2018-00237226-CU-PT
Stephen Butalla vs. CSAA Insurance Exchange
Nature of Proceeding: Petition to Compel Uninsured Motorist Arbitration
Filed By: Schultz, Brad A.
Claimant Stephen Butalla’s (Butalla) petition to compel an uninsured motorist arbitration is DENIED.
This case arises from a motor vehicle collision that occurred in February 2011. Butalla alleges an uninsured driver caused his injuries. Respondent CSAA Insurance Group, sued as CSAA Insurance Exchange, (CSAA) is Butalla’s insurer. Butalla’s CSAA policy provides uninsured motorist coverage. Both Insurance Code § 11580.2 and the policy require Butalla to demand an arbitration to resolve his coverage dispute with CSAA.
Background Facts/Procedure
In January 2013, Butalla, through his former counsel Joseph Cooper (Cooper), served CSAA with a written demand to arbitrate. (Schultz Decl., ¶ 3.) The demand, which was served by certified mail / return-receipt requested, expressed an interest in resolving the matter without arbitration. (Id. [“However, I look forward to resolving any residual issues prior to going to litigation”].) The following month, Senior CSAA Casualty Specialist Victoria McWhorter (McWhorter) responded:
This letter is to acknowledge that you have demanded arbitration of the referenced uninsured motorist claim. However[,] pursuant to your request, we have agreed that this matter will not be referred to counsel at this time; rather, I will continue to handle this file in an effort to achieve an early resolution.
[¶¶]
If at any time you desire that counsel be retained to represent the interests of [CSAA], please so advise me. Further, CSAA reserves the right to refer this matter to counsel at any time.
(Schultz Decl., Exh. C.) The same letter requested Butalla’s medical records and any disability records that would facilitate evaluation of his claim.
In January 2014, McWhorter wrote to Cooper again and indicated she had not heard from him. She asked for information to evaluate the claim, and she reiterated that although Butalla had demanded arbitration, the matter had not been referred to CSAA’s litigation department per Cooper’s request. (Id., Exh. D.) In September 2014, McWhorter issued a similar letter, reiterating that she had not heard from Cooper, and adding that “it may be in the best interest of our insured, and your client, to move the case to Litigation.” (Id.)
In March 2015, Cooper served a letter “to make an uninsured motorist demand” on Butalla’s behalf. (Schultz Decl., Exh. E.) This letter contained a narrative of Butalla’s injuries and related medical history. It also included medical records, a traffic collision
report, wage records, bills and expenses. The end of the letter contained a demand for Butalla’s $300,000 policy limit and a request: “Please let me know if you are prepared to resolve this case at this stage of the process.” (Id.)
In July 2015, McWhorter wrote that she required additional information (general personnel records from Butalla’s employer, including “mandatory C-DOT physical requirements, and performance reviews”) to evaluate the claim. (Schultz Decl., Exh. F.) She added that, “[w]ith your cooperation, we should be able to get back to you as expeditiously as possible to come to a settlement resolution.” (Id.) She also wrote “[y] ou have requested that we not refer the case to Arbitration, and if at any time you would have us to [sic] so, please let me know.” (Id.)
In October 2015, McWhorter wrote to Cooper again. (Schultz Decl., Exh. G.) She requested the records requested in the July 2015 letter, and she extended a settlement offer based on the information received so far.
Cooper retired from practice, and Butalla’s current counsel, the Demas Law Group, P.C. (Demas), began representing him in January 2016. (Shultz Decl., ¶ 9.) In March 2016, McWhorter wrote to Demas that the “[s]tatute is protected with Mr. Cooper’s request for Arbitration; he did not want the case referred.” (Id., Exh. H; see also Ins. Code § 11580.2(i)(1)(c) [“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 […] The insured has formally instituted arbitration proceedings by notifying the insurer in writing sent by certified mail, return receipt requested’”].) McWhorter wrote to Demas again in September 2016 and indicated that she had not heard from him. (Id., Exh. I.) She reiterated the settlement offer, requested any new documents Demas might have obtained, and advised, “[i]f at any time you wish the case referred to Arbitration[,] please let me know; Enclosed is [a] copy of the Auto Policy as it pertains to Mr. Butalla [‘]s Arbitration rights and duties.” (Id.)
In April 2018, Demas sent a third written demand for arbitration. (Schultz Decl., Exh. J.) By that time, more than five years had passed since Cooper served CSAA with the original demand. CSAA’s counsel, the Law Offices of Stephen A. Mason, (Mason) responded in June 2018. Mason rejected the demand because Butalla had failed to complete an arbitration within five years. (See Ins. Code § 11580.2(i); Schultz Decl., Exh. K.)
