Rodgers v. State Farm Mutual Auto. Ins. Co.

• Decision Date: 17 December 1970
• Court: California Court of Appeals Court of Appeals
• Parties: Beulah F. RODGERS, Petitioner and Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Respondent. Civ. 1229.

Page 678

91 Cal.Rptr. 678

13 Cal.App.3d 641

Beulah F. RODGERS, Petitioner and Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Respondent.

Civ. 1229.

Court of Appeal, Fifth District, California.

Dec. 17, 1970.

C. Ray Robinson and Carter Jay Stroud, Merced, for petitioner-appellant.

Silveira, Garrett, Goul & Curry and William L. Garrett, Merced, for defendant-respondent.

COAKLEY, Associate Justice.

This is another of the many reported cases arising under the so-called 'uninsured motor vehicle' statute (Ins.Code § 11580.2; see cases construing statute in Shepard's California Citations, Statutes). The issues in this case have not been the subject of an opinion by the California Supreme Court and, as noted below, our conclusion with respect to issue No. 2 is contrary to that reached in an opinion of the Court of Appeal, Second District, Division I, in American Ins. Co. v. Gernand, 262 Cal.App.2d 300, 68 Cal.Rptr. 810. Thus, the concluding paragraph in the opinion in Felner v. Meritplan Ins. Co., 6 Cal.App.3d 540, 547, 86 Cal.Rptr. 178, 182, is particularly appropos:

'The kaleidoscopic pattern of decisions in this field must certainly be a difficult one for trial courts and arbitration tribunals to interpret. We think it would be helpful for the Supreme Court to clarify the somewhat confusing body of procedural law which has grown up in uninsured motorist coverage and indicate the scope of future arbitration submissions.' ¹

Appellant Rodgers, driving her car, was injured in a two-car accident on Highway 99. The second car was driven by Suzanne Ford. Both cars were proceeding northerly in northbound lanes. The accident was caused primarily by an unidentified third car which entered a northbound lane from an on ramp, made a U-turn, and proceeded in a southerly direction, i.e., driving south in lanes reserved exclusively for northbound traffic. In attempting to avoid the third car, the Rodgers and Ford cars collided. The third car did not come into contact with either the Rodgers or the Ford car, and exited via the on ramp. At the time of the accident, appellant was insured by respondent, State Farm Mutual, under a liability policy containing an uninsured motor vehicle provision, providing for arbitration as required by Insurance Code section 11580.2. Appellant made an uninsured motor vehicle claim upon respondent and requested arbitration. Her claim asserted that the accident had been caused by the negligence of the driver of the unidentified car. Respondent rejected appellant's request to arbitrate the claim. Appellant did not then petition the superior court for an order compelling arbitration, as she was entitled to do under Code of Civil Procedure section 1281.2. Instead, she instituted a personal injury action against Ford. While that action was pending, and approximately 17 months after presenting her first claim and arbitration request to the respondent, the appellant presented a second claim and demand for arbitration to the respondent. This also was rejected. Appellant thereupon petitioned the superior court for an order requiring respondent to arbitrate the claim. The petition was denied and this appeal followed. An order denying a petition to compel arbitration is an appealable order. (Code Civ.Proc. § 1294, subd. (a); Esparza v. State Farm Mut. Auto. Ins. Co., 257 Cal.App.2d 496, 498, fn. 1, 65 Cal.Rptr. 245.)

The parties recognize that their respective rights and obligations are controlled by Insurance Code section 11580.2 and the provisions of the policy issued by the respondent as mandated by that statute. ² The purpose of the statute is to provide insurance protection to designated categories of persons included under a liability policy insuring against injuries or death caused by a so-called uninsured motor vehicle. The particular part of the statute with which we are here concerned reads as follows:

'The term 'uninsured motor vehicle' means a motor vehicle with respect to the ownership, maintenance or use of which * * * the owner or operator thereof or the owner or operator thereof be unknown, provided that, with respect to an 'uninsured motor vehicle' whose owner or operator is unknown.

'(1) The bodily injury has arisen out of physical contact of such automobile with the insured or with an automobile which the insured is occupying.' (Emphasis added.)

Issue No. 1. Does the statute impose liability upon the insurer, absent physical contact? The answer is, 'No.'

