Opinion
C098904
07-26-2024
LAMONTE FULLER, Plaintiff and Appellant, v. CSAA INSURANCE EXCHANGE, Defendant and Respondent.
NOT TO BE PUBLISHED
(Super. Ct. No. CV20222272)
ROBIE, ACTING P. J.
Insurance Code section 11580.2 requires uninsured motorist insurance policies to include an arbitration provision stating: "[T]he 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." (§ 11580.2, subd. (f).) Plaintiff Lamonte Fuller had an uninsured motorist insurance policy with a consistent arbitration provision through defendant CSAA Insurance Exchange (CSAA) when he was allegedly hit by an uninsured motorist. Fuller filed a petition to compel arbitration with the trial court and CSAA resisted arbitration on the grounds it believed there was no physical contact between the vehicles, a necessary fact to establish the other driver was an uninsured motorist. The trial court denied the petition finding the issue of physical contact was not covered by the arbitration provision. We reverse the trial court's order, concluding our Supreme Court's precedent requires arbitration of the physical contact issue under the parties' agreement.
Undesignated section references are to the Insurance Code.
FACTUAL AND PROCEDURAL BACKGROUND
On December 28, 2022, Fuller filed a petition to compel arbitration. The petition stated Fuller was driving "when he was negligently impacted and run off the road by an unknown driver of a vehicle .... Said individual fled the scene of the accident. As a result of this accident, [Fuller] suffered significant injuries." The petition alleged Fuller had uninsured motorist coverage through CSAA and attached the relevant policy. The policy states CSAA "will pay damages . . . for bodily injury to an insured person, which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle." (Boldface omitted.) "Uninsured motor vehicle" includes a hit-and-run vehicle where the identity of the operator cannot be ascertained and the bodily injury arises out of "physical contact of such motor vehicle with the insured person." (Boldface omitted.)
The policy has an arbitration provision stating: "If an insured person makes a claim under this [p]art and [CSAA does] not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle because of bodily injury to such insured person, or, if so entitled, [does] not agree as to the amount, then either party, on written demand of the other, shall institute arbitration proceedings as provided in [s]ection 11580.2 .... [¶] In the event of a dispute as to coverage under this [p]art, any arbitration proceedings will be postponed until that dispute is resolved by agreement of the parties or by a court of competent jurisdiction." (Boldface omitted.)
CSAA denied the claim because "there was no physical contact between [Fuller's] vehicle and the vehicle that cut him off," and asserted arbitration is not the proper venue to determine whether there was physical contact.
On April 24, 2023, the trial court heard argument on the petition and filed an order a week later denying the petition. The court found our Supreme Court's opinion in Orpustan v. State Farm Mut. Auto. Ins. Co. (1972) 7 Cal.3d 988 (Orpustan) was distinguishable and not controlling. The court's order also recited the arbitration provision and bolded the second paragraph disclaiming arbitration for disputes of coverage.
Fuller appeals.
DISCUSSION
This appeal presents a straightforward legal question with a not so straightforward answer. Fuller contends the trial court erred because the issue of physical contact with the uninsured motorist is for the arbitrator to decide, as found by our Supreme Court in Orpustan when interpreting a similar arbitration provision. CSAA argues to the contrary, stating other Supreme Court precedent makes clear Orpustan is inapplicable here. We conclude Fuller's position is more persuasive.
This dispute requires interpretation of the insurance policy and section 11580.2. We consequently review the trial court's order de novo. (Tornai v. CSAA Insurance Exchange (2023) 98 Cal.App.5th 974, 982 ["When the court's order [denying a petition to compel arbitration] is based on a decision of law, we employ a de novo standard of review"].)" '[I]n ruling on a petition to compel, the court must determine whether the parties entered into an enforceable agreement to arbitrate that reaches the dispute in question, construing the agreement to the limited extent necessary to make this determination.' [Citation.] If such an agreement exists, the court must ordinarily order the parties to arbitration." (Id. at pp. 981-982.)
