Banks v. Milwaukee Ins. Co.

• Decision Date: 07 December 1966
• Citation: 247 Cal.App.2d 34,55 Cal.Rptr. 139
• Court: California Court of Appeals Court of Appeals
• Parties: , 36 A.L.R.3d 933 Lucius W. BANKS, Plaintiff and Appellant, v. MILWAUKEE INSURANCE COMPANY, Defendant and Respondent. Civ. 29313.

Page 139

55 Cal.Rptr. 139

247 Cal.App.2d 34, 36 A.L.R.3d 933

Lucius W. BANKS, Plaintiff and Appellant, v. MILWAUKEE INSURANCE COMPANY, Defendant and Respondent.

Civ. 29313.

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

Dec. 7, 1966.

Rehearing Denied Dec. 27, 1966.

Hearing Denied Feb. 1, 1967.

Denton & Thomas and Kenneth R. Thomas, Los Angeles, for plaintiff and appellant.

Betts & Loomis and Albert H. Ebright, Los Angeles, for defendant and respondent.

KINGSLEY, Justice.

Plaintiff, having been injured in an automobile accident involving an uninsured motorist, made claim for damages under his insurance policy with defendant. The parties being unable to agree on the amount involved, the matter was submitted to arbitration under the auspices of the American Arbitration Association. After hearings, the arbitrator rendered his award, in the following terms:

'(A) MILWAUKEE INSURANCE COMPANY, hereinafter sometimes referred to as MILWAUKEE, shall pay to LUCIUS W. BANKS, hereinafter sometimes referred to as BANKS, the sum of FIVE HUNDRED THIRTY-NINE DOLLARS AND FIFTY CENTS ($539.50).

'(B) The administrative fees of the American Arbitration Association in the amount of $53.00 shall be borne equally. Therefore, MILWAUKEE shall pay to BANKS the additional sum of $26.50 representing their one-half share of the fees previously advanced by BANKS to the Association.

'(C) This Award is in full settlement of all claims submitted in this arbitration.'

The award was rendered on November 26, 1963. On December 4, 1963, plaintiff filed with the arbitrator an application, purportedly under section 1284 of the Code of Civil Procedure, ¹ for a correction of the award. The ground alleged was that the arbitrator had not included any allowance for general damages, it being contended that the award was in the exact sum of the special damages for loss of earnings. ² The arbitrator took no action on this application until January 20, 1964, when he wrote a letter to the American Arbitration Association, purportedly correcting his award by adding an allowance of $1,000 for general damages. ³ The Association rejected the purported correction, on the ground that it was not made within the 30 day period set forth in section 1284.

Plaintiff then filed his petition, ⁴ purportedly pursuant to sections 1286.2 to 1286.8, seeking a correction or vacation of the award. Defendant answered and prayed for confirmation of the award as originally rendered. After a hearing, and the consideration of declarations filed by both parties, plaintiff's petition was denied and judgment confirming the award as originally rendered was entered. ⁵ Plaintiff has appealed.

I

The trial court held that the attempted correction was void and of no effect on the ground that it came too late. We agree with that conclusion; but, for reasons discussed herein, we conclude that the correction, even if timely, would have been beyond the power of the arbitrator.

First: The power to correct an award, once finally rendered, is derived from section 1284 of the Code of Civil Procedure. So far as herein pertinent, that section provides:

'The arbitrators, upon written application of a party to the arbitration, may correct the award upon any of the grounds set forth in subdivisions (a) and (c) of Section 1286.6 not later than 30 days after service of a signed copy of the award on the applicant.

If no denial of the application or correction of the application orcorrection of the award is served within the 30-day period provided in this section, the application for correction shall be deemed denied on the last day thereof.'

Since the attempt to correct the award was not made until more than 30 days after the award was rendered and served, the arbitrator's power had lapsed and his action was of no legal effect.

Second: Even if the attempted 'correction' had been timely made, it was not a correction which the arbitrator had power to make . As above noted, under section 1284, a correction by an arbitrator may be made 'upon any of the grounds set forth in subdivisions (a) and (c) of section 1286.6.' But those two subdivisions provide for corrections where '* * * (a) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award; * * * or (c) The award is imperfect in a matter of form, not affecting the merits of the controversy ' These grounds are exclusive; ⁶ and it is obvious that neither of them covers the kind of 'correction' that plaintiff requested. ⁷ As distinguished from judicial correction or judicial vacation, which we consider later, it is clear that section 1284 confers on an arbitrator power to make corrections only in a very limited area. The correction requested here was no mere recalculation, but a revision in substance, adding an element of damages not covered (according to plaintiff) in the award as rendered.

II

Plaintiff's petition to the superior court sought, among other relief, a 'correction' of the award by the court, on the same theory as had been urged on the arbitrator. The judicial power of correction is contained in section 1286.6, to which we have adverted above. For the reasons already set forth, subdivisions (a) and (c) of the section give no authority for the correction here desired. In addition to those two subdivisions, the court (as distinguished from the arbitrator) may 'correct' an award if '* * * (b) The arbitrators exceeded their powers but the award may be corrected without affecting the merits of the decision upon the controversy submitted; * * *' This subdivision affords plaintiff no aid. By no theory, could the inclusion of damages for an unliquidated claim based on pain and suffering be thought to be a 'correction' at all, much less a correction which did not 'affect the merits' of the controversy.

III

Finally, plaintiff's petition sought to have the superior court vacate the award and (under section 1287) order a new hearing.

As his first ground for vacating, plaintiff contended that the arbitrator had been guilty of misconduct (a) in delaying his action on the application for correction; (b) in not granting that application; and (c) in not awarding general damages for pain and suffering. What has been said above is a sufficient answer to the first two arguments. In addition, and without attempting here to define the meaning of 'misconduct' as used in section 1286.2, subdivision (c), we think it clear that the mere failure to act is not the kind of 'misconduct' that is there contemplated. As we point out below, the most that the third argument amounts to is that the arbitrator did not exercise his powers fully. This may be a ground to vacate under subdivision (e) but it is not 'misconduct' under subdivision (c).

The ultimate contention is that the court should have vacated the award, under subdivision (e) of section 1286.2, in that the failure to award general damages amounted to 'conduct of the arbitrators contrary to the provisions of this title' by which conduct the rights of the plaintiff had been 'substantially prejudiced.'

If the record actually shows that the issue of general damages had been submitted to the arbitrator, and that he had totally failed to consider it, the court could and should have vacated the award. It is provided in section 1283.4 that:

'The award shall be in writing and signed by the arbitrators concurring therein. It shall include a determination of all the questions submitted to the arbitrators the decision of which is necessary in order to determine the controversy.'

Failure to find on all issues submitted, is, thus, a statutory ground for vacating an award. ⁸

We conclude that the record before us sufficiently shows that the arbitrator had violated the requirements of section 1283.4 and, therefore, that the trial court should have vacated the award and directed further proceedings in accordance with the provisions of section 1287.

First: The record shows that the arbitrator had failed to consider at all the element of...