Wolfe v. Farm Bureau Ins. Co.

Decision Date25 March 1996
Docket Number20563,Nos. 20561,s. 20561
PartiesIn the Matter of the Arbitration of: Stanley K. WOLFE, Claimant-Appellant, v. FARM BUREAU INSURANCE CO., Defendant-Respondent. Stanley K. WOLFE, Individually, Plaintiff-Appellant, v. FARM BUREAU INSURANCE SERVICE COMPANY OF IDAHO, an Idaho corporation, Defendant-Respondent. Coeur d'Alene, October 1994 Term
CourtIdaho Supreme Court

McFadden Law Offices, P.A., St. Maries; Aherin, Rice & Anegon, Lewiston, for appellant. Darrel W. Aherin argued.

Clements, Brown & McNichols, P.A., Lewiston, for respondent. John R. Stegner argued.

SUBSTITUTE OPINION

THE COURT'S PRIOR OPINION DATED AUGUST 17, 1995 IS HEREBY WITHDRAWN.

Chief Justice McDEVITT delivered the opinion of the Court with respect to Parts I, II, IV and V(A), in which Justices JOHNSON, TROUT and SILAK, and Justice Pro Tem LEGGETT, joined, and an opinion with respect to Part III and V(B) in which Justices JOHNSON and SILAK, and Justice Pro Tem LEGGETT, joined. Justice TROUT delivered the opinion of the Court with respect to Parts V(C), VI, VII and VIII, in which Justices JOHNSON and SILAK, and Justice Pro Tem LEGGETT, joined. Justice TROUT filed a dissenting opinion from Part III. Chief Justice McDEVITT dissented from Parts V(C), VI, VII and VIII.

Stanley K. Wolfe (Wolfe) appeals the district court's determination that Wolfe's motion for confirmation of arbitration award, costs, attorney fees, and prejudgment interest

[128 Idaho 401] was barred by res judicata (claim preclusion) or lack of jurisdiction and the district court's grant of summary judgment for Farm Bureau Insurance Service Company of Idaho (Farm Bureau) on Wolfe's breach of insurance contract action. This appeal is a consolidation of the two cases decided in district court.

I.

FACTS AND PROCEDURE

Wolfe was injured as a passenger in a one car automobile accident on February 27, 1988. The driver/owner of the car, Kathleen Griffin (Griffin), had a $25,000.00 insurance policy. Wolfe made a claim against Griffin, which resulted in Wolfe recovering $25,000.00 from Griffin's insurer for his injuries.

On June 1, 1988, Wolfe presented proof of loss to his insurer, Farm Bureau, and notified them that Wolfe's claim would exceed Griffin's insurance liability limits. Wolfe's insurance policy contained an underinsured motorist clause, which would allow Wolfe to recover those damages from Farm Bureau he would legally be entitled to recover from the underinsured motorist. Since Griffin's policy limit was $25,000.00, Wolfe demanded his insurer, Farm Bureau, pay him the limits of his $300,000.00 insurance policy pursuant to Wolfe's underinsured motorist provision. On October 24, 1990, Farm Bureau rejected Wolfe's claim and offered to pay Wolfe $50,000.00 plus $13,000.00 for additional medical treatment in full settlement of the claim. Wolfe rejected the offer, and on June 13, 1991, Farm Bureau demanded arbitration, as was its right under the insurance contract.

The arbitration hearing was held in December 1991, and on January 2, 1992, the arbitrators awarded Wolfe damages totaling $304,488.55. Deductions were made from Wolfe's award as follows: eighteen percent (18%) for Wolfe's comparative negligence, one percent (1%) for Wolfe's failure to wear a seat belt, and a $25,000.00 deduction for the amount already paid to Wolfe by Griffin's insurer. The net amount of the award, after the deductions, totaled $221,635.72. With the exception of the parties' stipulation to the payment of costs and fees of the arbitrators, the arbitration award was silent on the issue of prejudgment interest, costs, or attorney fees. Within five (5) days of the arbitration award, and prior to any filing of a lawsuit or any application for confirmation of the arbitration award, attorney fees, costs, and prejudgment interest, Farm Bureau paid the amount of the arbitration award in full. Wolfe's counsel signed a Satisfaction of Arbitration Award on January 23, 1992.

On January 22, 1992, Wolfe filed an application for confirmation of the arbitration award and a motion for costs, attorney fees, and prejudgment interest (Case No. 92-88892, "Confirmation I") in district court. The district judge denied the motions on the grounds that the district court lacked both personal and subject matter jurisdiction. No appeal was taken from the decision.

