Lanois v. Employers Fire Insurance Company, Case No. B251403 (2/1 Jan. 9, 2015) (Chaney, Rothschild, Johnson) (unpublished) involved an underinsured motorist insurance carrier’s challenge to an arbitration award, on the grounds that the award was rendered untimely, and that the arbitrator exceeded her powers by adding interest to a 950K award, after the parties had agreed that the insurer’s liability for damages under its policy could not exceed 950K. The trial court disagreed with the carrier, confirming the award and denying the carrier’s motion to vacate. The carrier appealed – unsuccessfully.
The carrier’s policy was for $1M. However, because the plaintiffs had already been paid $50K under another policy, the parties agreed the maximum liability the arbitrator could award under the underinsured motorist policy was $950K. The arbitrator awarded $1M in an award on November 8, 2012, and subsequently corrected the award to $950K, adding pre-judgment interest from November 8, 2012.
First, regarding the carrier’s contention the arbitrator could not add interest on top of the 950K award, the Court held: “Neither Insurance Code section 11580.2, subdivision (p)(4), nor any provision in the insurance policy precludes plaintiffs’ recovery of prejudgment interest because, when added to the liability damages award (which does not exceed the policy limit), plaintiffs’ total recovery exceeds Employers’ maximum liability under the policy.” So the interest award was not improper.
Second, the carrier contended the initial November 8, 2012 award, an Interim Binding Arbitration Award, resolved the liability incorrectly, and then the arbitrator exceeded her powers by waiting more than 30 days to correct the amount to $950K. The Court of Appeal disagreed, pointing out that the arbitrator’s time to correct did not run from the interim award, particularly so here, because there was evidence that other issues remained open at the time of the initial reward, as a result of which the final binding award could be issued later.