Handy

In this appeal we are asked to decide whether a trial court may authorize an arbitrator in a court-ordered arbitration pursuant to Civil Code section 2860, governing matters involving Cumis counsel, to decide issues concerning the scope of coverage provided by insurance policies, the existence of a conflict of interest and the insurers’ respective duties to defend. We conclude Civil Code section 2860 does not authorize arbitration of these preliminary issues and reverse and remand the judgment of the trial court with directions to vacate the arbitrator’s award.

Facts and Proceedings Below

On May 4, 1988, a fire occurred in the First Interstate building in downtown Los Angeles. Although the precise cause of the fire was never determined, a Los Angeles Fire Department report indicated the fire started on the 12th floor of the building. First Interstate Bank of California (FICAL) and a subsidiary of its parent and holding company, First Interstate Bancorp (Bancorp), were tenants on the 12th floor.

The building itself is owned by First Interstate Tower (Tower), a joint venture of the Equitable Life Assurance Society of the United States (Equitable) and the United…