Federal Mut. Ins. Co. v. Schermerhorn

• Decision Date: 21 December 1965
• Citation: 238 Cal.App.2d 900,48 Cal.Rptr. 325
• Court: California Court of Appeals Court of Appeals
• Parties: FEDERAL MUTUAL INSURANCE COMPANY, Plaintiff and Respondent, v. Patricia SCHERMERHORN, Defendant and Appellant. Civ. 22320.

Page 325

48 Cal.Rptr. 325

238 Cal.App.2d 900

FEDERAL MUTUAL INSURANCE COMPANY, Plaintiff and Respondent, v. Patricia SCHERMERHORN, Defendant and Appellant.

Civ. 22320.

District Court of Appeal, First District, Division 2, California.

Dec. 21, 1965.

Bernard Allard, Francis T. Cornish, John B. Brethauer, Oakland, Spellacy, Spellacy, Lano & Anderson, Marble, Minn., for appellant.

Sedgwick, Detert, Moran & Arnold, Raymond J. Arata, Jr., San Francisco, for respondent.

AGEE, Justice.

On December 10, 1960, Patricia Schermerhorn was injured as the result of a collision between an automobile in which she was riding and a pickup truck owned and being driven by George Matsunaga.

Allstate Insurance Company had issued a public liability insurance policy on another vehicle owned by Matsunaga but there was no existing policy on the pickup truck. However, the Allstate policy contained a 'temporary substitute' clause and Matsunaga claimed coverage of the pickup truck under its provisions. Allstate denied such coverage.

Federal Mutual Insurance Company had issued a public liability insurance policy on the automobile in which Schermerhorn was riding. It provided uninsured motorists' coverage and contained a provision to settle by arbitration any controversy relating to liability or damages arising under such coverage.

On February 25, 1964, Schermerhorn requested arbitration under this provision and caused a hearing to be scheduled before the American Arbitration Association for May 28, 1964.

On April 15, 1964 Federal filed the within action against Allstate, Matsunaga and Schermerhorn, seeking a declaration of whether Allstate's policy covered Matsunaga's pickup truck.

Federal also asked for a preliminary injunction against Schermerhorn, restraining her from proceeding with the arbitration until the determination of its dispute with Allstate. Such an injunction was granted and Schermerhorn has appealed.

On February 11, 1965 the issue as between Federal, Allstate and Matsunaga was tried by the court sitting without a jury. ¹ On April 23, 1965 the court filed a 'Memorandum of Opinion,' holding that Allstate's policy did not cover Matsunaga or his pickup truck.

After settlement of findings and conclusions of law, judgment in favor of Allstate was entered on December 10, 1965. Federal has stated that it intends to appeal therefrom. Meanwhile, the preliminary injunction continues to prevent Schermerhorn from pursuing the remedy provided by the Uninsured Motorist Coverage Act. (Stats.1959, ch. 817; former Ins. Code § 11580.2, as in effect during the period pertinent herein.)

On appeal, respondent does not deny appellant's right to such remedy or question the power of the arbitrator to determine the issue as to whether Matsunaga is or is not an 'uninsured motorist.' (Cf. Jordan v. Pacific Auto Ins. Co. (1965) 232 Cal.App.2d 127, 132, 42 Cal.Rptr. 556.)

Respondent states that, while the legislative intent of the Act 'is clearly one to provide financial protection to users of the highways who are injured due to the negligence of uninsured motorists,' a 'Delay of an arbitration hearing does not thwart the Legislative intent' and that 'The delay here was purposely temporary to determine if in fact George Matsunaga was uninsured at the time of the accident.'

The 'temporary' delay, which commenced with the issuance of the preliminary injunction, will continue until the final determination of Federal's appeal from the judgment in favor of Allstate, unless such injunction is dissolved and the arbitration hearing allowed to proceed.

Respondent's points and authorities filed with the court below in support of its application for a preliminary injunction made two contentions only, (1) that the issue as to whether Matsunaga was an uninsured motorist was for the determination of a court and 'should not be left to arbitration' and (2) that, by filing a superior court personal injury action against Matsunaga, 'Patricia Schermerhorn chose to submit to the court the question of her right to recover damages and if so, the amount thereof, thereby waiving her right to demand arbitration.' Both of these contentions have now been decided adversely to respondent by our appellate courts.

The record does not disclose the ground or grounds upon which the preliminary injunction was granted. However, Jordan v. Pacific Auto Ins. Co., supra, and Loscalzo v. Federal Mut. Ins. Co., 228 Cal.App.2d 391, 39 Cal.Rptr. 437, were decided after its issuance and were therefore not available for consideration by the court.

In Jordan, as stated above, it was held that the uninsured motorist question is properly triable in the arbitration proceedings.

Loscalzo was decided on July 9, 1964, and arose out of the same accident as that involved herein....