Filed 7/24/17 Foremost Ins. Co. v. Superior Court CA1/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE


FOREMOST INSURANCE COMPANY,
Petitioner,
v.
THE SUPERIOR COURT OF ALAMEDA COUNTY,
Respondent;
GORDON BLACKWELL,
Real Party in Interest.



A151242

(Alameda County
Super. Ct. No. RG16838718)


Petitioner Foremost Insurance Company (Foremost) seeks relief from an order granting the petition of real party in interest Gordon Blackwell to compel an appraisal under an insurance policy issued by Foremost to Blackwell’s deceased father. We grant the requested relief and remand to the trial court with directions to deny Blackwell’s petition to compel.
Factual and Procedural Background
On January 19, 2012, a wind storm damaged Larry Blackwell’s mobile home. The mobile home was insured by a Foremost Platinum Manufactured Home policy issued by Foremost. Paragraph 5 of the policy conditions (hereinafter the appraisal condition or condition 5) provides in relevant part: “If you and we fail to agree on the amount of the loss, then both you and we have the right to select a competent and disinterested appraiser within 20 days from the day of disagreement. The appraisers will determine the amount of the loss. If they do not agree, then the appraisers will choose a competent and disinterested umpire. Then each appraiser will submit his amount of the loss to an umpire selected by them or by a court having jurisdiction if the appraisers cannot agree upon an umpire. The agreement of any two will determine the amount of loss for damage to your property.” Paragraph 8 of the policy conditions (hereinafter the legal action condition or condition 8) provides as follows: “You may not bring legal action against us concerning this policy unless you have fully complied with all of the policy terms. If you and we have failed to agree on the amount of the loss, then you may not bring legal action against us until you have submitted and resolved that dispute through appraisal as described in condition 5. Suit must be brought within one year after the loss occurs.”
On February 3, 2012, Blackwell notified Foremost of his father’s claim for loss under the policy. Between February and October 2012, Foremost made various payments for repairs to the mobile home but a dispute arose regarding the total amount of the covered loss.
In early August 2012, Foremost informed Larry that their dispute would best “be settled through the appraisal process” and promised to notify Larry of the name of its selected appraiser by August 27. On August 17, Foremost gave Larry the name of its appraiser and asked Larry to advise Foremost of his appraiser by August 27. Larry did not provide the name of an appraiser, informing Foremost instead that he wished “to bypass the appraisal process” and settle the claim. Foremost asked for additional documentation supporting Larry’s claims, but indicated that it would not waive its option to proceed with an appraisal. On October 15, 2012, after Larry failed to respond to further correspondence from Foremost, Foremost informed Larry that it was closing the claim file and would not make additional payments on the claim.
The following day Larry filed a complaint against Foremost in the Santa Cruz County Superior Court, alleging causes of action for breach of contract and breach of the covenant of good faith and fair dealing. Larry died after the complaint was filed and on October 29, 2013, Blackwell filed a first amended complaint containing the same allegations but naming himself as an individual plaintiff and successor in interest to Larry. Prior to trial, Foremost moved to dismiss the amended complaint on the ground that Larry had failed to cooperate in obtaining an appraisal, a condition precedent to filing an action under the insurance policy. Blackwell responded that Foremost “never seriously pursued the appraisal process,” because to do so “would have done nothing to settle an essential dispute, the proper investigation of damage and scope of repair.” The trial court found that Foremost had not waived the appraisal condition or the legal action condition, which barred Blackwell’s claims against Foremost. The complaint was dismissed on April 8, 2015. On June 27, 2016, the trial court’s decision was affirmed by the Sixth District Court of Appeal. (Blackwell v. Foremost Ins. Co.\ (June 27, , 2016, H042263) [nonpub. opn.].)
On November 14, 2016, Blackwell filed a petition in the Alameda County Superior Court to compel an appraisal under the policy. He claimed that the time for seeking an appraisal had been tolled during the pendency of the litigation and that he had not waived his right to an appraisal.
On March 14, 2017, over Foremost’s opposition, the trial court granted the petition to compel an appraisal. Thereafter, Foremost filed a petition for a writ of mandate to set aside the trial court’s order. We stayed the order compelling an appraisal, requested informal briefing, and gave notice pursuant to Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171 (Palma) that if warranted, we might issue a peremptory writ in the first instance.
