Judge Barbara M. Scheper, Case 23STCP00787 2023-05-16 Tentative Ruling

Judge: Barbara M. Scheper, Case: 23STCP00787, Date: 2023-05-16 Tentative Ruling

Case Number: 23STCP00787 Hearing Date: May 16, 2023 Dept: 30

Dept. 30

Calendar No.

Mercury Ins. Co. vs. Dusaban, et. al., Case No. 23STCP00787

Tentative Ruling re: Petitioner’s Motion to Dismiss

Petitioner Mercury Insurance Company (Petitioner) moves for an order dismissing the uninsured motorist arbitration demanded by Respondent Wilma S. Dusaban (Respondent) pursuant to Ins. Code § 11580.2(i)(2)(A). The motion is granted.

“Although an insured may have made a claim with his uninsured motorist (UM) liability insurance carrier for damages suffered in an auto accident with an uninsured motorist, he may not subsequently file a legal action against his UM insurer unless, within two years after the date of the accident, he first files an action against the uninsured motorist, demands arbitration with his UM insurer, or reaches an agreement with his UM insurer.” (Blankenship v. Allstate Ins. Co. (2010) 186 Cal.App.4th 87, 91; Ins. Code § 11580.2, subd. (i)(1).).)

Arbitration instituted pursuant to Section 11580.2 shall be concluded “[w]ithin five years from the institution of the arbitration proceeding.” (Ins. Code § 11580.2, subd. (i)(2).) “The doctrines of estoppel, waiver, impossibility, impracticality, and futility apply to excuse a party’s noncompliance with the statutory timeframe, as determined by the court.” (Ins. Code § 11580.2, subd. (i)(3).)

Respondent’s arbitration claim arises from a car accident took place on October 14, 2014. (Schubert Decl. ¶ 4.) On October 13, 2016, counsel for Respondent sent a letter entitled “DEMAND FOR UNDER-INSURED/UNINSURED MOTORIST ARBITRATION” to counsel for Petitioner, demanding arbitration on behalf of Respondent. (Schubert Decl., Ex. C.)

On November 7, 2017, Respondent’s counsel sent Petitioner a “DEMAND FOR UNDER-INSURED MOTORIST SETTLEMENT,” which demanded settlement in the amount of $150,000. (Schubert Decl. ¶ 9, Ex. D.) On April 5 and October 25, 2018, Petitioner sent letters to Respondent which stated, “This will reiterate our request that you hold your demand open at this time. It is our goal to resolve Ms. Dusaban’s claim, and to that end we are in need of the complete Kaiser medical records.” (Schubert Decls. ¶¶ 10-11.) On January 10, 2019, Petitioner sent another letter to Respondent “request[ing] that you hold your demand open at this time,” because Petitioner had “received the complete medical records and are in the process of completing our evaluation.” (Schubert Decl. ¶ 13, Ex. H.) Petitioner deposed Respondent on September 16, 2019. (Schubert Decl. ¶ 14.)

Beginning on September 30, 2019, the parties corresponded regarding proposed arbitrators while Petitioner conducted further discovery. (Schubert Decl. ¶¶ 15-29.) On August 18, 2022, Petitioner sent a letter to Respondent’s attorney advising that the matter should be dismissed for failure to resolve within five years. (Schubert Decl. ¶ 30, Ex. W.) The parties did not agree to an arbitrator until January 26, 2023. (Frandsen Decl., Ex. H.) Petitioner filed the current action on March 10, 2023.

The Court finds that October 13, 2016 letter from Respondent’s counsel constituted the institution of the arbitration proceedings. (Santangelo v. Allstate Ins. Co. (1998) 65 Cal.App.4th 804, 812 [letter from insured’s counsel stating that “[Y]ou should consider this a formal demand for arbitration” constituted institution of arbitration proceeding under Section 11580.2].) The five-year period set by Section 11580.2(i)(2) therefore ran from that date. Adding 180 days for COVID-relating tolling, the five-year period for concluding arbitration expired on April 11, 2022.

While Respondent argues that the October 13, 2016 letter did not constitute a demand for the arbitration, that interpretation is at odds with the title of the letter and its clear statement that “we are hereby demanding an Under-insured/Uninsured Motorist Arbitration.” (Schubert Decl., Ex. C.) Additionally, if the Court were to accept Respondent’s contention that arbitration was first demanded on August 19, 2019, the claim would be subject to dismissal for failure to demand arbitration within two years of the date of the accident. (Ins. Code § 11580.2, subd. (i)(1).)

Respondent argues that her failure to comply with the five-year period under section 11580.2 is excusable due to estoppel, waiver, or impracticability. (Ins. Code § 11580.2, subd. (i)(3).)

“There are four basic elements of equitable estoppel: (1) The party to be estopped must have known the facts; (2) the party to be estopped must have intended that its conduct would be acted upon, or it must have acted so as to have given the party asserting estoppel the right to believe that it was so intended; (3) the party asserting estoppel must have been ignorant of the true state of facts; and (4) the party asserting estoppel must have relied on the conduct to its injury.” (Komorsky v. Farmers Ins. Exchange (2019) 33 Cal.App.5th 960, 972.) “[T]he burden of prosecution [of arbitration] is always with the plaintiff or claimant.” (Santangelo, 65 Cal.App.4th at 816 [quoting Allstate Ins. Co. v. Gonzalez (1995) 38 Cal.App.4th 783, 792].)

Respondent argues that estoppel applies because Petitioner expressly stated that it would move forward with arbitration and continually engaged in efforts to select an arbitrator prior to August 22, 2022. These circumstances do not support estoppel, because Respondent has not shown that she was ignorant of the true state of any facts or that she detrimentally relied on Petitioner’s actions.

While Respondent argues that Petitioner failed to notify Respondent of its intent to invoke the 5-year limitations period, Petitioner had no duty to provide such notice. Insurance Code § 11580.2, subd. (k) “imposes a duty on insurers to give their insured notice of the statutory time limit found in subdivision (i), [but] specifically states that ‘[t]he notice shall not be required if the insurer has received notice that the insured is represented by an attorney.’ ” (Juarez v. 21st Century Ins. Co. (2003) 105 Cal.App.4th 371, 375.) “[T]he clear language of Insurance Code section 11580.2, subdivision (k) . . . eliminates any such disclosure requirement when the insured has an attorney.” (Id. at 376.) Here, Petitioner had written notice that Respondent was represented by counsel, and Petitioner had no duty to notify Respondent of the expiration of the five-year limitations period.

Respondent also argues that arbitration during the five-year period would have been impractical because she continued to incur damages from medical expenses throughout that time. Respondent has provided no support for the proposition that an insured’s continuing injury makes arbitration of their claim impracticable.

Respondent last seeks relief pursuant to the mandatory relief provision of Code Civ. Proc. § 473. Under that provision, “the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (Code Civ. Proc. § 473, subd. (b).)

Respondent is not entitled to mandatory relief under Section 473 because judgment has not yet been entered, and because she has not made a motion for such relief “in proper form.” Accordingly, Petitioner’s motion to dismiss is granted.