Metropolitan Casualty Insurance Company v. Lammers et al, No. 3:2015cv05369 - Document 20 (W.D. Wash. 2016)

Court Description: ORDER denying 14 Plaintiff's Motion for Summary Judgment - by Judge J Richard Creatura.(SH)

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Metropolitan Casualty Insurance Company v. Lammers et al Doc. 20 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 8 9 10 11 METROPOLITAN CASUALTY INSURANCE COMPANY, Plaintiff, 12 13 14 v. CASE NO. C15-5369 JRC ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT BRENDA LAMMERS and MICHAEL LAMMERS, 15 Defendants. 16 17 This Court has jurisdiction pursuant to 28 U.S.C. § 636(c), Fed. R. Civ. P. 73 and 18 Local Magistrate Judge Rule MJR 13 (see also Joint Status Report, Dkt. 11, p. 2). This 19 matter is before the Court on plaintiff’s motion for summary judgment (Dkt. 14) and has 20 been fully briefed (see Dkts. 14, 15, 16, 17, 18, 19). 21 Plaintiff Metropolitan Casualty Insurance Company (“MetLife”) asks the Court to 22 enter an order as a matter of law that defendants Brenda and Michael Lammers are 23 collaterally estopped from claiming UIM coverage under the MetLife automobile policy 24 ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 1 Dockets.Justia.com 1 issued to defendants for damages arising from a motor vehicle accident in Arizona on 2 April 19, 2010 (Dkt. 14). Defendants litigated their personal injury and loss of consortium 3 claims in a binding high/low arbitration in Maricopa County, Arizona. The arbitration 4 5 award was $84,130.92 to defendant Brenda Lammers, which was less than the third party tort feasor’s policy of $100,000.00. That arbitration award did not result in a judgment, 6 but rather a stipulation and order of dismissal with prejudice. Washington law states that 7 a party to an action is not collaterally estopped unless the previous case resulted in a 8 9 10 “judgment.” A stipulation and order of dismissal with prejudice, under either Washington law or Arizona law, is not a “judgment.” Therefore, defendants are not collaterally 11 estopped from making a claim under the Under Insured Motorist provisions of their 12 insurance policy even though the matter was previously arbitrated for a lesser amount. 13 14 15 Therefore, plaintiff’s motion for summary judgment is denied. FACTUAL SUMMARY The facts are largely undisputed. Ms. Lammers was on a motorcycle and was 16 involved in an accident with Anthony Bivona in Maricopa County, Arizona. Mr. Bivona 17 18 was insured by Allstate at the time of the collision with liability limits of $100,000 (Dkt. 14, p. 2). Defendants filed a lawsuit against Mr. Bivona in Maricopa County. The 19 parties litigated the action in Maricopa County, but finally stipulated to submit the case to 20 binding high/low arbitration (Ex. A, Decl. of Stephanie Yedinak (hereinafter “Yedinak 21 22 23 Decl.,” Dkt. 15, p. 5)). The parties stipulated and agreed that plaintiff would not receive less than $30,000 and not more than $100,000 (id., p. 9, ¶ 5). The agreement also 24 specified that after the arbitration, the case would be dismissed with prejudice and each ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 2 1 side would bear its own fees and costs (id.). After an arbitration, on January 23, 2015, 2 the arbitrator issued an award in favor of Ms. Lammers in the amount of $84,130.92 (id., 3 Ex. C at p. 2, line 20, p. 3, line 9). The arbitrator did not award Mr. Lammers any 4 5 damages for loss of consortium (id. at p. 3, lines 12-13). Mr. Bivona’s insurer promptly paid the arbitration award and on March 16, 2015 the parties filed in Maricopa County a 6 notice of settlement and a stipulation to dismiss with prejudice (id. at Ex. D, Ex. E). The 7 court dismissed the case with prejudice on March 19, 2015 (id., Ex. F). 8 9 10 11 On February 17, 2015, defendants filed a policy limit demand with their own underinsured motorist carrier, MetLife, for $250,000 on (id., Ex. G). Plaintiff MetLife filed this lawsuit claiming that it had no obligations under the 12 insurance policy because defendants are collaterally estopped from claiming that the 13 amount they are legally entitled to collect as a result of the accident is in excess of 14 $84,130.92 (Dkt. 1, p. 5, ¶ 18). 