Maria Nadine Carlos Miguel et al vs Mid Century Insurance Company

Case Number

24CV07199

Case Type

Hearing Date / Time

Mon, 04/07/2025 - 10:00

Nature of Proceedings

Petition: Compel Arbitration

Tentative Ruling

Maria Nadine Carlos Miguel, et al. v. Mid Century Insurance Company                                                                                                      

Case No. 24CV07199

           

Hearing Date: April 7, 2025

HEARING:              Petitioners’ Petition to Compel Arbitration of Uninsured Motorist Claim

ATTORNEYS:        For Petitioners Ruben Aviles Orozco, Maria Nadine Carlos Miguel, and Ruben Aviles: Chad M. Prentice

                                    For Respondent Mid Century Insurance Company: David B.          Ezra, Walker Macon        

TENTATIVE RULING:

Petitioners’ petition to compel arbitration of uninsured motorist claim is granted.

Background:

This action commenced on December 20, 2024, by the filing of the original petition to compel arbitration by petitioners Maria Nadine Carlos Miguel (“Miguel”), individually, and as guardian ad litem for Ruben Aviles Orozco (“Orozco”), a minor, against Mid Century Insurance Company (“respondent”).

On January 7, 2025, petitioners filed their operative amended petition (“AP”) to compel arbitration. The caption of the AP lists Orozco, Miguel, and Ruben Aviles (“Aviles”) (collectively “petitioners”) as petitioners.

As alleged in the AP:

Petitioners’ insurance policy with respondent provides for uninsured motorist coverage, with an agreement to arbitrate, but respondent is refusing to engage in arbitration. (AP, p. 1, l. 25 - p. 2, l. 2.)

On September 24, 2022, petitioners were injured in an automobile accident, in Santa Barbara, that was caused by Maria Jimenez and Jose L. Torres Limon. (AP, ¶ 1.)

On December 14, 2022, petitioners filed a complaint against Jimenez and Limon as Santa Barbara Superior Court Case No. 22CV04934. (AP, ¶ 2 & Exh. A.) Respondent was apprised of the suit against Jimenez and Limon. (Ibid.) By way of a letter dated February 24, 2023, respondent acknowledged the suit and requested to be notified if Jimenez files and serves a cross-complaint. (Ibid. & Exh. B.)

Petitioners learned that the defendants in the action were uninsured at the time of the collision, and informed respondent of their uninsured status. (AP, ¶¶ 3, 5.) At all relevant times, petitioners were covered by a bodily injury insurance policy that contained uninsured motorist coverage (“UM policy”) issued by respondent. (AP, ¶ 4 & Exh. C.)

By way of a March 20, 2023, letter, respondent confirmed to petitioners that the UM coverage  had been “triggered.” (AP, ¶ 6 & Exh. D.)

On March 22, 2023, petitioners dismissed the action, against Jimenez and Limon, without prejudice. (AP, ¶ 8.) Petitioners relied on the March 20, 2023, “trigger letter” in their decision to dismiss the action. (AP, ¶ 9.)

By way of several letters, respondent advised petitioners that it needed additional time to complete its investigation. (AP, ¶ 10 & Exh. E.)

On September 30, 2024, petitioners made a policy limits settlement demand. (AP, ¶ 11.)

On October 4, 2024, respondent requested confirmation that the UM statute of limitations had been protected. (AP, ¶ 12 & Exh. F.) On October 15, 2024, petitioners reminded respondent that the action had been timely filed against the uninsured motorist, such that a cause of action against respondent had accrued. (AP, ¶ 13 & Exh. G.)

On November 7, 2024, respondent, for the first time, claimed that any UM benefits were time-barred, arguing that the dismissal had impaired its subrogation rights against the liable parties, and declined arbitration. (AP, ¶ 14 & Exh. H.) On November 11, 2024, petitioners advised respondent that its analysis was incorrect and that the timely filing of the lawsuit resulted in accrual of a cause of action for UM benefits against respondent and that respondent’s subrogation rights were fully protected by Insurance Code section 11580.2, subdivision (g). (AP, ¶ 15 & Exh. I.) By way of a November 15, 2024, letter, respondent refused to change its position and has confirmed that it refuses to arbitrate. (AP, ¶  16 & Exh. J.)

