Commercial Ins. Co. of Newark, N. J. v. Copeland

• Decision Date: 15 February 1967
• Citation: 248 Cal.App.2d 561,56 Cal.Rptr. 794
• Court: California Court of Appeals Court of Appeals
• Parties: COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, a corporation, Plaintiff and Respondent, v. Dorothy COPELAND, James Copeland, Defendants and Appellants. Civ. 29344.

Page 794

56 Cal.Rptr. 794

248 Cal.App.2d 561

COMMERCIAL INSURANCE COMPANY OF NEWARK, NEW JERSEY, a corporation, Plaintiff and Respondent, v. Dorothy COPELAND, James Copeland, Defendants and Appellants.

Civ. 29344.

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

Feb. 15, 1967.

James W. Thomason, Anaheim, for defendants and appellants.

Clausen & Gilliland, Kenneth H. Clausen, Los Angeles, for plaintiff and respondent.

JEFFERSON, Associate Justice.

The plaintiff insurance company brought an action, seeking a declaration that all claims against it under the uninsured motorist coverage provided in a policy issued by plaintiff to defendants Dorothy and James Copeland, have been settled by a binding release executed by defendants; and for a permanent injunction restraining defendants from proceeding with the arbitration of these claims. The case was submitted to the court on the depositions of defendants, two doctors, an insurance agent and an insurance adjuster; plus certain medical records and documents signed by defendants which related to their claims. From a judgment granting the relief sought, defendants appeal.

On October 15, 1961, Mr. and Mrs. Copeland were in their car, with Mr. Copeland driving and Mrs. Copeland seated beside him in the front seat, when they stopped at an intersection and were struck from the rear by another car, its driver allegedly uninsured. After the collision Mrs. Copeland was still seated on the seat in an upright position. Her neck began to hurt almost immediately. The next day she went to see Dr. Ryan complaining of a stiff neck. He examined her and had x-rays taken of her neck with negative results. On October 23rd she returned to Dr. Ryan's office with the same complaint. For these two visits and the x-rays Mrs. Copeland was charged $37.00.

Sometime in the early part of November 1961, Mrs. Copeland began to feel pain in her low back area. A small ache at first but in a few days it became quite severe. On December 15, 1961, she went to Dr. Sherwood, a chiropractor. After several treatments the low back pain was not as severe but it still remained to some extent at all times thereafter. On January 23, 1962, Mrs. Copeland signed and submitted to plaintiff a proof of claim form under the uninsured motorist coverage. In it she described her injury as a stiff neck. On February 6, 1962, she and Mr. Copeland executed a document titled 'Release of Claims for Benefits on Account of Bodily Injury or Death Caused by Uninsured Automobiles.' As consideration for the release they received $50.00. At that time, although she 'didn't know' that the low back pains were caused by the accident, she 'had thought of it.' On the same date the Copelands also executed a receipt and release form, under the medical payments coverage, for the sum of $37.00, the cost of the treatment for her sore neck and from which injury she had at that time nearly fully recovered. On February 16, 1962, when her low back pains began to get more severe, she went again to Dr. Sherwood for treatment and, when they grew still worse, on February 24, she went to Dr. Hawkins. She told the latter her back pains were caused by the automobile accident.

Dr. Hawkins had x-rays taken of Mrs. Copeland. The x-rays showed evidence of disc degeneration in her low back together with arthritic spurring. Hawkins testified (by deposition) that these conditions take several years to develop and that almost any kind of trauma will bring on the onset of symptoms or complaints; 'it could have been related to the accident,' but he 'would expect some signs of back pain, or stiffness within a few days or instantly' if an accident occurred of sufficient severity to injure the disc 'right then and there.' The conditions from which Mrs. Copeland suffered could also have come on gradually without accident or trauma; or from doing nothing more than bending over or sneezing, something so commonplace a person would not be aware of it; that it is 'just anybody's guess' as to what caused the symptoms to appear.

On October 3, 1962, Mrs. Copeland filed a demand for arbitration with the American Arbitration Association under the uninsured motorist coverage of the policy issued by plaintiff. The present action followed.

The policy of insurance issued by plaintiff to defendants contains the 'uninsured motorist coverage' prescribed by section 11580.2 of the Insurance Code, no more, no less. ¹ In respect to arbitration, it provides, in accordance with section 11580.2, that the 'determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the company or, if they fail to agree, by arbitration.'

At the outset defendants contend that the court below had no authority to determine the legal effect of the release; such determination they argue, the contract of insurance provided for submission to arbitration.

'It is the rule that the powers of the arbitrator are determined by the contract by which the matter is submitted to him. (Citation.)' (Aetna Cas. & Surety Co. v. Superior Court, 233 Cal.App.2d 333, 337, 43 Cal.Rptr. 476, 478.) As we have indicated, the contract of insurance in this case was limited to the minimum requirements prescribed by section 11580.2; arbitration was provided for disputes respecting only the 'determination as to whether the insured * * * is legally entitled to recover * * * damages, and if so the amount thereof.' These issues relate to the liability of the uninsured motorist to the insured, not to the amount of money the insurance company must pay (Fisher v. State Farm Mut. Auto Ins. Co., 243 A.C.A. 933, 935--936, 52 Cal.Rptr. 721; Aetna Cas. & Surety Co. v. Superior Court, supra, 233 Cal.App.2d at p. 337, 43 Cal.Rptr. 476), or to the preliminary question of whether there is a valid and subsisting agreement to arbitrate.

In a proceeding seeking to enforce an arbitration agreement, section 1281.2 of the Code of Civil Procedure specifically provides for a court determination of the question of whether arbitration has been waived by a party otherwise entitled. The section reads in part:

'On petition of a...