15 Defendants filed their answer and counterclaim, alleging that plaintiff 16 unreasonably denied coverage and seeks affirmative relief including reasonable 17 18 attorney’s fees and costs for violation of the Insurance Fair Conduct Act (Dkt. 7, pp. 6-7). Summary Judgment Standard 19 Summary judgment is appropriate if the “‘pleadings, depositions, answers to 20 interrogatories, and admissions on file, together with the affidavits, if any, show 21 22 23 that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as matter of law.’” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) 24 (quoting FRCP 56(c)). Whether collateral estoppel is available to a litigant is a question ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 3 1 of law that is properly resolved on summary judgment. Resolution Trust Corp. v. 2 Keating, 186 F.3d 1110, 1114 (9th Cir. 1999) (citation omitted). 3 Washington’s Collateral Estoppel Standard 4 5 Both parties agree that the law of the forum state applies to determine the preclusive effect of the Arizona arbitration award. See Plaintiff’s Motion (Dkt. 14, p. 8); 6 Defendants’ Response, (Dkt. 17, p. 11). The parties also agree on the standard applied by 7 Washington courts to determine if defendants are collaterally estopped from bringing 8 9 10 suit. Plaintiff cites Renninger v. Dept. of Corrections, 134 Wn.2d 437, 449, 951 P.2d 782 (1998) (Dkt. 14, p. 7) and defendant cites Gurtz v. New Hampshire Insurance, 65 Wn. 11 App. 419, 422-23, 828 P.2d 90 (1992) (Dkt. 17, p. 6). Both cases use basically the same 12 standard. As stated by plaintiff: For collateral estoppel to apply, the party seeking application of the doctrine must establish that (1) the issue decided in the earlier proceeding was identical to the issue presented in the later proceeding; (2) the earlier proceeding ended in a judgment on the merits; (3) the party against whom collateral estoppel is asserted was a party to, or in privity with a party to, the earlier proceeding; and (4) application of collateral estoppel does not work an injustice on the party against whom it is applied. Renninger v. Dep’t of Corrections, 134 Wn.2d 437, 449, 951 P.2d 782 (1998). 13 14 15 16 17 18 19 (Dkt. 14, pp. 6-7. See Defendants’ Response, Dkt. 17, p. 6, (citing Gurtz, supra at 42223). 20 The parties also agree that one of the critical issues is whether or not the 21 arbitration award in Arizona, which resulted in the parties filing a stipulation and order of 22 dismissal constitutes a “judgment,” as defined in the second prong of the above standard. 23 24 See Plaintiff’s Motion (Dkt. 14, p 8), Defendants’ Response (Dkt. 17, pp. 13-15). ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 4 1 The parties disagree regarding which state’s law should apply when it comes to 2 defining what constitutes a “judgment.” Plaintiff claims that Arizona law applies. (Dkt. 3 14, pp. 8-14). Defendants claim that Washington law applies; however none of the cases 4 5 cited by defendants confronts the issue of whether an arbitration proceeding results in a final judgment. (Dkt. 17, pp. 11-13 (citing Corley v. Hertz Corp., 76 Wn. App. 687 6 (1994); W. Am. Ins. Co. v. Macdonald, 68 Wn. App. 191 (1992); Van Vonno v. Hertz 7 Corp., 120 Wn.2d 416 (1992))). As stated by the Washington Court of Appeals: “To 8 9 10 determine whether the Oregon arbitration proceeding resulted in a final judgment, we look to Oregon law, [because] ‘[the] local law of the state of rendition determines 11 whether or not a judgment is final and, if not, what issue or issues remain subject to final 12 determination.’” Larsen v. Farmers Insurance Co., 80 Wn. App. 259, 263, 909 P.2d 935, 13 937 (1996) (citing Taylor v. Basye, 119 Wn. 263, 205 P. 16 (1922)) (quoting Restatement 14 (Second) of Conflicts of Laws § 107, comment (c) (1971)). According to the Restatement 15 (Second) of Conflicts of Laws § 107, comment (c), as “between States of the United 16 States, application of the local law of the State of rendition to determine whether a 17 18 judgment is final is required by the Constitution.” However, this Court sees no substantive difference between the law of Washington and Arizona on this issue. Neither 19 state considers a stipulation and order of dismissal with prejudice a “judgment”, as that 20 term is commonly applied. 