Court Opinion

ID: 8421802
Source: CourtListenerOpinion
Date Created: 2022-11-03 22:01:40.142663+00
Date Added: 2024-06-11T16:48:26.118817
License: Public Domain

Filed 11/3/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                          DIVISION SEVEN

 THE TRAVELERS                      B306897
 INDEMNITY CO.,
                                    (Los Angeles County
         Plaintiff and Appellant,   Super. Ct. No. 19STCP00877)

         v.

 RICARDO LARA, as Insurance
 Commissioner, etc.,

          Defendant and
          Respondent;

 ADIR INTERNATIONAL, LLC,

          Real Party in Interest.

      APPEAL from a judgment and postjudgment order of the
Superior Court of Los Angeles County, James C. Chalfant, Judge.
Affirmed.
      Gordon & Reese, Asim K. Desai, Margaret M. Drugan;
Gibson, Dunn & Crutcher, Blane H. Evanson and Samuel
Eckman for Plaintiff and Appellant.
      Rob Bonta, Attorney General, Tamar Pachter, Senior
Assistant Attorney General, Lisa W. Chao, Supervising Deputy
Attorney General, and John C. Keith, Deputy Attorney General,
for Defendant and Respondent.
      Klapach & Klapach and Joseph S. Klapach for Real Party
in Interest.
                       _________________
       The Travelers Indemnity Company appeals the judgment
entered after the superior court denied Travelers’ petition for a
writ of administrative mandate challenging the Insurance
Commissioner’s decision that certain agreements relating to
workers’ compensation insurance policies issued to Adir
International, LLC were unenforceable. Travelers contends
Adir’s lawsuit in the trial court, which included a request for a
declaratory judgment the agreements were void, barred the
Commissioner, under the doctrine of exclusive concurrent
jurisdiction, from exercising jurisdiction while that lawsuit was
pending. Travelers also appeals the postjudgment order granting
Adir’s motion for attorney fees, contending attorney fees were not
authorized.
       We affirm the order and judgment denying Travelers’s
petition. The exclusive concurrent jurisdiction doctrine does not
apply in this context to proceedings pending before the trial court
and an administrative agency; and, in any event, it was
reasonable and consistent with the primary jurisdiction doctrine
for the trial court to defer to the Commissioner’s determination
of the validity of the agreement at issue. In addition, because
Adir’s administrative claim fell within the agreement’s attorney
fee provision, we affirm the postjudgment order awarding Adir
attorney fees.

                                 2
      FACTUAL AND PROCEDURAL BACKGROUND
      1. The Workers’ Compensation Insurance Policies
      Adir operates the Curacao chain of retail department
stores. Between 2004 to 2011 Travelers issued Adir annual
guaranteed cost workers’ compensation insurance policies. Each
policy was filed with the Workers Compensation Rating Bureau
                                                     1
(WCRB) pursuant to Insurance Code section 11658 and specified
the rates to be charged to Adir. In addition, each policy included
a general purpose endorsement, stating “the insured and the
insurer have mutually agreed to a large risk alternative rating
option retrospective rating plan.”
      Unlike the policies, which contained a fixed premium for
the policy period, the alternative rating option retrospective
rating plan provided for an adjustment of the premium after the
policy period ended based on losses suffered during the policy
period. The endorsement did not set forth the method for

1
      Insurance Code section 11658 provides in part, “(a) A
workers’ compensation insurance policy or endorsement shall not
be issued by an insurer to any person in this state unless the
insurer files a copy of the form or endorsement with the [WCRB]
pursuant to subdivision (e) of Section 11750.3 and 30 days have
expired from the date the form or endorsement is received by the
commissioner from the rating organization without notice from
the commissioner, unless the commissioner gives written
approval of the form or endorsement prior to that time. [¶] (b) If
the commissioner notifies the insurer that the filed form or
endorsement does not comply with the requirements of law,
specifying the reasons for his or her opinion, it is unlawful for the
insurer to issue any policy or endorsement in that form.”
     Undesignated statutory references are to the Insurance
Code except in part 4 of the Discussion.

                                  3
premium calculation, definitions, terms, rates or the parties’
obligations under the alternative rating option. Those provisions
were contained in a separate side agreement that also included
an arbitration provision. Unlike the guaranteed cost policies, the
side agreements were not filed with the WCRB for review by the
Commissioner.
       In 2012 Adir did not renew its workers’ compensation
insurance with Travelers and refused to pay Travelers’ post-
policy period adjusted premiums as required by the side
agreements.
       2. Travelers’ Arbitration Request; Adir’s Lawsuit
       After negotiations to recover premiums Adir owned under
the large risk alternative rating plan failed, Travelers in 2014
served Adir with an arbitration demand. In response Adir filed
an action in Los Angeles County Superior Court (L.A.S.C.
No. BC575513) against Travelers and its insurance broker,
Grosslight Insurance, asserting claims for breach of contract,
tortious breach of the implied covenant of good faith and fair
dealing and fraud, primarily alleging Travelers had engaged in
improper claims-handling and settlement practices that
increased Travelers’ costs of administering claims and, in turn,
the amount of Adir’s retrospective premiums. Adir’s complaint
also included a claim for declaratory relief, seeking a judicial
determination the side agreements, in particular the arbitration
provision, were void because they had not been filed with the
                                                  2
WCRB as required by sections 11658 and 11735.

