Judge Audra Mori, Case 22STCV22002 2022-09-02 Tentative Ruling

Petitioner Jonathan Pouldar (“Petitioner”) filed the instant petition to compel arbitration against Respondent State Farm Mutual Automobile Insurance Company (“Respondent”) in connection with underinsured and uninsured motorist claims. Petitioner alleges he was involved in a motor vehicle accident on May 18, 2020, where he sustained substantial bodily injury, and that on October 29, 2020, Petitioner was involved a second motor vehicle accident that aggravated his preexisting injuries. Petitioner provides that he settled the first accident for the third-party’s policy limits of $25,000, but that the policy was not sufficient to satisfy the damages sustained by Petitioner. Petitioner states as a result of the injuries that were reaggravated by the second accident, Petitioner tendered both claims to Respondent under the underinsured and uninsured motorist policy maintained by Petitioner with Respondent. Petitioner states he submitted a policy limits settlement demand to Respondent on March 2, 2022, but Respondent has not agreed to tender the limits for either claim. Petitioner then sent two separate demands for arbitration on March 21, 2022, pursuant to Insurance Code § 11580.2, but that to date, Respondent has failed to Petitioner’s request select an arbitrator.

Petitioner then filed the moving papers on August 10, 2022. Respondent opposes the petition, and Petitioner filed a reply.

“California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes…” (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967; CCP § 1281.2.) In deciding a petition to compel arbitration, trial courts must decide first whether an enforceable arbitration agreement exists between the parties, and then determine the second gateway issue whether the claims are covered within the scope of the agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) However, California does not have a “policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate and which no statute has made arbitrable.” (Bouton v. USAA Cas. Ins. Co. (2008) 43 Cal.4th 1190, 1199.)

Concerning the scope of arbitration under Insurance Code § 11580.2(f), “the determination as to whether the insured shall be legally entitled to recover damages, and if so entitled, the amount thereof, shall be made by agreement between the insured and the insurer or, in the event of disagreement, by arbitration.” (Ins. Code § 11580.2(f).) The provisions of this statute make it clear that only two issues are subject to arbitration: (1) whether the insured is entitled to recover against the uninsured motorist and (2) if so, the amount of the damages. (Bouton, 43 Cal.4th at 1201.)

Here, Petitioner contends the relevant policy issued by Respondent requires arbitration of any dispute arising under the policy, and that despite Petitioner timely serving a demand for arbitration that Respondent accepted, Respondent has failed to proceed with arbitration. Petitioner asserts that it was only after Petitioner filed the instant petition that Respondent agreed to select an arbitrator. Petitioner argues that this matter should be ordered to arbitration, and that both claims should be consolidated for arbitration.

In opposition, Respondent contends the petition should be denied because arbitration is already underway, and the parties are already engaged in discovery. Respondent further asserts that the parties have selected an arbitrator, Jay Horton, and a Case Management Conference with the arbitrator is expected to be on calendar before this matter is heard. Alternatively, Respondent asserts that if the motion is granted, Respondent proposes five arbitrators for the Court to consider.

In reply, Petitioner argues that the Court should retain jurisdiction over this matter to ensure Respondent does not cause further delay. Additionally, Petitioner requests the subject two proceedings concerning each motor vehicle accident Petitioner was involved in be consolidated for arbitration with a single arbitrator.

There is no dispute between the parties that there is an enforceable arbitration agreement between them, or that the issues raised by Petitioner concerning the two accidents are within the scope of the agreement. Both parties provide they have agreed to arbitrate Petitioner’s claims. While Respondent attests that arbitration is already underway and the parties have selected an arbitrator, Respondent submits no evidence of such and also proposes five arbitrators for the Court to consider.

Therefore, the remaining issues to be decided are whether both of Petitioner’s claims should be consolidated for arbitration with a single arbitrator, the selection of an arbitrator, and whether a trial date should remain set in this matter. The Court addresses these issues below.

A party to an arbitration agreement may petition the court to consolidate separate arbitration proceedings, and the court may order consolidation of separate arbitration proceedings when:

(1) Separate arbitration agreements or proceedings exist between the same parties; or one party is a party to a separate arbitration agreement or proceeding with a third party; and

(2) The disputes arise from the same transactions or series of related transactions; and

(3) There is common issue or issues of law or fact creating the possibility of conflicting rulings by more than one arbitrator or panel of arbitrators.

