Court Opinion

ID: 6351237
Source: CourtListenerOpinion
Date Created: 2022-06-20 22:01:19.906269+00
Date Added: 2024-06-11T12:47:46.993056
License: Public Domain

Filed 6/20/22 Teague v. National General Ins. CA5

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

            IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                     FIFTH APPELLATE DISTRICT

    DARRELL TEAGUE,
                                                                                             F083543
      Plaintiff and Respondent,
                                                                            (Super. Ct. No. BCV-18-101946
      v.                                                                                 BCB)

    NATIONAL GENERAL INSURANCE
    COMPANY,                                                                              OPINION
      Defendant and Appellant.

                                                   THE COURT *
           APPEAL from a judgment of the Superior Court of Kern County. Bernard C.
Barmann, Judge.
           MacDonald & Cody and Bryan M. Thomas for Defendant and Appellant.
           Law Offices of Brian C. Gonzalez, Brian C. Gonzalez; Law Offices of Robert M.
Cohen and Robert M. Cohen for Plaintiff and Respondent.
                                                        -ooOoo-
           An insurance company and its insured dispute the amount of coverage provided
for injuries suffered by the insured in a collision with a hit-and-run driver. An arbitrator
awarded the insured $267,000. The trial court confirmed the award and entered

*          Before Franson, Acting P. J., Smith, J. and Snauffer, J.
judgment. On appeal, the insurance company contends the award should have been
corrected to $250,000, which is the limit of the uninsured motorist coverage provided in
its policy.
       Under California’s constitutional doctrine of reversible error, a judgment of the
lower court is presumed correct and, thus, the appellant must affirmatively demonstrate
prejudicial error. One of the arguments raised by the insured during the arbitration was
that the $1,000,000 umbrella he purchased extended his uninsured motorist coverage.
The insurance company’s appellate briefing did not directly address this argument. It
ignored the existence of the umbrella coverage. As a result, the insurance company has
not (1) established how the umbrella coverage and the uninsured motor coverage relate to
one another and (2) affirmatively demonstrated that the umbrella coverage did not extend
the uninsured motorist coverage. Without such a demonstration, we cannot conclude that
the trial court erred in confirming the arbitration award.
       We therefore affirm the judgment.
                                     BACKGROUND
The Insurance Policy
       In 2016, plaintiff Darrell Teague and his wife renewed their automobile insurance
with Personal Express Insurance Company. Defendant National General Insurance
Company is the successor of Personal Express Insurance Company. The declarations
page from the policy listed the Teagues as insured drivers and their Chevrolet Silverado
as the insured vehicle. The schedule of coverages and limits includes an entry for
“Uninsured / Underinsured Motorist Bodily Injury” with limits of “$250,000 Each Person
/ $500,000 Each Accident” at a premium of $40.00. The schedule also includes an entry
for “Umbrella” with a limit of $1,000,000 at a premium of $126.00. Nothing in the
declarations page indicates the umbrella coverage is limited to liability incurred by the
insured drivers or, more specifically, that it does not extend to the uninsured motorist
coverage.

                                             2.
       Part C of the policy sets forth the terms of the uninsured motorist coverage. Three
provisions in part C address the limit on liability, other insurance, and arbitration.
       First, the “LIMIT OF LIABILITY” section in part C includes a provision which
states: “The limit of liability shown in the Declarations for each person for Uninsured
Motorists Coverage is our maximum limit of liability for all damages, including .…”
National General Insurance contends that this provision along with the limit set forth on
the declarations page make clear that $250,000 is the maximum amount of its liability for
damages caused by an uninsured motorist.
       Second, the “OTHER INSURANCE” section in part C begins by stating the
following:

       “If there is other applicable insurance available under one or more policies
       or provisions of coverage that is similar to the insurance provided under
       this Part of the policy: [¶] 1. Any recovery of damages under all such
       policies or provisions of coverage may equal but not exceed the highest
       applicable limit for any one vehicle under any insurance providing
       coverage on either a primary or excess basis.”
       The parties’ appellate briefing and their papers included in the clerk’s transcript do
not mention this provision and do not address whether the umbrella coverage is a
“provision[] of coverage that is similar to the insurance provided under this Part of the
policy.”
       Third, the “ARBITRATION” section of part C includes a paragraph designated
C.2. that provides:

       “The amount of damages. This applies only if the amount does not exceed
       the minimum limit for bodily injury liability specified by the financial
       responsibility law of the state in which ‘your covered auto’ is principally
       garaged. If the amount exceeds that limit, either party may demand the
       right to a trial. This demand must be made within 60 days of the
       arbitrators’ decision. If this demand is not made, the amount of damages
       agreed to by the arbitrators will be binding.”