2
      Section 11735 provides in part, “(a) Every insurer shall file
with the commissioner all rates and supplementary rate
information that are to be used in this state. . . . [¶] (b) Rates

                                 4
      Shortly after filing the lawsuit Adir asked the trial court to
                                                   3
declare the arbitration agreement unenforceable. The court
denied the motion, ruling the enforceability of the arbitration
provision in the side agreements was a matter for the arbitrator.
The court stayed Adir’s action and ordered the matter to
arbitration.
       What happened next in both the arbitration proceeding and
the trial court is detailed in our nonpublished opinion Adir
International, LLC v. The Travelers Indemnity Co. (Dec. 30, 2020,
B293415). In brief, the arbitration panel found the arbitration
provision was severable from the side agreement, did not
constitute an “endorsement” as defined in the Insurance Code
and did not need to be filed with the WCRB to be enforceable.
Following a hearing the arbitration panel also found the side
agreements did not violate sections 11658 or 11735. However,
before the arbitration panel could issue its final award, the trial
court in June 2018 agreed to hear Adir’s renewed motion to
declare the arbitration agreement unenforceable. Citing a then-
recent court of appeal decision (Nielsen Contracting, Inc. v.
Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096) and a
precedential ruling from the Commissioner (Matter of Shasta
Linen Supply, Inc. (June 20, 2016) Cal. Insurance Commissioner,
No. AHB-WCA-14-31) (Matter of Shasta Linen)) that arbitration
agreements must be filed with the WCRB to comply with

filed pursuant to this section shall be filed in the form and
manner prescribed by the commissioner.”
3
       We refer to the “trial court” when discussing Adir’s lawsuit
to distinguish it from the “superior court,” which heard Travelers’
petition for writ of administrative mandate.

                                 5
sections 11658 and 11735, the court reconsidered its earlier
ruling and found the arbitration agreement void and
unenforceable. We affirmed the trial court’s order reconsidering
its prior ruling and denying arbitration of Adir’s lawsuit. (Adir
International, supra, B293415 [pp. 18-20].)
       3. Adir’s Administrative Complaint
       While the arbitration was pending, Adir on February 17,
2016 filed with Travelers a request for action under the policy’s
dispute resolution provision, which allowed the insured to
challenge Travelers’ interpretation and application of specified
aspects of the policy and, if dissatisfied with Travelers’
resolution, to seek review before the Department of Insurance.
Travelers denied Adir’s complaint and request for action.
       Adir on April 22, 2016 filed an administrative appeal (and
on June 2, 2016 a supplemental appeal) with the Department of
Insurance pursuant to section 11737, subdivision (f), which
authorizes a person aggrieved by application of a rating system to
                            4
appeal to the Commissioner. Adir contended the side
agreements constituted an “unfiled rating plan” in violation of
sections 16358 and 11735. According to Adir, by relying on the

4
       Section 11737, subdivision (f), provides, “Every insurer or
rating organization shall provide within this state a reasonable
means whereby any person aggrieved by the application of its
filings may be heard by the insurer or rating organization on
written request to review the manner in which the rating system
has been applied in connection with the insurance afforded or
offered.” If the insurer or rating organization rejects the
grievance, the party aggrieved “may appeal . . . to the
commissioner,” who, after holding a noticed hearing, “may affirm,
modify, or reverse” that action by the insurer.

                                6
invalid side agreement to calculate premiums, Travelers had
misapplied its rating system to Adir.
      In response Travelers petitioned for a writ of prohibition in
the pending trial court action requesting the court stay the
administrative hearing while the lawsuit was pending. The court
denied the petition.
      At the administrative hearing Travelers, relying on the
doctrine of exclusive concurrent jurisdiction, argued the
Commissioner lacked jurisdiction to consider the merits of Adir’s
administrative complaint under section 11737, subdivision (f),
while the action in the trial court was still pending. The
Commissioner rejected that argument, concluding the
Department of Insurance had “exclusive jurisdiction [pursuant to
section 11737, subdivision (f)], to adjudicate [Adir]’s claim that
Travelers’ unfiled Side Agreements misapplied Travelers’ filed
rating plan by violating Insurance Code sections 11658 and
11735, as well as California Code of Regulations, title 10,
              5
section 2268.” On the merits the Commissioner ruled Travelers’
side agreements were void because they had not been filed with
the WCRB as required and constituted a misapplication of
Travelers’ filed rating plan in violation of sections 11658 and
11735.

5
      California Code of Regulations, title 10, section 2268,
provides, “(a) An insurer shall not use any policy form,
endorsement form, or ancillary agreement unless attached to and
made a part of the policy. . . . [¶] (b) An insurer shall not use a
policy form, endorsement form, or ancillary agreement except
those filed and approved by the Commissioner in accordance with
these regulations.”

                                 7
      4. Travelers’ Petition for Writ of Administrative Mandate
       Travelers filed a petition for a writ of administrative
mandate challenging the Commissioner’s decision. The superior
court denied Travelers’ petition, rejecting Travelers’ contention
the Commissioner lacked jurisdiction to consider Adir’s
administrative complaint while the trial court action, which
included a claim for declaratory relief invalidating the side
agreements, was still pending. Like the Commissioner, the court
also rejected Travelers’ alternative jurisdictional argument that
Adir’s administrative complaint did not challenge a “rating
system” and thus did not fall within the jurisdiction of the
Commissioner under section 11737, subdivision (f).
       5. The Court’s Postjudgment Fee Order
       Following entry of judgment denying Travelers’ petition for
writ of administrative mandate, Adir moved pursuant to an
attorney fee provision in the side agreements and Civil Code
section 1717 to recover its attorney fees as the prevailing party in
the action. The court awarded Adir $321,338.54 in reasonable
attorney fees incurred in the administrative hearing and this
administrative mandamus action and rejected Adir’s requests for
additional attorney fees as the prevailing party on its declaratory
relief claim in the trial court action. The court ruled any
prevailing party determination in the trial court action was
premature and not within the court’s jurisdictional purview in
any event. (Adir does not contest the propriety of that order.)
       Travelers filed notices of appeal from both the judgment
and the postjudgment attorney fee order. We ordered the appeals
consolidated.

