Swan v. American Family Mut. Ins. Co.

• Decision Date: 02 March 2000
• Docket Number: No. 98CA1768.,98CA1768.
• Parties: Rebecca A. SWAN, Plaintiff-Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a Wisconsin corporation, Intervenor-Appellee.
• Court: Colorado Court of Appeals

8 P.3d 546

Rebecca A. SWAN, Plaintiff-Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, a Wisconsin corporation, Intervenor-Appellee.

No. 98CA1768.

Colorado Court of Appeals, Div. I.

March 2, 2000.

Certiorari Denied September 5, 2000.

Vernon K. Sessions, Denver, Colorado, for Plaintiff-Appellant.

Harris, Karstaedt, Jamison & Powers, P.C., Lee Lindsay, Englewood, Colorado, for Intervenor-Appellee.

Opinion by Judge NIETO.

Plaintiff, Rebecca A. Swan, appeals from the judgment of the trial court modifying an arbitration award against the intervenor, American Family Mutual Insurance Company (American Family). We affirm.

Plaintiff was involved in an automobile accident with an uninsured motorist, and subsequently brought suit seeking damages. The defendant failed to answer or appear in the case. Plaintiff's own automobile insurance carrier, American Family, intervened prior to the damages hearing. The trial court then ordered that, pursuant to the insurance contract, the case would be held in abeyance pending resolution of the uninsured motorist insurance arbitration between the plaintiff and American Family.

On April 17, 1998, the arbitrators entered the initial award of $150,000 plus interest and costs for the plaintiff. On April 28, 1998, American Family filed an application with the arbitrators requesting modification of the award. They asserted that the award should be reduced to $100,000, the policy limit of the uninsured motorist insurance. On May 13, 1998, in response to American Family's application, the arbitrators entered the following order (amended award):

The arbitrators decline to modify their award, Order that the maximum amount recoverable under law and the insurance contract is $100,000, which would include interest. Plus the additional costs awarded under this Order. [sic].

Within thirty days following entry of the amended award but more than thirty days after the initial award, American Family asked the trial court to vacate and modify the arbitration award. Plaintiff filed a motion requesting that the trial court confirm the initial award. After hearing, the trial court modified the arbitration award to $100,000 plus interest and costs, and entered judgment in favor of plaintiff and against American Family.

I

On appeal to this court, the plaintiff asserts that the initial award became final when American Family failed to ask the court to vacate or modify the award within thirty days of delivery to the parties, as required by §§ 13-22-214 and 13-22-215, C.R.S.1999. Relying on Kutch v. State Farm Mutual Automobile Insurance Co., 960 P.2d 93 (Colo.1998), plaintiff asserts that American Family's application to the arbitrators to modify their award pursuant to § 13-22-211, C.R.S.1999, did not toll the time limits in §§ 13-22-214 and 13-22-215. In Kutch the supreme court held that failure to apply to the court for vacation or modification of an arbitration award within the time period mandated by §§ 13-22-214 and 13-22-215 acts as a bar to modification. However, in Kutch there was no application to the arbitrators for modification of the award pursuant to § 13-22-211. Therefore, Kutch did not consider the tolling issue raised by American Family.

American Family argues that the application filed with the arbitrators to modify the initial award in effect tolled the thirty-day requirement in §§ 13-22-214 and 13-22-215. We agree. Section 13-22-211 provides that, on application of a party within twenty days after delivery of the award, the arbitrators may modify or correct the award "upon the grounds stated in section 13-22-215(1)(a) and (1)(c) or for the purpose of clarifying the award." The statute also provides that the modified or corrected award "is subject to the provisions of sections 13-22-213 to XX-XX-XXX."

The effect § 13-22-211 has upon the other time limits in the Uniform Arbitration Act of 1975, §§ 13-22-201 through XX-XX-XXX, C.R.S.1999, is a matter of first impression in Colorado. The issue has been addressed by the courts in other jurisdictions. In Konicki v. Oak Brook Racquet Club, Inc., 110 Ill. App.3d 217, 65 Ill.Dec. 819, 441 N.E.2d 1333 (1982), the court, in construing similar statutes, held that application to the arbitrator tolls the time for seeking review in the trial court regardless of whether the relief requested is granted or denied. Other jurisdictions have reached a contrary result. See Groves v. Groves, 704 N.E.2d 1072 (Ind.Ct. App.1999)

; Teleometrics International, Inc. v. Hall, 922 S.W.2d 189 (Tex.App.1995). We find the reasoning in Konicki more persuasive because it gives effect to all the provisions of the statutes involved and reflects due concern for the efficiency of the arbitration process and for judicial economy.

Therefore, we hold that an application to the arbitrators pursuant to § 13-22-211 tolls the time limits in §§ 13-22-214 and 13-22-215. These time limits begin to run anew upon delivery of the arbitrators' order to the parties.

We find support for our conclusion in § 13-22-202, C.R.S.1999, which states the legislative intent to make the arbitration process efficient while promoting judicial economy. The act gives parties the right to ask the arbitrator to modify an award, but does not set a time within which the arbitrator must act on the request. If an application to the arbitrators pursuant to § 13-22-211 does not toll the time limits of §§ 13-22-214 and 13-22-215, given the very short time limits, a party would have to proceed in both forums to guarantee that the issues would be considered. Requiring duplicate filings, which would be almost automatic, is not consistent with the stated legislative intent to make the arbitration process effective and efficient. It also would not promote judicial economy to require filing petitions with the court when the issues may be resolved by the arbitration. If parallel petitions are filed, it could lead to the anomalous result of the arbitrators modifying an award at the same time the court is vacating it.

II

Plaintiff argues that the court committed reversible error by modifying the arbitrators' award upon grounds other than those provided in § 13-22-215. Plaintiff is correct that § 13-22-215 limits the authority of the court to modify an arbitration award. Foust v. Aetna Casualty & Insurance...