                                              3.
       Teague contends this provision applies to the $267,000 arbitration award and,
because National General Insurance did not demand a trial within 60 days of the
arbitrator’s decision, the amount of damages awarded in that decision is binding.
National General Insurance’s appellate briefing omits any reference to this paragraph of
the arbitration agreement contained in part C.
       The insurance policy included in the appellate record consists of a declarations
page and 13 additional pages. The policy does not contain a part that sets forth the terms
of the umbrella coverage purchased by the Teagues. Also, National General Insurance’s
appellate briefing does not refer to any writing (whether part of the policy or a separate
document) that sets forth the terms of the umbrella coverage. Our own independent
review of the record did not locate any such document. As a result, the exact terms of the
umbrella coverage (including its scope) remain a mystery to this court.
The Accident
       On August 17, 2016, Teague was driving home in the Silverado. While stopped at
a red light, the Silverado was struck from behind by a Dodge Caravan, which then left the
scene of the accident. Teague contended he sustained bodily injuries in the hit-and-run
accident and filed an uninsured motorist claim with National General Insurance.
The Lawsuit and Arbitration
       On August 9, 2018, Teague filed a complaint against National General Insurance.
Arbitration proceedings were held before a retired superior court judge on March 10 and
11, 2021. On April 15, 2021, the arbitrator issued a 50-page decision that awarded
Teague the sum of $267,000. At lines 14 and 15 of the second page of the arbitration
decision, the arbitrator addressed the dispute that is the subject of this appeal by stating:
“The amount of the policy limits is disputed. This is an issue that is not a subject for

                                              4.
determination by the Arbitrator.”1 In light of this statement and reading the arbitration
decision as a whole, we conclude the arbitrator did not decide that the coverage
limitations exceeded $250,000. The statements made at page 33, lines 18 through 21, and
page 34, lines 20 through 25, of the arbitration decision simply are the arbitrator’s
description of Teague’s contentions. Those descriptions are not the arbitrator’s
determination as to what policy limits, if any, apply.
Petition to Confirm Arbitration Award
       On September 2, 2021, Teague filed a petition to confirm the arbitration award
with the trial court. National General Insurance filed an opposition that asserted the
contractually agreed-upon uninsured motorist limits of $250,000 applied and, therefore,
the trial court should correct the arbitrator’s award pursuant to its authority under Code of
Civil Procedure section 1286.6.2 Teague filed a reply that asserted the insurance policy
provided $1,250,000 in coverage for the subject claim—that is, $250,000 in uninsured
motorist coverage and an additional $1,000,000 under the umbrella policy.
       On September 30, 2021, a hearing was held on the petition to confirm the
arbitration award. After announcing its tentative ruling and hearing the arguments of
counsel, the trial court granted the motion and directed Teague’s attorney to prepare an
order. A reporter’s transcript of the hearing is not part of the appellate record.
       On October 14, 2021, the trial court signed and filed a judgment implementing its
order confirming the arbitration award. The judgment held National General Insurance
liable to Teague for the sum of $267,000 together within interest at 10 percent from April
15, 2021, the date of the arbitration award.

1      Neither side’s appellate briefing mentions this paragraph of the arbitrator’s
decision.
2      Unlabeled statutory references are to the Code of Civil Procedure.

