Allstate Ins. Co. v. Cook, 2

Decision Date04 March 1974
Docket NumberNo. 2,CA-CIV,2
Citation519 P.2d 66,21 Ariz.App. 313
PartiesALLSTATE INSURANCE COMPANY, a corporation, Appellant, v. Richard M. COOK, Appellee. 1439.
CourtArizona Court of Appeals

HATHAWAY, Chief Judge.

The appellant-insurer (hereinafter referred to as Allstate) seeks reversal of a superior court judgment confirming an arbitration award in favor of appellee (hereinafter referred to as Cook).

Cook, while riding as a passenger in an automobile driven by Galvez and owned by Garcia, was injured when the car was involved in a collision with an uninsured vehicle driven by Soto. The Galvezdriven vehicle was insured by Farmers Insurance Exchange and Allstate had issued an automobile liability insurance policy, including uninsured motorist cover age, to Cook's father.

After the accident in question, Farmers paid Cook $10,000 and Cook executed a release of Farmers. Cook then made demand upon Allstate to pay the limit of its uninsured motorist coverage to him. On December 22, 1969, Cook filed a demand for arbitration pursuant to the following provision in the Allstate policy:

'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 endorsement, the matter or written demand of either, the matter or matters upon which such person and 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 endorsement.'

February 8, 1971 was set as the date for the arbitration hearing. On January 26, 1971, Allstate filed a lawsuit against Cook alleging in part that since Cook had been paid $10,000 under the uninsured motorist coverage of the Farmer's policy, there was no coverage under the Allstate policy and requested a declaration as to its obligation to Cook arising out of its insurance policy. Allstate also filed a petition to stay the arbitration proceeding. Cook responded with a motion to dismiss and to compel arbitration. The arbitration hearing was held as scheduled on February 8, 1971, and thereafter on February 23, 1971 the court ruled as follows on the motion to dismiss the declaratory judgment action:

'It is hereby ordered that the Motion is granted, and the Complaint is ordered dismissed without prejudice to the rights of the Plts. to have the Superior Court hear and determine any matters properly presented to it with reference to any award resulting from the arbitration proceeding.

The portion of the Motion requesting the Court to compel arbitration is moot since the Court was formed by both counsel that the arbitration has actually been held.'

At the commencement of the arbitration hearing, counsel for Allstate argued that the arbitrator was without jurisdiction to determine Allstate's liability under the insurance policy because Allstate denied the existence of coverage under such policy. He contended that the arbitration provision of the insurance policy did not authorize submission of coverage issues to arbitration. The partial transcript of the hearing reflects that the arbitrator intended to decide whether or not there was coverage:

'Well, I am going to take into account the fact that Cook has received $10,000 already and what I mean by that is, for example, if I find that the person is entitled to $15,000, he will get $5,000.'

On March 4, 1971 the arbitrator made his award directing Allstate to pay Cook the sum of $10,000, expressly finding that Cook was damaged in excess of $20,000. Allstate did not pay the sum awarded whereupon Cook applied for confirmation of the arbitration award. Allstate opposed the application alleging that the arbitrator had exceeded his power and acted beyond his jurisdiction. 1 The matter was duly heard and the judgment confirming the arbitrator's award resulted. This appeal followed. 2

The pivotal question is whether or not the arbitrator had authority to decide, as he apparently decided,...

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21 cases
  • Board of Ed. of Berkeley County v. W. Harley Miller, Inc.
    • United States
    • West Virginia Supreme Court
    • July 5, 1977 find an agreement to arbitrate, Flood v. Country Mut. Ins. Co., 41 Ill.2d 91, 242 N.E.2d 149, (1968); Allstate Ins. Co. v. Cook, 21 Ariz.App. 313, 519 P.2d 66 (1974), the trend among the jurisdictions is to hold that the court is to apply ordinary principles of contract interpretation to......
  • Liddy v. Companion Ins. Co.
    • United States
    • Indiana Appellate Court
    • June 12, 1979
    ...Other cases have held that coverage questions are not arbitrable under such an arbitration clause. E. g., Allstate Insurance Co. v. Cook (1974) 21 Ariz.App. 313, 519 P.2d 66 ("under this endorsement"); Frager, supra ("under this Part"); Flood, supra ("under this Section"); Vasilakis v. Safe......
  • Yeung v. Maric
    • United States
    • Arizona Court of Appeals
    • June 8, 2010
    ...judicial litigation. But Arizona public policy favors arbitration as a means of disposing of controversies, Allstate Ins. Co. v. Cook, 21 Ariz.App. 313, 315, 519 P.2d 66, 68 (1974), and to that end Arizona has enacted the Uniform Arbitration See Foy v. Thorp, 186 Ariz. 151, 153, 920 P.2d 31......
  • Hanson v. Commercial Union Ins. Co.
    • United States
    • Arizona Court of Appeals
    • June 10, 1986
    ...are without power to decide issues outside the scope of the submission agreement. The court stated in Allstate Insurance Co. v. Cook, 21 Ariz.App. 313, 519 P.2d 66 (1974): We agree with appellee that the public policy of Arizona favors arbitration as a means of disposing of controversy. Jea......
  • Request a trial to view additional results
1 books & journal articles
  • 4.2.1 Scope of the Proceeding
    • United States
    • State Bar of Arizona Liability Insurance Law Chapter 4 Litigation (Sections 4.1 to 4.8)
    • Invalid date
    ...v. Arrow Ins. Co., 16 Ariz. App. 589, 591, 494 P.2d 1334, 1336 (1972), review denied. [81]Id.; Allstate Ins. Co. v. Cook, 21 Ariz. App. 313, 315, 519 P.2d 66, 68 (1974), review denied. Arizona's public policy is manifest in the legislature's adoption, in 1962, of the Uniform Arbitration Act......

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