                                 8
                           DISCUSSION
      1. Standard of Review
      Code of Civil Procedure section 1094.5 specifies the
procedure for review of administrative orders and decisions.
Subdivision (b) of that section provides the superior court’s
inquiry in administrative mandamus “shall extend to the
questions whether the respondent [administrative entity] has
proceeded without, or in excess of, jurisdiction; whether there
was a fair trial; and whether there was any prejudicial abuse of
discretion,” which is established when the “the respondent has
not proceeded in the manner required by law, the order or
decision is not supported by the findings, or the findings are not
supported by the evidence.”
      On appeal from the judgment on a petition for writ of
administrative mandate in a case, as here, not involving
                           6
fundamental vested rights, we review the agency’s findings, not
the superior court’s decision, for substantial evidence (Sky Posters
Inc. v. Department of Transportation (2022) 78 Cal.App.5th 644,
660; Doe v. University of Southern California (2018)
28 Cal.App.5th 26, 34) and the agency’s legal determinations
de novo (Sky Posters, at p. 660; Schmid v. City and County of
San Francisco (2021) 60 Cal.App.5th 470, 485; Valero Refining
Co.—California v. Bay Area Air Quality Management Dist.
Hearing Bd. (2020) 49 Cal.App.5th 618, 637). In conducting our
de novo review, we accord “great weight and respect” to an
administrative construction of a controlling statute. (Boling v.
Public Employment Relations Bd. (2018) 5 Cal.5th 898, 911,

6
      Both Travelers and Adir acknowledge the issue presented
does not involve a fundamental vested right.

                                 9
[when an agency is interpreting a controlling statute or
regulation, “[t]he appropriate mode of review . . . is one in which
the judiciary, although taking ultimate responsibility for the
construction of the statute, accords great weight and respect to
the administrative construction,” cleaned up]; American Coatings
Assn. v. South Coast Air Quality Management Dist. (2012)
54 Cal.4th 446, 461-462 [same]; see McHugh v. Protective Life
Ins. Co. (2021) 12 Cal.5th 213, 227 [“[w]e also extend some
deference to [the Department of Insurance]’s interpretations of
the Insurance Code, to the extent that those interpretations are
embodied in quasi-legislative regulations or constitute long-
standing, consistent, and contemporaneous interpretations”].)
      2. The Doctrine of Exclusive Concurrent Jurisdiction Does
         Not Apply; Even If the Court Erred, Travelers Has Not
         Demonstrated Any Prejudice
       Travelers contends the Commissioner acted in excess of his
jurisdiction by deciding Adir’s administrative appeal while Adir’s
trial court action was pending. Citing the rule of exclusive
concurrent jurisdiction applicable between two judicial tribunals
(see Browne v. Superior Court (1940) 16 Cal.2d 593, 597 [“where
several courts have concurrent jurisdiction of a certain type of
proceeding, the first one to assume and exercise such jurisdiction
in a particular case acquires an exclusive jurisdiction”]; Franklin
& Franklin v. 7-Eleven Owners for Fair Franchising (2000)
85 Cal.App.4th 1168, 1175 [“where two (or more) courts possess
concurrent subject matter jurisdiction over a cause, the court that
first asserts jurisdiction assumes it to the exclusion of all others,
thus rendering ‘concurrent’ jurisdiction ‘exclusive’ with the first
court”]), Travelers contends the trial court, the first tribunal to
assume jurisdiction over the validity of the side agreements when

                                 10
Adir filed its lawsuit seeking a declaration they were void, had
concurrent, and thus priority, jurisdiction to consider the matter;
and the Commissioner erred in concluding he had “exclusive
jurisdiction” under section 11737, subdivision (f).
                                                                  7
       Travelers concedes on appeal, as it did in the arbitration,
the Commissioner has exclusive jurisdiction to consider “an
appropriate” claim pursuant to section 11737, subdivision (f),
that an insurer has misapplied its rating system to an insured.
However, Travelers argues Adir’s administrative complaint
challenged the legal validity of a rating system, not its
application to Adir. It is over that threshold issue—whether the
side agreements containing the rating system Travelers applied
to Adir constituted unfiled endorsements in violation of
sections 11658 and 11735 and the governing regulation—that the
trial court and the Commissioner enjoyed concurrent jurisdiction,
Travelers argues. And, Travelers continues, the trial court’s
concurrent jurisdiction over that threshold issue became
exclusive when, prior to the administrative appeal, it exercised
its jurisdiction over Adir’s lawsuit and ordered the matter to
arbitration.
       As a preliminary matter, there is some question whether by
seeking arbitration of the claims alleged in Adir’s lawsuit,

7
      During the arbitration Travelers told the arbitrators Adir
had begun administrative proceedings under section 11737,
subdivision (f). When the arbitration panel suggested Travelers
could not contract out of Adir’s right to pursue statutorily
authorized administrative proceedings, Travelers acknowledged
the Commissioner had jurisdiction to consider Adir’s
section 11737, subdivision (f), claim: “[Adir’s c]ounsel is correct
that Travelers cannot avoid and does not seek to avoid the
regulatory process of California.”