                                               5.
                                       DISCUSSION
I.     PRINCIPLES OF APPELLATE REVIEW
       National General Insurance contends the trial court erred in confirming the
arbitration award and in denying its request to correct the award because the award
exceeded the arbitrator’s power, which was defined by the contract limits contained in the
agreement to arbitrate. (See § 1285.2 [response to petition may request the court to
correct the award].) Under section 1286.6, subdivision (b), a trial court “shall correct the
award and confirm it as corrected” if it determines “[t]he arbitrators exceeded their
powers but the award may be corrected without affecting the merits of the decision upon
the controversy submitted.”
       A.     Standard of Review
       The proceedings below occurred before the trial court and before an arbitrator.
Consequently, we describe the standard of review applied to the trial court’s decision and
the standard of review applied to the arbitrator’s decision.
       The parties agree the trial court’s determination of whether the arbitrator exceeded
his powers is a question of law subject to de novo review on appeal. They also agree
that, to the extent that a trial court decision is based on findings of disputed facts, those
findings are subject to review under the substantial evidence standard.
       Insofar as our inquiry addresses the arbitrator’s resolution of questions of law or
fact, we apply a highly deferential standard. (Cooper v. Lavely & Singer Professional
Corp. (2014) 230 Cal.App.4th 1, 12.) The principle of arbitral finality, practical
considerations, and our Supreme Court’s decisions “all dictate that arbitrators, unless
expressly restricted by the agreement or the submission to arbitration, have substantial
discretion to determine the scope of their contractual authority to fashion remedies, and
that judicial review of their awards must be correspondingly narrow and deferential.”
(Advanced Micro Devices, Inc. v. Intel Corp. (1994) 9 Cal.4th 362, 376.)

                                               6.
       In this appeal, the foregoing principle about deference to an arbitrator’s
determination about the scope of their authority regarding remedies is significant because
the arbitrator decided the dispute as to the amount of the policy limits presented an issue
that was not a subject for his determination. In other words, the arbitrator determined the
amount of the award and left the question of the policy limits open—that is, left it to be
decided in subsequent proceedings. In the circumstances of this case, those subsequent
proceedings were initiated when Teague filed his petition to confirm the arbitration award
in the trial court.
       Based on our high court’s conclusions about the deference due an arbitrator’s
power to determine the scope of their contractual authority, we defer to (i.e., accept) the
arbitrator’s determination that the question of policy limits was not an issue for him to
resolve. Accordingly, our review proceeds to the issue of whether the trial court properly
resolved the question about policy limits. That issue leads us to some basic principles of
appellate practice and procedure, which follow.
       B.      Appellant’s Burden of Demonstrating Error
       “ ‘A judgment or order of the lower court is presumed correct. All intendments
and presumptions are indulged to support it on matters as to which the record is silent,
and error must be affirmatively shown. This is not only a general principle of appellate
practice but an ingredient of the constitutional doctrine of reversible error.’ ” (Denham v.
Superior Court (1970) 2 Cal.3d 557, 564.) A necessary corollary of the presumption of
correctness and the requirement that appellants affirmatively demonstrate error is that if
the record is inadequate for meaningful review, the issue must be resolved against the
appellant. (Jameson v. Desta (2018) 5 Cal.5th 594, 609.) Applying these principles to
this appeal, we presume the trial court correctly determined the award of $267,000 did
not exceed the insurance policy’s coverage limits. As a result, National General

                                             7.
Insurance has the burden of affirmatively demonstrating the trial court erred in this
regard.
II.       APPELLANT HAS NOT SHOWN THE TRIAL COURT ERRED
          The main obstacle for this court in addressing the amount of coverage provided for
damages inflicted by an uninsured motorist is the absence of information about the
umbrella coverage purchased by the Teagues. The declarations page contains only a
single line about the umbrella coverage. It is identified simply as “Umbrella” with a limit
of $1 million and the premium charged was $126.00.
          After the declarations page, the “PERSONAL AUTO POLICY” consists of 13
pages. We infer no pages were omitted because the first page is numbered “Page 1 of
13” and the following 12 pages list their number and repeat “of 13.” The policy begins
with an “AGREEMENT” that states in full: “In return for payment of the premium and
subject to all the terms of this policy, we agree with you as follows:” The next section is
labeled “DEFINITIONS.” After the definitions, the policy sets forth parts A through F.
None of these parts address the umbrella coverage. As a result, the only information
about the umbrella coverage available to this court is the single line on the declarations
page. Consequently, the question about the scope of the insurance policy’s coverage can
be rephrased as whether the trial court misinterpreted that single line of the insurance
policy after, of course, considering the policy as a whole.
          The usual rules of contract interpretation apply to insurance policies. (Hervey v.
Mercury Casualty Co. (2010) 185 Cal.App.4th 954, 961.) As a result, the trial court’s
interpretation, like this court’s interpretation, is governed by the rules of contract law,
subject to specific rules designed for insurance policies. When, as here, the facts are
undisputed (i.e., the parties presented no extrinsic evidence as to the policy’s meaning),
the interpretation of the policy, including whether it is ambiguous, is a question of law.
(Id. at pp. 962–963.)

