Court Opinion

ID: 4711331
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:36:48.939037+00
Date Added: 2024-06-11T08:07:08.406907
License: Public Domain

Talmadge, J.
(dissenting) — After an arbitration was *503held to determine the extent of damages to Cline Price for purposes of underinsured motorist coverage (UIM), Farmers Insurance Company of Washington (Farmers) was entitled to an offset for personal injury protection (PIP) benefits paid to Price. But the majority determines the trial court lacked jurisdiction to consider any offset in confirming an arbitration award pursuant to RCW 7.04. Instead, the majority requires Farmers to commence a needless, separate declaratory judgment action to secure the offset. The majority’s interpretation of the trial court’s jurisdiction to confirm arbitration awards under RCW 7.04 is wrong, mandating a completely impractical procedure for confirming arbitration awards. For these reasons, I respectfully dissent.13
A. Offset Against UIM Recovery for PIP Benefits Paid
The majority does not reach the merits of Farmers’ entitlement to an offset against any payment under Price’s UIM coverage in his Farmers policy for PIP benefits paid to him under that same policy. On the merits, the Court of Appeals opinion is sound and well-reasoned: Farmers was entitled to an offset against any UIM payment for PIP benefits paid to Price. See Price v. Farmers Ins. Co., 82 Wn. App. 20, 23-25, 916 P.2d 949, review granted, 130 Wn.2d 1007 (1996).
As we held in Keenan v. Industrial Indem. Ins. Co., 108 Wn.2d 314, 319, 738 P.2d 270 (1987), if an insurance contract contains an offset clause, the clause will be enforced to the extent the insured is fully compen*504sated for his or her damages. In the present case, the Farmers policy contained the following provision in its conditions section allowing for an offset:
5. Our Right to Recover Payment
When a person has been paid damages by us under this policy and also recovers from another, we shall be reimbursed to the extent of our payment after that person has been fully compensated for his or her loss.
Except as limited above, we are entitled to all the rights of recovery of the person to whom payment was made against another. That person must sign and deliver to us any legal papers relating to that recovery, do whatever else is necessary to help us exercise those rights and do nothing after loss to prejudice our rights.
It may be necessary for us to make payment under the Underinsured Motorist Coverage due to the insolvency of another insurance carrier. In such a case, our right of subrogation is limited to proceedings directly against the insolvent insurer or receiver. We will exercise those rights which the person insured by the insolvent insurer might otherwise have had, if he or she had personally made the payment.
Clerk’s Papers at 16. As the Court of Appeals noted, the recovery provision is unambiguous. Price, 82 Wn. App. at 24. This provision indicates if the insured is compensated from a third party, such compensation will be an offset against the amount due under the UIM provision in the policy. It provides no limitation in cases in which the insured’s loss is compensated by a third party and also by the insured’s UIM coverage. Id. For underinsured motorist coverage, a combination of payments by a third party and the insured’s own UIM coverage is naturally contemplated. No public policy rationale exists to defeat an offset against underinsured motorist coverage. Consequently, we should allow an offset for PIP benefits paid to Price in this case. In Barney v. Safeco Ins. Co., 73 Wn. App. 426, 430, 869 P.2d 1093 (1994), the Safeco policy did not contain an offset provision and the Court of Appeals determined that *505the insurer was required to make both PIP and UIM payments. Barney is readily distinguishable from our facts.
B. Confirmation of an Arbitration Award
Where a matter has been entrusted to arbitration, RCW 7.04.150 provides a superior court must confirm the award made by the arbitrators:
At any time within one year after the award is made, unless the parties shall extend the time in writing, any party to the arbitration may apply to the court for an order confirming the award, and the court shall grant such an order unless the award is beyond the jurisdiction of the court, or is vacated, modified, or corrected, as provided in RCW 7.04.160 and RCW 7.04.170.
Characterizing Farmers’ entitlement to an offset for PIP benefits paid to Price here as a coverage issue, the majority states coverage issues generally may not be submitted to arbitrators, unless the parties agree, because coverage issues are exclusively within the province of the courts. Majority op. at 497-500. The majority specifically determines such coverage issues are beyond the jurisdiction of the courts in a procedure to confirm the arbitrator’s award. Majority op. at 497-98.14
*506The majority’s analysis of RCW 7.04.150 is far too narrow and unsupported by prior case law regarding the courts’ jurisdiction under that statute. Ironically, in Barney, the PIP offset issue was decided in the context of an arbitration confirmation proceeding without controversy. See also Woodley v. Safeco Ins. Co., 84 Wn. App. 653, 659, 929 P.2d 1150 (1997) (noting a court confirming an arbitration award has authority to reduce its amount by legally available offsets); In re Arbitration of Fortin, 82 Wn. App. 74, 81-82, 914 P.2d 1209 (1996).
