Court Opinion

ID: 9455229
Source: CourtListenerOpinion
Date Created: 2023-08-04 19:15:16.184843+00
Date Added: 2024-06-11T17:34:30.729457
License: Public Domain

CELEBREZZE, Circuit Judge
(dissenting) .
The sole issue in this case is whether the Appellant, by its conduct, impliedly waived its right to arbitrate a dispute arising under an uninsured motorist endorsement in its policy with the Appel-lees. The majority apparently holds that reasonable minds could not reasonably differ that the Appellant did not waive arbitration. I respectfully disagree.
The Michigan Supreme Court has held that where arbitration is involved, waiver need not be shown to have been expressly made, but may be implied from the conduct of an- insürer. Bielski v. Wolverine Ins. Co., 379 Mich. 280, 150 N.W.2d 788 (1967). In Bielski, which was that court’s most recent pronouncement on this issue, the Michigan Supreme Court quoted the following statements with approval:
“ ‘A clause in an insurance policy providing for arbitration or appraisal of the loss or damage as a condition precedent to a suit by the policy holder to recover insurance is inserted wholly for the protection of the insurer and may be waived by it. Such waivers need not be expressed in terms, but may be implied by the acts, omissions, or conduct of the insurer or its agents authorized in such respect.’ 29A Am.Jur., Insurance, § 1617, p. 703. ”
“ ‘The insurer, once having waived the right to demand arbitration of the loss under the terms of the policy, cannot require that the matter in dispute be submitted to arbitrators.' 29A Am.Jur., Insurance, § 1617, p. 704. ” 379 Mich, at 286, 150 N.W.2d at 790.
The policy enunciated in Bielski, and in other Michigan cases, is that where insurers recognize the existence of arbitrable disputes, they have the duty to go forward with, or expedite, arbitration. Where they fail to do so, they waive their right to arbitrate. This policy stems from several entrenched principles of insurance law. First, insurers, which profit off their investments, benefit from delays in the resolution of conflicts, at the expense of their insureds. See Shapiro v. Patrons’ Mutual Fire Ins. Co., 219 Mich. 581, 189 N. W. 202, 203 (1922). Since delay benefits the insurer, it should not be encouraged to sit on the procedures it writes into its contract for its benefit until its insured exercises them for it. Second, this policy arises from the long-recognized duty of insurance companies to cooperate with their insureds. See, e. g., Gaunt v. John Hancock Mutual Life Ins. Co., 160 F.2d 599 (2d Cir. 1947), cert. denied, 331 U.S. 849, 67 S.Ct. 1736, 91 L.Ed. 1858. The third principle underlying this policy is the canon contra proferentem which is applied with particular force to insurance contracts generally. See, e. g., McNally v. American States Ins. Co., 308 F.2d 438, 444 (6th Cir. 1962) (applying Michigan law).
I believe that the Appellant’s letters of February 9 and 22 at least raised a jury question as to waiver, which the jury properly decided in favor of the. Appel-lees. Those letters indicate beyond a doubt that the Appellant knew there was a genuine, arbitrable dispute. Yet, neither letter mentioned arbitration. Nei*1379ther intimated that the Appellant was considering arbitration; neither suggested the Appellees request arbitration pursuant to Clause 15. One indicated that the Appellant considered the matter “closed and requires no further action”; the other that the Appellant was “unable to consider any coverage U payment.” The abrupt, final tone of these letters suggests they were calculated to delay or avoid payment. They certainly breached the Appellant’s “duty to cooperate” towards a “reasonably speedy determination of liability.” Shapiro v. Patrons’ Mutual Fire Ins. Co., 219 Mich. 581, 189 N.W. 202, 203 (1922).
In view of my feeling that those two letters raised at least a jury question as to waiver, I would consider the March 2 letter irrelevant. Having impliedly waived by its actions the right to arbitrate the dispute, the Appellant could not revive it by subsequent acts. Bielski v. Wolverine Ins. Co., 379 Mich. 280, 150 N.W.2d 788 (1967).
I would affirm the judgment of the District Court.