Court Opinion

ID: 9627519
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:47:04.461512+00
Date Added: 2024-06-11T18:06:46.526358
License: Public Domain

BISTLINE, Justice,
dissenting.
On further review and detailed analysis of this Court’s decision in Sullivan I, and the appeal record in that case, it is seen that this Court’s holding there is found in one sentence: “In the instant case we deem it clear that Allstate’s denial of liability upon the grounds that Julie Sullivan’s *883own negligence was the proximate cause of her damages, was not taken in bad faith.” Sullivan v. Allstate Ins. Co., 111 Idaho 304/306, 723 P.2d 848, 850 (1986) (emphasis added). The reason for that deemed holding is found in the sentence which follows the one quoted above, “The uncontested finding of the arbitrators of 35 percent negligence on the part of Julie Sullivan speaks loudly in defense of the position of Allstate.” Id. However, and unfortunately, these supposed issues which our opinion passed on were different from the issue raised on appeal.1 The issue raised on appeal was whether the .district court was correct in two rulings which were the basis of dismissal of the complaint. Those two rulings surfaced in this Court’s Sullivan I opinion, and one of them was the basis for the district court’s order of summary judgment of dismissal of the plaintiffs’ complaint.
Mentioning again that I am reviewing the appeal record in Sullivan I, the exact language of the district court’s order upon which dismissal was predicated, was this:
1. A cause of action based upon an insurer’s refusal to pay an uninsured motorist’s claim cannot exist until the liability of the uninsured motorist is admitted or adjudicated and the insurer then refuses to pay the claim.
3. The insured should be required to first go through arbitration of an uninsured motorist claim, as required by the automobile policy, prior to bringing an action against the insurer for a bad faith claim.
(Emphasis added.) Our Sullivan I opinion was erroneously written as though we were affirming a district court determination that had been made on the merits, i.e., that Judge Magnuson had found Allstate free of the liability alleged in the plaintiffs’ complaint.
Judge Cogswell, whose opinion and decision we review in this case now before us, examined Sullivan I and came to this conclusion:
The Court can only interpret the decision of Judge Magnuson to hold that the Complaint in Case No. 23040 was prematurely filed and that a cause of action had not then arisen because of the arbitration proceedings.
Judge Cogswell was eminently correct in his evaluation. Judge Magnuson did not feel that the issues, of Allstate’s alleged liability were properly before him; hence the dismissal. It is also of considerable moment that his memorandum decision did not say that dismissal would be with prejudice. Rather the final formal judgment of dismissal was drawn and presented by Allstate’s counsel, and there for the first time appeared the words “with prejudice.” Judge Magnuson may or may not have noted counsel’s presumptiveness in adding the two words which were added. Because he had adjudicated nothing other than that the action was prematurely brought, whether the action was dismissal with or without prejudice was undoubtedly thought to be of no consequence.
A circumstance similar to this would be the filing of a medical malpractice case absent complying with the provisions of Chapter 10 of Title 6, Idaho Code, which requires submission to a screening panel for its review of the medical or hospital care which would be challenged in a tort action, “which proceedings shall be informal and nonbinding, but nonetheless compulsory as a condition precedent to litigation.” I.C. § 6-1001 enacted in 1976, ch. 278, p. 953 (emphasis added). Judge Magnuson was undoubtedly aware of this statutory requirement, and it is reasonable to believe that he had its salutary purposes in mind when he ruled that the Sullivan plaintiffs were premature in the various claims which were laid out by their counsel in the *884Sullivan I complaint, filed before there had been any determination of Allstate’s alleged liability, either by adjudication or arbitration. This Court noted in James v. Buck, 111 Idaho 708, 727 P.2d 1136 (1986), that the purpose of the legislature in enacting Chapter 10 of Title 6, Idaho Code, was:
To encourage nonlitigation of claims against physicians and hospitals by providing for prelitigation screening of such claims by a hearing panel as provided in this act.
111 Idaho at 712, 727 P.2d at 1140. For certain a complaint for medical malpractice which is filed without complying with I.C. § 6-1001 would be subject to dismissal. Just as equally certain, that dismissal would be subject to a bar in res judicata if a second such action was filed without complying with I.C. § 6-1001. Such dismissal would not bar a subsequent action brought to litigate claims of liability after there had been full compliance with Chapter 10 of Title 6, Idaho Code. Similarly, an action brought to obtain a monetary judgment on a promissory note would be dismissed if the note was not yet due. Absent the condition of the note being due, the dismissal would be adjudicative of nothing but that the action had been prematurely brought.
The Court’s opinion goes far astray in its conclusion that because “Sullivan I was dismissed with prejudice” the Sullivan II complaint containing “identical allegations” made as between “identical parties” is barred by the doctrine of res judicata. The Court arrives at such wrong destination by a very poor reading and comprehension of the record which, although it is voluminous and parts of it are out of chronological order, is not difficult.
Julie Sullivan was injured on September 24, 1982, and the action was filed on September 29, 1984, which was shortly after she demanded arbitration, as appears in the affidavit of Mr. Eismann. R. 63. Mr. Eismann’s affidavit attached the arbitration agreement which was signed by Julie Sullivan (and duly acknowledged) and by an agent for Allstate (and duly acknowledged), respectively on April 16 and May 23, 1984. R. beginning at 65. Mr. Eismann’s affidavit with attachment was filed in support of and in conjunction with an Allstate motion for summary judgment, or for a stay of proceedings
Out of order in the record,2 but nevertheless contained therein is Mr. Eismann’s supporting brief. R. 173-83. At page 181, the brief convincingly argued to Judge Magnuson that:
Had there been an issue as to whether the arbitration clause was induced by fraud or otherwise not valid, it would be the duty of the plaintiff to raise only this issue before a court. A recent case in Washington concluded that if the system of arbitration is to be meaningful, the plaintiff must submit all disputes within the contemplation of the contract, except for the issue of fraudulent inducement to agree to arbitration. Allison v. Medicab, International, 92 Wn.2d 199, 203, [597] 509 P.2d 380 (1979).
In the case at bar, a reading of the contract and case law leads to the conclusion that the cause of action presented by the plaintiff is within the contemplation of the arbitration provision. Since this cause of action arose out of the contract, the inclusive language of the contract would require that all issues be presented to arbitration. (Citations omitted.)
R. 181-82.
The order granting summary judgment, drawn by Mr. Eismann at the court’s direction, quite naturally reflected that which he had urged and with which the court agreed, i.e., the agreement to arbitrate precluded a trial of the issues which Julie Sullivan’s complaint raised against Allstate. R. 142-43. The action was dismissed with prejudice but without costs or attorneys’ fees to either party on April 29, 1985. R. 143. Notwithstanding that dis*885missal, and that it had been filed of record on April 30, 1985, dedicated counsel for Julie Sullivan filed and served an affidavit of his own in opposition to the order, and on May 23, 1985, restyled as a motion for reconsideration of the memorandum decision and ensuing order of dismissal, submitted a thorough memorandum well fortified with citation.
The motion for reconsideration was heard on May 23, 1985, at Coeur d’Alene, Idaho, lasting from 2:20 p.m. to 2:55 p.m. The court minutes best tell what took place:
MOTION TO RECONSIDER