21 22 23 Arizona Rule of Civil Procedure 76 provides for the entry of “judgment” upon a compulsory arbitration award where no appeal has been filed, if a party seeks to have 24 such judgment entered. Ariz. R. Civ. P. 76(c) (“Upon expiration of the time for appeal, if ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 5 1 no appeal has been filed, any party may file to have judgment entered on the award”). In 2 this case, however, the parties agreed to enter a stipulation for binding arbitration and, 3 following the arbitration, to dismiss the case with prejudice upon the completion of the 4 5 arbitration. See Declaration, Dkt. 15, Exhibits E, F. Therefore, the compulsory arbitration rules, which allow for the entry of a judgment do not apply, although they do 6 suggest that an arbitration award, by itself, is not a judgment and that a party must file 7 with the court an order for entry of judgment on the arbitration award. Nevertheless, for 8 9 10 all other arbitrations, Arizona has adopted the Arizona Arbitration Act, Ariz. Rev. Stat. Ann. § 12-1514, which provides, in part, that a party may seek a “judgment or decree” 11 and provides a mechanism for confirming an arbitration award and entering a 12 “judgment.” See Ariz. Rev. Stat. Ann. § 12-1514. According to this Arizona statute, 13 upon “the granting of an order confirming, modifying or correcting an award, judgment 14 or decree shall be entered in conformity therewith and be enforced as any other judgment 15 or decree.” Id. This is not dissimilar from Washington law, which has similar provisions 16 and will be discussed more below. See, e.g., RCW 7.04A.220 (“after a party to the 17 18 arbitration proceeding receives notice of an award, the party may file a motion with the court for an order confirming the award, at which time the court shall issue such an order 19 unless the award is modified or corrected under RCW 7.04A .200 or 7.04A.240 or is 20 vacated under RCW 7.04A.230”). 21 22 23 A “judgment” is a clearly defined judicial decree that results in a number of specific rights, including the right to execute on the judgment, see, e.g., Byers v. Wik, 169 24 Ariz. 215, 218-19 (Ariz. App. Ct. 1991) (citing Ariz. Rev. Stat. § 12-1553(2)), provide a ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 6 1 lien on real property, see, e.g., Freeman v. Winthroath Pumps-Div. of Worthington Corp., 2 475 P.2d 274, 276 (Ariz. Ct. App. 1970), full faith and credit in another state, see e.g., 3 U.S. Const. art. IV, § 1; RCW 6.36.910, RCW 6.36.025; In re Wagner, 50 Wn.App. 162, 4 5 166, 748 P.2d 639 (1987), and call for supplemental proceedings, see, e.g., Lore v. Citizens Bank, 51 Ariz. 191, 195, 75 P.2d 371, 372 (Ariz. 1938) . A stipulation and order 6 of dismissal comes with none of these resulting benefits and burdens. An arbitration 7 award may be binding on the parties to the arbitration, but such an award is still not a 8 9 10 “judgment” entered in a court of competent jurisdiction. Since Washington’s law of collateral estoppel clearly requires a “judgment,” a private arbitration between parties 11 will not fulfill this requirement. If the arbitration award had been reduced to judgment in 12 Arizona, then perhaps that might have led to a different result. But those are not the facts 13 presented in case here. 14 Neither party has cited the Court to any case that is directly on point regarding 15 whether an arbitration award, followed by a stipulation and order of dismissal with 16 prejudice constitutes a “judgment” for purposes of applying the Washington law of 17 18 collateral estoppel. Plaintiff concedes that there is little case law determining the preclusive effect of “common law” arbitrations in Arizona (Dkt. 14, page 10). Such being 19 the case, the Court concludes that the relevant Arizona statute is relatively 20 