Santangelo v. Allstate Ins. Co.

• Decision Date: 23 July 1998
• Docket Number: No. C027317,C027317
• Citation: 76 Cal.Rptr.2d 735,65 Cal.App.4th 804
• Court: California Court of Appeals Court of Appeals
• Parties: , 98 Cal. Daily Op. Serv. 5732, 98 Daily Journal D.A.R. 7969 Christy SANTANGELO, Plaintiff and Appellant, v. ALLSTATE INSURANCE COMPANY, Defendant and Respondent.

Page 735

76 Cal.Rptr.2d 735

65 Cal.App.4th 804, 98 Cal. Daily Op. Serv. 5732,

98 Daily Journal D.A.R. 7969

Christy SANTANGELO, Plaintiff and Appellant, v. ALLSTATE INSURANCE COMPANY, Defendant and Respondent.

No. C027317.

Court of Appeal, Third District, California.

July 23, 1998.

As Modified Aug. 18, 1998.

Mastagni, Holstedt & Chiurazzi and Albert S. Wong, Sacramento, for Plaintiff and Appellant.

Gallawa, Brown & Kroesch, Douglas A. Kroesch and Nicole M. DeSantis, Sacramento, for Defendant and Respondent.

SIMS, Acting Presiding Justice.

Christy Santangelo appeals from the trial court's order denying her petition to compel arbitration against Allstate Insurance Company ("Allstate"). She contends the trial court erred in concluding she lost the right to arbitrate by failing to conclude arbitration within five years of initiating arbitration, pursuant to Insurance Code section 11580.2, subdivision (i) (hereafter, section 11580.2(i); further statutory references are to the Insurance Code unless otherwise stated). Appellant claims this was an improper retroactive application of a new statute enacted while her case was pending. We shall affirm the trial court's order.

FACTUAL AND PROCEDURAL BACKGROUND

On March 3, 1990, appellant (then age 11) was a passenger in a vehicle driven by nonparty Doris Preston which was involved in a motor vehicle accident with an uninsured motorist. Appellant seeks to recover under the uninsured motorist provision of Ms. Preston's insurance policy with Allstate.

On March 4, 1991, appellant instituted uninsured motorist arbitration with Allstate. Her attorney's letter to Allstate stated in part: "[W]e agreed in order to protect my client's uninsured motorist claim that I would have to make a demand for arbitration under the applicable insurance policy, as well as, 11580.2 et seq. of the Insurance Code. Therefore, you may consider this a demand for arbitration under the uninsured motorist provisions of the applicable insurance policy. [p] Furthermore, pursuant to our agreement, it is my understanding that while you should consider this a formal demand for arbitration, we agreed that we would await the results of the defense medical scheduled for April 1, 1991, prior to initiating the arbitration proceedings in hopes that we may conclude this matter by settlement...."

Apparently, in March 1993, the parties reached a settlement, but, as we discuss post, it was never brought to fruition for reasons not apparent from the record.

On July 25, 1994, Allstate's attorney wrote to Attorney Ilija Cvetich, at the firm of Mastagni, Holstedt & Chiurazzi, asking if he represented appellant and, if so, they needed to "get this matter moving."

Cvetich apparently contacted Allstate's counsel in late September 1994, confirming his representation of appellant and prompting In the meantime, on September 16, 1994, the American Arbitration Association (AAA) Center for Mediation wrote to Cvetich, stating it had been advised Cvetich was now representing appellant and asking whether appellant still wanted to proceed with arbitration.

Allstate's counsel to send a letter to Cvetich on October 6, 1994, demanding arbitration. ¹

Allstate scheduled a medical examination for appellant for January 11, 1995.

On March 10, 1995, Allstate's attorney wrote to the Mastagni law firm, stating his understanding that Cvetich was no longer with the firm and asking whether Cvetich took the file with him or who was handling the case. Allstate's counsel also indicated he had solicited a demand on February 3, 1995, but received no response, and was demanding arbitration.

On June 19, 1995, the AAA Center for Mediation wrote: "Repeated attempts to reach you by telephone have been unsuccessful, so I am writing to invite you to arbitrate th[is] matter...."

On January 1, 1996, a new amendment to section 11580.2 went into effect (fn.4, post ), requiring that uninsured motorist arbitrations must be completed within five years after institution of the arbitration proceeding.

On January 9, 1996, Allstate's counsel wrote to Cvetich and the Mastagni firm, expressing continued uncertainty over who was representing appellant and expressing an intent to file a petition to compel arbitration.

