Opinion
Rehearing Denied April 17, 1970.
Opinion on pages 678 to 683 omitted
HEARING GRANTED
See 3 Cal.3d 398 for subsequent opinion.
For Opinion on Hearing see, 90 Cal.Rptr. 608, 475 P.2d 88.
[85 Cal.Rptr. 403]Long & Levit, San Francisco, for petitioners.
Stark, Stewart, Simon & Sparrowe, Oakland, for real party in interest.
DAVID, Associate Justice pro tem.
Retired Superior Court Judge sitting under assignment by the Chairman of the Judicial Council.
The trial court acted in excess of its jurisdiction in its order of November 28, 1969, vacating an arbitration award, ordering a rehearing before new appraisers, and directing that the 'actual cash value' which the appraisers were to determine be determined by the legal standard of 'fair market value.'
[85 Cal.Rptr. 404]There is no question that an arbitration is involved. The proceeding before us in this application was taken under Code of Civil Procedure, section 1286.2, subdivisions (d) and (e), according to the minute order of the superior court to which exception was taken. Where the opinion of a single appraiser and umpire had been provided for, it was held not an arbitration. (Lewis Food Co. v. Fireman's Fund Ins. Co. (1962) 207 Cal.App.2d 515, 24 Cal.Rptr. 557.) We do not deem this case controlling, since appraisals specifically are included in arbitration 'agreements' as defined in Code of Civil Procedure, section 1280, subdivision (a). Here a body of three appraisers was provided under the insurance contract, and their determination was made controlling. "An award in writing so itemized, of any two when filed with the company shall determine the amount of actual value and loss." This is an agreement to arbitrate. (Canadian Indem. Co. v. Ohm (1969) 271 A.C.A. 805, 808, 76 Cal.Rptr. 902.)
I. The award on its face shows that the appraisers unanimously fixed the 'cash value' and 'loss or damages under cash value.'
II. Since this was what the appraisers were required to do, they did not exceed their powers (jurisdiction). Any alleged mistake of law or fact does not give the superior court jurisdiction to vacate the award made, however erroneous it is deemed to be; nor to order that they make an award upon the premise that 'actual cash value' means 'fair market value.' (Lesser Towers, Inc. v. Roscoe-Ajax Constr. Co. (1969) 271 A.C.A. 776, 802-803, 77 Cal.Rptr. 100, quoting Morris v. Zuckerman (1968) 69 Cal.2d 686, 691, 72 Cal.Rptr. 880, 884, 446 P.2d 1000, 1004: "Neither the merits of the controversy * * * nor the sufficiency of the evidence to support the arbitrator's award are matters for judicial review."
It is well settled that an allegedly erroneous view of the law or its misapplication does not confer jurisdiction on the superior court to intervene. (Sapp v. Barenfeld (1949) 34 Cal.2d 515, 523, 212 P.2d 233; Olivera v. Modiano-Schneider, Inc. (1962) 205 Cal.App.2d 9, 14, 23 Cal.Rptr. 30; Crofoot v. Blair Holdings Corp. (1953) 119 Cal.App.2d 156, 186, 189, 260 P.2d 156 (hearing denied, Supreme Court); B. S. B. Constr. Co. v. Rex Constr. Co. (1962) 200 Cal.App.2d 327, 334, 19 Cal.Rptr. 167; Government Employees Ins. Co. v. Brunner (1961) 191 Cal.App.2d 334, 340, 12 Cal.Rptr. 547; Downer Corp. v. Union Paving Co. (1956) 146 Cal.App.2d 708, 715, 304 P.2d 756, cert. den. 354 U.S. 914, 77 S.Ct. 1295, 1 L.Ed.2d 1427; Cecil v. Bank of America (1956) 142 Cal.App.2d 249, 251, 298 P.2d 24; Flores v. Barman (1955) 130 Cal.App.2d 282, 286, 279 P.2d 81; Hohn v. Hohn (1964) 229 Cal.App.2d 336, 342, 40 Cal.Rptr. 125.)
A mistake of law cannot be set aside. Such is not one of the grounds specified for review or correction of the award. (Code Civ.Proc. §§ 1286.2, 1286.6.) To hold that the arbitrators were not the final judges of both law and fact would eviscerate the whole purpose of arbitration. Instead of being a quick and informal way of determining controversies, arbitration would merely be an unnecessary and dilatory step in the course of litigation. (Pacific Vegetable Oil Corp. v. C. S. T., Ltd. (1946) 29 Cal.2d 228, 240, 174 P.2d 441.)
Valuation of property, by any method, short of an actual sale, is a matter of informed opinion, and hence is a matter of fact, to be determined by a consideration of many factors. An expert appraiser is not to be confined to any one method in his fictitious hypotheses. Such is the concept of what a willing buyer would give a willing seller, if a sale were to be held, and if such willing seller were not compelled to sell and willing buyer were not compelled to buy; and if what was offered for sale were to interest any buyer at all within a reasonable time, the usual terms of purchase and sale prevailing. These concepts become shadowy make-believe, [85 Cal.Rptr. 405]when the crystal ball is consulted to assess the damage to a building by considering the difference between its actual cash value before and after the calamity. Clairvoyance, indeed, may be needed to determine the 'market value' of a damaged or destroyed building dissociated from the realty on which it stands (or stood). (Cf. McAnarney v. Newark F. Ins. Co. (1928) 247 N.Y. 176, 159 N.E. 902, 56 A.L.R. 1149.) It is with good reason, then, that the courts decline to review the exercise of the discretion vested in the appraisers. It is sufficient that it was vested, and that they have produced (unanimously in this case) the result of their judgment. 'A decision simply that one of the parties should pay the other a sum of money is sufficiently determinative of all items embraced in the submission.' (Sapp v. Barenfeld (1949), supra, 34 Cal.2d 515 523, 212 P.2d 233, 239.)
The petition upon which the court below acted was based upon the declaration of George H. Horton, one of the appraisers, who approved the arbitration appraisement and award, but who indicated replacement cost less depreciation was the basis for the computation made.
An award cannot be impeached by an arbiter. (Lauria v. Soriano (1960) 180 Cal.App.2d 163, 168, 171, 4 Cal.Rptr. 328.)
Under the circumstances of a particular loss, even if the matter were properly before a court, it is not necessarily prejudicial error to base actual cash value upon reproduction cost less depreciation. This is apparent from the authorities cited in 61 A.L.R.2d 711, 'Test or criterion of 'actual cash value' under insurance policy insuring to extent of actual cash value at time of loss.'
In the note last cited (p. 725), it is stated, 'Although, according to what would appear to be the majority view, market value in not a proper criterion of the actual cash value of buildings insured to that extent at the time of damage or loss, nevertheless the market value test has sometimes been applied to determine the measure of the insured's recovery in actions upon insurance policies covering that class of property.'
No California cases adopt that test. There certainly is no authority to sustain the lower court's order requiring the use of that yardstick.
Let the peremptory writ issue as prayed, with costs to petitioners, to be taxed by the trial court.
SHOEMAKER, P. J., and TAYLOR, J., concur.