Petitioners seek to compel arbitration under the UM policy. Respondent filed its opposition on February 13, 2025.

Analysis:

As an initial matter: Respondent has included reference to a trial court ruling in an unrelated case. However, “ ‘it is improper to cite or rely upon unpublished opinions except in limited circumstances not present here.’ ” (People v. Gray (214) 229 Cal.App.4th 285, 292 fn. 15 [citing Cal. Rules of Court, Rule 8.1115].) Respondent is directed to refrain from citing to unpublished California decisions in the future except where authorized by Rule 8.1115(b).” Neither the document, nor argument pertaining to the document, will not be considered in ruling on the present petition.

The underlying facts of this matter are undisputed. The petitioners and respondent are parties to a contract for insurance coverage that contains an arbitration provision. That provision provides in full:

“If an insured person and we do not agree (1) that the person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle, or (2) as to the amount of payment under this part, either that person or we may demand that the issue be determined by arbitration.

“In that event, an arbitrator will be selected by the insured person and us. If agreement on an arbitrator cannot be reached within thirty (30) days, the judge of a court having jurisdiction will appoint the arbitrator. The expense of the arbitrator and all other expenses of arbitration will be shared equally. Attorney’s fees and fees paid for the witnesses are not expenses of arbitration and will be paid by the party incurring them.

“The arbitrator shall determine (1) if the insured person is legally entitled to recover damages from the owner or operator of an uninsured motor vehicle, and, if so, (2) the amount of payment under this part as determined by this policy or any other applicable policy.

“Arbitration will take place in the county where the insured person lives. Local court rules governing procedures and evidence will apply. The decision in writing of the arbitrator will be binding subject to the terms of this insurance.

“Formal demand for arbitration shall be filed in a court of competent jurisdiction. The court shall be located in the county and state of residence of the party making the demand. Demand may also be made by sending a certified letter to the party against whom arbitration is sought, with a return receipt as evidence.” (Petition, Exh. C, p. 13, ¶ I.)

“Public policy favors compensation for innocent casualties of the ever more dangerous enterprise of negotiating our highways, and instructs us to construe the uninsured motorist statute in favor of coverage wherever possible. [Citations.]” (Campbell v. State Farm Mut. Auto. Ins. Co. (1989) 209 Cal.App.3d 871, 874.)

Respondent’s argument is: (1) the UM claims are time barred, and (2) arbitration is not the appropriate forum for coverage disputes. (Opp., p. 1, ll. 2-5.)

Respondent argues that the claims are time barred because:

“Under California Insurance Code section 11580.2(i), one of three prerequisites to an uninsured motorist claim must be satisfied within two years of the date of the accident. Because the Petitioners did not satisfy any of the three Section 11580.2(i) prerequisites within two years of the date of the accident -- September 24, 2024 -- their claims are time barred.” (Opp., p. 1., ll. 8-11.)

Insurance Code section 11580.2, subdivision (i)(1), provides:

“(1) No cause of action shall accrue to the insured under any policy or endorsement provision issued pursuant to this section unless one of the following actions have been taken within two years from the date of the accident:

“(A) Suit for bodily injury has been filed against the uninsured motorist, in a court of competent jurisdiction.

“(B) Agreement as to the amount due under the policy has been concluded.

“(C) The insured has formally instituted arbitration proceedings by notifying the insurer in writing sent by certified mail, return receipt requested. Notice shall be sent to the insurer or to the agent for process designated by the insurer filed with the department.” (italics added.)

The plain language of that statute states that only one of the enumerated actions need take place, within two years from the date of the accident, for a cause of action to accrue.

Respondent argues that the dismissal of the lawsuit means that the law treats the complaint as though it were never filed. (Opp., p. 5, ll. 20-21.)

Petitioners argue, by way of their reply brief, that they have satisfied section 11580.2 by filing suit for bodily injury against the uninsured motorist, even though they dismissed the action without prejudice following receipt of the “trigger letter” from respondent. As noted above, the underlying accident took place on September 24, 2022, and petitioners filed their suit against the uninsured parties on December 14, 2022.