Demas responded by letter in June 2018. (Schultz Decl., Exh. L.) Demas noted the many occasions on which McWhorter had indicated that the matter had not been referred to arbitration. Demas also asserted that the parties had continued discussing settlement after January 24, 2018, when five years elapsed.
The parties reached an impasse, and this petition followed.
Discussion
Butalla concedes that more than five years passed without an arbitration. He argues that principles of estoppel, waiver and equitable tolling nonetheless entitle him to an order compelling arbitration now. The court disagrees.
First, the court rejects Butalla’s estoppel argument. Estoppel requires conduct or
omissions inducing reliance. Yet, McWhorter never told Cooper or Demas that Butalla should not move forward with arbitration. Nor did she say that the five-year statute had been waived or extended. Instead, she told Cooper and Demas that Butalla could move forward with arbitration at any time, and that she had not forwarded the matter to litigation / arbitration per Cooper’s request.
Butalla nonetheless argues that McWhorter’s conduct somehow misled him and his counsel into believing that she had extended the five-year deadline. Despite McWhorter’s multiple letters indicating that she had not heard from Butalla’s counsel for some time, and her repeated requests for documents, Butalla accuses her of delaying as a means to trigger the five-year statute. The accusation rings hollow. Butalla also cites a single telephone call after the statute had run, at which time McWhorter attempted to discuss the outstanding settlement offer. McWhorter could not have induced Butalla to allow the five-year statute to pass when the statute had already run. (See Prudential-LMI Commercial Ins. v. Superior Court (1990) 51 Cal.3d 674, 690, fn. 5.) Butalla’s estoppel arguments are untenable, and the court rejects them.
Butalla’s waiver arguments fare no better.
“‘[W]aiver is the intentional relinquishment of a known right after knowledge of the facts.’ [Citations.] The burden … is on the party claiming a waiver of a right to prove it by clear and convincing evidence that does not leave the matter to speculation, and ‘doubtful cases will be decided against a waiver’ [citation].” [Citations.] ” ‘ “Waiver always rests upon intent.” ‘ ” [Citations.] The waiver may be either express, based on the words of the waiving party, or implied, based on conduct indicating an intent to relinquish the right. [Citation.]
(Waller v. Truck Ins. Exch. (1995) 11 Cal.4th 1, 31.) Nothing clearly or convincingly establishes CSAA’s intent to give up its right to assert the five-year statute. McWhorter did not waive the five-year statute by discussing settlement after the statute had run. (See Prudential-LMI Commercial Ins., supra, p. 690, fn. 5.) And even if she could have waived the statute after-the-fact, the evidence is at least as consistent with her unwitting failure to appreciate the deadline’s passage. Any such failure was not a waiver.
The fact that McWhorter indicated in letters, served before five years had passed, that Butalla’s claim could be referred to arbitration “at any time” was not a waiver either. McWhorter’s use of the phrase “at any time” simply reflected her understanding that Butalla and his counsel wished to pursue an informal resolution first but could “at any time” opt for a formal arbitration. McWhorter did not mean that CSAA agreed to arbitrate at a time after five years had passed.
Finally, equitable tolling does not entitle to Butalla to compel an arbitration now.
Equitable tolling is a judge-made doctrine “which operates independently of the literal wording of the Code of Civil Procedure” to suspend or extend a statute of limitations as necessary to ensure fundamental practicality and fairness. [Citations.] This court has applied equitable tolling in carefully considered situations to prevent the unjust technical forfeiture of causes of action, where the defendant would suffer no
prejudice. [Citations.] […¶ …T]he effect of equitable tolling is that the limitations period stops running during the tolling event, and begins to run again only when the tolling event has concluded. As a consequence, the tolled interval, no matter when it took place, is tacked onto the end of the limitations period, thus extending the deadline for suit by the entire length of time during which the tolling event previously occurred. (Bold added.)
(Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 370-371.) Butalla does not cite any event that could have tolled the five-year period. (Compare Santangelo v. Allstate Ins. Co. (App. 3 Dist. 1998) 65 Cal.App.4th 804, 817 [settlement of a claim might have tolled five-year period, but because no settlement occurred, there was no tolling event].) Instead, he generally argues that it would be inequitable to hold him to the five -year statute because CSAA received timely notice of his claim, and the forfeiture of his claim would prejudice him.
Butalla’s arguments are not persuasive. If timely notice of an uninsured motorist claim tolled the five-year statute, then the statute would be tolled in most if not all cases. Similarly, if forfeiture alone tolled the statute, then the statute would be tolled indefinitely every time five years elapsed without an arbitration. Because more is required to toll a statute of limitations, Butalla’s arguments fail.
Disposition
The motion is denied.
The minute order is effective immediately. No formal order pursuant to CRC 3.1312 or further notice is required.