straightforward on this issue and provides persuasive guidance. According to this Arizona 21 22 23 statute, upon “the granting of an order confirming, modifying or correcting an award, judgment or decree shall be entered in conformity therewith and be enforced as any other 24 judgment or decree.” Ariz. Rev. Stat. Ann. § 12-1514. This statute unequivocally ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 7 1 indicates that in order for a judgment to be entered, there first must be “the granting of an 2 order confirming, modifying or correcting an award.” Here, there was no granting of an 3 order confirming, modifying or correcting the arbitration award. Instead, there was an 4 5 order of dismissal with prejudice that included the following language: Pursuant to Stipulation and good cause showing therefore, 6 7 IT IS ORDERED that the above-caption and numbered matter be, and the same hereby is, dismissed with prejudice, all parties to bear their own attorneys fees and costs. 8 9 10 11 ORDERED this date: _____________, 2015. (Yedinak Decl.,” Dkt. 15, Exh. F). This is the entire Order, and it is clear that there is no mention of the arbitration 12 award, much less any confirmation, modification or correction of such award. (See id.). 13 In addition, plaintiff has not submitted any evidence that judgment specifically was 14 entered on the arbitration award. The situation presented here thus contrasts with one in 15 which a “court [] affirmed the award and entered judgment.” Nelson v. Ochsner, 2013 16 Ariz. App. Unpub. LEXIS 240 at *5 (Ariz. Ct. App. 2013) (unpublished opinion); see 17 18 also Requip v. Jeffrey C. Stone, Inc., 2010 Ariz. App. Unpub. LEXIS 830, *2, 2010 WL 1050320 (Ariz. Ct. App. 2010) (unpublished opinion) ("the superior court entered 19 judgment, confirming the arbitration award 'in its entirety' and awarding 'Summit' its 20 attorneys' fees of $240,596.02 and costs of $20,481.79"). In the absence of controlling 21 22 23 caselaw on this issue, the Court finds the Arizona statutory scheme to be persuasive as to Arizona law on whether or not an arbitration award that is not confirmed by the court is a 24 judgment. Therefore, the Court concludes that because there was no order confirming, ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 8 1 modifying or correcting the arbitration award, judgment never was entered. See Ariz. 2 Rev. Stat. Ann. § 12-1514. 3 4 5 The Court also notes that, as noted by the Arizona Court of Appeals, there is a particular procedure specified by statute for obtaining confirmation of an arbitration award in Arizona: 6 7 Section 12-1511 (2003), entitled "Confirmation of an award," specifies the procedure to be followed by a party seeking to have an arbitration award confirmed by the superior court: 8 9 10 11 12 A party seeking confirmation of an award shall file and serve an application therefor in the same manner in which complaints are filed and served in civil actions. Upon the expiration of twenty days from service of the application, which shall be made upon the party against whom the award has been made, the court shall enter judgment upon the award unless opposition is made in accordance with § 12-1512. 13 Morgan v. Carillon Invs., Inc., 207 Ariz. 547, 550, 88 P.3d 1159, 1162, 2004 Ariz. App. 14 LEXIS 57, *9, 424 Ariz. Adv. Rep. 24 (Ariz. Ct. App. 2004) (quoting Ariz. Rev. Stat. 15 16 17 Ann. § 12-1512). Plaintiff does not submit any evidence suggesting that this procedure was followed by either party to the arbitration, thus buttressing this Court’s conclusion 18 that, pursuant to Arizona law, an arbitration award that has not been confirmed by the 19 court is not a judgment and that they are distinct. This statutory procedure in Arizona for 20 confirming an award and obtaining thereby a judgment also demonstrates that there can 21 be an award without a judgment. 