                                               8.
       “ ‘The fundamental goal of contractual interpretation is to give effect to the mutual
intention of the parties.’ [Citations.] ‘Such intent is to be inferred, if possible, solely
from the written provisions of the contract.’ [Citations.] ‘If contractual language is clear
and explicit, it governs.’ [Citation.]” (State of California v. Continental Ins. Co. (2012)
55 Cal.4th 186, 195.) Alternatively, if there is an ambiguity in the language of the
insurance contract, courts generally interpret the coverage clauses broadly and resolve
ambiguities in favor of coverage. (Wells Fargo Bank v. California Ins. Guarantee Assn.
(1995) 38 Cal.App.4th 936, 943.) This approach protects the objectively reasonable
expectations of the insured. (Ibid.) The rationale for the foregoing principles is that the
insurance company usually drafts policy language and the insured has little or no
meaningful opportunity to bargain for modifications. (Ibid.) Accordingly, the insurance
company, as the drafter of the policy, is held responsible for ambiguous policy language.
(Ibid.; see Civ. Code, § 1654 [uncertain contractual language should be interpreted
against party who caused the uncertainty].)
       First, we resolve the threshold legal question of ambiguity. We conclude the
policy language contained in the appellate record is reasonably susceptible to more than
one meaning on the specific question of whether the umbrella coverage extended the
uninsured motorist coverage of $250,000. In other words, it is unclear whether the
umbrella coverage only applies to liability that the Teagues might have incurred or,
alternatively, whether it extends all aspects of the policy, including the protection
provided to the Teagues against damages inflicted by uninsured motorists.
       Second, we resolve the ambiguity in favor of Teague and conclude that the
umbrella coverage extended the limits of the uninsured motorist coverage. This
interpretation is compelled by the rule of law that ambiguities relating to coverage are
resolved in favor of the insured. (Wells Fargo Bank v. California Ins. Guarantee Assn.,
supra, 38 Cal.App.4th at p. 943.) Consequently, the trial court correctly confirmed the
arbitration award.

                                               9.
III.   TEAGUE’S REQUEST FOR SANCTIONS
       A heading in Teague’s respondent’s brief contends that National General
Insurance brought a frivolous appeal. Teague argues the appeal was brought to cause
delay and counsel for National General Insurance engaged in a pattern of late filing and
rule violations to extend the delay caused by the frivolous appeal. Teague contends that,
under these circumstances, this court may impose sanctions pursuant to section 907 and
California Rules of Court, rule 8.276.3
       Teague’s request for sanction refers to an award of costs on appeal. Teague may
have used the term costs in the broadest sense, which would include the reasonable
attorney fees. This interpretation is supported by the fact that Teague, as the prevailing
party on appeal, is entitled to costs pursuant to California Rules of Court, rule 8.278(a)(2)
unless, in the interest of justice, this court orders otherwise. This rule renders a narrow
request for costs superfluous.
       Consequently, we infer that Teague is requesting that the imposition of sanctions
in an amount to compensate his counsel for the time reasonably incurred in this appeal.
We deny the request for sanctions because it is procedurally improper. (See Symmonds v.
Mahoney (2019) 31 Cal.App.5th 1096, 1114.) A request for sanctions on appeal must be
raised in a separate motion. (Cal. Rules of Court, rule 8.276(b)(1).) “Sanctions cannot be
sought in the respondent’s brief.” (Cowan v. Krayzman (2011) 196 Cal.App.4th 907,

3      Section 907 provides: “When it appears to the reviewing court that the appeal was
frivolous or taken solely for delay, it may add to the costs on appeal such damages as
may be just.”
        California Rules of Court, rule 8.276 states: “(a) Grounds for sanctions On
motion of a party or its own motion, a Court of Appeal may impose sanctions, including
the award or denial of costs under rule 8.278, on a party or an attorney for: [¶] (1) Taking
a frivolous appeal or appealing solely to cause delay; [¶] (2) Including in the record any
matter not reasonably material to the appeal’s determination; [¶] (3) Filing a frivolous
motion; or [¶] (4) Committing any other unreasonable violation of these rules.”

                                             10.
919.) In addition, Teague failed to “include a declaration supporting the amount of any
monetary sanction sought.” (Cal. Rules of Court, rule 8.276(b)(1).)
                                    DISPOSITION
      The judgment is affirmed. Respondent Teague shall recover his costs on appeal.

                                           11.