Judge: Serena R. Murillo, Case: 20STCV00996, Date: 2023-01-11 Tentative Ruling

Case Number: 20STCV00996    Hearing Date: January 11, 2023    Dept: 29

TENTATIVE

Petitioner Mercury Insurance Company’s motion to dismiss is TAKEN OFF CALENDAR.

Legal Standard

Insurance Code section 11580.2(i)(2) provides:

“Any arbitration instituted pursuant to this section shall be concluded either:

(A) Within five years from the institution of the arbitration proceeding.

(B) If the insured has a workers' compensation claim arising from the same accident, within three years of the date the claim is concluded, or within the five-year period set forth in subparagraph (A), whichever occurs later."

Discussion

Mercury moves to dismiss this case, arguing that the failure to conclude arbitration within the five years mandated under subdivision (i)(2) of Insurance Code section 11580.2 is grounds for dismissal with prejudice.

Mercury’s arguments are unavailing and fail to address the relevant case law that establishes this court does not have jurisdiction to dismiss the action.  As explained in Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1796: 

Once a court grants the petition to compel arbitration and stays the action at law, the action at law sits in the twilight zone of abatement with the trial court retaining merely a vestigial jurisdiction over matters submitted to arbitration. This vestigial jurisdiction over the action at law consists solely of making the determination, upon conclusion of the arbitration proceedings, of whether there was an award on the merits (in which case the action at law should be dismissed because of the res judicata effects of the arbitration award Division of Labor Standards Enforcement v. Williams (1981) 121 Cal.App.3d 302, 309, 175 Cal.Rptr. 347; Rest.2d Judgments, § 84) or not (at which point the action at law may resume to determine the rights of the parties). 

In Brock, the court of appeals reversed the trial court’s order dismissing the case for failure to prosecute, finding that the trial court did not have jurisdiction to do so.  Instead, the court of appeals suggested that the party seeking dismissal of the action petition the arbitrator for such relief, explaining that the trial court’s jurisdiction would be limited to confirming, correcting, or vacating such a decision.  (Id. at 1808.) 

Likewise, having compelled the claims to arbitration, this court does not have jurisdiction to dismiss the action until the arbitrator has entered an award.  Although the Court of Appeals has held that the trial court may regain jurisdiction if the parties agree to withdraw the controversy from arbitration, no such agreement exists in this case.  (See Byerly v. Sale (1988) 204 Cal.App.3d 1312, 1315.)   

Mercury argues that the ramifications of failing to conclude an underinsured motorist arbitration within five years of initiation of proceedings were illustrated in Santangelo v. Allstate Ins. Co. 65 Cal.App.4th 804 (1998), where, pursuant to Insurance Code section 11580.2., it was held the claimant had a mandatory duty to complete arbitration proceedings within five years of having demanded arbitration, which he failed to do. (Id., at p. 813.) However, in Santangelo, the insured petitioned to compel arbitration of uninsured motorist claim, and the Court denied petition on the ground that the insured had lost the right by failing to conclude arbitration within five years of its initiation. Here, the motion to compel arbitration was granted and the case was stayed. Thus, the Court has no jurisdiction.

Accordingly, Mercury’s motion to dismiss is taken OFF CALENDAR.