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Regal Insurance Company v. Canal Insurance Company2/27/2004
On Certiorari to the Utah Court of Appeals
In this case, we address the statutory procedure applicable to Utah insurers seeking reimbursement of no-fault or personal injury protection ("PIP") benefits from other insurers. An insurer paid a PIP benefit claim to its insured and then, by filing suit, sought reimbursement for that payment from the tortfeasor's insurer. We are called upon to decide whether binding arbitration is the exclusive forum for an insurer seeking such reimbursement. We hold that it is.
BACKGROUND
While waiting at the curb with her bicycle, Christina Chatwin was struck and injured by the right rear tire of a tractor-trailer rig as it turned the corner. Chatwin made a claim for $3,000 in PIP benefits to her own insurance carrier, Regal Insurance Company ("Regal"). Regal paid Chatwin's claim and sought reimbursement for that payment from Canal Insurance Company ("Canal"), the insurer of the trailer that struck Chatwin. Canal refused to reimburse Regal, asserting that its policy covering the trailer did not include PIP benefits. Regal then filed suit against Canal, seeking reimbursement under the equitable theory of subrogation. In response, Canal argued that any common law right of subrogation had been foreclosed by Utah's statutory scheme, which requires that insurers submit PIP reimbursement disputes to binding arbitration. See Utah Code Ann. ยง31A-22-309(6) (1999).
The trial court held that Utah Code section 31A-22-309(6) did not extinguish Regal's common law right of subrogation to press Chatwin's claims against Canal. The court reasoned that while the binding arbitration procedure mandated by statute applied to reimbursement disputes over allocation of fault, it did not apply to reimbursement disputes based upon issues of coverage. Because the dispute between Regal and Canal is a coverage dispute, the trial court held that Regal was entitled to press its claim in court. After considering the coverage issue, the trial court entered summary judgment in favor of Regal.
Canal appealed, and the court of appeals reversed. The court of appeals held that Utah Code section 31A-22-309(6) and this court's interpretation of that provision in Allstate Insurance Co. v. Ivie, 606 P.2d 1197 (Utah 1980), replaced an insurer's common law right of subrogation for recovery of PIP benefits with the right to seek reimbursement through arbitration. Accordingly, the court of appeals held that binding arbitration was the exclusive avenue through which Regal could seek reimbursement of its PIP payments from Canal. We agree and affirm the judgment of the court of appeals.
STANDARD OF REVIEW
Because no facts are in dispute, this case presents only questions of law. We review the court of appeals' interpretation of the relevant statute for correctness, according no deference to its conclusions. State v. Ostler, 2001 UT 68, , 31 P.3d 528. We review the court of appeals' interpretation of our case law under the same standard. State v. Redd, 2001 UT 113, 13, 37 P.3d 1160.
ANALYSIS
I. THE SCOPE OF THE MANDATORY ARBITRATION PROVISION
We construe the mandatory arbitration provision of Utah Code section 31A-22-309(6) broadly, holding that it applies to reimbursement disputes based on issues of coverage, as well as reimbursement disputes based on issues of fault. Our construction is based on the plain language of the statute and on the fact that a narrower interpretation would frustrate the statutory purpose of increasing efficiency in the resolution of PIP reimbursement disputes among insurers.
We begin with the language of the statute itself. Section 31A-22-309(
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