                                 11
including for declaratory relief, Travelers forfeited any argument
the trial court was the proper tribunal to consider the question of
the validity of the agreements. Had the arbitration proceeded to
a final award, the court’s jurisdiction would have been limited to
vacating or confirming the award without deciding the legal
                                                 8
question of the validity of the side agreements.
       There is also some doubt whether the rule of exclusive
concurrent jurisdiction applies here. The “judge-made rule” of
exclusive concurrent jurisdiction “is based upon the public
policies of avoiding conflicts that might arise between courts if
they were free to make contradictory decisions or awards relating
to the same controversy and preventing vexatious litigation and
multiplicity of suits. [Citation.] The rule is ‘a judicial rule of
priority or preference and is not jurisdictional in the traditional
sense of the word,’ in that it ‘does not divest a court, which
otherwise had jurisdiction of an action, of jurisdiction.’ [Citation.]
Because it is a policy rule, application of the rule depends upon
the balancing of countervailing policies.” (Shaw v. Superior

8
       Once a petition to compel arbitration is granted and the
lawsuit stayed, “‘the action at law sits in the twilight zone of
abatement with the trial court retaining merely vestigial
jurisdiction over matters submitted to arbitration.’ [Citation.]
During that time, under its ‘vestigial’ jurisdiction, a court may:
appoint arbitrators if the method selected by the parties fails
(§ 1281.6); grant a provisional remedy ‘but only upon the ground
that the award to which an applicant may be entitled may be
rendered ineffectual without provisional relief’ (§ 1281.8,
subd. (b)); and confirm, correct or vacate the arbitration award
(§ 1285).” (Titan/Value Equities Group, Inc. v. Superior Court
(1994) 29 Cal.App.4th 482, 487-488; accord, Optimal Markets,
Inc. v. Salant (2013) 221 Cal.App.4th 912, 923-924.)

                                 12
Court (2022) 78 Cal.App.5th 245, 255-256; accord, BBBB Bonding
Corp. v. Caldwell (2021) 73 Cal.App.5th 349, 374.)
       Here, the two tribunals at issue are not two courts of
general jurisdiction but a court and a state agency. Relying on
Scott v. Industrial Accident Commission (1956) 46 Cal.2d 76
(Scott) and other workers’ compensation cases, Travelers
contends the doctrine is equally applicable in this context.
       In Scott the plaintiff filed a lawsuit for personal injuries.
While that lawsuit was pending, the plaintiff also filed a claim
before the Industrial Accident Commission (the precursor to the
Workers’ Compensation Appeals Board) for the same injury. The
defendant sought a writ of prohibition to “suspend” the
administrative action until the superior court action was final.
At issue in both actions was whether the plaintiff had suffered
the injuries in the course and scope of his employment. If he did,
workers’ compensation provided the exclusive remedy, and the
trial court lacked jurisdiction over the claim. If not, the court had
jurisdiction, and the Industrial Accident Commission did not.
(Scott, supra, 46 Cal.2d at pp. 80-81.) The question presented to
the Scott Court was which tribunal had priority to determine that
threshold jurisdictional issue.
       The Supreme Court began by recognizing—as Travelers
does not—the question was not one of exclusive concurrent
jurisdiction because it involved a court of general jurisdiction and
an agency of limited jurisdiction, with the jurisdiction of the
two tribunals exclusive of each other. (See Scott, supra,
46 Cal.2d at p. 81 [“[t]he issue is not one of simultaneous exercise
of general concurrent jurisdiction; it is rather, the right of
proceeding simultaneously in two tribunals, the jurisdiction of
which is essentially exclusive of the other, but each of which has

                                 13
the power to make a determination of jurisdiction which, when
final, will be conclusive upon the other”].) Nonetheless, in
determining which tribunal, the trial court or the Industrial
Accident Commission, had “jurisdiction to determine
jurisdiction,” the Court held it made most sense to apply “the
general rule long recognized as governing tribunals whose
jurisdiction is generally concurrent.” (Id. at p. 89 [the first court
to assume jurisdiction has priority jurisdiction]; accord,
Hollingsworth v. Superior Court (2019) 37 Cal.App.5th 927, 929-
930 [“[t]he Supreme Court has made clear [in Scott] that when a
civil action and a workers’ compensation proceeding are
concurrently pending, ‘the tribunal first assuming jurisdiction’
should determine exclusive jurisdiction”].)
       Travelers asserts there is no reason to limit Scott’s ruling to
the workers’ compensation context and the peculiar circumstance
that the only concurrent jurisdiction shared by the trial court and
the agency is the authority to determine which tribunal has
exclusive jurisdiction over the controversy. Since the trial court
and the Commissioner enjoyed concurrent jurisdiction over the
threshold issue of the validity of the side agreements, Travelers
contends, the trial court should have priority to consider that
issue. In seeking an alternative forum following an adverse
ruling in the trial court (the order granting Travelers’ petition for
arbitration), Travelers continues, Adir engaged in precisely the
type of forum shopping the doctrine of exclusive concurrent
jurisdiction is intended to forestall. Travelers offers no authority
for this extension of the Scott analysis to other situations
involving actions pending before an agency and the trial court.
       Moreover, Travelers acknowledged the Commissioner had
exclusive jurisdiction to consider a “proper” section 11737,