Discussion
1. Writ review is appropriate.
“The Legislature has specifically made orders denying a petition to compel arbitration appealable. [Citation.] In contrast, orders compelling arbitration are considered interlocutory and are not appealable. [Citation.] ‘The rationale behind the rule making an order compelling arbitration nonappealable is that inasmuch as the order does not resolve all of the issues in controversy, to permit an appeal would delay and defeat the purposes of the arbitration statute.’ [Citation.] Thus, writ review of orders directing parties to arbitrate is available only in ‘unusual circumstances’ or in ‘exceptional situations.’ [Citations.] [¶] Nevertheless, California courts have held that writ review of orders compelling arbitration is proper in at least two circumstances: (1) if the matters ordered arbitrated fall clearly outside the scope of the arbitration agreement or (2) if the arbitration would appear to be unduly time consuming or expensive.” (Zembsch v. Superior Court (2006) 146 Cal.App.4th 153, 160)
The present case presents such exceptional circumstances. As discussed below, Blackwell waived his right to an appraisal and his petition to compel filed at this late date reflects an abuse of the judicial process. Under these circumstances, writ review is appropriate to prevent the waste of both the parties’ financial resources and the state’s judicial resources.
2. Blackwell waived his right to an appraisal.
The agreement to conduct an appraisal included in the insurance policy constitutes “an ‘agreement’ within the meaning of Code of Civil Procedure section 1280, subdivision (a), and thus is considered to be an arbitration agreement subject to the statutory contractual arbitration law.” (Kirkwood v. California State Auto. Assn. Inter-Ins. Bureau (2011) 193 Cal.App.4th 49, 57, fn. omitted.) Under Code of Civil Procedure section 1281.2, if a party to an arbitration agreement petitions the court with allegations of an agreement to arbitrate a controversy and another party refuses to arbitrate, “the court shall order [the parties] to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner.” Although the statutes and case law speak in terms of waiver, that term is used as shorthand “ ‘ “for the conclusion that a contractual right to arbitration has been lost.” ’ [Citation.] . . . In this context, waiver is more like a forfeiture arising from the nonperformance of a required act.” (Burton v. Cruise (2010) 190 Cal.App.4th 939, 944.) “[N]o single test delineates the nature of the conduct that will constitute a waiver of arbitration. [Citations.] ‘ “In the past, California courts have found a waiver of the right to demand arbitration in a variety of contexts, ranging from situations in which the party seeking to compel arbitration has previously taken steps inconsistent with an intent to invoke arbitration [citations] to instances in which the petitioning party has unreasonably delayed in undertaking the procedure. [Citations.] The decisions likewise hold that the ‘bad faith’ or ‘wilful misconduct’ of a party may constitute a waiver and thus justify a refusal to compel arbitration.” ’ ” (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195-1196.)
“Generally, the determination of waiver is a question of fact, and the trial court’s finding, if supported by sufficient evidence, is binding on the appellate court. [Citations.] ‘When, however, the facts are undisputed and only one inference may reasonably be drawn, the issue is one of law and the reviewing court is not bound by the trial court’s ruling.’ ” (St. Agnes Medical Center v. PacifiCare of California, supra, 31 Cal.4th at p. 1196.) As the essential facts are not disputed in this case, we apply de novo review.
Here, the undisputed facts establish that Blackwell waived his right to demand an appraisal under the policy. In his memorandum filed in support of his petition to compel, Blackwell concedes that Foremost “sought appraisal” and that he “declined” and opted instead to file a lawsuit against Foremost. He explained that at the time he did not believe an appraisal was a condition precedent to his lawsuit and thus he did not want to incur those costs unnecessarily. He contends that his decision not to pursue an appraisal at that time was not a waiver of his right to do so now. Blackwell is simply wrong.
Preliminarily we note that obtaining an appraisal at this point would at most be an exercise in futility. Blackwell’s complaint was dismissed with prejudice and as his attorney conceded at the Santa Cruz hearing on the motion to dismiss, the statute of limitations on those claims had long since run. An appraisal could determine only the total amount of the loss but would not revive Blackwell’s breach of contract claims.
