Opinion ID: 2164682
Heading Depth: 1
Heading Rank: 1

Heading: The language of the arbitration clause. The relevant provisions of the uninsured motorist endorsement of the Fireman's Fund policy are as follows:

Text: The Company will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured highway vehicle; provided, for the purposes of this coverage, determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the Company or, if they fail to agree, by arbitration. If any person making claim hereunder and the Company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured highway vehicle because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this insurance, then upon written demand of either, the matter or matters upon which such person and the Company do not agree shall be settled by arbitration, which shall be conducted in accordance with the rules of the American Arbitration Association unless other means of conducting the arbitration are agreed to between the insured and the Company, and judgment upon the award rendered by the arbitrators may be entered in any Court having jurisdiction thereof. Such person and the Company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this insurance. The first provision purports to require the insured and insurer to submit the issue of the uninsured motorist's liability for damages and their amount to arbitration when the insured and insurer are unable to agree. Under the second provision, arbitration may then be invoked upon written demand of either. . .  The insured and insurer also purport to be bound by any award made by the arbitrators. . . .  These provisions do not make arbitration a condition precedent to suit as alleged by Fireman's Fund in its motion to dismiss and as held by the trial court in its order sustaining the motion. Instead, when arbitration is utilized it becomes the sole method of resolving the dispute. It is a substitute for litigation rather than an essential prelude to it. Moreover, these provisions do not make arbitration a substitute for litigation in all cases. The clause purports to make arbitration mandatory only upon written demand of either party to the dispute. Otherwise the case may proceed to suit. Therefore the trial court erred both in holding that the clause makes arbitration a condition precedent to suit and that it makes arbitration essential in all cases.