toney v. Coeur D'Alene Sch. Dist. No. 271, 117 Idaho 785, 786, 792 P.2d 350, 351 (1990). It is error for a trial court to certify any interlocutory order as final under Rule 54(b) if it does not resolve one or more of the claims. Brinkmeyer v. Brinkmeyer, 135 Idaho 596, 599, 21 P.3d 918, 921 (2001); Rife v. Long, 127 Idaho 841, 844, 908 P.2d 143, 146 (1995); Toney, 117 Idaho at 786,792 P.2d at 351. An appeal may be pursued according to I.C. § 7-919(a)(3) when a judge enters an order confirming or denying confirmation of an arbitrator's award. In granting a 54(b) certificate the trial judge should determine whether the interests of justice served by an immediate appeal would outweigh the policy against piecemeal appeals. Bishop v. Capital Financial Services, 109 Idaho 866, 868, 712 P.2d 567, 569 (1985)citing Pichon v. L.J. Broekemeier, 99 Idaho 598, 586 P.2d 1042 (1978). The decision to grant or deny a 54(b) certificate rests in the sound discretion of the trial judge who is best able to evaluate the situation. Brinkmeyer, 135 Idaho at 599,21 P.3d at 921 (2001).
The district court did not abuse its discretion when it granted the Rule 54(b) certificate. This appeal is appropriate pursuant to I.C. § 7-919(a)(3) because the district court denied confirmation of the arbitrator's award. Furthermore, the district court resolved the bad faith claim in its entirety and determined the validity of the offset provision. Because the statute specifically authorizes an appeal under this scenario and because one of the claims was resolved in its entirety the district court did not abuse its discretion in issuing the rule 54(b) certificate.
This Court exercises free review in determining whether an insurance contract is ambiguous. Clark v. Prudential Property and Cas. Ins. Co., 138 Idaho 538, 541, 66 P.3d 242, 245 (2003). When the policy language is unambiguous, coverage must be determined, as a matter of law, according to the plain meaning of the words used. Id. Although a contract may be unambiguous, if it violates public policy, it is illegal and unenforceable. Martinez v. Idaho Counties Reciprocal Mgmt. Program, 134 Idaho 247, 252, 999 P.2d 902, 907 (2000...
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