Fisher v. State Farm Mut. Auto. Ins. Co.

• Court: California Court of Appeals
• Writing for the Court: KAUS; SHINN, P.J., and FORD
• Citation: 52 Cal.Rptr. 721,243 Cal.App.2d 749
• Parties: In the Matter of the Arbitration between William Alexander FISHER and Linnie P. Fisher, Petitioners and Respondents, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Appellant. Civ. 28711.
• Decision Date: 28 July 1966

Page 721

52 Cal.Rptr. 721 243 Cal.App.2d 749 In the Matter of the Arbitration between William Alexander FISHER and Linnie P. Fisher, Petitioners and Respondents,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Appellant. Civ. 28711. District Court of Appeal, Second District,
Division 3, California. July 28, 1966.
Hearing Denied Sept. 28, 1966.

[243 Cal.App.2d 750] Spray, Gould & Bowers and Eugene R. Grace, Los Angeles, for appellant.

Wiener & Wiener and Albert C. Mour, Sherman Oaks, for respondents.

Page 722

KAUS, Justice.

State Farm Mutual Automobile Insurance Company ('State Farm') appeals from a judgment entered in conformity with an arbitration award. (Code Civ.Proc. § 1287.4.)

The facts are very simple: State Farm issued an automobile liability policy to William Fisher. It contained the so-called 'uninsured motorist coverage' prescribed by section 11580.2 of the Insurance Code. The arbitration agreement contained in the policy under which the subject arbitration was held reads in part as follows: 'Arbitration. 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 payable hereunder, when each party shall, upon written demand of either, select a competent and disinterested arbitrator * * *. The arbitrators shall then hear and determine the question or questions so in dispute, and the decision in writing of any two arbitrators shall be binding upon the insured and the company, * * *.' (Emphasis added.)

Without the necessity of judicial prodding the parties proceeded to arbitration. The award, after the usual recitals, reads as follows: 'That Respondent, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, is required to pay to the Petitioner, WILLIAM A. FISHER, the sum of $70.00. That Respondent, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,[243 Cal.App.2d 751] is required to pay the Petitioner, LINNIE P. FISHER, the sum of $5,756.37. This award is based on the evidence as submitted to the panel at the hearing on January 11, 1964, the includes special damages for the Petitioners WILLIAM A. FISHER and LINNIE P. FISHER as well as general damages for the Petitioner, LINNIE P. FISHER.'

There is no dispute about the fact that Linnie P. Fisher was an insured within the meaning of section 11580.2(b).

The Fishers then petitioned the superior court to confirm the award. The affidavits filed by the parties in connection with the proceedings seeking confirmation and State Farm's opposition thereto show quite clearly that under the so-called 'medical payment coverage' of the State Farm policy, the company had paid $1,000.00 to Linnie Fisher and $70.00 to William Fisher. These payments were all made before the date of the hearing before the arbitrators. The whole controversy centers on State Farm's contention that these payments should have been deducted from the award by the superior court.

Under section 11580.2(g)(2) any 'loss payable under the terms of the uninsured motorist * * * coverage * * * may be reduced' by the amounts thus paid under a medical payment coverage and the policy issued by State Farm expressly so provided. It is obvious from the declarations filed in the superior court that these payments were not brought to the attention of the arbitrators.

If only the issues declared to be arbitrable under section 11580.2 had been agreed to be submitted to arbitration, we would entertain serious doubts whether the award can stand In toto. These issues are 'whether the insured shall be legally entitled to recover damages, and if so entitled, the amount thereof * * *.' (Ins.Code, § 11580.2(e).) They relate clearly to the liability of the uninsured motorist to the insured and not to the amount of money which the insurance company must pay the insured under the uninsured motorist coverage. (Aetna Cas. & Surety Co. v. Superior Court, 233 Cal.App.2d 333, 337, 43 Cal.Rptr. 476.) The amounts paid under the medical payment coverage, on the other hand, are declared by subsection (g)(2) of section 11580.2 to be deductible from the 'loss payable' under the terms of the uninsured motorist coverage. This 'loss' is by no means synonymous with the liability

Page 723

of the third party to the insured, chiefly because it is limited to 'the financial responsibility...