Godfrey v. Hartford Casualty Insurance Co., 142 Wash. 2d 885

Summary

The Washington Supreme Court held that an insurance-policy provision allowing a trial de novo on damages after the parties arbitrated liability and damages was unenforceable under Washington's Arbitration Act. The court also held that Hartford waived its right to a jury trial by agreeing to arbitration and awarded the insureds attorney fees for litigating to obtain the benefit of their insurance contract. The court reversed the Court of Appeals and reinstated the trial court's judgment confirming the $165,000 arbitration award.

Holdings

1. When parties submit all issues of liability and damages to arbitration governed by chapter 7.04 RCW, a contractual provision permitting a trial de novo on damages is unenforceable because the Act does not contemplate nonbinding arbitration and limits judicial review to statutory procedures for vacating, modifying, or correcting an award.
2. Hartford waived its right to a jury trial by agreeing in its insurance policy to arbitrate the dispute under the Arbitration Act.
3. The Godfreys were entitled to attorney fees because they were compelled to litigate to obtain the benefit of their insurance contract, including entry of judgment on the arbitration award.

Questions Presented

1. Whether the policy provision permitting a trial de novo on damages after the parties arbitrated liability and damages was unenforceable under the public policy embodied in chapter 7.04 RCW.
2. Whether invalidating or refusing to enforce the trial de novo provision deprived Hartford of its constitutional right to a jury trial under article I, section 21 of the Washington Constitution.
3. Whether the Godfreys were entitled to attorney fees for litigating to obtain the benefit of their insurance contract and judgment on the arbitration award.

Disposition

reversed