Allstate Insurance Co. v. Nodak Mutual Insurance Co. ( 1995 )

VANDE WALLE, Chief Justice,

dissenting.

The arbitrators, exercising exceptionally good judgment, concluded that the issue of which statute of limitations applied is “more appropriately addressed in a court of law.” We should exercise equally as good judgment and decide the issue. In State v. Stremick Const. Co., 370 N.W.2d 730, 735 (N.D.1985), I dissented to the majority holding that the timeliness of a contractor’s demand for arbitration was a matter especially within the purview of the arbitration panel rather than an issue for the trial court in an action for declaratory judgment. Because the question did not arise out of the contract as required by the controlling statute, section 24-02-31, NDCC, but rather an interpretation of the statutes, I agreed with the New York rationale that “if the issue of the timeliness of the demand for arbitration arises out of the statutes it is an issue for the courts to decide, whereas if it arises out of the contract it is for the arbitrators to determine.” Stremick, 370 N.W.2d at 735-36 (VandeWalle, J., dissenting).

That rationale is all the more applicable here, where the basic legal question is which of two statutes of limitation apply to the right of subrogation under section 26.1-41-17, NDCC, the two-year statute in section 28-01-18(4), NDCC, or the six-year statute under section 28-01-16(1),(2), NDCC. This issue has little or nothing to do with the parties or the facts of the instant action. It is a question, the answer to which applies, or should apply, to any subrogation action under section 26.1-41-17, NDCC.

The majority opinion creates the possibility if not the probability of inconsistent conclusions on a pure legal question in that the two-year or six-year statute could apply under identical facts, depending on the view of the arbitrators. Nor is court review of the arbitrators decision a panacea in view of the court’s adoption of the “clearly irrational” standard of review of the decision of the arbitrators. Scherbenske Excavating, Inc. v. North Dakota State Hwy. Dept., 365 N.W.2d 485, 487 (N.D.1985) [citing Nelson Paving Co., Inc. v. Hjelle, 207 N.W.2d 225 (N.D.1973)]. Although that standard was borrowed from New York, see Nelson Paving, supra at 234, New York, as the majority opinion notes, does not allow arbitrators to determine these issues. See Smith Barney, Harris Upham & Co. v. Luckie, 85 N.Y.2d 193, 623 N.Y.S.2d 800, 647 N.E.2d 1308 (1995). If we are to borrow such a broad standard of review from another jurisdiction, we ought also follow the limitations of that jurisdiction as to the matters to which that standard of review is applied. See Stremick Const. Co., 370 N.W.2d at 735 (VandeWalle, J., dissenting); compare Schweigert v. Provident Life Ins. Co., 503 N.W.2d 225, 232 (N.D.1993) [VandeWalle, C.J., concurring specially]. Because which statute of limitations applies is not fact engendered or fact specific but arises out of the statutes, it should be decided by the courts, not the arbitrators.

I concede here, as I conceded in the dissent in Stremick, that there is authority from other jurisdictions to support the majority’s conclusion. I do not concede we need blindly follow what I consider to be inferior reasoning. For good reason, the arbitrators did not want to decide this issue. It is a classic question of law that is separated from the facts of the dispute. It is a question for the court to decide. Although it might at first appear contrary to my dissent in Stremick, because I agree Chapter 32-29.2, NDCC, applies to arbitration under section 26.1-41-17, NDCC, I would also agree that once a court has decided which statute of limitation applies the arbitrators should decide whether or not the demand for arbitration has been timely filed if there is disagreement as to the facts rather than the applicable statute.

Because I believe the question of which statute of limitations applies is one for the courts to decide and because I believe the trial court properly concluded that section 28-01-16, NDCC, applies in that the arbitration claim is an action upon a liability created by a statute, section 26.1 — 41—17, NDCC, I would affirm in its entirety the trial court’s judgment.

SANDSTROM, J., concurs.