Does the trial court here know something that I don't?
Ms. Tornai gets into an auto accident with someone with a $25,000 insurance policy. She settles for the $25,000 policy limits, but says that her damages are above that. So she makes a claim under her own auto policy for an accident with an underinsured motorist.
The insurance company (CSAA) is willing to pay, but the only medical expenses that plaintiff submits are bills for a little over $30,000, and as to those, Medi-Cal paid them, at a discount, so legally, plaintiff can only recover the (discounted) amounts Medi-Cal actually paid. Plaintiff's lawyer, however, apparently refuses to provide CSAA with the documents that show how much was actually paid. The lawyer instead insists that CSAA pay a policy limits demand of $275,000, to which CSAA -- not surprisingly -- says, "No thanks."
So CSAA and plaintiff have a dispute over the amount of uninsured motorist (UM) benefits under the policy, and California law (and the policy itself) requires arbitration of that dispute. So when plaintiff sues, CSAA files a motion to compel arbitration.
Which the trial court denies. The trial court agrees with plaintiff that CSAA is just stalling, and should pay the amounts "indisputably" due right now, before arbitration. So the trial court says that the whole shebang -- bad faith plus the UM amounts due -- will be resolved in court instead of arbitration.
The Court of Appeal reverses. In an opinion by Justice Richman that seems indisputably correct. The law requires that the amount of UM payments due -- which is, in fact, clearly disputed, since plaintiff is demanding tons more than the $2,000+ CSAA has offered to pay -- be arbitrated, so, yeah, that dispute goes to arbitration.
I'm honestly not sure how the trial court could have possibly thought otherwise.
Now, it's clear that the trial court was miffed at CSAA, and thought that it was, in fact, just stalling, and hoping to benefit by delay. But at least on the cold paper record, it doesn't seem that way to me. CSAA's request for the actual Medi-Cal payment amounts -- which plaintiff's lawyer refused to provide -- seems entirely reasonable. Whereas plaintiff's claim for a whopping $275,000, right now, for $30,000 (max) in medical expenses seems a bit excessive, or at least gives rise to a legitimate dispute.
Reading between the lines, maybe it's also that CSAA was a bit sloppy in its motion to compel, since its moving papers at least ostensibly requested arbitration of the "entire" lawsuit, including the bad faith claim (not just the claim for UM benefits). CSAA made clear in its reply brief that's not what it wanted, but perhaps that confusion -- plus the purported stalling -- gave rise to the trial court's attitude towards the whole thing. Baby and the bathwater, and all that.
Still. Justice Richman says that the UM claim goes to arbitration, then we'll figure out later if there's any bad faith. Seems entirely the right way to go.