                                 14
                     9
subdivision (f), claim. If the trial court lacked jurisdiction to
consider the section 11737, subdivision (f), claim, it was not
forum shopping for Adir to bring that claim before the
Commissioner.
       More fundamentally, even if Travelers were correct that
the trial court could have required the Commissioner to defer
further action while it considered the validity of the side
agreements as part of Adir’s lawsuit, nothing precluded the court
from invoking the doctrine of primary jurisdiction to allow the
Commissioner to decide the validity of the side agreements in the
first instance. (See Farmers Ins. Exchange v. Superior Court
(1992) 2 Cal.4th 377, 390-391 (Farmers) [the concept of primary
jurisdiction applies when both the court and a state agency have
concurrent jurisdiction; primary jurisdiction applies “where a
claim is originally cognizable in the courts, and comes into play
whenever enforcement of the claim requires the resolution of
issues which, under a regulatory scheme, have been placed
within the special competence of an administrative body; in such
a case the judicial process is suspended pending referral of such
issues to the administrative body for its views,” italics and
internal quotation marks omitted]; see Villanueva v. Fidelity
National Title Co. (2021) 11 Cal.5th 104, 126, fn. 12 [under the
doctrine of primary jurisdiction, “an initial suit in court is
permitted, although the trial court may thereafter choose to stay
the action and solicit the agency’s views”]; Jonathan Neil &
Assoc., Inc. v. Jones (2004) 33 Cal.4th 917, 931-932 [same].)

9
     Travelers’ argument in the alternative that the
Commissioner lacked jurisdiction to consider any aspect of Adir’s
administrative complaint is addressed in section 3.

                               15
       “[T]he primary jurisdiction doctrine advances two related
policies: it enhances court decisionmaking and efficiency by
allowing courts to take advantage of administrative expertise,
and it helps assure uniform application of regulatory laws.
[Citations.] [¶] No rigid formula exists for applying the primary
jurisdiction doctrine. [Citation.] Instead, resolution generally
hinges on a court’s determination of the extent to which the
policies noted above are implicated in a given case. [Citation.]
This discretionary approach leaves courts with considerable
flexibility to avoid application of the doctrine in appropriate
situations, as required by the interests of justice.” (Farmers,
supra, 2 Cal.4th at pp. 391-392, fns. omitted; see id. at p. 397
[“questions involving insurance rate making” pose issues
involving agency expertise; “[i]t is readily apparent that a court
would benefit immensely, and uniformity of decisions would be
greatly enhanced, by having an expert administrative analysis
available before attempting to grapple with such a potentially
broad-ranging and technical question of insurance law”].)
       Travelers acknowledges the trial court may well have had
discretion under the doctrine of primary jurisdiction to stay the
contract action pending the Commissioner’s ruling on the
section 11737, subdivision (f), claim, and defer to the
Commissioner the threshold question whether the side
agreements were enforceable; but that decision, Travelers argues,
belonged to the trial court in the first instance. The trial court
presiding over Adir’s lawsuit never made that decision, nor
should it have, Travelers asserts, because no particular expertise
was needed to determine whether the governing statutes
required the side agreements to be filed with the WCRB to be
valid and enforceable. (Cf. Farmers, supra, 2 Cal.4th at p. 396.)

                                16
       Adir responds that, in denying Travelers’ petition for a writ
of prohibition to stay the administrative action while the action
in the trial court was pending, the trial court effectively deferred
to the expertise of the Commissioner to decide the threshold
question whether the side agreements needed to be filed with the
WCRB.
       Whether the trial court impliedly invoked the primary
jurisdiction doctrine when it denied Travelers’ request for a writ
of prohibition is far from clear. Significantly, neither Travelers’
petition for a writ of prohibition nor the trial court’s order
denying the petition is included in the record on appeal. During
the administrative mandamus action, Travelers attributed the
trial court’s denial of its petition for a writ of prohibition to a
procedural defect—the petition was not verified—an explanation
the superior court in the mandamus action observed had been
offered “without citation to record evidence.” The absence of a
clear record supports a ruling against Travelers on the point.
(See Jameson v. Desta (2018) 5 Cal.5th 594, 609 [“[the appellant]
has the burden of providing an adequate record[; f]ailure to
provide an adequate record on an issue requires that the issue be
resolved against [the appellant]”].)
       Moreover, contrary to Travelers’ argument, it would have
been quite reasonable for the trial court to have intended to defer
to the Commissioner’s determination of the validity of Travelers’
side agreements and, for that reason, to have denied the petition
for writ of prohibition. The Commissioner’s precedential decision
affected all Travelers policy holders with unfiled side agreements,
creating the very uniformity of decision for Travelers’ insureds
that the primary jurisdiction doctrine is intended to ensure.
(See Jonathan Neil & Assoc., Inc. v. Jones, supra, 33 Cal.4th at

