Opinion
[As modified Dec. 31, 1997.]
[Reprinted without change for tracking pending review and disposition by the Supreme Court.]
[REVIEW GRANTED BY CAL. SUPREME COURT]
Superior Court of San Bernardino County, No. SCV19185, W. Robert Fawke, Judge. [Copyrighted Material Omitted] COUNSEL
Judge of the San Bernardino Municipal Court, Central Division, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Williamson, Raleigh & Doherty, John K. Raleigh and Jeffrey H. Leo for Petitioner.
No appearance for Respondent.
Magana, Cathcart & McCarthy, Richard L. Bisetti and Marnie S. Skeen for Real Parties in Interest.
OPINION
GAUT, J.
1. Introduction
May the trial court order that a consolidated personal injury lawsuit and a related uninsured motorist (U/M) claim be subject to nonbinding arbitration with the right to a trial de novo before a jury? We decide that the two proceedings may be consolidated for purposes of discovery and for arbitration but not for a trial de novo on the U/M claim. Therefore, we treat the instant appeal as a petition for an extraordinary writ and we grant the petition and order the issuance of a writ of mandate directing the trial court to set aside its order of November 18, 1996, and enter a new order requiring the civil action and the U/M claim to be jointly arbitrated, with the arbitration award to be binding as between plaintiffs/real parties in interest Ronald A. and Andrea Wooster (the Woosters) and Mercury Insurance Group (Mercury) and nonbinding as between the Woosters and defendants Samuel Lewis Hull (Hull) and Mountain Top Rentals (Mountain Top).
2. Factual and Procedural Background
In March 1994, the Woosters were involved in a rear-end collision with Hull, an employee of Mountain Top. The Woosters contend that their vehicle was then struck by a hit-and-run driver.
The Woosters filed a personal injury action against Hull and Mountain Top. The Woosters also made a U/M claim on their insurance policy with Mercury. The Woosters then filed a motion to consolidate the personal injury action and the U/M claim. Mercury filed opposition to the motion and the Woosters filed a reply. On May 16, 1996, the trial court granted the Woosters' motion in part but reserved the question of whether the consolidation would include consolidation for trial.
On August 12, 1996, the court conducted a case management conference and ordered that the entire matter, including the U/M claim, be submitted to mandatory nonbinding judicial arbitration.
On October 9, 1996, Mercury filed a motion "to separate non-binding [judicial] arbitration from binding [uninsured motorist] arbitration." Mercury also filed a "Notice of Rejection of Arbitrator [C.C.P. section 1141.10] and of Objection to Non-Binding Arbitration." The Woosters opposed Mercury's "motion to separate." At the hearing on November 18, 1996, the court announced that "the case was to remain consolidated for all purposes, including trial" and denied Mercury's motion.
In December 1996, Mercury filed a petition for writ of mandate, challenging the court's ruling of November 18, 1996. We summarily denied the petition on December 20, 1996.
On January 10, 1997, Mercury filed a notice of appeal from the court's order "denying the Motion of Respondent/Appellant for an Order compelling arbitration." In the docketing statement filed with the appellate court, Mercury describes the nature of order or judgment appealed as an "Order denying Motion Compelling Arbitration."
3. Appealability
Mercury bases this appeal on an order denying its motion "to separate non-binding [judicial] arbitration from binding [uninsured motorist] arbitration." The threshold issue is whether the November 18, 1996, order of the trial court is appealable or otherwise subject to review. If Mercury's motion "to separate" could properly be characterized as a motion to compel arbitration, the order denying that motion would be appealable. (Code Civ. Proc., section 1294, subd. (a).) Mercury, however, did not make a motion to compel arbitration. Instead, Mercury only asked the court to decide whether the arbitration would be binding, not whether the U/M claim would be arbitrated. The court then ruled that the arbitration would not be binding. The court also ruled, sua sponte, that the entire case would be consolidated for a jury trial, although that issue was not then before the trial court.
Initially, we reject the Woosters' argument that our previous summary denial of Mercury's petition for a writ of mandate precludes this proceeding. (1) An order summarily denying a writ petition does not have any law of the case effect. (Kowis v. Howard (1992) 3 Cal.4th 888, 899 [12 Cal.Rptr.2d 728, 838 P.2d 250].) (2) But rather than strain to characterize the lower court's order as appealable, we determine instead to treat the instant matter as a petition for an extraordinary writ. The criteria for following that course exist here: (1) the issue concerning consolidation of personal injury and U/M claims is of widespread interest; (2) the trial court's order is clearly erroneous as a matter of law and substantially prejudices Mercury's case; (3) the question of appealability was far from clear in advance; (4) Mercury may suffer harm or prejudice that cannot be corrected on appeal; (5) and, foremost, judicial economy would not be served by deferring resolution of the issue. (Olson v. Cory (1983) 35 Cal.3d 390, 398 [197 Cal.Rptr. 843, 673 P.2d 720]; Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1266, 1273-1274 [258 Cal.Rptr. 66]; Jacobs-Zorne v. Superior Court (1996) 46 Cal.App.4th 1064, 1072 [54 Cal.Rptr.2d 385].)
