Opinion ID: 1131746
Heading Depth: 1
Heading Rank: 2

Heading: arbitration costs

Text: Did the trial court violate statutory provisions by allowing the insurance policy to split the costs of arbitration between the parties? There are three different statutory provisions regarding costs: 1) the general statute regarding costs in civil actions, 2) the New Mexico Arbitration Act which deals with costs in arbitration, and 3) the uninsured motorists' insurance statute which deals specifically with arbitration in the context of uninsured motorists' disputes in the instant case. NMSA 1978, Section 39-3-30, regarding costs in civil actions, states: In all civil actions or proceedings of any kind, the party prevailing shall recover his costs against the other party unless the court orders otherwise for good cause shown. (Emphasis added.) The New Mexico Arbitration Act, NMSA 1978, Section 44-7-10 provides:  Unless otherwise provided in the agreement to arbitrate, the arbitrators' expenses and fees    shall be paid as provided in the award. (Emphasis added.) Section 66-5-302 of the uninsured motorists' insurance statute reads: The arbitrator may award the costs of arbitration to the prevailing party. (Emphasis added.) A conflict seems to exist between these three statutory provisions. Generally, in civil actions, Section 39-3-30 mandates that costs be awarded to the prevailing party. The New Mexico Arbitration Act, Section 44-7-10, allows parties to contract for allocation of arbitration costs in general arbitration cases. More specifically, under the uninsured motorists' insurance statute, Section 66-5-302, costs of arbitration may be awarded to the prevailing party by the arbitrator. In Dairyland Insurance Co. v. Rose, 92 N.M. 527, 591 P.2d 281 (1979), this court dealt with a conflict between the New Mexico Uniform Arbitration Act and the uninsured motorists' statute, and held: The legislative history of the two acts involved here lends support to the view that the New Mexico Uniform Arbitration Act was intended to supersede the de novo trial provision of the uninsured motorist law. Id. at 530, 591 P.2d at 284 (emphasis added). On the specific question of whether or not a de novo hearing would be allowed, this court held that the more recent New Mexico Uniform Arbitration Act prohibiting de novo review would prevail. The prohibition of a de novo appeal in the Arbitration Act directly contradicted the uninsured motorists' insurance statute which allowed a de novo review of arbitration. The conflict between the two acts was found to be so repugnant as to be irreconciliable. The court in Dairyland relied on two rules of statutory construction: (1) Repeals by implication are not favored unless necessary to give effect to obvious legislative intent; (2) the enactment of a new and comprehensive law covering the whole subject matter which is inconsistent with and repugnant to the prior law manifests legislative intent to repeal the earlier statute or so much thereof as may be in conflict with the later one.  Id. at 530, 591 P.2d at 284 (emphasis added). In this case the uninsured motorists' insurance statute and the New Mexico Arbitration Act are not in such a state of repugnant conflict on the issue of apportionment of arbitration costs. The Arbitration Act merely encompasses the uninsured motorists' insurance statute; it allows the arbitrator to award costs of arbitration to the prevailing party (as does the uninsured motorists' insurance statute) unless the parties contract to award it in some other way. This distinction is not enough to warrant a repeal by implication and does not make the acts irreconciliable. There is a third rule of statutory construction not mentioned by the court in Dairyland which aids in the resolution of the question before us. That is: a statute dealing with a specific subject will be considered an exception to, and given effect over, a more general statute. In re Rehabilitation of Western Investors Life Ins. Co., 100 N.M. 370, 671 P.2d 31 (1983); City of Alamogordo v. Walker Motor Co., 94 N.M. 690, 616 P.2d 403 (1980); State v. Mirabal, 108 N.M. 749, 779 P.2d 126 (Ct. App.), cert. denied, 108 N.M. 713, 778 P.2d 911 (1989). This is true whether the special statute was passed before, after, or along with the general statute. See Saiz v. City of Albuquerque, 82 N.M. 746, 487 P.2d 174 (Ct.App. 1971). New Mexico courts in interpreting various provisions of the uninsured motorists' statute have relied on certain public policy considerations gleaned from the acts of the legislature in implementing this law. There have been attempts to place the insured in the same position he or she would have been in had the tort-feasor had liability insurance. State Farm Mut. Auto. Ins. v. Maidment, 107 N.M. 568, 761 P.2d 446 (Ct.App.), cert. denied, 107 N.M. 413, 759 P.2d 200 (1988). See also Gantt v. L & G Air Conditioning, 101 N.M. 208, 680 P.2d 348 (Ct.App. 1983), cert. quashed, 101 N.M. 189, 679 P.2d 1287 (1984). If Mr. Fullbright had had liability insurance, Mr. Stinbrink would have been able to bring a civil action against him and would have been able to recover his costs as the prevailing party. New Mexico policy also encourages arbitration of disputes. Shaw v. Kuhnel & Assoc., 102 N.M. 607, 698 P.2d 880 (1985). Arbitration is encouraged to relieve congestion in the court system, to speed up resolution of disputes, and to make more economical to all parties the resolution of cases. There is also a general principle in New Mexico law that insurance contracts will be construed against the insurance company which prepared the document. Mountain States Mut. Casualty Co. v. Northeastern N.M. Fair Ass'n, 84 N.M. 779, 508 P.2d 588 (1973). E.g., United Nuclear Corp. v. Mission Ins. Co., 97 N.M. 647, 642 P.2d 1106 (Ct.App. 1982). See State Farm Auto. Ins. Co. v. Kiehne, 97 N.M. 470, 641 P.2d 501 (1982). In the present case, the insurance contract provides that costs will be shared equally by the parties should the matter go to arbitration. Just as easily, the contract could require the insured to bear seventy-five or eighty percent  or even all  of the costs of arbitration. This would presumably be allowable under Section 44-7-10. If the insurance company under the uninsured motorists' portion of the policy forced the insured to be responsible for all or most of the costs of arbitration regardless of the outcome, this would have a chilling effect on uninsured motorists' claims and on arbitration in general. This result would seem to be incompatible with New Mexico's announced public policies to encourage arbitration and to protect persons from uninsured drivers by placing injured parties in the same or similar position they would have been in had they been dealing with a person with liability insurance. It would also be inconsistent with the public policy of New Mexico to apportion or assess costs against the losing party. Under the facts of the present case, we remand the question of the amount of costs to the district court for a further remand to the arbitrators to make an appropriate award. The arbitrators have already determined that claimant-appellant is the prevailing party, having found that the uninsured tort-feasor was 100% responsible for the accident. They also found that, if it were possible, punitive damages would be awarded against him. The judgment is reversed and the cause remanded for further proceedings consistent with this opinion. IT IS SO ORDERED. SOSA, C.J., and RANSOM and WILSON, JJ. MONTGOMERY, J., concurs in part, dissents in part.