22 23 24 ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 9 1 The contrast between the case herein and one in which this above-noted procedure 2 was followed is demonstrated by an Order in a 2009 case before the Arizona Superior 3 Court, which included the following language: 4 5 6 7 8 9 10 11 12 This matter has come before the Court from Plaintiff's Motion to Confirm Arbitration Award, pursuant to A.R.S. §12-1511. After considering Plaintiff's Motion to Confirm Arbitration Award, Defendant's Opposition and all other pleadings and supplements, and after hearing oral arguments on June 9 and June 11, 2009, this Court granted Plaintiff's Motion to Confirm Arbitration Award in open court on June 11, 2009. Accordingly, pursuant to A.R.S., § 12-1511 and A.R.S. § 12-1514; IT IS HEREBY ORDERED that Judgment upon the Arbitration Award dated February 13, 2009, and the supplemental and Amended Arbitration Award dated April 3, 2009, attached as Exhibits 1 and 2 and which are incorporated to this Judgment by reference for all purposes, is entered in conformity therewith in favor of Plaintiff, Desert Sun Management, LLC, and against Defendant, Swaim Associates, Ltd. 13 Desert Sun Mgmt. Llc v. V., 2009 Ariz. Super. LEXIS 1104 at *1 (Ariz. Super. Ct. June 14 22, 2009) (unpublished opinion). According to Arizona law, a particular procedure must 15 16 17 be followed in order to obtain confirmation of an arbitration award, and after such procedure is followed, judgment thereafter is entered. There is no evidence of a judgment 18 in this case on the arbitration award. If an arbitration award were equivalent to a 19 judgment pursuant to Arizona law, there would be no need for this statutory procedure. 20 In addition, defendants cite a case that is substantially the same as the case before 21 the Court involving an Oregon arbitration and discussing Washington law. See Larsen v. 22 Farmers Insurance Co., 80 Wn. App. 259, 265, 909 P.2d 935, 938 (1996). In that case, 23 plaintiff Larson was involved in an automobile accident in Portland, Oregon in 24 ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 10 1 Multnomah County. The responsible third party had liability coverage in the amount of 2 $25,000. Larson sued the third party in Multnomah County Circuit Court. Oregon has a 3 mandatory arbitration statute. The arbitrator awarded Larson $21,366.00. Larson and the 4 5 third party filed a stipulated order of dismissal, similar to the stipulation and order of dismissal with prejudice filed in the case before this Court. Id. at 261, 909 P. 2d at 936. 6 Larson then made a UIM claim against defendant Farmers Insurance Company before a 7 panel of three arbiters in Lewis County, Washington. The panel granted the motion to 8 9 10 terminate the arbitration based on collateral estoppel. Larson then filed suit in Lewis County Superior Court, arguing that the Oregon arbitration award was not a “final 11 judgment” and that he was not precluded from seeking UIM damages in excess of 12 $21,366. The court gave an exhaustive analysis as to why a “judgment” was not the same 13 as an arbitration award that resulted in a stipulation and order of dismissal. See id. at 14 265-66, 909 P.2d at 938-40. Among other things, the court noted that a judgment is not 15 recognized nor enforced in other states unless it is a final determination under the local 16 law of the state of rendition. See id. at 263 (footnotes omitted). Only after a judgment is 17 18 entered, does the award “‘have the same force and effect as a final judgment.’” Id. at 265 (quoting O.R.S. 36.425(3)). Citing Washington law, the court noted that the Washington 19 legislature did not consider an arbitration award to be equivalent to a final judgment of a 20 court unless there is a subsequent award of a judgment. Id. at 265, (quoting Channel v. 21 22 23 Mills, 61 Wn.App. 295, 299-300, 810 P.2d 67 (1991)). Although the Washington code provisions have since been repealed and replaced, the analysis still is relevant, as there 24 still remains a process for confirmation of an arbitration award. See id.; RCW 7.04.150, ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 11 1 160, 170, 180, 190 (repealed); RCW 7.04A.220 (“after a party to the arbitration 2 proceeding receives notice of an award, the party may file a motion with the court for an 3 order confirming the award, at which time the court shall issue such