The courts are generally without authority under RCW 7.04 to review a decision of an arbitrator on the merits and any judicial review is confined to the grounds identified in RCW 7.04.160 and .170. Barnett v. Hicks, 119 Wn.2d 151, 153-54, 829 P.2d 1087 (1992); ACF Property Management, Inc. v. Chaussee, 69 Wn. App. 913, 918-19, 850 P.2d 1387, review denied, 122 Wn.2d 1019, 863 P.2d 1353 (1993); Martin v. Hydraulic Fishing Supply, Inc., 66 Wn. App. 370, 374, 832 P.2d 118 (1992).
But in the present action, there is no challenge to the decision of the arbitrators on the merits. The sole issue entrusted to them was the extent of Price’s total damages. The court is not second-guessing the arbitrator’s decision in any fashion. Rather, it is doing precisely what it is charged with doing under our system.
Our courts are courts of general jurisdiction. Wash. Const, art. IV, § 6. This Court had jurisdiction over the parties. It had jurisdiction over the subject matter of the dispute, i.e., the offset for PIP benefits paid. The court had jurisdiction to decide the offset question in a proceeding under RCW 7.04.150 because there is no explicit statutory *507bar to the court’s deciding a matter over which it has subject matter jurisdiction.
The majority concedes the practical effect of its decision is to require the parties, in the absence of agreement, to commence a separate action in the superior court to determine the amount and propriety of any claimed offsets and the corresponding net judgment. The majority also concedes such a process will result in bifurcated consideration of the issues in the case, thereby multiplying litigation. Majority op. at 501-02.15 In this case, for example, in the majority’s view, had there been no agreement between the parties with respect to the offset for the settlement between Price and the tortfeasor, the trial court would have been obliged to enter a judgment in the amount of $275,000 against Farmers, and Farmers would have been required to file a separate lawsuit to claim its obvious offset for monies paid to Price by the tortfeasor or pursuant to the PIP protection in Price’s Farmers policy. Such an approach is painfully laborious and oblivious to the costs of litigation.
RCW 7.04.150 provides for a simpler approach to this matter. The question of the plaintiffs’ total damages for purposes of UIM coverage was appropriately submitted to the arbitrators here and the arbitrators found Price’s total damages to be $275,000. Under RCW 7.04.150, the trial court has jurisdiction to confirm the arbitrator’s award, but not to examine the merits of the arbitrators’ decision except as permitted by RCW 7.04.160, .170. As part of the process of confirming an arbitration award, if the court *508has jurisdiction over the parties, it may also resolve any other matters over which it has subject matter jurisdiction and enter a net judgment. Cf. Woodley, 84 Wn. App. at 659-60 (a court confirming an arbitration award has authority to reduce its amount by legally available offsets).
Because of an incorrect interpretation of RCW 7.04.150 and the jurisdiction of the court to consider issues such as the PIP offset issue in this case, the majority does not reach the merits of the offset for PIP benefits in this case. A proper interpretation of the jurisdiction of the court under RCW 7.04.150 indicates the trial court had jurisdiction to consider the offset for PIP benefits paid and incorrectly addressed the issue, as the Court of Appeals noted.
Furthermore, even if we assume the majority is correct that the statutory limitations on the trial court’s ability to disturb arbitration awards are jurisdictional, the courts may consider the offset issue under RCW 7.04.170, which provides in relevant part:
In any of the following cases, the court shall, after notice and hearing, make an order modifying or correcting the award, upon the application of any party to the arbitration:
(1) Where there was an evident miscalculation of figures
Price and Farmers arbitrated the question of the UIM payment due to Price. Rather than being a collateral matter, the offset issue goes directly to the amount Farmers must pay in UIM benefits. The arbitration award cryptically stated: "The award in the above-referenced matter was $275,000 with Mr. Petersen dissenting.” Clerk’s Papers at 8. Both parties, however, have taken this amount as a statement of Price’s total damages because it so clearly exceeds the amount Farmers must pay in UIM benefits. Thus, to the extent the arbitrators were asked to determine Farmer’s UIM liability and they entered an amount that could not possibly be correct, the court may modify the award pursuant to the express authorization of RCW 7.04.170. By asking the superior court to disallow *509the offset, Price "applied for modification of the award and invoked the court’s authority to determine the offset issue under this statute.
I would reverse the decision of the trial court and remand the case to the trial court for entry of a judgment reflecting Farmers’ entitlement to an offset for PIP benefits paid.
Durham, C.J., and Dolliver, J., concur with Talmadge, J.