                                17
pp. 932-933 [“‘considerations of judicial economy, and concerns
for uniformity in application of the complex insurance regulations
here involved, strongly militate in favor of a stay to await action
by the Insurance Commissioner in the present case’”]; Farmers,
supra, 2 Cal.4th at p. 396.)
       Finally, even under Travelers’ own theory of exclusive
concurrent jurisdiction, error by the superior court is reversible
only where the error results in a miscarriage of justice or
prejudice to the party asserting the rule. (Cal. Const., art. VI,
§ 13; People ex rel. Garamendi v. American Autoplan, Inc. (1993)
20 Cal.App.4th 760, 772 (Garamendi).) As the Garamendi court
characterized the question when addressing the effect of the
court’s alleged error in its application of the doctrine of exclusive
concurrent jurisdiction, “‘Is it too late to lock the stable now that
the horse has been stolen?’” (Garamendi, at p. 772.) “‘[What]
purpose would be served by reversing the judgment entered in
this case and remanding the case so that the litigation can
proceed in an orderly manner with priority in the [court which
had priority jurisdiction[?]] If there are no errors in this record,
and the evidence compels the result which has been obtained,
such a reversal would appear frivolous.’” (Id. at pp. 772-773.)
       Travelers has not identified, let alone demonstrated, any
prejudice from the Commissioner’s exercise of his jurisdiction to
consider Adir’s administrative claim. To the contrary, Travelers
concedes, as it did in the arbitration proceeding, the
Commissioner has exclusive jurisdiction over a “proper”
section 11737 claim and asserts Adir may still bring its claim
before the Commissioner after resolution of the trial court action,
at which time the court’s determination, under principles of issue
preclusion, would govern the issue of the validity of the side

                                 18
agreements. In essence, Travelers argues prejudice exists
because the court would have decided the issue differently, not
because of any identified unfairness in the administrative
proceedings. Quite apart from whether our holding in Adir
International, LLC v. The Travelers Indemnity Co., supra,
B293415, and the application of the law of the case doctrine
effectively foreclosed any possibility that Travelers could prevail
on that issue in the trial court, the potential for a different
outcome, alone, is not prejudice given the nature of the error
asserted here. (See Garamendi, supra, 20 Cal.App.4th at p. 775.)
      3. Travelers’ Argument in the Alternative the Commissioner
         Lacked Jurisdiction To Consider Adir’s Section 11737
         Claim At All Is Also Without Merit
      Travelers argues in the alternative that the Commissioner
did not have jurisdiction at all, concurrent or otherwise, to decide
Adir’s administrative claim under section 11737, subdivision (f).
According to this argument, Adir’s administrative complaint, at
its heart, is a dispute over the legal validity of a contract, not the
particular application of Travelers’ rating system, and thus
outside both the purpose and jurisdictional purview of
section 11737, subdivision (f). To reinforce this point, Travelers
emphasizes that subdivision (a) of section 11737 authorizes the
Commissioner to “disapprove a rate if the insurer fails to comply
with the filing requirements under Section 11735.” In other
words, Travelers argues, its failure to comply with the filing
requirements may result in an enforcement action by the
Commissioner, but not an administrative claim by the insured.
      As the Commissioner observed when he rejected this
argument, Adir’s complaint specifically alleged Travelers was not
using the rating system on file with the WCRB but a wholly

                                  19
separate rating system that had not been approved, resulting in a
misapplication of the rating system to Adir. The Commissioner
found such an argument fell squarely within the jurisdiction of
the Department of Insurance under section 11737, subdivision (f),
as the Commissioner had previously concluded in his
precedential decision Matter of Shasta Linen. Subdivision (a) of
section 11737 does not undermine that analysis. To the contrary,
as the Commissioner’s decision explains, subdivisions (a)
through (e) reflect the Legislature’s decision to vest the
Commissioner with the authority to bring an enforcement action.
Subdivision (f), in contrast, affords an insured aggrieved by the
misapplication of the insured’s rating system the ability to appeal
that decision to the Commissioner, who acts in that capacity not
as an enforcer, but as an adjudicator of the claim. Nothing in
section 11737, subdivision (a), supports Travelers’ dubious (and
in light of its statements at the arbitration, seemingly
disingenuous) assertions the Commissioner had no authority to
hear Adir’s administrative claim.
      4. The Court Did Not Err in Granting in Part Adir’s
         Postjudgment Motion for Attorney Fees
      The side agreements that Adir challenged in the
administrative hearing, and which the Commissioner ruled were
not enforceable, contained an attorney fee clause that provided,
“Within five (5) days of our demand, you shall reimburse us for
any and all costs and expenses, including, but not limited to,
attorneys’ fees incurred by us in connection with the collection or
enforcement of any of your Obligations to us.” “Obligation” is
defined in the side agreements as “any indebtedness or liability of
any kind owed by [Adir] to [Travelers].”

                                20
       Although the agreement by its terms limits recovery of
attorney fees to Travelers, Civil Code section 1717 (section 1717),
when applicable, makes a fee provision reciprocal: “(a) In any
action on a contract, where the contract specifically provides that
attorney’s fees and costs, which are incurred to enforce that
contract, shall be awarded either to one of the parties or to the
prevailing party, then the party who is determined to be the
party prevailing on the contract, whether he or she is the party
specified in the contract or not, shall be entitled to reasonable
attorney’s fees in addition to other costs.” This reciprocal
mandate was adopted by the Legislature to “‘establish mutuality
of remedy where [a] contractual provision makes recovery of
attorney’s fees available for one party, . . . and to prevent
oppressive use of one-sided attorney’s fees provisions.’” (Tract
19051 Homeowners Assn. v. Kemp (2015) 60 Cal.4th 1135, 1146;
accord, Eden Township Healthcare Dist. v. Eden Medical Center
(2013) 220 Cal.App.4th 418, 429 (Eden Township).)
       The court ruled Adir, as the prevailing party in the
administrative mandamus action, was entitled to its reasonable
attorney fees incurred in this action, including at the
administrative hearing. Travelers contends attorney fees were
beyond the scope of the side agreements and, in any event, were
not authorized by section 1717 because Adir, whose lawsuit is
still pending in the trial court, is not the prevailing party in an
action “on a contract,” and neither the administrative mandate
hearing nor the administrative hearing before the Department of
Insurance was an “action” within the meaning of section 1717.
None of these arguments has merit.

