Storm v. The Standard Fire Insurance Co.Annotate this Case
In an action arising from an underinsured motorist arbitration, the Court of Appeal reversed the trial court's order striking plaintiff's memorandum of costs and remanded the matter with directions for the trial court to consider whether the costs as claimed by plaintiff are recoverable within the meaning of Code of Civil Procedure section 998 and 1293.2.
The court held that the relevant policy language, which stated that "[e]ach party will . . . [p]ay the expenses it incurs [in arbitration]" and "[b]ear the expenses of the arbitrator equally," does not preclude the recovery under section 998 of arbitration costs, or the recovery under section 1293.2 of post-arbitration costs. The court explained that specifying how the costs are to be paid in the first instance says nothing about whether such costs may be recouped later under the cost-shifting provisions of sections 998 or 1293.2.
The court also held that the insurance policy strictly limited the decisional authority of the arbitrator to two issues—plaintiff's entitlement to damages, and the amount thereof. However, the court explained that it did not give the arbitrator the power to award costs. Therefore, the court found Heimlich v. Shivji (2019) 7 Cal.5th 350 (Heimlich) distinguishable.