California Mediation and Arbitration

Arbitration, Automobiles: Insurance Code Makes Underinsured Motorist Claim Arbitrable

Insurance Code Section 11580.2 Was Dispositive.

        California Insurance Code section 11580.2, subdivision (f) provides that disputes between insureds and insurers over entitlement to recover damages caused by an uninsured or under insured motorist [UIM], or the amount of damages, must be resolved by agreement or arbitration. When Brett McIsaac sued Foremost Insurance over an UIM, he argued that the matter was exempt  from arbitration, because he was suing for breach of contract and for bad faith, and a bad faith action is not a dispute over coverage or the amount of the UIM claim. The trial court sided with McIsaac; the Court of Appeal did not. Brett McIsaac v. Foremost Insurance Company Grand Rapids, Michigan, A160389 (1/1 filed 4/30, cert. for pub. 5/19/21) (Margulies, Humes, Banke). Justice Margulies explained that, while McIsaac had sued for bad faith, the insurance company also made a showing that the parties disputed the amount of damages due to plaintiff on his UIM. Thus, the insurance company was entitled to arbitrate.

        COMMENT: The Court of Appeal agreed that the bad faith claim did not need to be arbitrated. But the action for bad faith could be stayed while other claims were arbitrated.

Arbitration, Authentication, Standard Of Review, Employment: First District Div. 5 Agrees That Employer Failed To Authenticate Electronic Signature On Arbitration Agreement

Authentication Of Electronic Signatures Continues To Trip Up Employers.

        The trial court denied the employer's motion to compel arbitration, because the employee Bannister "presented evidence that she never saw the [arbitration] agreement during the  onboarding process and did not affix her  electronic signature to it," and the  Court of Appeal affirmed. Maureen Bannister v. Marinidence Opco, LLC, et al., A159815 (1/5  5/21/21) (Burns, Simons, Rodriguez).

        When an appeal from a denial of a  motion to arbitrate turns on undisputed facts, the Court of Appeal reviews the trial court's ruling for  substantial evidence. If the facts are undisputed, then the  review  of the  trial court's finding can be a  question of  law. Here, the court  agreed that  the outcome is  the same regardless of  the  standard applied. The trial court concluded that, given conflicting evidence, the employer failed to  prove by "a preponderance of the evidence" the existence of an arbitration agreement. And the Court of  Appeal defers to the trial court's determination of the credibility of witnesses and weight of the evidence.

        COMMENT: Civil Code section 1633.9, subdivision (a), governs the authentication of electronic signatures. It provides: "(a) An electronic record or electronic signature is attributable to a person if it was the act of the person.  The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable."