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California Casualty Indemnity Exchange v. Federated Mutual Ins. Co.

Summarized by: 

Date Filed: 07-25-2012
Case #: A147246
Brewer, J. for the Court; Armstrong, P.J.; and Duncan, J.
Full Text Opinion: http://courts.oregon.gov/Publications/A147246.pdf

Insurance Law: Under ORS 742.534, the legislature's intent was to provide a mandatory arbitration remedy in regards to legal liability and the amount of PIP reimbursement, and therefore these two issues may not be litigated.

California Casualty Indemnity Exchange (CCIE) appealed a determination by the trial court that the parties' dispute was subject to interinsurer arbitration. CCIE paid personal injury protection (PIP) benefits to its insured and sought reimbursement from Federated Mutual Insurance Company (FMIC). Both CCIE and FMIC are members to the PIP intercompany reimbursement agreement, requiring them to forgo litigation and arbitrate disputes arising from recovery rights. The issue on appeal was whether ORS 742.534(3) requires arbitration regarding the reimbursement of PIP benefits. On appeal, CCIE claimed there was no dispute concerning liability or the amount of PIP benefits paid and therefore arbitration should not be mandatory. The Court of Appeals disagreed with CCIE's narrow statutory interpretation and determined that because the dispute involved the amount of reimbursement, it was required to be decided by arbitration. Affirmed.