Government Emp. Ins. Co. v. Brunner

• Decision Date: 18 April 1961
• Docket Number: No. 24737,24737
• Citation: 12 Cal.Rptr. 547,191 Cal.App.2d 334
• Court: California Court of Appeals Court of Appeals
• Parties: In the Matter of the Arbitration between GOVERNMENT EMPLOYEES INSURANCE COMPANY and John Richard BRUNNER. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Applicant and Respondent, v. John R. BRUNNER, Responding Party and Appellant.

Page 547

12 Cal.Rptr. 547

191 Cal.App.2d 334

In the Matter of the Arbitration between GOVERNMENT EMPLOYEES INSURANCE COMPANY and John Richard BRUNNER.

GOVERNMENT EMPLOYEES INSURANCE COMPANY, Applicant and Respondent, v. John R. BRUNNER, Responding Party and Appellant.

No. 24737.

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

April 18, 1961.

Rehearing Denied May 12, 1961.

Hearing Denied June 14, 1961.

John Richard Brunner, Huntington Beach, in pro. per., for appellant.

Parker, Stanbury, Reese & McGee, Los Angeles, for respondent.

ASHBURN, Justice.

John Richard Brunner appeals from an order affirming an arbitrator's award. Appellant was the insured in a combination automobile insurance policy which was in effect on January 16, 1958. It contained an agreement to pay to the insured damages for bodily injury caused by an uninsured automobile. Also the following: '6. 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 of payment which may be owing under this endorsement, 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 in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this endorsement.'

An accident occurred on said January 16th and appellant claims to have received personal injuries and property damage. He filed an action in the United States District Court for the District of Columbia to recover from respondent upon said policy, apparently under the 'uninsured motorist endorsement' and other policy provisions. The complaint was filed on July 6, 1959, and served on respondent the next day. Its contents are not disclosed by the record before us. So far as appears, the action lay dormant until after the arbitration award had been made pursuant to hearing held in Los Angeles, the award being dated September 24, 1959. On October 5, 1959, appellant filed an amended complaint in said District of Columbia court seeking judgment for $240,000 and a declaration that respondent had waived any right to an arbitration. This was 11 days after the making of the arbitration award.

Meantime the American Arbitration Association (whose rules were to be pursued with respect to any arbitration, as provided in paragraph 6 quoted supra) appointed Felix F. Silver as sole arbitrator of the controversy between the parties hereto. He qualified and caused notice of hearing to be given by registered mail to both parties. In absence of proof to the contrary it is presumed that all these proceedings were regularly and properly taken. Popcorn Equipment Co. v. Page, 92 Cal.App.2d 448, 451, 207 P.2d 647, 649: 'Every reasonable intendment will be indulged to give effect to arbitration proceedigs. An award made upon an unqualified submission will not be set aside on the ground that it is contrary to law unless the error appears on the face of the award and causes substantial injustice. [Citation.] To justify the setting aside of the award on account of error it must be shown that the rights of one of the parties is prejudiced by the award. [Citation.] The burden is on the party objecting to the award to show affirmatively that error was committed by the arbitrators. [Citations.]' To same effect see, Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 195, 260 P.2d 156; Straus v. North Hollywood Hosp., Inc., 150 Cal.App.2d 306, 310, 309 P.2d 541.

Appellant did not attend the arbitrator's hearing, although he had been duly notified, hence it proceeded without him and an award was made on September 24, 1959 to the effect that respondent pay appellant $285 and bear all administrative fees and expenses of the proceeding.

The award also says: 'This Award is in full settlement of all claims filed by either party against the other.' This obviously means all claims with respect to the subject matter of arbitration--the uninsured motorist endorsement.

Respondent's motion to confirm the award was filed on October 29, 1959, returnable on November 5, 1959. Thereupon appellant filed on November 4, 1959, an application for stay of the arbitration proceeding 'until such time as the action presently in the United States District Court for the District of Columbia is finally terminated, or, in the alternative, 2. Continuing this hearing for a sufficient time to permit me to take depositions and prepare myself to resist the instant action.' The application sets forth the fact of filing the original District of Columbia complaint on July 6, 1959, and serving same upon defendant on July 7, 1959; attached to it is a copy of an amended complaint which was filed on October 5, 1959, 11 days after the arbitrator's award was made. That complaint attempts to plead fraud and repudiation of contract on the part of respondent in withholding from appellant information concerning the uninsured automobile coverage. Elsewhere in the record (his request for admissions) it appears that the desired information was furnished appellant on January 8, 1959, about 10 months before the application for a stay and almost 7 months prior to his receiving notice of hearing to be held by the arbitrator.

Essentially the application for a stay is an attack upon the arbitration. It contains these paragraphs: '6. One of the principal issues to be determined, among others, in the aforesaid action presently pending in the United States District Court for the District of Columbia is whether the Government Employees Insurance Company, applicant herein, had, by its fraud, by its breach and repudiation of the instant contract of insurance, and by other wrongful acts, waived any right to resolve by arbitration any disagreements between the Government Employees Insurance Company and this affiant. 7. I do not concede the validity of the purported arbitrator's award submitted for approval herein and, should it become appropriate for me to do so, I will contest the award upon such grounds as may be available to me in the instant proceedings and/or in such other actions as may properly be brought. 8. Should I prevail in the aforesaid action, I.E., should the United States District Court for the District of Columbia declare invalid any arbitration proceedings whatever, it would be unnecessary for me to attack the purported arbitrator's award presented to this Honorable Court on the specific points of its invalidity.'

The motion to confirm and the application for stay were heard at the same time; the former was granted and the other denied.

Appellant's arguments invoke an analogy to the rules governing the plea of another action pending, and he relies basically upon the argument that the original complaint in the District of Columbia action having been filed before the arbitration proceeding was begun, the latter must be stayed until termination of the former. The analogy is not a true one and this for several reasons.

Were we dealing with two court actions the pendency of a prior action in another jurisdiction would not afford compulsory ground for a stay of the local proceeding. 1 Cal.Jur.2d § 33, p. 59; appellant's cited cases of Dodge v. Superior Court, 139 Cal.App. 178, 181, 33 P.2d 695, 34 P.2d 501, and Simmons v. Superior Court, 96 Cal.App.2d 119, 214 P.2d 844, 19 A.L.R.2d 288, are not to the contrary.

More important, however, is the differentiating nature of an arbitration. One of its major reasons for being is avoidance of delays incidental to court actions. 'The laws with reference to arbitration were passed primarily for the purpose of expediting and facilitating the settlement of disputes and to overcome delays caused by litigation. They are not enacted to provide a means of creating delay.' Pneucrete Corp. v. United States Fid. & G. Co., 7 Cal.App.2d 733, 740, 46 P.2d 1000, 1003.

If both proceedings were pending in this jurisdiction § 1284, Code of Civil Procedure, would be...