Felner v. Meritplan Ins. Co.

• Decision Date: 13 April 1970
• Citation: 466 P.2d 722,86 Cal.Rptr. 178,6 Cal.App.3d 540
• Court: California Court of Appeals Court of Appeals
• Parties: Berek N. FELNER and Fay Felner, Plaintiffs and Respondents, v. MERITPLAN INSURANCE COMPANY, Defendant and Appellant. Civ. 34758.

Page 178

86 Cal.Rptr. 178

6 Cal.App.3d 540

Berek N. FELNER and Fay Felner, Plaintiffs and Respondents, v. MERITPLAN INSURANCE COMPANY, Defendant and Appellant.

Civ. 34758.

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

April 13, 1970.

Steck & Marston, Pasadena, for appellant.

Sanford M. Gage, Los Angeles, for respondents.

FLEMING, Associate Justice.

Meritplan Insurance appeals a superior court judgment confirming an arbitration award of $4,100 in favor of the Felners, an award based on the uninsured motorist coverage of their liability insurance policy.

At the arbitration hearing Meritplan disclaimed liability under the policy, claiming that no physical contact had occurred between the Felner automobile and the unidentified automobile which caused the accident and therefore the uninsured motorist coverage of the policy did not apply. Both sides presented evidence on this issue, and the arbitrator decided in favor of the Felners, finding that physical contact between vehicles had occurred. Meritplan, in opposing confirmation of the arbitration award in the superior court, contended the court should conduct a new evidentiary hearing on the issue of physical contact, but the court rejected this contention and affirmed the award. On appeal, Meritplan argues procedural error because the superior court refused an evidentiary hearing on the issue of physical contact.

Section 11580.2 of the Insurance Code requires a motor vehicle liability insurance policy to provide coverage for injuries to the insured caused by an uninsured automobile. An uninsured automobile includes a hit-and-run automobile which had physical contact with the insured. Subsection (f) declares that the parties to the policy shall determine--by agreement or by arbitration--whether the insured is legally entitled to recover damages, and, if so, the amount of the damages.

The Felner policy provided that '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 the coverage, then, upon written demand of either, The matter or matters upon which such person and the company do not agree shall be settled by arbitration * * * and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof.' (Italics added.)

At bench the issue between the parties no longer involves the validity of the finding of physical contact between the insured and a hit-and-run automobile but rather the question whether the arbitrator or the superior court has ultimate authority to make a finding of physical contact between vehicles. Such a procedural controversy is to be settled by reference to the terms of the agreement authorizing the submission of the dispute to arbitration. On examining the Felner policy we conclude that its arbitration submission is broad enough to cover a dispute over the meaning of the term uninsured automobile (which for a hit-and-run automobile requires a finding of physical contact). We view the agreement to submit to the arbitrator the question whether the insured was 'legally entitled to recover damages from the owner or operator of an uninsured automobile' as sufficiently comprehensive to include the subordinate question whether the vehicle which caused the accident was an uninsured automobile within the meaning of the policy. 'It is for the arbitrators to determine which issues were actually 'necessary' to the ultimate decision. (See Grunwald-Marx, Inc. v. Los Angeles Joint Board, 52 Cal.2d 568, 589--590, 343 P.2d 23.) Likewise, any doubts as to the meaning or extent of an arbitration agreement are for the arbitrators and not the court to resolve. (See O'Malley v. Wilshire Oil Co., 59 Cal.2d 482, 490--491, 30 Cal.Rptr. 452, 381 P.2d 188 (collective bargaining agreement.)' (Morris v. Zuckerman, 69 Cal.2d 686, 690, 72 Cal.Rptr. 880, 883--884, 446 P.2d 1000, 1003--1004; Code Civ.Proc. § 1283.4.) Since the issue of physical contact was properly before the arbitrator for decision, the only questions for the superior court to consider in confirming or vacating the arbitration award were whether there had been corruption or misconduct by the arbitrator and whether the arbitrator had improperly conducted the hearing or exceeded his powers in making his award. (Code Civ.Proc. § 1286.2.) The record indicates that the parties to the arbitration had been given an opportunity to litigate the issue of physical contact, that both sides took advantage of this opportunity, and that the arbitrator decided the issue in favor of the policyholders. Since the disputed issue fell within the terms of the submission, the superior court properly confirmed the award. (Jordan v. Pacific Auto. Ins. Co., 232 Cal.App.2d 127, 132, 42 Cal.Rptr. 556; American Ins. Co. v. Gernand, 262 Cal.App.2d 300, 68 Cal.Rptr. 810; Esparza v. State Farm Mut. Auto. Ins. Co., 257 Cal.App.2d 496, 500--501, 65 Cal.Rptr. 245 (hear. den.); Federal Mut. Ins. Co. v. Schermerhorn, 238 Cal.App.2d 900, 48 Cal.Rptr. 325.)

Even if the policy should be construed as one which did not authorize arbitration of the issue of physical contact between vehicles ( a construction which we think would take away a substantial part of the benefits, speed, and economies of arbitration), once the insurer submitted the dispute to the arbitrator for decision, it waived any defect in the arbitrator's authority to decide this issue and waived any right to litigate the smae issue in another tribunal. (Fidelity & Cas. Co. v. Dennis, 229 Cal.App.2d 541, 40 Cal.Rptr. 418; Jordan v. Pacific Auto. Ins. Co., 232 Cal.App.2d 127, 42 Cal.Rptr. 556; Hernandez v. State Farm Ins. Co., 272 A.C.A. 303, 77 Cal.Rptr. 196.) A party cannot gamble on a favorable outcome of a submitted issue and, having lost the gamble, then attack the validity of his submission to the tribunal which decided the issue against him. (O'Malley v. Petroleum Maintenance Co., 48 Cal.2d 107, 110, 308 P.2d 9; Interinsurance Exch. of Automobile Club v. Bailes, 219 Cal.App.2d 830, 33 Cal.Rptr. 533; Lofberg v. Aetna Cas. & Sur. Co., 264 Cal.App.2d 306, 309, 70 Cal.Rptr. 269.)

Appellant relies on Pacific Automobile Ins. Co. v. Lang, 265 Cal.App.2d 837, 71 Cal.Rptr. 637, to establish the proposition that a judicial finding of fact on physical contact is required. In that case the arbitrator made an uninsured motorist award in favor of the insured despite the arbitrator's own finding that there had been no physical contact between the unidentified vehicle and the insured's vehicle. Thereafter, the superior court vacated the award, concluding that the arbitrator had exceeded his authority under the terms of the policy. On appeal, the Court of Appeal remanded the case to the trial court for an evidentiary hearing to determine the arbitrator's jurisdiction. The court said: 'It appears from the record that when the matter came before the trial court, pursuant to the stipulation of counsel, the court did not receive evidence and make an independent judicial determination as to whether or not the insured automobile had any physical contact with the phantom automobile. A judicial determination of this factual issue necessarily must precede determination of the issue of law whether the arbitrator has jurisdiction to proceed. But here the trial court accepted the arbitrator's determination of the factual issue and rested thereon its own determination of the issue of law. This was error.' (pp. 842--843, 71 Cal.Rptr. p. 640.) The reasoning in support of the order for a judicial finding on physical contact apparently ran somewhat as follows: the arbitrator had jurisdiction to make an award only if an unidentified uninsured...