We begin with section 11580.2. This provision requires insurers to provide coverage for bodily injury or wrongful death caused by uninsured motorists. (§ 11580.2, subd. (a)(1).) The statute's definition of an uninsured motorist includes accidents with an unknown driver and "[t]he bodily injury has arisen out of physical contact of the automobile with the insured." (§ 11580.2, subd. (b)(1).) Section 11580.2, subdivision (f) also has an arbitration provision stating: "The policy or an endorsement added thereto shall provide that 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."
Our Supreme Court has interpreted section 11580.2's arbitration provision on four occasions, most recently in Bouton v. USAA Casualty Ins. Co. (2008) 43 Cal.4th 1190 (Bouton). In Bouton, the court first summarized the general rule for the scope of arbitration for uninsured motorist claims under section 11580.2: "(1) [A]rbitration of issues other than liability and damages is appropriate if the parties have contractually agreed to arbitrate more than is required by section 11580.2, subdivision (f); and, (2) only issues of liability and damages may be decided in an arbitral forum if the parties did not agree to arbitrate more than is required by section 11580.2, subdivision (f)." (Bouton, at p. 1197.)
Our high court then summarized its three previous cases interpreting section 11580.2, and how it summarized those cases in Bouton has some meaning to the resolution of the parties' dispute here. The first case was Orpustan, which involved the same controversy here of whether the issue of physical contact with an uninsured motorist must be arbitrated. (Bouton, supra, 43 Cal.4th at p. 1197.) The court in Bouton explained the policy in Orpustan "contained the language mandated by section 11580.2, subdivision (f), and further stated that if the parties' "do not agree as to the amount payable hereunder,"' the parties may demand arbitration. [Citation.] [Our Supreme Court] held that the parties' agreement to arbitrate the issue of 'whether the insured "is legally entitled to recover damages from the owner or operator of an uninsured automobile"' was sufficiently broad to encompass arbitration of whether the hit-and-run vehicle was an uninsured vehicle within the meaning of the statute and the plaintiff's policy. [Citation.] [Our Supreme Court] reasoned that requiring a court to decide 'jurisdictional facts' when the parties had agreed to arbitrate the questions in dispute would transform a procedure intended to result in prompt resolution' "into one carrying all the burdens and delays of civil litigation, overlaid by jurisdictional uncertainty between successive tribunals." '" (Bouton, at p. 1198.)
In the next case, Van Tassel v. Superior Court (1974) 12 Cal.3d 624, the issue was whether the insured's daughter, who died in an accident, lived within the same household as to be covered by the uninsured motorist policy. (Bouton, supra, 43 Cal.4th at p. 1198.) "The arbitration provision of the insurance policy provided that' "whether the insured is legally entitled to recover . . . damages, and (if so entitled) the amount thereof, shall be made . . . in the event of disagreement, by arbitration ...." '" (Ibid.) Our Supreme Court in Van Tassel, relying on Orpustan, "held that whether a claimant constituted a covered person under the uninsured motorist policy was a 'jurisdictional fact' to be resolved by arbitration." (Bouton, at p. 1198.)
The court narrowed the" 'jurisdictional facts'" rule in the next case of Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473 (Freeman). (Bouton, supra, 43 Cal.4th at pp. 1199-1200.) "The issue in Freeman was whether the trial court was entitled to consider the forfeiture/statute of limitations issue, or whether an arbitrator should decide whether the plaintiff's motion to compel arbitration was time-barred and his right to arbitration therefore forfeited." (Bouton, at p. 1199.) Our Supreme Court held this issue" 'is clearly one for the determination of the court pursuant to the provisions of section 1281.2 of the Code of Civil Procedure.'" (Bouton, at p. 1199.) The court in Bouton explained that in Van Tassel it had relied on Orpustan's "broad language regarding 'jurisdictional facts'" that was" 'an invitation to misinterpretation,'" and the court sought to "correct that misinterpretation" in Freeman. (Bouton, at pp. 1199-1200.)