Wolfe obtained personal jurisdiction over all the parties and filed a second application for confirmation of the arbitration award and motion for costs, attorney fees, and prejudgment interest in district court on July 28, 1992 (Case No. 92-91603, "Confirmation II"). The same day, Wolfe filed a breach of insurance contract action against Farm Bureau (Case No. 92-91604). Wolfe sought the same relief in both actions; attorney fees, costs, and prejudgment interest. Farm Bureau filed a motion for summary judgment on the breach of contract claim and a motion to dismiss Confirmation II. The district court granted summary judgment for the breach of contract action and held that the motions in Confirmation II were barred by res judicata (claim preclusion) or alternatively were denied for lack of subject matter jurisdiction.

The two cases have been consolidated for this appeal. Wolfe appeals the district court's decision to deny the motions in Confirmation II and its decision to grant Farm Bureau's motion for summary judgment on Wolfe's complaint for breach of insurance contract. Both parties seek attorney fees on appeal.

JOHNSON, TROUT and SILAK, JJ., and Justice Pro Tem LEGGETT, concur.

II. ISSUES ON APPEAL

A. Whether the district court erred in determining that it lacked subject matter jurisdiction to confirm Wolfe's arbitration award and award costs, pre-judgment interest, and attorney fees.

B. Whether the district court erred in determining that Wolfe's application for confirmation of the arbitration award, costs, prejudgment interest, and attorney fees was barred by the doctrine res judicata.

C. Whether Wolfe is entitled to costs, prejudgment interest, and attorney fees in his motion for confirmation of the arbitration award in Confirmation II or in his breach of contract action.

D. Whether the district court erred in granting summary judgment for Farm Bureau in Wolfe's breach of contract action.

E. Whether Wolfe or Farm Bureau is entitled to attorney fees on appeal.

JOHNSON, TROUT and SILAK, JJ., and Justice Pro Tem LEGGETT, concur.

III. SUBJECT MATTER JURISDICTION

The district court dismissed Wolfe's confirmation motion in Confirmation II and Wolfe's application for costs, prejudgment interest, and attorney fees on the ground that the court lacked subject matter jurisdiction. We conclude that the district court had subject matter jurisdiction to confirm the arbitration award and to award costs, prejudgment interest, and attorney fees.

The Idaho Legislature has granted parties arbitration access to the courts to seek confirmation of an arbitration award. I.C. § 7-911. Idaho Code § 7-911 provides:

Upon application of a party, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the court shall proceed as provided in sections 7-912 and 7-913, Idaho Code.

I.C. § 7-911 (emphasis added). Once a valid arbitration award is made, then upon the application of a party for confirmation of the award, the award must be confirmed, unless grounds are urged for vacating, modifying, or correcting the award. I.C. § 7-911; Landmark v. Mader Agency, Inc., 126 Idaho 74, 76, 878 P.2d 773, 775 (1994). Once an arbitration award is confirmed by the court, it becomes enforceable as any other judgment or decree. I.C. § 7-914. The court obtains its jurisdiction to enter judgment on and enforce any arbitration award pursuant to I.C. § 7-917.

Farm Bureau's payment in full of the arbitration award did not preclude Wolfe from seeking confirmation of the award. The confirmation request after payment of the award does not create a moot question between Wolfe and Farm Bureau and does not divest jurisdiction from the court to confirm the award.

Although time limitations are imposed for vacating, modifying, or correcting an award, no limitations exist in the Idaho Uniform Arbitration Act (UAA) which restrict the time as to when an application for confirmation of an arbitration award may be filed. The district court has jurisdiction to confirm Wolfe's arbitration award and shall confirm the arbitration award on remand.

JOHNSON and SILAK, JJ., and Justice Pro Tem LEGGETT, concur.

TROUT, J., dissents.

IV. THE DOCTRINE OF RES JUDICATA

The district court alternatively dismissed Confirmation II because it held Wolfe's claim was barred by the doctrine of res judicata (claim preclusion). The rule of res judicata is that "in an action between the same parties upon the same claim or demand, the former adjudication concludes parties and privies not only as to every matter offered and received to sustain or defeat the claim but also as to every matter which Wolfe filed an application for confirmation in Confirmation I with the district court, which was dismissed for lack of personal and subject matter jurisdiction. Wolfe subsequently cured the personal jurisdiction defect and filed a second application for confirmation of the arbitration award and motion for attorney fees, costs, and prejudgment interest in Confirmation II. The district court held that Confirmation II was barred by the doctrine of res judicata because it had ruled in Confirmation...

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