The one published case cited by respondent in support of its argument, that dismissal of the lawsuit equates to never filing a lawsuit, is Allstate Ins. Co. v. Superior Court (1982) 132 Cal.App.3d 670 (Allstate). As petitioners point out, the quoted language from Allstate was not interpreting the effect of a dismissal without prejudice in the context of Insurance Code section 11580.2, subdivision (i). Allstate was concerned with the effect of a federal court dismissing an action, rather than remanding it to the state court, and the plaintiff’s ability to thereafter resume proceedings in the state court. Allstate relies on federal statutes in interpreting the effect of the dismissal. The same is not true of the present petition to compel arbitration. Here, there is a specific statute and plaintiffs have complied with it by filing the suit within two years of the date of the collision. The cause of action against respondent accrued at that time. Respondent provides no persuasive authority to the contrary. Thus, petitioners are entitled to arbitration of their claims.

Additionally, and in the alternative, respondent is estopped from denying arbitration.

“ ‘ “The doctrine of equitable estoppel is founded on concepts of equity and fair dealing. It provides that a person may not deny the existence of a state of facts if he intentionally led another to believe a particular circumstance to be true and to rely upon such belief to his detriment.” ’ [Citations.]” (Expansion Pointe Properties Limited Partnership v. Procopio, Cory, Hargreaves & Savitch, LLP (2007) 152 Cal.App.4th 42, 57.)

The “trigger letter” sent by respondent to plaintiffs’ attorney on March 20, 2023, states:

“Per our conversation earlier today, I have confirmed that the Underinsured Motorist Bodily Injury coverage available under your client’s insurance policy has been triggered. We have the no coverage denial from the claimant carrier confirming this in the file. Please provide us with an updated status as to your client’s treatment, injuries, and medical documents when time allows.” (Petition, Exh. D.) 

This facially appears to be a clear representation by respondent that plaintiff’s had fulfilled all requirements to trigger the UM coverage. Plaintiffs relied on this letter, confirming that the coverage had been triggered, and dismissed the case against the uninsured defendants two days later. Respondent cannot now claim that the requirements were not met.

Respondent’s argument, that coverage issues are not subject to arbitration, is likewise unpersuasive. The question presented is whether petitioners can enforce the arbitration agreement, despite respondent’s claim that petitioners have not complied with the Insurance Code. 

“[I]n circumstances generally involving contractual arbitration provisions, when a petitioner files a petition to compel arbitration of that arbitration provision, a trial court must make preliminary factual determinations whether: (1) there is an arbitration agreement; and (2) the petitioner is a party to that agreement or can otherwise enforce that agreement. (Code Civ. Proc., § 1281.2.) Code of Civil Procedure section 1281.2 authorizes petitions to compel arbitration, providing in part: “ ‘On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists . . ..’ ” . . . Therefore, in considering a Code of Civil Procedure section 1281.2 petition to compel arbitration, a trial court must make the preliminary determinations whether there is an agreement to arbitrate and whether the petitioner is a party to that agreement (or can otherwise enforce the agreement). [Citation.]” (Bouton v. USAA Casualty Ins. Co. (2008) 167 Cal.App.4th 412, 423-424; italics added.)

Although plaintiffs could have brought this as a declaratory relief action, the fact that they brought it as a petition to compel arbitration is not fatal. In fact, in a case cited by both petitioners and respondent, Spear v. California State Auto. Assn. (1992) 2 Cal.4th 1035, the California Supreme Court decided a similar issue, on a motion to compel arbitration, of whether petitioner’s action was barred by the statute of limitations. The fact that the Court decided the issue of the statute of limitations demonstrates that these are the types of issues that may be resolved on a motion to compel arbitration. Here, the court has made the preliminary factual determinations that there is an arbitration agreement and that, having complied with the Insurance Code, plaintiffs are entitled to enforce that agreement. The issue of whether the dismissal of the lawsuit bars petitioners’ claims is no different than the California Supreme Court’s decision based on a statute of limitations argument.

The motion to compel arbitration will be granted.