Our Supreme Court in Bouton explained the "clarifi[cation]" of" 'jurisdictional facts'" in Freeman. (Bouton, supra, 43 Cal.4th at p. 1200.) Jurisdictional facts are to be determined by the arbitrator because they," 'in the circumstances of the particular case, are a part of "the entirety of the controversy" and whose determination may have the effect of precluding [the arbitrator] from reaching the merits of the dispute. It was in this latter sense that [our Supreme Court] used the term "jurisdictional" in describing those other issues-i.e., in the sense that the arbitrator's consideration of the merits of the controversy must await his [or her] determination of them.'" (Ibid.) This is opposed to "the statute of limitations issue" and "prior issue of waiver of the right to compel arbitration" that are "logically and legally prior to any consideration by the arbitrator of" jurisdictional facts. (Ibid.)
Our high court in Bouton found Van Tassel irreconcilable with this analysis in Freeman and thus overruled Van Tassel's "overly broad interpretation of the Orpustan decision." (Bouton, supra, 43 Cal.4th at p. 1200.) The court then reaffirmed, "[C]onsistent with our decision in Freeman, that section 11580.2, subdivision (f), 'read literally, requires arbitration of two issues only: (1) whether the insured is entitled to recover against the uninsured motorist and (2) if so, the amount of the damages.'" (Bouton, at p. 1201.)
Our Supreme Court applied this rule in Bouton to two consolidated cases. The first controversy involved whether the petitioner was covered by his sister's insurance policy, and the policy had a standard section 11580.2 arbitration agreement. (Bouton, supra, 43 Cal.4th at pp. 1194-1195, 1200.) The court found this must be resolved by a court, not an arbitrator, because whether the petitioner "is a covered person under the insurance policy is not a question regarding the underinsured tortfeasor's liability to the insured, or the amount of damages. Questions of coverage-that is, whether the claimant is insured and therefore entitled to take advantage of the protection provided by the policy at issue-must be resolved before an arbitrator reaches the two arbitrable questions pursuant to section 11580.2, subdivision (f)." (Bouton, at p. 1201.)
In the second Bouton controversy, the petitioner, who had an insurance policy with a standard section 11580.2 arbitration provision, was hit by an underinsured motorist. (Bouton, supra, 43 Cal.4th at pp. 1195-1196, 1201.) The petitioner obtained a default judgment against that driver, whose insurer paid part of the judgment amount, and then the petitioner demanded his insurer pay the difference, arguing the default judgment "conclusively established damages." (Id. at pp. 1195-1196; id. at p. 1201.) Our Supreme Court determined it was for an arbitrator, and not a court, to decide whether the default judgment binds the petitioner's insurer. (Id. at p. 1201.) The court found this issue "subsumed within the arbitrable issues of liability and damages. The entire controversy-whether [the petitioner] is entitled to damages arising out of his [or her] accident with the underinsured tortfeasor, and the amount thereof-is arbitrable. Whether the default judgment binds [the insurer] is a part of the controversy between the parties regarding liability and damages, and must be resolved by the arbitrator in the course of addressing the two statutorily mandated arbitrable issues." (Id. at p. 1202.) The court further explained, "[T]he effect of the default judgment is an issue the arbitrator necessarily will address in the course of resolving the arbitrable controversy concerning the tortfeasor's liability to the insured, and the amount of damages." (Id. at pp. 1202-1203.)
