Moresi v. Nationwide Mut.

• Decision Date: 26 May 1989
• Citation: 96 Or.App. 61,771 P.2d 301
• Parties: Magdalena MORESI, Appellant, v. NATIONWIDE MUTUAL, Respondent. 87-189-CV; CA A48571.
• Court: Oregon Court of Appeals

Page 301

771 P.2d 301

96 Or.App. 61

Magdalena MORESI, Appellant, v. NATIONWIDE MUTUAL, Respondent.

87-189-CV; CA A48571.

Court of Appeals of Oregon.

Argued and Submitted Jan. 20, 1989.

Decided April 5, 1989.

Reconsideration Denied May 26, 1989.

George W. Kelly, Eugene, argued the cause and submitted the brief for appellant.

Hugh Collins, Medford, argued the cause and submitted the brief for respondent.

Before BUTTLER, P.J., and WARREN and ROSSMAN, JJ.

ROSSMAN, Judge.

Appellant appeals from a judgment holding that she is not entitled to arbitration. We reverse.

On June 28, 1985, appellant was injured in an automobile accident involving an uninsured motorist. At that time, her vehicle was covered by a policy issued by respondent that provided, in part:

"If [respondent] and the insured do not agree about the insured's right to recover damages or the amount of damages, the following arbitration procedure will be used: After written demand for arbitration by either party, each party will select a competent and disinterested arbitrator. The two so selected will select a third." ¹

On May 4, 1987, respondent's agent wrote directly to appellant:

"On April 15, 1987, I contacted you to discuss the settlement of your pending Bodily Injury Uninsured Motorist claim. At that time offered you $4,000 worth of general damages. I want to make you aware that under the Oregon Statutes you have two years to reach a settlement for Bodily Injury Uninsured Motorist claims. If we fail to settle this pending Bodily Injury Uninsured Motorist case prior to June 28, 1987, there will be no action that you can take to collect for damages against Nationwide Insurance."

Appellant did not accept respondent's offer, and on June 23, 1987, she filed a "Petition to Arbitrate," in circuit court. The trial court, apparently concluding that the petition did not constitute a written demand, found that respondent was not in breach of the agreement to arbitrate and dismissed the petition.

The trial court's scope of inquiry in a proceeding to compel arbitration is governed by ORS 33.230 ² and is limited to whether there is a contract providing for arbitration and whether there has been a default in the contract. Union County Sch. Dist. No. 1 v. Valley Inland, 59 Or.App. 602, 606, 652 P.2d 349 (1982). There is no dispute whether a contract to arbitrate exists. Respondent argues that it was not in default because appellant did not meet "the condition precedent" of a written demand. ³ Appellant argues that the trial court could not consider that defense which requires interpretation of the words "written demand," because interpretation of a term of a contract that is subject to arbitration is the responsibility of the arbitrator and not of the court.

ORS 33.230 does not make it clear what defenses the trial court may consider. Union County Sch. Dist. No. 1 v. Valley Inland, supra, 59 Or.App. at 606, 652 P.2d 349. We find persuasive the analysis of the judicial scope of inquiry discussed in Rockland (Primiano Const.), 51 N.Y.2d 1, 431 N.Y.S.2d 478, 409 N.E.2d 951 (1980). The court noted that "conditions precedent" are matters for judicial determination when they involve the conditions that the parties agreed on about access to the arbitral forum. Those conditions are not the same as procedural conditions:

"Sharply to be distinguished from conditions precedent to arbitration are procedural stipulations that the parties may have laid down to be observed in the conduct of the arbitration proceeding itself * * *. As would be expected, questions as to whether there has been compliance with such procedural regulations and, if not, what the consequences shall be, are for resolution by the arbitrator as incidental to the conduct of the arbitration proceeding * * *.

"It is recognized that both conditions precedent to access to the arbitral forum (falling within the judicial ambit) and procedural regulations or conditions in the arbitration proceedings (falling to the arbitrator) may be verbally referred to indiscriminately as 'conditions precedent' to arbitration. Such loose description, however, obscures analysis and clarity. ...