Judge Lynne M. Hobbs, Case Number: 24STCV07861, Date: 2024-09-17 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV07861, Date: 2024-09-17 Tentative Ruling

Case Number: 24STCV07861 Hearing Date: September 17, 2024 Dept: 61

JOAN CHIUNGHSIEN HUANG vs BLUE HILL SPECIALTY INSURANCE

TENTATIVE

Plaintiff Joan Chiunghsien Huang’s Motion to Compel Arbitration is GRANTED.

Plaintiff to provide notice.

DISCUSSION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Plaintiff Joan Chiunghsien Huang (Plaintiff) contends that Defendant Blue Hill Specialty Insurance Company (Defendant) has entered into a policy with Uber Technologies, Inc., whereby Uber drivers (such as Plaintiff) were to be covered for underinsured/uninsured motorist (UIM)coverage while passengers were in the vehicle. (Popovich Decl. Exh. A.) The Insurance Code provides that disputes between the insured and the insurer as to whether the insured is entitled to damage,s or the amount of those damages, are subject to arbitration. (Ins. Code § 11580.2, subd. (f).)

Defendant contends that the present controversy is not ripe for arbitration, because of Business & Professions Code § 7455, which requires network companies like Uber to provide “occupational accident insurance,” obtained “[f]or the benefit of app-based drivers,” and “accidental death insurance,” to be obtained “[f]or the benefit of spouses, children, or other dependents of app-based drivers.” (Bus. & Prof. Code § 7455, subd. (a), (b).) That same section elsewhere provides:

Any benefits provided to an app-based driver under subdivision (a) or (b) of this section shall be considered amounts payable under a worker's compensation law or disability benefit for the purpose of determining amounts payable under any insurance provided under Article 2 (commencing with Section 11580) of Chapter 1 of Part 3 of Division 2 of the Insurance Code.

(Bus. & Prof. Code § 7455, subd. (e).)

Defendant argues that the above provision declares benefits provided under occupational accident insurance (OAI) to be akin to worker’s compensation benefits, and as such Plaintiff’s entitlement to arbitration must await the adjudication of Plaintiff’s worker’s compensation claim, under Insurance Code § 11580.2, subd. (f), which further states: If the insured has or may have rights to benefits, other than nonoccupational disability benefits, under any workers' compensation law, the arbitrator shall not proceed with the arbitration until the insured's physical condition is stationary and ratable. (Ins. Code § 11580.2, subd. (f).) Defendant further contends that, under the policy at issue, any liability under the policy “shall be reduced by . . . all sums paid, payable, or that should apply, because of bodily injury under any . . . occupational accident insurance.” (Carroll Decl. Exh. A at p. 20.) Defendant therefore argues that Plaintiff is required to first claim benefits through the OAI process via the filing of a worker’s compensation claim before any arbitration may commence on the UIM claim.

Defendant’s argument is flawed, because Business & Profession code § 7455, subd. (e), does not require drivers to initiate a worker’s compensation claim to seek OAI benefits, but rather states that OAI benefits “shall be considered amounts payable under the worker’s compensation law . . . for the purpose of determining amounts payable” under UIM insurance. (Bus. & Prof. Code § 7455, subd. (e).) The statute prescribes the manner in which such benefits are to be calculated — i.e. like worker’s compensation benefits — and does not require that they be sought through the worker’s compensation process, which would warrant a stay of arbitration here.

This result is in keeping with the underlying policy of section 7455. As Plaintiff notes, Business & Professions Code § 7455 was passed as part of the suite of reforms enacted in 2020 through Proposition 22, which included among its signal consequences the express designation of an app- based driver to be an “independent contractor, not an employee or agent.” (Bus. & Prof. Code § 7451.) “An independent contractor is not eligible for workers' compensation.” (Global Hawk Ins. Co. v. Le (2014) 225 Cal.App.4th 593, 604.) It would therefore be anomalous to forestall Plaintiff, an app-based driver and independent contractor, from engaging in insurance arbitration to await worker’s compensation proceedings, which are not open to independent contractors.

The motion is therefore GRANTED.