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Hamilton v. Cooperative of American Physicians Inc./Mutual Protection Trust6/9/2005
onable and timely settlement, and failed to negotiate a reasonable and timely settlement.
The complaint further alleged "Dr. Hamilton now has pending against him a duly entered and unsatisfied judgment, constituting an enforceable, binding, legal obligation to the Tuckers. After entry of judgment, and in order to avoid financial ruin and to forestall collection efforts on the judgment by the Tuckers, Dr. Hamilton entered into a confidential settlement agreement with the Tuckers. Dr. Hamilton agreed, inter alia, to pursue his rights against CAP MPT for damages arising from CAP MPT's handling of the Tucker suit. The Tuckers agreed, inter alia, not to execute the judgment against Dr. Hamilton's personal assets, and agreed the sole source of their recovery would be the proceeds of Dr. Hamilton's suit or assertion of claims against CAP MPT." (Capitalization altered.)
The parties agreed to submit the case to binding arbitration in accordance with their agreement. The agreement provides: "Any dispute or controversy arising under, out of, in connection with or in relation to this Agreement shall be submitted to, and determined and settled by, arbitration in Los Angeles, California, before a panel of three (3) arbitrators . . . ."
The Discovery Dispute
On June 14, 2001, Hamilton requested the production of many documents in CAP/MPT's claim file. CAP/MPT argued that Hamilton was not entitled to discovery in the arbitration proceeding. It argued that the case did not involve an injury to or death of a person caused by the wrongful act or neglect of another as used in Code of Civil Procedure section 1283.05. Hamilton argued that "the parties agreed to submit all disputes, including discovery disputes to the discretion of the arbitrator," and the arbitrator had the power to order discovery and should order such discovery. (Capitalization altered from original and boldface omitted.) Hamilton did not dispute that section 1283.05 was inapplicable. Instead he argued "simply because the parties have not agreed to burden the arbitration process with all of the discovery mechanisms of section 1283.05 does not mean they agreed to no discovery at all." At a hearing, Hamilton argued that the arbitration dispute arises out of the failure to settle a personal injury claim and therefore fell within the meaning of section 1283.1, subdivision (a), which in turn made section 1283.05 applicable.
CAP/MPT agreed to provide nonpriviledged portions of the claim file. According to CAP/MPT's counsel the claim file was presented to the arbitrator, who reviewed it in camera and the non-privileged portions of the file were produced. Respondents point out that several documents from the claim file are included in the record, and Hamilton does not disagree.
Arbitration Award and Subsequent Proceedings
Two of the three arbitrators agreed to the following conclusions. As of April 22, 1998, the liability of CAP/MPT was reasonably clear applying an objective test. However, CAP/MPT was not the legal cause of the default judgment against Hamilton. "The arbitrators agree with the position taken by CAP/MPT that the reason why the default judgment was entered against Hamilton was his failure to pay his dues and assessments, resulting in his terminating membership." "The key factual question in this arbitration is whether the Claims Review Committee knowingly delayed decision for the express purpose of terminating Hamilton and thereby avoiding the obligation to indemnify. The arbitrators' emphatic answer is No." (Boldface omitted.) While the arbitrators found evidence that the claims staff was aware of Hamilton's status, it found no evidence that the physicians on the claims re
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