In all events, Blackwell could not refuse to submit the dispute over the amount of loss to appraisal and at the same time retain the right to do so should his litigation be unsuccessful. His conduct was simply inconsistent with a willingness to submit the dispute to an appraisal.
Martinez v. Scott Specialty Gases, Inc. (2000) 83 Cal.App.4th 1236 is instructive. In that case, plaintiffs litigated their complaint against defendant for wrongful termination through summary judgment. On appeal from the judgment entered in favor of defendant based on the finding that plaintiffs were required by the terms of the employee handbook to submit all of their claims to arbitration, plaintiffs belatedly sought to compel arbitration. (Id. at pp. 1240, 1243, 1249.) The court found that plaintiffs had waived their right to arbitration based on their actions, which were entirely inconsistent with “ ‘an intent to invoke arbitration.’ ” (Id. at p. 1250.) The court noted that despite defendant’s early demand to arbitrate, plaintiffs expressly refused to arbitrate and proceeded to litigate the matter. (Id. at p. 1251.) In conclusion, the court observed, “Plaintiffs waived their right to arbitrate as a matter of law and, while perhaps genuinely regretting this now that they find themselves without any recourse against defendants, have themselves to blame for their predicament.” (Ibid.)
Blackwell’s remaining arguments are similarly lacking in merit. Foremost did not forfeit its contentions by failing to assert “waiver” in the trial court as a defense to the petition to compel. As set forth above, the term “waiver” as used in this context is broad enough to include Foremost’s arguments. The introduction to Foremost’s opposition to the petition to compel states, “Plaintiff is now trying to restart his case in another jurisdiction, by claiming an inalienable right to an appraisal process four years after the claim was made, and after arguing that the appraisal process was waived by the moving party allowing a lawsuit to be filed without compliance with the insurance policy’s appraisal term, which includes that any lawsuit must be filed within one year of the claim. . . . [¶] Worse, however, plaintiff is engaging in forum shopping to avoid the disposal of this improperly filed petition, which is barred under the principles of res judicata, primary right doctrine, collateral estoppel, and waiver.”
Contrary to Blackwell’s assertion, the conclusion that he has waived the right to an appraisal is not inconsistent with the decision of the Sixth District Court of Appeal. That court rejected Blackwell’s argument that Foremost had waived the condition that required him to submit the dispute to an appraisal before filing suit. The court explained that Foremost’s “decision not to pursue appraisal at this point—the culmination of the hearing on the parties’ motions—was not equivalent to an abandonment of Foremost’s right to enforce the condition precedent to the lawsuit.” (Blackwell v. Foremost Ins. Co. (July 18, 2016, H042263) [nonpub. opn.], pp. *19-*20.) Even after the Santa Cruz trial court dismissed Blackwell’s action, Blackwell did not seek to compel an appraisal and instead pursued his argument on appeal that he was not obligated to submit the dispute to an appraisal. Foremost was not obligated to do anything further to avoid the implication that it insisted upon the appraisal and intended to enforce the legal action condition of the insurance policy.
There is no basis to conclude that Foremost is estopped from asserting Blackwell’s waiver of his right to an appraisal. Blackwell argues that “Foremost believed appraisal was appropriate and never withdrew its demand” and that Foremost “relied on its demand for appraisal, never withdrawn, to argue that the prior lawsuit must be dismissed.” Foremost has consistently argued that the insurance policy requires appraisal before an action may be brought and that since Blackwell had declined to participate in an appraisal he had forfeited the right to sue. There is no contradiction or basis for an estoppel arising from Foremost’s present contention that Blackwell’s change of position comes far too late to be effective. Blackwell waived the appraisal and at this late point in time has no right to undo his waiver.
Disposition
When “petitioner’s entitlement to relief is so obvious that no purpose could reasonably be served by plenary consideration of the issue,” the accelerated Palma procedure is appropriate. (Ng v. Superior Court (1992) 4 Cal.4th 29, 35; Palma, supra, 36 Cal.3d 171.) For the reasons given above, the superior court is directed to vacate its order compelling an appraisal and to enter a new and different order denying Blackwell’s petition to compel. The stay issued by this court on May 11, 2017 is dissolved.



Pollak, J.


We concur:


McGuiness, P. J.
Siggins, J.