In McIsaac v. Foremost Ins. Co., the California First District Court of Appeal overturned the trial court's decision dismissing Foremost Insurance Company ("Foremost" motion)'s to compel arbitration against its insured, Brett McIsaac ("McIsaac").
Facts: The parties' disagreement stemmed from a motorbike accident in which McIsaac was wounded while riding his bike. The vehicle's driver was underinsured, with only $15,000 in coverage. Underinsured motorist coverage was provided by Foremost under a motorbike liability insurance covering McIsaac for $100,000. McIsaac asked that Foremost pay him $85,000, which is the difference between the $15,000 underinsured motorist insurance limits and the $100,000 Foremost uninsured motorist limits.
Foremost launched an inquiry on the claim and made a settlement offer to McIsaac's lawyer, which was turned down. Following that, McIsaac's lawyer served Foremost with a demand for arbitration. Following that, McIsaac's lawyer agreed to allow some discovery (interrogatories and McIsaac's deposition) before choosing an arbitrator to handle the underinsured motorist claim. McIsaac, on the other hand, did not reply to the discovery and instead brought a case against Foremost, citing breach of contract and bad faith as grounds of action. Foremost responded by filing a motion to compel arbitration and a stay of the case. The trial court dismissed the petition because the arbitration was limited to determining whether McIsaac was entitled to collect underinsured benefits and the amount of those benefits. The arbitration provision did not apply to the parties' disagreement since McIsaac's complaint did not address these concerns.
Decision: The Court of Appeal reversed the trial court's decision, holding that Foremost was allowed to compel arbitration under the provisions of its policy and California Code of Civil Procedure 11580.2. None of the exceptions to compelling arbitration applies to Foremost's petition, according to the Court of Appeal (for example, under California Code of Civil Procedure 1281.2, a party to an arbitration agreement can eliminate arbitration if (1) the petitioner has waived arbitration, (2) grounds for rescinding the agreement exist, or (3) a party to an arbitration agreement is indeed a party to a third-party procedure where the outcome of the arbitration effects in conflicting rulings with the proceeding.)
The court of appeal ruled that in this case, the defendant does not want to arbitrate the plaintiff's bad faith claim. Defendant simply wanted the amount of UIM damages arbitrated, and he requested the trial court to put the case on hold until the arbitration was completed. Plaintiff is allowed to prosecute his bad faith claim after the arbitration, according to the defendant, both in the lower court and in this court.
In Conclusion, Defendant's case is well-considered. Unless the concerns involve a third party who is not legally bound to arbitrate, the fact that the case contains certain nonarbitrable matters is not grounds for denying a petition to compel arbitration.
 64 Cal.App.5th 418 (April 30, 2021).
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