Durand v. Wilshire Ins. Co.

• Decision Date: 24 February 1969
• Citation: 75 Cal.Rptr. 415,270 Cal.App.2d 58
• Court: California Court of Appeals Court of Appeals
• Parties: Allan C. DURAND, Petitioner and Appellant, v. WILSHIRE INSURANCE COMPANY, Defendant and Respondent. Civ. 32727.

Page 415

75 Cal.Rptr. 415

270 Cal.App.2d 58

Allan C. DURAND, Petitioner and Appellant, v. WILSHIRE INSURANCE COMPANY, Defendant and Respondent.

Civ. 32727.

Court of Appeal, Second District, Division 1, California.

Feb. 24, 1969.

Rehearing Denied March 18, 1969.

Hearing Denied April 23, 1969.

Frank Renzi, Jr., Ernest L. Graves and Fred Kilbride, Los Angeles, for appellant.

Joseph W. Jarrett and Loyd W. Reed, Los Angeles, for respondent.

LILLIE, Associate Justice.

This is an appeal from an order denying a petition to vacate the award of an arbitrator. Arbitration was had pursuant to the compulsory provisions of section 11580.2(e), Insurance Code, requiring coverage for bodily injury from an uninsured motorist, as well as under the policy issued to petitioner-appellant by respondent company.

Appellant sustained bodily injuries and damage to his car when the vehicle, then being driven by him, was involved in a collision with another car driven by one Brabant, admittedly an uninsured motorist. Thereafter claims were filed by appellant with respondent as well as with another company, Ohio Casualty, which had issued a policy covering damage to appellant's car. Respondent declined to pay, and the claim went to arbitration. Meantime, before any arbitration hearing could be had, appellant was compensated by Ohio which thereafter as subrogee, but assertedly without appellant's permission, instituted action in the Los Angeles Municipal Court against Brabant; pursuant to his subrogee's demand, however, appellant appeared and testified; judgment was rendered in Brabant's favor on March 21, 1967. At or about the time of the trial of the municipal court action the arbitration proceeding came on for hearing; such action then still pending, respondent at the outset challenged the jurisdiction of the arbitrator by contending that such action was one between the same parties or their privies, thus a bar to the claims asserted by appellant before the arbitrator under the doctrine of collateral estoppel and res judicata. Briefs were filed and evidentiary items presented. Thereafter the arbitrator rendered his decision or 'Award' in which he concluded that because of 'equitable estoppel' he lacked 'jurisdiction' until such time as the judgment in the municipal court action was vacated or eventually decided in appellant's favor; it was further concluded that in such latter event, appellant was entitled to damages from respondent in the sum of $7,500. ¹ The judgment in aspects still adverse to appellant eventually became final. In support of his motion in the superior court to vacate the arbitrator's award, no new evidence was offered and appellant relied upon the same matters resulting in the adverse ruling by the arbitrator.

There are express statutory rules, characterized by appellant in his closing brief as 'primitive,' which specify the grounds for vacating or correcting an arbitrator's award. (Code Civ.Proc. §§ 1286.2, § 1286.6.) In this appellate proceeding the claim for reversal is not predicated upon any of the grounds set forth in these sections; instead, appellant asserts that the doctrine of collateral estoppel may not be applied to the facts at bar and it was reversible error for both the arbitrator and the superior court so to do. He argues that resort to either collateral estoppel or res judicata is foreclosed by respondent's own contract--coverage IV thereunder being limited to the right of recovery by the insured for 'bodily injury'; further that collateral estoppel may not be injected into the controversy because (1) he was not a party to or in privity with a party to the municipal court action, (2) even if it be assumed that he was a party to or in privity with a party to such action, it cannot be ascertained what issues were actually litigated and determined, and (3) the value of applying the doctrine is outweighed by other considerations.

At the outset it should be noted that the issue of collateral estoppel was properly before the arbitrator without objection on appellant's part--this is conceded in appellant's opening brief. In such circumstances, even if the arbitrator's decision was erroneous, it is not subject to judicial review. The conclusiveness of an arbitrator's award against a claimed error of law was extensively discussed in Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 185--186, 260 P.2d 156, wherein the court had occasion to refer to numerous court decisions relative to this issue. 'Under these cases,' said the court, 'it must be held that in the absence of some limiting clause in the arbitration agreement, the merits of the award, either on questions of fact or of law, may not be reviewed except as provided in the statute.' (p. 186, 260 P.2d p. 172.) In a preceding paragraph, the court made reference to earlier decisions bearing on the particular problem. Thus, 'it is settled that the courts have no power to review the sufficiency of the evidence. Pacific Vegetable Oil Corp. v. C.S.T., Ltd., 29 Cal.2d 228, 174 P.2d 441; 5 Cal.Jur.2d p. 120, § 52. The law is not quite so clear as to a court's powers of review over questions of law. The earlier cases held that the court had the power to review errors of law, at least where they appeared upon the face of the award. (Citations.) The later cases have gone much farther in granting finality to the award even as to questions of law. In Pacific Vegetable Oil Corp. v. C.S.T., Ltd., 29 Cal.2d 228, 233, 174 P.2d 441, 445, it was bluntly held that 'The merits of the controversy between the parties are not subject to judicial review.'' (p. 185, 260 P.2d p. 171.) Finally, reference is made in Crofoot, supra, to United States v. Moorman, 338 U.S. 457, 70 S.Ct. 288, 94 L.Ed. 256, wherein the court, 'in upholding as final the arbitrator's determination, held that, whether the problem raised was one of law or of fact, the courts should not fritter away the arbitrator's powers under the guise of interpretation.' (pp. 185--186, 260 P.2d p. 172.) To the same effect (that error in law or in fact is not ground for vacating an arbitrator's award) are Interinsurance Exch. of Automobile Club of Southern California v. Bailes, 219 Cal.App.2d 830, 834, 33 Cal.Rptr. 533, and Government Employees Ins. Co. v. Brunner, 191 Cal.App.2d 334, 337, 12 Cal.Rptr. 547.

The sole grounds for vacating or correcting an arbitrator's award are found in sections 1286.2 and 1286.6, Code of Civil Procedure, Supra, and a dissatisfied litigant is limited thereto. (Ulene v. Murray Millman of California, 175 Cal.App.2d 655, 660--661, 346 P.2d 494.) Even if, as will hereinafter be shown and as contended by appellant, collateral estoppel was not available to respondent under the facts presented, did the arbitrator exceed his powers (§ 1286.2(d)) by finding, albeit erroneously, that such doctrine applied? The compulsory arbitration provisions of section 11580.2, Insurance Code (controlling here), require a 'determination as to whether the insured shall be legally entitled to recover damages, and if so entitled, the amount thereof * * *.' The above statutory provisions are incorporated with but slight variance in language in the contract of the parties to this litigation and immediately follow further provisions under 'Coverage J--Family Protection (Damages for Bodily Injury).' Under 'Coverage J' respondent becomes obligated 'To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury * * * sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile. * * *' While the court did not have occasion to decide the effect of 'Family Protection' coverage, set forth (incidentally) in language identical to the coverage in the subject contract, in Jordan v. Pacific Auto. Ins. Co., 232 Cal.App.2d 127, 42 Cal.Rptr. 556, we were required to deal with the legislative purpose behind the enactment of section 11580.2, Supra: '(I)n line with the strong legislative policy favoring arbitration, it was contemplated that under such provision the arbitrator would decide all facts relative to the issue whether the insured 'shall be legally entitled to recover damages.'' (pp. 132--133, 42 Cal.Rptr. 556, 560.) ² It cannot be doubted that 'all facts...