an order unless the 4 5 award is modified or corrected under RCW 7.04A .200 or 7.04A.240 or is vacated under RCW 7.04A.230”); see also RCW 230, 240. As noted previously, the law in Washington 6 on this topic is similar to that in Arizona, as in Arizona “an order confirming, modifying 7 or correcting an award,” is required before judgment is entered, Ariz. Rev. Stat. Ann. § 8 9 10 12-1514, and in Washington, “the party may file a motion with the court for an order confirming the award . . . .” RCW 7.04A.220. Statutes in both states provide a 11 mechanism by which a party may receive an order confirming the award. The logical 12 inference is that an arbitration award is not automatically confirmed absent an explicit 13 order from the court and does not qualify as a judgment pursuant to the law in either 14 Arizona or Washington. 15 The Larson court also noted with approval 4 Am. Jur. 2d, Alternative Dispute 16 Resolution § 214, 241-42, which states, in part: 17 18 19 20 The award of the arbitrators acting with the scope of their authority determines the rights of the parties as effectually as a judgment secured by regular legal procedure and is as binding as a judgment until set aside or its validity questioned in a proper manner. However it has also been said that it is only judgment entered on arbitration after confirmation that is entitled to res judicata effect. 21 See Larsen, supra 80 Wn. App. at 267-68 (italics added by the Larsen court) (footnotes 22 omitted by Larsen court), 909 P.2d at 940. The court concluded that an arbitration 23 award, resulting in a stipulation and order of dismissal, was not equivalent to a final 24 ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 12 1 judgment on the merits. Id. at 265, 909 P.2d at 938. This Court finds that the reasoning 2 in Larsen is not only sound, but also is persuasive and clearly sets forth Washington’s 3 law of collateral estoppel, especially as it affects claims for UIM coverage, which is the 4 5 subject of this case. Swift Tool Co. v. Erickson (In re Erickson), 2008 Bankr. LEXIS 618 at 13-14, 49 Bankr. Ct. Dec. 154 (Bankr. W.D. Wash. Feb. 13, 2008) (“under Washington 6 law an arbitration award that is not reduced to judgment does not have res judicata or 7 collateral estoppel effect . . . .”) (citing Channel v. Mills, 61 Wn. App. 295, 810 P.2d 8 9 10 67 (1991) (“ arbitration award not reduced to judgment does not have collateral estoppel effect”); Larsen, supra, 80 Wash. App. 259, 909 P.2d 935 (“construing Oregon law but 11 finding it similar to Washington and following Channel”)) (rejecting “dicta” in 12 Dougherty v. Nationwide Ins. Co., 58 Wash. App. 843, 795 P.2d 166 (1990)). None of the 13 cases cited by plaintiff are similarly binding or persuasive. Plaintiff cites Funk v. Funk, 6 14 Ariz. App. 527, 434 P.2d 529 (1967) for the proposition that an arbitration award is a 15 “final decision” on the merits. Dkt. 14, p. 12. While this may be true, it is not a “final 16 judgment.” The Funk case did not involve collateral estoppel. Rather, “[t]he single issue 17 18 presented by the appellants is whether it was error, in the absence of a showing of fraud, for the trial court to modify the arbitration agreement . . . .” Funk v. Funk, 6 Ariz. App. 19 527, 530, 434 P.2d 529, 532 (1967). The court noted that the parties had agreed to accept 20 the arbitration “as if it were a judgment determining this matter.” Id. This language does 21 22 23 not support the conclusion that an arbitration award is the same as a judgment. In fact, the court seems to be acknowledging that an “arbitration agreement” is distinguishable 24 from a “judgment,” unless the parties agree that it will be treated as such. Further ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 13 1 distinguishing this matter from Funk, in Funk, “[t]he board's award was entered and filed 2 in the superior court of Maricopa County.” Id. at 531, 6 Ariz. App. at 529. Even though 3 the arbitration award in Funk was “not [] a statutory arbitration,” and was a common law 4 5 arbitration, the resulting award nevertheless was entered and filed with the