BE IT KNOWN that the following proceedings were had, to-wit:

2:20 P.M. Court is in session. Call 23040. Counsel are present to argue a motion in this Bonner County case. Motion to Reconsider refers to the Court’s Order of 4/16/85.
Mr. Manko offers Exhibit #A. Mr. Eismann states that he received Mr. Manko’s brief at 11:30 A.M. this date. He has no objection to Exhibit # A and therefor the COURT ADMITS EXHIBIT # A for purposes of this hearing. Mr. McClenan advises that he received a certified copy of the Order at 10:30 A.M. this date.
2:32 P.M. Mr. Manko argues pursuant to the arbitration decision now in favor of Plaintiff. Questions rather the Court held no cause of action for bad faith or no cause of action maintained at all. Cites Carter case as set out in brief.
Mr. Eismann provides copies of decisions holding no cause of action under bad faith re: 41-1320.
2:45 P.M. The Court reviews those decisions.
Mr. Eismann further responds.
The Court will not take any judicial notice of House bill 193. It is not a factor in a determination made today. 2:55 P.M. The COURT DENIES THE MOTION FOR RECONSIDERATION and turns to the next matter on the docket.
R. 153-54 (emphasis added). The reporter's transcript is somewhat more informative, but not sufficiently to justify any conclusion other than that Judge Magnuson was convinced that the action was prematurely filed. In no way whatever did Judge Magnuson say, or even intimate, that the much belated presentation to him of the arbitration award 3 caused him to reassume jurisdiction over an action which he had dismissed because it had been prematurely filed. Otherwise put, he was not inclined to do any more than any judge would do at that late time — examine it out of curiosity — but stand by the dismissal which had long ago been entered. As pointed out earlier herein, the dismissal was res judicata of nothing, but was plainly and visibly predicated upon the motion which Mr. Eismann had made on behalf of Allstate. To intimate, as the majority does, that the belated presentation of an arbitration award reinstated an action which had been dismissed as prematurely filed does a great disservice to an experienced and able trial judge who had the appeal record and transcript at hand, and ruled otherwise.
Only after the court convened at 2:30 p.m. to hear the motion for reconsideration was the court made aware that the arbitration award had been made. This was on being advised by one of the counsel present that it had been just received that day in the morning mail. The court was asked to look at it, did look at it, and allowed it to be marked as an exhibit, and quickly put all that aside: “THE COURT: It appears that no one had notice of it before today, so we will operate on who is going to argue the Motion for Reconsideration." The most use made of the arbitration award was by plaintiffs’ counsel:
The plaintiffs in fact have prevailed in the arbitration, and it removes in my opinion the problem of not having a litigated liability situation at the time of the Complaint when this matter was originally argued.
*886So, for that reason, I am somewhat confused as to the Court’s order.
Tr., Vol. I, 5. The trial court at that late stage could hardly be expected to wipe the slate clean and make a holding that this late development invalidated its order that the action had been prematurely filed because of the lack of compliance with that condition precedent to bringing suit.
By nature kind and courteous, he heard counsel out to their satisfaction, following which the court stated it had reviewed its memorandum decision, reviewed the plaintiffs’ brief supporting the motion for reconsideration, “and upon reflecting, I am going to stand by my original decision.” Tr., Vol. I, 13. He added that he found Mr. Eismann’s decisions, brought into court that day interesting, but that in all candor the determination to stand by his decision had been made before he had been made aware of them: “[w]hat I meant to do by the decision is to dismiss the action.” Tr., Vol. I, 13.
ON DENIAL OF RESPONDENTS’ PETITION FOR REHEARING

. Justice Shepard was inadvertently indulging in obiter dictum. In review and retrospect, it is obvious that he did see and peruse the arbitration award which, as illustrated hereinafter, played no part in the district court’s determination that the case should be dismissed because it was prematurely filed. On the very last day that the case was tangentially in front of the district court, the arbitration award was produced at the eleventh hour. Infra, at 888, 792 P.2d at 913.

. The brief, though dated December 21, 1984, was not filed as part of the record until June 26, 1985. Similarly, the plaintiffs brief was also filed June 26, 1985, both being filed after the appeal was taken.

. Not to be confused with the arbitration provision of the insurance contract, or with the agreement to submit the debate to arbitrators.