The majority addresses the trial court’s jurisdiction under RCW 7.04.150 despite the fact Price did not properly preserve this issue for review; Price raised this issue for the first time in his petition for review, arguing the review of the trial court’s confirmation award should have been limited to the specific statutory grounds for vacating or modifying an arbitration award set forth in RCW 7.04.160 and .170. See Pet. for Review at 4-7. Price never made this argument to the trial court or the Court of Appeals. While a jurisdictional issue may be raised for the first time on appeal, RAP 2.5(a), Price invited the error when he raised the PIP offset issue in his trial court pleadings and argued the policy did not contain appropriate offset language. Clerk’s Papers at 2. We should not permit Price to benefit from an error he invited. See State v. Wakefield, 130 Wn.2d 464, 475, 925 P.2d 183 (1996) (doctrine of invited error prohibits a party from setting up an error at trial and then complaining of it on appeal).

A distinct flaw is present in the majority’s analysis when it permits the trial court to enter a judgment recognizing an offset for Farmers in the amount of a settlement between Price and the actual tortfeasor in this case. The majority concedes the parties agreed to this offset, resolving an uncontested "coverage” issue. Majority op. at 498 n.8. In effect, given the majority’s jurisdictional analysis, the parties agreed to extend the jurisdiction of the courts to a matter beyond the court’s jurisdiction, a practice expressly forbidden by numerous decisions of this Court. See, e.g., Barnett v. Hicks, 119 Wn.2d 151, 161, 829 P.2d 1087 (1992) (citing cases); Washington Local Lodge No. 104 of Int’l Bhd. of Boilermakers v. International Bhd. of Boilermakers, 28 Wn.2d 536, 544, 183 P.2d 504, 189 P.2d 648 (1947) (if a court has no jurisdiction of an action, the parties cannot by stipulation confer it upon the court); Miles v. Chinto Mining Co., 21 Wn.2d 902, 903, 153 P.2d 856, 156 P.2d 235 (1944) (the “universal rule” is that the parties to an action cannot, by stipulation, confer upon a court a jurisdiction with which it is not vested, citing, 14 Am. Juk. 380, § 184; Cogswell v. Hogan, 1 Wash. 4, 23 P. 835 (1890); Sawtelle v. Weymouth, 14 Wash. 21, 43 P. 1101 (1896); Seattle, L.S. & E.R. Co. v. Simpson, 19 Wash. 628, 54 P. 29 (1898); Mottet v. Stafford, 94 Wash. 572, 162 P. 1001 (1917)); State v. Diamond Tank Transp., Inc., 200 Wash. *506206, 207, 93 P.2d 313 (1939); Adams v. City of Walla Walla, 196 Wash. 268, 271, 82 P.2d 584 (1938) (parties cannot stipulate a justiciable controversy exists so as to clothe this court with jurisdiction, where none exists under the pleadings and the record as made). See also Schneider v. Setzer, 74 Wn. App. 373, 872 P.2d 1158 (1994) (parties to arbitration proceeding could not, by stipulation, waive trial de novo in superior court in order to gain immediate review of arbitrator’s decision in Court of Appeals); and 14 Lewis H. Orland & Karl B. Tegland, Washington Practice: Trial Practice § 33, at 91 (5th ed. 1996).

An additional glaring flaw in the majority’s analysis is it may violate traditional principles of res judicata by condoning the splitting of causes of action. RCW 7.04.190 requires entry of a judgment in conformity with the order confirming the arbitration award. This judgment has the same force and effect as any other civil judgment. RCW 7.04.210.
Once a judgment has been entered, it is res judicata as to all issues associated with the cause of action upon which it is based. See Loveridge v. Fred Meyer, Inc., 125 Wn.2d 759, 763-64, 887 P.2d 898 (1995) (under the principles of res judicata, a judgment is binding upon parties to the litigation and persons in privity with those parties, precluding relitigation of claims and issues that were litigated, or might have been litigated, in a prior action).