                                21
         a. The attorney fee order was within the scope of the
            attorney fee authorization in the side agreement
       “‘Before section 1717 comes into play, it is necessary to
determine whether the parties entered an agreement for the
payment of attorney fees and, if so, the scope of the attorney fee
agreement.’” (Mountain Air Enterprises, LLC v. Sundowner
Towers, LLC (2017) 3 Cal.5th 744, 752 (Mountain Air); accord,
Santisas v. Goodin (1998) 17 Cal.4th 599, 608.) In determining
the scope of an attorney fee provision, the rules of contract
interpretation apply: We interpret the words of the contract in
their “‘ordinary and popular sense,’ unless ‘used by the parties in
a technical sense or a special meaning is given to them by
usage.’” (Mountain Air, at p. 752; see Civ. Code, §§ 1638, 1644,
1647.) If the action is outside the scope of the attorney fee
provision, that is the end of the matter; section 1717 does not
apply. (Mountain Air, at p. 752.)
       Relying on Mountain Air, supra, 3 Cal.5th 744, Travelers
contends the scope of the attorney fee provision in the side
agreements is expressly limited to the “enforcement of Adir’s
obligations to Travelers.” Because the administrative proceeding
Adir initiated was not an action by Travelers to enforce Adir’s
obligations under the side agreements, Travelers argues,
Travelers could not have recovered its attorney fees had it
prevailed on Adir’s administrative claim, and neither can Adir.
       In Mountain Air, supra, 3 Cal.5th 744 the seller brought an
action against prospective purchasers for breach of a repurchase
agreement. The prospective purchasers asserted in defense that
a subsequent option agreement had created a novation of the
initial repurchase agreement, granting them the right, but not
the obligation, to purchase the property. The prospective

                                22
purchasers prevailed at trial and moved to recover their attorney
fees based on a provision in the option agreement that authorized
attorney fees and costs to the prevailing party in any legal action
or proceeding “‘brought for the enforcement of this Agreement or
because of an alleged dispute, breach, default, or
misrepresentation in connection with any provision of this
Agreement.’” (Id. at p. 752, italics omitted.) At issue was
whether the prospective purchasers’ affirmative defense to the
enforcement of the repurchase agreement—that a separate option
agreement had created a novation of the repurchase agreement—
constituted an action or proceeding “brought” to enforce the
option agreement. The sellers argued, and the Court agreed, the
assertion of the option contract as a defense in an action to
enforce a separate contract was not synonymous with “‘bringing
an “action” or “proceeding”’” to enforce the option agreement.
                            10
(See id. at pp. 753, 755-756.)
      According to Travelers, Adir’s administrative claim that the
side agreements were not enforceable was akin to the affirmative
defense the prospective purchasers asserted in Mountain Air.
That is, Travelers did not bring an enforcement action. (Had it
done so, and lost, Travelers admits, it would be responsible for

10
       The Mountain Air Court held, however, the sellers did
bring the action because of an alleged dispute in connection with
the repurchase agreement, an alternative basis for attorney fees
in the option agreement. Because the option agreement was
properly construed together with the repurchase agreement as
one agreement, the Court held the sellers would have been
entitled to their attorney fees had they prevailed. (Mountain Air,
supra, 3 Cal.5th at pp. 759-760.)

                                 23
attorney fees.) Rather, Adir raised an affirmative claim that the
side agreements were not enforceable.
       Travelers’ reliance on Mountain Air is misplaced. The
Mountain Air Court held an affirmative defense that relied on an
option contract distinct from the repurchase agreement the
sellers had sought to enforce in the action was not, in itself, an
“action or proceeding” to enforce the option contract. That is a
very different matter from what occurred here. The language of
the side agreements authorized attorney fees in connection with
Travelers’ enforcement of Adir’s obligations under the very
contracts Adir argued were illegal and void. Had Travelers
prevailed on Adir’s administrative claim, Travelers would have
been entitled to recover its attorney fees despite the absence of an
affirmative enforcement claim. (See Eden Township, supra,
220 Cal.App.4th at pp. 425, 430 [in an action in which
complaining party unsuccessfully asserts that the underlying
contract is illegal and invalid, the party who successfully defends
on the ground the contract is valid may recover its attorney fees,
“regardless of whether the [party] previously had asserted its
own affirmative claim to enforce the contract”]; accord,
California-American Water Co. v. Marina Coast Water Dist.
(2017) 18 Cal.App.5th 571, 577-578 [same, citing Eden
Township].) Accordingly, so too is Adir.
         b. The mandamus action was “on the contract”
      Travelers’ related contention the reciprocal mandate of
section 1717 does not apply because the administrative complaint
involved a matter of statutory interpretation (whether the side
agreements were endorsements that were required to be filed
under various Insurance Code provisions) and thus was not an
action “on a contract” (see § 1717) is also without merit. As

