CLOSE X
RSS Feed LinkedIn Instagram Twitter Facebook
Search:
FMG Law Blog Line

Posts Tagged ‘UIM Arbitration’

Increasing Suits to Avoid Arbitrator Administrator Selection Clauses in California UIM Arbitration and Possible Responses

Posted on: July 11th, 2019

By: Timothy Kenna

Many automobile insurance policies designate an Arbitration Administrator to conduct UIM arbitrations under their rules.  Increasingly counsel for the insured are seeking to avoid arbitration under the rules of the selected Administrator arguing that there is an inherent bias created by the designation in the policy.  However, these objections are generally unsupported by any actual facts or credible legal arguments.

California Insurance Code section 11580.2, subdivision (f), provides that an uninsured motorist policy “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.  The arbitration shall be conducted by a single neutral arbitrator.’”

The California appellate courts have routinely upheld arbitration clauses providing for the selection of neutral arbitrators by selected Administrators in a wide range of contexts outside of UIM disputes.  Additionally, Briggs v. Resolution Remedies (2008) 168 Cal.App.4th 1402 upheld the Administrator selection in the UIM arbitration clause involved in that case.  The fact that UIM arbitrations have been conducted under these same provisions for decades with few attacks on the fairness of the results is testament to the fairness of the selections under these policies.

Responses to suits seeking to avoid the selection of Administrator include demurrers and motions to compel arbitration in accordance with the provisions of the UIM arbitration clause and Insurance Code section 11580.2(f).  Sanctions may also be sought.  CCP Section 128.5 provides that “a trial court may order a party, the party’s attorney, or both to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay . . . .”

“Actions or tactics” can include, for example, the making or opposing of motions or the filing and service of a complaint, cross-complaint, answer, or other responsive pleading.  When a tactic or action utterly lacks merit the courts are entitled to infer the party knew it lacked merit and pursued it for some ulterior motive.  Dolan v. Buena Engineers, Inc. (1994) 24 Cal.App.4th 1500, 1505.

If you have questions or would like more information, please contact Timothy Kenna at [email protected].