UNDERINSURED MOTORISTS’ LIABILITY

Prahl v. Allstate Northbrook Indemnity Co.,110 Cal. App. 5th 118

In September 2023, Prahl filed a petition to compel arbitration of an uninsured motorist claim. The petition alleged he was involved in a multiple vehicle accident in March 2016 while insured by Allstate with a policy that contained uninsured motorist coverage. The available insurance proceeds from the drivers at fault were insufficient to fully compensate Prahl for the injuries and damages he suffered. Prahl settled with these drivers and then sought to initiate arbitration of his underinsured motorist claim. Allstate agreed to arbitration in May 2018. Arbitration was scheduled for November 2022 but was continued based on Prahl's counsel's unavailability. In August 2023, Prahl's counsel contacted counsel for Allstate to reset the arbitration. Allstate asserted that the five-year limitation set forth in Insurance Code section 11580.2(i), had expired in May 2023. Prahl nevertheless filed the petition, asserting that Emergency Rule 10 extended the deadline to conclude arbitration by six months. Emergency Rule 10, filed in response to the COVID pandemic, provided for a six month extension to all deadlines set forth in statutes for all “civil actions” filed prior to April 2020. Prahl contended that an arbitration was a civil action, citing California Rule of Court 1.6(1) which stated that the word “action” included “special proceeding” and that arbitration was a special proceeding. The trial court denied the petition and Prahl appealed.

The Court of Appeal affirmed. A special proceeding is a remedy established by statute but still obtained in court. Judicial remedies are defined as those remedies administered by the courts of justice or judicial officers empowered for that purpose by the Constitution and statutes. Judicial remedies are divided into two classes: actions and special proceedings. An action is an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense. Every other remedy is a special proceeding. Special proceedings generally are confined to the type of case which was not, under the common law or equity practice, either an action at law or a suit in equity. The term “special proceeding” applies only to a proceeding that is distinct from, and not a mere part of, any underlying litigation. The term has reference only to such proceedings as may be commenced independently of a pending action by petition or motion upon notice to obtain special relief. Thus, a special proceeding can only encompass arbitration when there is a judicial remedy involved such as a petition to compel arbitration. .Prahl cites no authority indicating his arbitration can be considered a special proceeding. Indeed, arbitration by itself is not a special proceeding.