                                 24
discussed, Adir successfully obtained an administrative ruling
and then a judgment in the mandamus action that its contractual
obligations under the side agreements were unenforceable. That
is unquestionably an action “on a contract.” (See California-
American Water Co. v. Marina Coast Water Dist., supra,
18 Cal.App.5th at p. 576 [a complaint alleging a contract is void
under Government Code section 1090 is an action “on a contract”
for purposes of section 1717 regardless of whether contract claims
are alleged]; Eden Township, supra, 220 Cal.App.4th at p. 427 [“it
is difficult to think of an action that is more likely to be
characterized as an ‘action on a contract’ than one in which the
party bringing the action explicitly seeks to have the subject
contract declared void and invalid in its entirety”]; see generally
Hsu v. Abbara (1995) 9 Cal.4th 863, 870 [“[i]t is now settled [law]
that a party is entitled to attorney fees under section 1717 ‘even
when the party prevails on grounds the contract is inapplicable,
invalid, unenforceable or nonexistent, if the other party would
have been entitled to attorney’s fees had it prevailed’”].)
         c. Adir was the prevailing party in the administrative
            mandamus action
       Relying on DisputeSuite.com, LLC v. Scoreinc.com (2017)
2 Cal.5th 968 (DisputeSuite), Travelers contends in the
alternative that any award of attorney fees in this mandamus
action was premature because Adir’s trial court action, including
its claim for declaratory relief regarding the validity of the side
agreements, is still pending, making Adir’s victory in the
administrative action an interim one. In DisputeSuite the
Supreme Court considered whether a defendant was entitled to
an award of attorney fees pursuant section 1717 after obtaining a
dismissal of the plaintiff’s contract action because the parties’

                                25
agreement contained a forum selection clause specifying the
courts of another jurisdiction. The trial court concluded there
was not yet a prevailing party. The DisputeSuite Court affirmed
that decision, holding the defendant’s victory in moving the
litigation to Florida did not make it the prevailing party as a
matter of law, and the trial court had acted within its discretion
in denying the motion for attorney fees: “Considering that the
action had already been refiled in the chosen jurisdiction and the
parties’ substantive disputes remained unresolved, the [trial]
court could reasonably conclude neither party had yet achieved
its litigation objectives to an extent warranting an award of fees.”
(Id. at p. 971; see Hsu v. Abbara, supra, 9 Cal.4th at p. 876
[prevailing party determination is to be made by comparing the
parties’ relative degrees of success “upon final resolution of the
contract claims”].)
        DisputeSuite does not assist Travelers. Adir’s success
before the Commissioner and in the administrative mandamus
proceeding constitutes a final determination on the merits of its
challenge to the validity of the side agreements, not simply a
procedural victory in an ongoing lawsuit, as was the case in
DisputeSuite. That litigation is complete, and Adir is
unquestionably the prevailing party.
        Travelers next contends the court erred when it ignored
Adir’s “obvious forum shopping” and determined it “was not
inequitable” to apply section 1717’s reciprocal mandate and
award Adir attorney fees. That argument, too, is without merit.
As the Supreme Court has explained, while there are certainly
occasions when the court must balance the equities in
determining whether a party has prevailed (see Hsu v. Abbara,
supra, 9 Cal.4th at p. 877 [“[w]e agree that in determining

                                 26
litigation success, courts should respect substance rather than
form, and to this extent should be guided by ‘equitable
considerations’”]), “when one party obtains a ‘simple, unqualified
win,’” “the trial court may not invoke equitable considerations
unrelated to litigation success,” except as expressly authorized by
statute. (Ibid.) To consider the equities unrelated to litigation
success “would convert the attorney fees motion from a relatively
uncomplicated evaluation of the parties’ comparative litigation
success into a formless, limitless attack on the ethics and
character of every party who seeks attorney fees under
section 1717. We find no evidence that the Legislature intended
that the prevailing party determination be made in this way.”
(Hsu, at p. 877.) Because it would have been improper to deny
Adir attorney fees based on equitable considerations unrelated to
litigation success, the court’s no-inequity finding is immaterial.
       Finally, citing no legal authority, Travelers contends, at the
very least, the award of attorney fees should be reduced to
exclude fees incurred by Adir in prosecuting the administrative
proceeding in the Department of Insurance, which it contends
was not “an action” within the meaning of section 1717. As
discussed, under the broad scope of the attorney fee provision in
the side agreements, Travelers would have been entitled to its
fees had it prevailed in the administrative proceeding as “fees
incurred by us in connection with the collection or enforcement”
of Adir’s contractual obligations. We have no difficulty
concluding section 1717’s reciprocal fee mandate regarding fees
incurred “in an action” on a contract applies equally to the fees
incurred by Adir in the administrative proceeding giving rise to
the mandamus action. (Cf. Edna Valley Watch v. County of
San Luis Obispo (2011) 197 Cal.App.4th 1312, 1319 [in Code of

                                 27
Civil Procedure section 1021.5’s authorization of attorney fees to
a successful party “in any action” that results in the enforcement
of an important right affecting the public interest, the term
“action” includes not simply the mandamus proceeding but also
the administrative proceeding giving rise to it]; see generally
Santisas v. Goodin, supra, 17 Cal.4th at p. 610 [“[t]he primary
purpose of section 1717 is to ensure mutuality of remedy for
attorney fee claims under contractual attorney fee provisions”].)
                           DISPOSITION
       The judgment and postjudgment order are affirmed. Adir
is to recover its costs on appeal.

                                     PERLUSS, P. J.
      We concur:

            SEGAL J.

            FEUER, J.

                                28