On January 18, 1996, Attorney Albert Wong from the Mastagni firm responded, indicating he was representing appellant, it appeared an arbitrator had already been selected, and Allstate could "go ahead and schedule the Arbitration Hearing 90 days from today," though a settlement could hopefully be negotiated before then. ²

In early February 1996, Allstate advised it was offering $16,000 in settlement but was no longer willing to pay any future medical expenses in addition to the $16,000.

March 4, 1996, marked five years from appellant's March 4, 1991, letter demanding arbitration.

In early July 1996, appellant's counsel indicated he was waiting to hear from a doctor who examined appellant in early June 1996. ³ The record reflects (through the declaration of appellant's attorney) that the purpose of this medical examination was to satisfy appellant's mother concerning the prospect of future medical expenses.

On November 27, 1996, Allstate's attorney wrote to appellant's counsel: "As I recently reviewed my file I noted that the original demand for uninsured motorist arbitration in this matter is dated March 4, 1991. Pursuant to ... § 11580.2(i)(2)(A) uninsured motorist arbitrations must be concluded within five years from the institution of the arbitration proceeding. More than five years has now elapsed and it appears to me that Ms. Santangelo is precluded from pursuing this claim further."

On April 16, 1997, appellant filed her petition to compel arbitration. Her attorney's declaration asserted: "Attorneys Stephen Duggan, Kenneth Miller and Ilija Cvetich represented Christy Santangelo prior to January, 1996. Several demands for arbitration were made by attorneys for both sides, however, an arbitration date was not scheduled. In 1993, a settlement was made, but was withdrawn. Mr. Cvetich left the [Mastagni] firm ... in January, 1995, and retained ... Santangelo's file. Thereafter, on or about January, 1996, Ms. Santangelo's guardian and mother retained [the Mastagni firm] to pursue this claim." Appellant's counsel further In opposition to the petition to compel arbitration, Allstate's attorney submitted a declaration denying any agreement to delay the arbitration. Allstate's attorney attested: "In my discussions in correspondence with [appellant's attorneys], I never agreed to waive any time limits or encouraged Ms. Santangelo, her mother, or the attorneys representing them, to delay this matter."

attested: "On January 18, 1996 I made a formal request for arbitration in this matter. Shortly thereafter, settlement negotiations commenced with defense counsel, resulting in a verbal agreement not to schedule an arbitration date to allow ... Santangelo to seek further medical evaluations. It is my belief any delay in scheduling the arbitration was made in hope of resolving this case short of arbitration."

The trial court issued a tentative ruling granting the petition to compel arbitration, because Allstate's letters demanding arbitration in October 1994 and March 1995 prevented the court from finding that arbitration was initiated on March 4, 1991.

A hearing was held, at which Allstate argued that if the March 4, 1991, letter did not initiate arbitration, then appellant's claim was barred by failure to initiate arbitration within one year of the accident.

On June 30, 1997, following a hearing, the trial court issued a written order vacating its tentative ruling and denying the petition to compel arbitration. The trial court found arbitration was initiated when appellant sent the March 4, 1991, letter formally demanding arbitration. Since arbitration was not concluded within five years of that date, and since appellant produced no evidence it was impossible or impracticable timely to conclude arbitration, the petition was foreclosed pursuant to section 11580.2(i). The court's order further stated section 11580.2(i) was procedural in nature and therefore could be retroactively applied to this case.

The trial court denied appellant's subsequent motion for reconsideration.

Appellant filed a notice of appeal from the order denying the petition to compel arbitration and from the trial court's denial of reconsideration. However, her appellate brief makes no contention with regard to the reconsideration motion, and we therefore need not consider that matter.

DISCUSSION

I

An order denying a petition to compel arbitration is an appealable order. (Code Civ. Proc., § 1294, subd. (a).)

II

Section 11580.2(i), ⁴ which addresses uninsured motorist coverage, requires that uninsured motorist arbitration be (1) initiated within one year of the date of accident, and (2) completed within five years from the institution of arbitration. The five-year limitation was added to the statute in 1995, effective January 1, 1996 (Stats.1995, ch. 738, § 1), while this case was pending.

A. Institution Of Arbitration

At the end of her brief, appellant briefly argues that, even assuming the five year period for completion of arbitration applies to We question whether appellant presented this factual theory in the trial court during proceedings on the petition to compel arbitration. Since it appears she did not, she is precluded from changing her theory on appeal. ⁵ (Richmond v. Dart Industries, Inc. (1987) 196 Cal.App.3d 869, 874, 242 Cal.Rptr. 184.)

her, there are insufficient facts to indicate that arbitration was instituted on March 4, 1991, since her demand letter of that date assertedly indicated there was an agreement to defer the commencement until some future (unspecified) date after the independent medical examination scheduled for April 1, 1991.

Moreover, even assuming she did not waive the issue by failing timely to raise it in the trial court,...