We distill a few core principles from Bouton and its review of prior cases. Section 11580.2 requires arbitrating only the issues of" '(1) whether the insured is entitled to recover against the uninsured motorist and (2) if so, the amount of the damages.'" (Bouton, supra, 43 Cal.4th at p. 1201.) This does include some facts in controversy that are "subsumed within the arbitrable issues of liability and damages" (id. at p. 1202) because they" 'are a part of "the entirety of the controversy" and whose determination may have the effect of precluding [the arbitrator] from reaching the merits of the dispute'" (id. at p. 1200). But this does not include issues that are "logically and legally prior to any consideration by the arbitrator of" facts in controversy, such as statute of limitations, waiver of arbitration, and "[q]uestions of coverage-that is, whether the claimant is insured and therefore entitled to take advantage of the protection provided by the policy at issue." (Id. at pp. 1200, 1201.)
With this understanding of the law, the issue of physical contact must be arbitrated here because it is a fact in controversy necessary to the resolution of the uninsured motorist's liability and associated damages. Fuller and CSAA agreed to arbitrate whether Fuller "is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle because of bodily injury to such insured person, or, if so entitled, [they] do not agree as to the amount." (Boldface omitted.) The parties agree this language is the same required by section 11580.2. The contested issue is if this arbitration term requires arbitrating whether the other vehicle made contact with Fuller such that it constitutes an uninsured motor vehicle under the policy. We conclude it does because the physical contact issue forms an integral part of the core controversy of whether Fuller is entitled to recover damages from the other motorist. If there was or was not contact and to what extent alters the other driver's liability and amount of damages Fuller is legally entitled to recover. (Cf. Guyton v. City of Los Angeles (1959) 174 Cal.App.2d 354, 362 ["a driver must at all times exercise ordinary care to avoid a collision including swerving or altering his [or her] course"].) It is possible there was no physical contact between the vehicles, but it is also possible there was physical contact. There is no way to assess the likelihood of either outcome without evaluating the evidence of the accident and discerning the other driver's liability. But that issue cannot be predetermined before arbitration because it is "subsumed" within the "entire controversy"-the "arbitrator necessarily will address in the course of resolving the arbitrable controversy concerning the tortfeasor's liability to the insured," whether or not the other motorist caused the accident and how, i.e., whether it made physical contact with Fuller. (Bouton, supra, 43 Cal.4th at pp. 12021203.) These are the facts in controversy our Supreme Court affirmed in Bouton that are to be decided by the arbitrator. (Id. at p. 1200.) The parties therefore agreed to arbitrate the issue of physical contact and whether the other driver was an uninsured motorist under the policy.
Permitting a court to first make this determination would also undermine the benefits of arbitration. A court or an arbitrator will need to find whether there was physical contact or not before resolution of this case. And to make this determination will require evaluating the same evidence required to determine the ultimate liability of the uninsured driver-Fuller's testimony, witness testimony, and forensic evidence of the accident. Having a court first review that evidence to determine whether there is contact and if there is, having an arbitrator review the exact same evidence to determine the extent of liability and damages undercuts" '" 'a strong public policy in favor of arbitration as a speedy and relatively inexpensive means of dispute resolution.'" '" (Adolph v. Coastal Auto Sales, Inc. (2010) 184 Cal.App.4th 1443, 1451.)
This is what our Supreme Court found in Orpustan. Going beyond Bouton's brief survey of the case, the court in Orpustan stated the plaintiff argued "all disputes arising under the uninsured motorist coverage should be subject to decision by the arbitrator, including the issue of physical contact in relation to the insurer's liability under the policy.... [¶] It [was the court's] opinion that plaintiff's view should prevail in leaving the entirety of the controversy to the determination of the arbitrator.... [W]hether the insured 'is legally entitled to recover damages from the owner or operator of an uninsured automobile' appears sufficiently comprehensive to include the subordinate question whether, within the meaning of the policy, the vehicle [that] caused the accident was an uninsured automobile (which for a hit-and-run automobile requires a finding of physical contact)." (Orpustan, supra, 7 Cal.3d at pp. 991-992.) The court also found, "To hold otherwise would deprive the insured of the value of arbitration as a speedy remedy under the [u]ninsured [m]otorist [c]overage statute," and having a court decide the physical contact issue first "would have the effect of 'turning a procedure designed to furnish prompt, continuous, expert, and inexpensive resolution of controversy into one carrying all the burdens and delays of civil litigation, overlaid by jurisdictional uncertainty between successive tribunals.'" (Id. at p. 992.) This is precisely the issue here and the analysis directly applies.