court. Id. Here, plaintiff has not presented any evidence that the arbitration award was entered and 6 filed with the court in Arizona. It also appears that in Funk, there was an “original 7 judgment on the award,” which is not present here. Id. at 533. The Court concludes that 8 9 10 Funk buttresses this Court’s discussion above regarding the Arizona statutes, and evidences that even in common law arbitrations in Arizona, the award needs to be entered 11 or confirmed by the court in order for judgment to be entered on it. Plaintiff also cites 12 Torres v. Kennecut Copper Corp., 15 Ariz. App. 272, 274, where the court stated that 13 “[a] dismissal with prejudice is a judgment on the merits, and is therefore res judicata as 14 to every issue reasonably framed by the pleadings. Id. at 274, citing DeGraff v. Smith, 62 15 Ariz. 261, 157 P.2d 342 (1945); 53 Am.Jur.2d, Master and Servant § 408 (1970). In 16 Torres, the court went further and said that plaintiffs were “collaterally estopped” from 17 18 bringing a claim against defendant. 15 Ariz. App. at 274, 488 P.2d at 479. Both Torres and DeGraff involve principals of respondeat superior. Id.; DeGraff v. Smith, 62 Ariz. at 19 264, 488 P.2d at 479. Both cases involved situations in which an employer was released 20 from liability when the claims against the servant were dismissed with prejudice. Since 21 22 23 the alleged master could only be found liable on the basis of respondeat superior, and the claims against the servant were dismissed with prejudice, both courts found that the 24 claims against the employer were barred by res judicata. These claims based on ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 14 1 respondeat superior are a far cry from UIM claims, and involve different standards than 2 are applicable here. For example, although the Torres court concluded that collateral 3 estoppel applied, this conclusion was in the context of the application of Arizona law 4 5 regarding collateral estoppel, which, as discussed below, does not require a final judgment, as is required pursuant to Washington law regarding collateral estoppel, which 6 governs here, but only requires a valid and final decision. 7 Finally, plaintiff cites two Arizona cases involving the court’s mandatory 8 9 10 arbitration rules which stand for the proposition that under the mandatory arbitration rules and if no appeal has been taken, the arbitration award becomes “final and binding as a 11 judgment of the Superior Court” following the expiration of appeal period. See Dkt. 14, 12 p. 13, citing Valler v. Lee, 190 Ariz. 391, 393, 949 P.2d 51, 53 (Ariz. Ct. App. 1997) and 13 Suppland v. Nilz, 128 Ariz. 43, 623 P.2d 832 (Ariz. Ct. App. 1980). Again, these cases 14 are significant in what they do not say. First, they do not stand for the proposition that a 15 stipulation and order of dismissal should be treated as a “judgment.” Instead, after the 16 time for appeal expires, and the award becomes “final and binding as a judgment of the 17 18 Superior court, [] the Clerk of the Superior Court shall enter the award in the judgment docket. Valler, supra, 190 Ariz. at 393. Second, they both involved mandatory arbitration 19 rules that, as the parties concede, were not binding on the arbitration proceeding in the 20 matter before this Court. Third, those mandatory arbitration rules clearly distinguish 21 22 23 between an arbitration award and a “judgment,” which may, or may not, follow the arbitration award or could result in an appeal and demand for a trial de novo. Ariz. Rev. 24 Stat.§ 12-133(f). ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 15 1 Although plaintiff cites Neff v. Allstate Ins. Co., 70 Wn. App. 796 (Wash. Ct. App. 2 1993), that case is distinguishable, as in Neff, the “arbitrator’s award was reduced to 3 judgment and filed with the Whatcom County Superior Court on December 17, 1991.” Id. 4 5 at 798. As noted numerous times throughout this Order, there was no explicit entry of the arbitrator’s award in the matter before the Court, and no explicit reduction to judgment. 