The statute uniformly has been construed to deny recovery where there was no physical contact between the so-called 'uninsured,' 'unidentified' or 'phantom' vehicle and the other car or cars involved in the accident in which plaintiff sustained injury. (Page v. Insurance Co. of North America, 256 Cal.App.2d 374, 64 Cal.Rptr. 89; Pacific Automobile Ins. Co. v. Lang, 265 Cal.App.2d 837, 71 Cal.Rptr. 637; and Inter-Insurance Exchange v. Lopez, 238 Cal.App.2d 441, 47 Cal.Rptr. 834.)

We know of no decision holding the insurer liable where, as here, the third or so-called phantom car does not come into actual physical contact with either the insured or the vehicle he occupies, or with another car which, in turn, strikes the insured or the car occupied by him. ³

Appellant makes a strong argument for extending the statute to permit recovery where, as here, it is undisputed that the phantom car caused the accident, and, thus, no element of a fictitious or fraudulent claim is present. She does so in reliance upon dictum in Inter-Insurance Exchange v. Lopez, Supra. ⁴ Appellant's argument for extending coverage under the statute, though persuasive, is properly addressed to the Legislature and not the courts. (See Page v. Insurance Co. of North America, Supra.) ⁵

Issue No. 2. Did the court err in denying appellant's petition to compel arbitration? Again, the answer is, 'No.'

Appellant contends that the issue of physical contact must be decided by an arbitrator, and not by the court. Although the Supreme Court has not passed upon the point at issue, we are not totally without guidance.

In Pacific Automobile Ins. Co. v. Lang, Supra, 265 Cal.App.2d 837, 71 Cal.Rptr. 637, an arbitrator awarded damages to the claimant notwithstanding his finding that there had been no physical contact between the claimant and the unidentified car. On the claimant's petition to confirm the award (Code Civ.Proc. § 1285) the trial court granted the insurer's motion to vacate the award. It did so upon the grounds that the arbitrator acted in excess of his jurisdiction in that the award went 'beyond the lawful agreement of the parties' (p. 840, 71 Cal.Rptr. p. 639) and beyond the requirements of the statute in awarding damages where he, the arbitrator, found no physical contact between the claimant and the phantom car. While the Court of Appeal reversed on other grounds, it held unequivocally that where physical contact is an issue it must be decided by the court, and the arbitrator is without jurisdiction to determine that issue.

Allen v. Interinsurance Exchange, 275 Cal.App.2d 636, 640, 80 Cal.Rptr. 247 holds that an arbitrator's award may be vacated where the claimant was 'not legally entitled to recover damages.'

Hernandez v. State Farm Ins. Co., Supra, 272 Cal.App.2d 255, 77 Cal.Rptr. 196, held that having voluntarily submitted an uninsured motor vehicle dispute to arbitration, including the question of physical contact, the parties are bound by the award. However, the court expressed doubt as to whether a party may be Compelled to submit the issue of physical contact to arbitration.

In Felner v. Meritplan Ins. Co., Supra, 6 Cal.App.3d 540, 86 Cal.Rptr. 178, the parties voluntarily submitted the dispute to arbitration, including the issue of physical contact which the insurer contested. Evidence was presented on that issue, and the arbitrator found that there was physical contact. The insurer then opposed confirmation of the award, contending that the court should hear the issue of physical contact De novo. On appeal, the reviewing court held that Having submitted the issue of physical contact to arbitration, the parties were bound by the award. DP In contrast, the respondent-insurer, in our case, has declined to submit the question of physical contact to arbitration because it is undisputed that no physical contact took place. Clearly, the cases are distinguishable.

The court, in Felner, at page 546, 86 Cal.Rptr. 178, noted that despite the rule and policy of permitting an arbitrator to decide all controverted questions so that the controversy may be resolved finally and expeditiously where an agreement to arbitrate exists (see Jordan v. Pacific Auto. Ins. Co., 232 Cal.App.2d 127, 42 Cal.Rptr. 556, and other cases cited in Felner supporting the policy of arbitration) '* * * an increasing number of uninsured motorist decisions have removed legal and factual issues from the arbitrators and transferred them to the courts,' citing several such cases (see 6 Cal.App.3d page 546, fn. 1, 86 Cal.Rptr. page 182). Among the cases cited are Pacific Automobile Ins. Co. v. Lang, Supra, wherein an arbitrator's award was vacated upon grounds of no physical contact, and Farmers Ins.Exch. v. Ruiz, 250...