We find no meaningful difference between the language in the Orpustan policy and the language in the policy at issue here. The arbitration provision quoted in Orpustan stated in its entirety:" 'If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount payable hereunder, then each party shall, upon written demand of either, select a competent and disinterested arbitrator. The two arbitrators so named shall select a third arbitrator.... The arbitrators shall then hear and determine the question or questions so in dispute, and the decision in writing of any two arbitrators shall be binding upon the insured and the company.'" (Orpustan, supra, 7 Cal.3d at p. 991.) This required arbitration of whether the insured was "legally entitled to recover damages from the owner or operator of an uninsured automobile" and "the amount payable [t]hereunder." (Ibid.) This language is nearly identical to the language employed in the policy here that requires arbitration if the parties do not agree the insured person "is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle because of bodily injury to such insured person," or "do not agree as to the amount." (Boldface omitted.) The only differences are "automobile" as opposed to "motor vehicle" and "amount payable hereunder" to just "amount." We can find no legal significance in these differences.
Our Supreme Court also indicated in Freeman that similar language there would require arbitration of the physical contact issue. The policy at issue in Freeman was substantially similar to the one in Orpustan and here, requiring arbitration of disputes as to whether the insured "is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle because of bodily injury to the insured, or [the parties] do not agree as to the amount payable hereunder." (Freeman, supra, 14 Cal.3d at p. 486.) The court in Freeman stated, "The language of this clause is similar to that which was interpreted in Orpustan . . ., and thus should be held to require arbitration of the physical contact issue." (Freeman, at p. 486.) Though that was not the issue in that case, this is still persuasive dictum that the language in the policy here requires arbitration of the physical contact issue.
CSAA disagrees, arguing its policy with Fuller is materially different than that in Orpustan and section 11580.2 for two reasons. First, it argues the phrase" 'do not agree as to the amount payable hereunder'" in Orpustan "broadens the scope of arbitrable issues beyond liability and the amount of damages, and therefore beyond the limits of arbitration in section 11580.2." But CSAA does not provide any analysis for how this broadens the scope or how it differs from the language in its policy with Fuller. This language appears to simply state, as the policy here does as required by section 11580.2, the parties must arbitrate the "amount" of the damages the insured is "legally entitled to recover" "in the event of disagreement." (§ 11580.2, subd. (f).) Second, CSAA argues the phrase" '[t]he arbitrators shall then hear and determine the question or questions so in dispute'" "grants arbitrators the power to resolve the amount payable under the [uninsured motorist] policy. [Citation.] The scope of this authority is significantly greater than the authority given [uninsured motorist] arbitrators under section 11580.2, and under the CSAA" policy with Fuller because the "amount of damages owed by the [uninsured motorist] driver" is not the same as "the amount owed under the [uninsured motorist] policy." But CSAA does not explain how damages owed to Fuller can differ from the amount CSAA owes under the policy. The policy requires CSAA to "pay damages . . . for bodily injury to an insured person, which an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle." (Boldface omitted.) This language establishes the amount payable under the policy is the amount of damages. And section 11580.2 grants arbitrators the power to resolve the "amount" the insured is "legally entitled to recover" under the policy due to the uninsured motorist's liability. (§ 11580.2, subd. (f).) The policy here does the same by utilizing the arbitrator if Fuller and CSAA "do not agree as to the amount." Orpustan is consequently directly on point and mandates arbitration here.