6 Also distinguishable is plaintiff’s citation to Fisher ex rel. Fisher v. Nat’l Gen. Ins. 7 Co, 192 Ariz. 366, 965 F.2d 100 (Ariz. App. Ct. 1998), as that case did not involve the 8 9 10 issue of collateral estoppel or whether or not an arbitration award was a judgment, but involved, in part, the issue of whether or not the 90-day deadline applied regarding 11 confirmation of the arbitration award and whether or not there was any reason that the 12 award should not be confirmed instead of vacated. Interpreting the relevant statutes, the 13 court concluded that the award should have been confirmed. Id. at 103, 192 Ariz. at 369. 14 Here, there is no such confirmation and no evidence that the award was presented to the 15 court for confirmation; and, such issue bears little relevance as to whether or not the 16 award constitutes a “judgment.” Similarly, here, neither party is arguing that the award 17 18 should be vacated. Plaintiff also cites Roden v. Roden, 29 Ariz. 549, 243 P. 413 (1926) and Suttle v. 19 Sealy, 94 Ariz. 161, 163-64, 382 P.2d 570, 572 (1963) for the proposition that an 20 arbitration award constitutes res judicata because it has been a “final determination” on 21 22 23 the merits of the case. See Roden v. Roden, 29 Ariz. at 549 and Suttle v. Sealy, 94 Ariz. at 163-64. While this may be true, a final determination is not the same as a final 24 judgment. There is a subtle difference between Arizona law and Washington law on the ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 16 1 issue of collateral estoppel. Under Arizona law, the third prong of the collateral estoppel 2 test is that there is “a valid and final decision on the merits.” See Campbell v. SZL 3 Properties, Ltd., 204 Ariz. 221, 223, 62 P.3d 966, 968 (2003) (citing Garcia v. General 4 5 Motors Corp., 195 Ariz. 510, 514, 990 P.2d 1069, 1073 (Ariz. Ct. App. 1999)). Whereas Washington law provides that collateral estoppel only applies when there is a “final 6 judgment.” See Renninger v. Dept. of Corrections, 134 Wn.2d 437, 449, 951 P.2d 782 7 (1998); Gurtz v. New Hampshire Insurance, 65 Wn. App. 419, 422-23, 828 P.2d 90 8 9 10 (1992). Therefore, although Arizona courts may very well consider an arbitration award akin to a judgment for purposes of applying Arizona’s collateral estoppel rules because it 11 is a “final decision,” as noted earlier, the parties agree that Washington’s collateral 12 estoppel rules apply in this case (Dkt. 14, p. 7, Dkt. 17, p. 6), and Washington collateral 13 estoppel rules require a “final judgment.” Therefore, any Arizona cases applying a 14 different collateral estoppel standard are inapplicable. In all other respects, Arizona 15 courts treat judgments as distinctly different from arbitration awards. As noted earlier, in 16 Arizona a judgment can result in a lien against real property, see, e.g., Freeman v. 17 18 Winthroath Pumps-Div. of Worthington Corp., 475 P.2d 274, 276 (Az. Ct. App. 1970), it would entitle the party to full faith and credit in another state, see e.g., U.S. Const. art. 19 IV, § 1; RCW 6.36.910, RCW 6.36.025; In re Wagner, 50 Wn.App. 162, 166, 748 P.2d 20 639 (1987), and would give the enforcing party the opportunity to bring supplemental 21 22 23 proceedings, see, e.g., Lore v. Citizens Bank, 51 Ariz. 191, 195, 75 P.2d 371, 372 (Ariz. 1938). None of these rights would occur until and unless a party receiving an arbitration 24 ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 17 1 award had filed a judgment. Nor would a stipulation and order of dismissal with 2 prejudice entitle the parties to such relief. 3 4 5 Since a “judgment” in many respects is distinctly different than a “decision on the merits,” and since Washington rules of collateral estoppel requires a “judgment,” this Court concludes that defendants are not collaterally estopped from bringing an 6 underinsured motorist claim against plaintiff. 7 Plaintiff’s motion is denied. 8 9 Dated this 14th day of March, 2016. 10 A 11 J. Richard Creatura United States Magistrate Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 ORDER ON PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT - 18

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