State Farm Mutual Automobile Insurance v. Superior Court

The petition before us involves the uninsured motorist provisions in a motor vehicle policy of insurance. Pursuant to a directive in Insurance Code section 11580.2, subdivision (f), the subject insurance contract between the insurer and the insured in this case contains a provision that (a) both parties must decide by agreement whether (1) the insured is legally entitled to collect damages from the owner or driver of the uninsured motor vehicle, and if so entitled, (2) what amount of damages the insured is entitled to collect from such owner or driver, and (b) if the insured and insurer cannot come to an agreement on those questions, then the questions shall be decided by arbitration.

We are asked to decide whether the insurer of someone who is involved in an accident with the owner or driver of an uninsured motor vehicle is required to arbitrate, with its insured, the amount of damages the insured is legally entitled to collect from such owner or driver if the insurer has already paid to its insured the full amount of benefits possible under the terms of the uninsured motorist policy provisions. Specifically, the insured in this case has taken the position that the…