We recognize language in Freeman and Bouton indicates Orpustan involved policy language broader than section 11580.2's required language. CSAA cites to this language to undercut the applicability of Orpustan to the present case because the policy at issue adheres to the language in section 11580.2. In Freeman, our Supreme Court stated the holding in Orpustan was "based upon the language of the insurance policy" and in a footnote cited a case where the appellate "court seemed to say that Orpustan was decided upon an interpretation of subdivision (f) of . . . section 11580.2," but the Supreme Court reiterated, "The language quoted above indicates Orpustan was an interpretation of the insurance policy." (Freeman, supra, 14 Cal.3d at pp. 482, 485, fn. 3, 486.) The court in Freeman also stated, as mentioned above, the language in the policy should cover the physical contact issue, but added "and possibly other issues beyond the liability of the uninsured motorist to the insured." (Id. at p. 486.) Bouton stated the Orpustan decision contained section 11580.2 language "and further stated that if the parties' "do not agree as to the amount payable hereunder,"' the parties may demand arbitration." (Bouton, supra, 43 Cal.4th at p. 1198, italics added.) These statements all indicate our Supreme Court believed Orpustan involved policy language beyond section 11580.2's requirements.
But the court never explained in either Freeman or Bouton how Orpustan's policy language differed from section 11580.2. In Freeman, the court said the determinative policy language was if the parties did" 'not agree as to the amount payable [t]hereunder,' the arbitrators were to 'hear and determine the question or questions so in dispute.'" (Freeman, supra, 14 Cal.3d at p. 482.) This is the same language CSAA argues is different, but for the reasons previously articulated we conclude it requires the same issues to be arbitrated as required by section 11580.2 and the policy at issue here.
The court's analysis of the controversies in Bouton also undermines any implication of differences between Orpustan and section 11580.2. In Bouton, our Supreme Court said the determinative policy language in Orpustan was" 'whether the insured "is legally entitled to recover damages from the owner or operator of an uninsured automobile." '" (Bouton, supra, 43 Cal.4th at p. 1198.) This language is strikingly similar to one of the policies in Bouton, which stated the parties agreed to arbitrate "whether 'the insured [was] legally entitled to collect damages from the owner or driver of the uninsured motor vehicle,'" and our Supreme Court found this language "consistent with section 11580.2, subdivision (f)." (Bouton, at p. 1201.) This is identical to the language Orpustan found sufficient to arbitrate the issue of physical contact except for "collect" instead of "recover" and "motor vehicle" instead of "automobile." (Bouton, at pp. 1198, 1201.) We again find no legal significance with using these synonyms.
This tension in Supreme Court precedent is displayed in a United States District Court for the Eastern District of California case finding section 11580.2 does not require arbitration of the physical contact issue, which CSAA relies on to argue physical contact is an issue of coverage. In Nationwide Ins. Co. of Am. v. Marquez (E.D.Cal., Dec. 2, 2016, No. 2:16-cv-01978-WHO) 2016 U.S.Dist. LEXIS 167790, pp. *1-*2, the petitioner asserted an uninsured motorist hit her and the uninsured motorist policy at issue had an arbitration provision "consistent with [section] 11580.2." The petitioner argued Orpustan applied, and the court agreed with the petitioner the policy there "contain[ed] some similar language [as the one in Orpustan] ('whether that person is legally entitled to recover damages under this coverage')," but found conclusive the arbitration provision at issue "explicitly limit[ed] arbitrable disputes. It state[d], 'Disputes concerning coverage under this part may not be arbitrated.'" (Nationwide, supra, 2016 U.S.Dist. LEXIS 167790 at p. *4.) The court also found, "Several subsequent decisions by the California Supreme Court distinguished Orpustan because the arbitration policy there included broad language that encapsulated the issue of physical contact," citing to Bouton and Freeman. (Nationwide, supra, 2016 U.S.Dist. LEXIS 167790 at p. *4.)
Unpublished federal cases may be cited as persuasive authority. (Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1096, fn. 18 ["Citing unpublished federal opinions does not violate our rules"]; Aguirre v. Amscan Holdings, Inc. (2015) 234 Cal.App.4th 1290, 1298, fn. 5 ["unpublished federal opinions may be cited as persuasive, although not binding, authority"].)
The court in Nationwide did not articulate a difference between the section 11580.2 language in the policy there with what was determinative in Orpustan. It instead found the language similar but relied on coverage issues explicitly not being covered by the policy's arbitration provision. (Nationwide Ins. Co. of Am. v. Marquez, supra, 2016 U.S.Dist. LEXIS 167790 at p. *4.) This coverage language is also in CSAA's policy with Fuller and appears to be the basis of the trial court's decision because it bolded this term in its order. But this is circular analysis. Coverage issues, as defined in Bouton, are issues not involving liability or damages. (Bouton, supra, 43 Cal.4th at p. 1201 ["Questions of coverage . . . must be resolved before an arbitrator reaches the two arbitrable questions pursuant to section 11580.2, subdivision (f)"].) If the issue involves liability or damages, it necessarily does not involve coverage, so disclaiming arbitration of coverage issues does no more than limiting arbitration to liability and damages.
Our Supreme Court could have also articulated the coverage language as being a key factor in Bouton because the policy for one Bouton controversy had terms explicitly disclaiming arbitration for coverage issues and one did not. (Compare Bouton, supra, 43 Cal.4th at p. 1195 [" 'This arbitration shall be limited to the two aforementioned factual issues and shall not address any other issues, including but not limited to, coverage questions' "], with id. at pp. 1195-1196.) But the court did not highlight this difference between the two policies at issue, nor with the policy in Orpustan that did not have a term explicitly disclaiming arbitration of coverage issues. (See Orpustan, supra, 7 Cal.3d at p. 990.) Instead, as detailed above, in all its opinions analyzing section 11580.2, our Supreme Court highlighted language in the Orpustan policy that mirrors the policy at issue here. We are therefore unconvinced by the analysis in Nationwide distinguishing Orpustan.
Ultimately, there is a Supreme Court case directly on point, Orpustan, that relies on policy language matching the language in the policy here to find physical contact must be arbitrated. Freeman also indicated similar language required arbitration of the physical contact issue. (Freeman, supra, 14 Cal.3d at p. 486.) Our Supreme Court narrowed the" 'jurisdictional facts'" rule from Orpustan as applied to other issues but did not eliminate the core ruling in Orpustan applicable here-facts in controversy must be arbitrated. (Bouton, supra, 43 Cal.4th at p. 1200.) While doing so, the court implied in Freeman and Bouton the policy language in Orpustan was broader than what section 11580.2 requires. (Freeman, at pp. 482, 485, fn. 3, 486; Bouton, at p. 1198.) But the precise scope of Orpustan as it relates to the physical contact issue was not necessary to the decisions in either Freeman or Bouton. Freeman and the first controversy in Bouton involved whether the petitioner was a covered party under the policy and the second controversy in Bouton involved whether a default judgment against the third-party driver bound the insurer. (Bouton, at pp. 1199-1201.) We therefore must find these remarks in Freeman and Bouton regarding the scope of the Orpustan policy as it related to physical contact to be dicta. (People v. Mendoza (2000) 23 Cal.4th 896, 915 [" 'we must view with caution seemingly categorical directives not essential to earlier decisions and be guided by this dictum only to the extent it remains analytically persuasive' "].) And we must follow valid Supreme Court precedent directly on point over these dicta. (Gogri v. Jack in the Box Inc. (2008) 166 Cal.App.4th 255, 272 [" 'Only statements necessary to the decision are binding precedents' "].) Thus, we apply Orpustan to conclude the trial court here erred in denying the petition to compel arbitration.
DISPOSITION
The judgment is reversed, and the trial court is directed to grant Fuller's petition to compel arbitration in the manner provided for in the subject insurance policy. CSAA shall pay costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1)-(2).)
We concur: BOULWARE EURIE, J. MESIWALA, J.