In this case, Petitioner requests that arbitration proceedings concerning Petitioner’s claims for each of the two accidents Petition was involved in be consolidated. Respondent does not oppose this request. The evidence shows that Petitioner and Respondent have an arbitration agreement covering both accidents, and that both arbitration proceedings concern a series of related transactions in that Petitioner alleges that his injuries in the first accident were aggravated in the second accident. Accordingly, there are common issues of law and fact that create a possibility of conflicting rulings if the proceedings are heard by more than one arbitrator. Moreover, consolidation of the proceedings will ensure the issues are properly determined, and Respondent does not contend it will be prejudiced in any way by consolidation. (See Gordon v. G.R.O.U.P. (1996) 49 Cal.App.4th 998, 1006 [“ ‘By adopting section 1281.3, California has manifested a strong policy favoring consolidating arbitrations involving common issues of law and fact. There are at least three important aims of this policy: the efficient settling of private disputes, judicial economy, and the avoidance of contrary results.’ ”].)

Therefore, pursuant to CCP § 1281.3, the Court consolidates the two arbitration proceedings for each accident into a single arbitration proceeding.

If the arbitration agreement provides a method of appointing an arbitrator, that method shall be followed. If the arbitration agreement does not provide a method for appointing an arbitrator, the parties to the agreement who seek arbitration and against whom arbitration is sought may agree on a method of appointing an arbitrator and that method shall be followed. In the absence of an agreed method, or if the agreed method fails or for any reason cannot be followed, or when an arbitrator appointed fails to act and his or her successor has not been appointed, the court, on petition of a party to the arbitration agreement, shall appoint the arbitrator.

When a petition is made to the court to appoint a neutral arbitrator, the court shall nominate five persons from lists of persons supplied jointly by the parties to the arbitration or obtained from a governmental agency concerned with arbitration or private disinterested association concerned with arbitration. The parties to the agreement who seek arbitration and against whom arbitration is sought may within five days of receipt of notice of the nominees from the court jointly select the arbitrator whether or not the arbitrator is among the nominees.

If the parties fail to select an arbitrator within the five-day period, the court shall appoint the arbitrator from the nominees.

Here, neither Petitioner nor Respondent point to any provision in their agreement concerning appointing an arbitrator in this circumstance. The parties have each proposed five arbitrators. If the parties have not already agreed upon Jay Horton as a mediator, from each parties’ proposed choices, the Court nominates the following five arbitrators to choose from:

The parties are to use the following method to select an arbitrator: Respondent is to choose the first name to strike from the list; Petitioner is to choose the second name to strike from the list; Respondent is to choose the third name to strike from the list; Petitioner is to choose the fourth name to strike from the list. The remaining individual is to be the arbitrator.

The parties are ordered to meet and confer in good faith immediately to attempt to agree upon an arbitrator. If they are unable to agree upon an arbitrator, they shall employ the above-referenced process to select the arbitrator within five days from today. The Court will set an OSC Re: Mediator Selection for ___________ at 8:30 a.m. to ensure that this is done. If the parties select a mediator, there is no need for them to appear.

The petition to compel arbitration is being granted as outlined above. Petitioner further requests that this matter not be stayed, and that the trial date not be vacated. In particular, Petitioner requests the trial date remain set in the event that Petitioner decides to pursue a bad faith claim against Respondent after arbitration has concluded.

However, this matter concerns only a petition to compel arbitration, and no Final Status Conference or trial date is required. To the extent Petitioner speculates he may file a bad faith claim, Petitioner may file such as a separate action, if and when, Petitioner wishes to do so. Accordingly, the Final Status Conference set for December 21, 2023, the trial date of January 4, 2024, and the Order to Show Cause Re: Dismissal set for July 5, 2024, are vacated.

This ruling and the selection of an arbitrator at the OSC Re: Mediator Selection set for ___________ at 8:30 a.m. constitute the final disposition of this action, which is merely a petition and cannot be converted into a civil action.

Hon. Audra Mori

Judge of the Superior Court