4. Binding or Nonbinding Arbitration
(3) Insurance Code section 11580.2, subdivisions (a) and (g), provides that every automobile insurance policy shall include uninsured motorist coverage and that any dispute regarding coverage or damages shall be subject to binding arbitration. (Goulart v. Crum & Forster Personal Ins. Co. (1990) 222 Cal.App.3d 527, 529 [271 Cal.Rptr. 627].) The purpose of binding U/M arbitration is to avoid " 'costly time consuming judicial involvement in attempting to recover benefits from one's own insurer.' " (Id. at p. 530, citing Chrisman v. Superior Court (1987) 191 Cal.App.3d 1465, 1469 [236 Cal.Rptr. 703].) Code of Civil Procedure section 1281.2, subdivision (c) provides that "If the court determines that a party to the arbitration is also a party to litigation in a pending court action ... the court (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action...." The court may also order separate arbitrations consolidated under Code of Civil Procedure section 1281.3. We address the interplay between these code sections.
(4) Mercury argues that the court abused its discretion by ordering Mercury to participate in a nonbinding arbitration after it had consolidated the two proceedings. In opposition, the Woosters offer several procedural arguments and also contend that the trial court did not abuse its discretion.
Two cases from the Court of Appeal, First Appellate District, have dealt with issues arising out of consolidation of a U/M claim and a related civil action. In Prudential Property & Casualty Ins. Co. v. Superior Court (1995) 36 Cal.App.4th 275, 278 [42 Cal.Rptr.2d 227], Division Five held that the superior court has "the authority [under Code of Civil Procedure section 1281.2] to order joinder of an arbitration proceeding and a civil action to avoid the possibility of conflicting rulings." In Prudential, the plaintiff made a motion to consolidate in an effort to force the U/M insurer to participate in settlement discussions. The Prudential court ordered consolidation to protect the plaintiff from the potential for inconsistent rulings, relying on comments made in (Knight et al., Cal. Practice Guide: Alternative Dispute Resolution (The Rutter Group 1994) ¶ 4:328, p. 4-70) arbitration practice guide: " '[P]iecemeal arbitration could be dangerous for plaintiff ... because the insurance carrier may attempt to shift responsibility to the other (insured) defendants; and later, at trial, they are likely to blame the uninsured motorist!' " (Prudential Property & Casualty Ins. Co. v. Superior Court, supra, 36 Cal.App.4th 275, 279.)
Subsequently, in Gordon v. G.R.O.U.P., Inc. (1996) 49 Cal.App.4th 998 [56 Cal.Rptr.2d 914], Division Two of the Court of Appeal, First Appellate District, pursuant to Code of Civil Procedure section 1281.3, held that the superior court could order a joint arbitration of a civil action and a U/M claim but that the insurer was then bound by the arbitration award and could not obtain a trial de novo after the arbitration. The thrust of Prudential and Gordon, read together, is that a U/M claim may be consolidated with a civil action for arbitration but that the U/M claim will still be subject to binding arbitration.
Without citing Code of Civil Procedure section 1281.3 or Gordon, which had only recently been published at the time of the November 1996 hearing, Mercury nevertheless argued that it should not be compelled to participate in a nonbinding arbitration. The superior court rejected this argument. Relying on Prudential, it ordered the parties to proceed to nonbinding arbitration, reasoning that otherwise there existed a possibility of conflicting rulings on a common issue of law or fact.
The question we now consider is not whether the U/M claim and the civil claim could be consolidated, because they had been, but rather the nature and effect of the consolidation. Prudential permits the superior court to order consolidation but Gordon holds that when a U/M arbitration is consolidated with a civil case that is ordered to judicial arbitration, the arbitration award is binding on the insurer and the insured but not binding on the plaintiffs and defendants in the civil action. The Woosters rely on the holding in Prudential to support a broader proposition, i.e., that a U/M claim can be tried by a jury rather than submitted to binding arbitration. We disagree that the Prudential court reached this particular issue. Furthermore, although Prudential approves consolidation in some circumstances, Gordon clarifies that consolidation does not change the contractual and statutory requirements for binding arbitration of a U/M claim.
Mercury did not cite Code of Civil Procedure section 1281.3 or Gordon to the trial court but the statute and Gordon simply affirm the validity of Mercury's position. Mercury has not raised a new argument on appeal; instead, it has presented additional supporting authorities. Therefore, we conclude that the superior court abused its discretion when it ordered Mercury to participate in a nonbinding arbitration with the threat of a jury trial if the arbitration award was ultimately rejected.
5. Disposition
Let a writ of mandate issue ordering the superior court to vacate its order compelling Mercury to participate in a nonbinding arbitration and to make a new order requiring all parties to participate in an arbitration in which the award will be binding as between Mercury and plaintiffs but will not be binding as between plaintiffs and defendants.
Ramirez, P. J., and Hollenhorst, J., concurred.