State Farm Mutual Automobile Insurance Co. v. Broadnax

attorney’s fees not set-off documented $1,900, plus statutory interest exceed ordered April 1990. It is further application for readmis- prior

sion, pay plus statu- respondent $200 May to William

tory interest from that, prior It is further ordered

Wolters. readmission, respondent shall dem- made restitution with

onstrate that he has respon- checks issued

respect to all funds, and returned for insufficient

dent No. It is

established Case 91SA339. that, prior any applica-

further ordered readmission, respondent pay

tion for attorney fees to Ama- court-ordered

$100 Cruz, interest from De-

do

cember FARM MUTUAL AUTOMOBILE

STATE COMPANY,

INSURANCE

Petitioner-Appellant, BROADNAX, Respondent-

Earle

Appellee. GAAL,

Philipp Plaintiff-Appellee,

STATE FARM MUTUAL AUTOMOBILE COMPANY,

INSURANCE

Defendant-Appellant. 91SA175,

Nos. 91SA129. Colorado,

Supreme Court of

En Banc.

March respondent- appearance

No on behalf of appellee No. 91SA175. Seaman, P.C.,

Creamer & Thomas J. Sea- Reiter, Denver, man, David P. for defen- dant-appellant No. 91SA129. Kaufman, P.C., Larry Kidneigh & L. McCray, Denver, plaintiff-appellee for No. 91SA129. Gen., Norton, Raymond Atty. A. T.

Gale Gen., Atty. Slaughter, Deputy Chief Timo- Gen., thy Tymkovich, Eugene M. Sol. C. Shields, Cavaliere, Deputy Attys. Merrill Gen., Djokic, Atty. Richard First Asst. Gen., Howard, Gen., Atty. Robert M. Asst. Denver, Atty. for amicus curiae General’s Office, in Nos. 91SA175 and 91SA129. Opinion Justice VOLLACK delivered the of the Court.

State Farm Mutual Automobile Insur- (State Farm) Company appeals from ance district court orders in two unrelated two action, Farm chal- actions. each lenged constitutionality of section 10- 4-708(1.5), (1990 Supp.), 4A C.R.S. requires binding arbitration of arising under no fault insurance contracts. simultaneously appeals, address both challenges to sec- since the constitutional 10-4-708(1.5) substantially each the same.1 We affirm the district court’s finding that section is consti- tutional. Farm Mutual Automobile v. Broadnax

Insurance Co. No. 90CV11678 policy car insurance State Farm issued a (Broadnax) prior Broadnax to De- to Earle cember 1988. On December September and on Broadnax was in car accidents. Broadnax sub- involved personal for mitted claims to State Farm Associates, P.C., policy. his Levy injury protection Marc R. benefits under Marc Morse, dispute regarding payment A of benefits Levy, Englewood, D. Cream- Stuart ensued, Seaman, Seaman, P.C., and Broadnax served State er & Thomas J. Jirak, April Denver, a Demand for Arbitration on petitioner- Thomas J. appellant in No. 91SA175. constitutionality 13-4-102(l)(b), (1987), is at issue. of a statute

1. Section grants jurisdiction appeals this court over when 6,1990, injuries filed a sustained automobile State Farm accidents. On November 10-4-706, sought Stay Supp.). Arbitration & 1991 Petition to 10-4-708(1.5) was obligated the No declaration Insurers are Fault denied The district court unconstitutional. provide direct benefits to Act insureds. consti- stay found the statute sought and Id. When benefits exceed tutional. $2,500, may bring insureds an action in tort against opera- another automobile owner or v. Farm Mutual Automobile Gaal State 10-4-714(l)(e), tor. 4A C.R.S. § Insurance Co. paid an is for When insured liable benefits insurer, No. 90CV9218 by another No Fault Act re- quires insurers to resolve reimbursement policy issued a car insurance State Farm binding through mandatory, issues arbitra- 14, Engholm prior to October to Rashel 10-4-717, (1987).3 4A tion. C.R.S. § (Gaal) date, Philipp 1988. On that Gaal in an accident with Rashel was involved disputes governed by thus section personal injury Engholm qualified for statutory 10-4-708(1.5) arise from the policy. protection benefits under State right of insureds to recover benefits direct- Gaal, paid Farm to or on behalf benefits 10-4-708(1), 4A ly from insurers. C.R.S. a dispute a arose and Gaal served but insurer, (1987). As Farm is in State Farm.2 Demand for Arbitration State statutory obligation contesting essence its 10-4-708(1.5) to disburse Section benefits. July hearing An was held in enacted on June and took was that argued State Farm which Approximately January effect on 1990.4 10-4-708(1.5) unconstitutional. section was later, 10-4-708(1.5) year one section Application to later filed an State Farm parties option provide amended Arbitration Award in district Vacate the resolving disputes through either bind- court. in contract. or actions 25, 1991, court On March the district 10-4-708(1.5), Supp.). Farm Mutual finding State relied on its in challenges section 10-4- State Farm Company Automobile Insurance 708(1.5) applied as it to Broadnax’s and 10-4-708(1.5) was Broadnax that section disputes, which arose between Janu- Gaal’s constitutional, ap- and denied State Farm’s July Our ary consid- plication. Farm now seeks review State challenges Farm’s is thus eration State court’s determination each the district of section 10-4- limited the version case. 708(1.5) to the 1991 prior which existed 10-4-708(1.5) provides, perti- Section amendment. part, “[a]ny nent action for breach brought pursuant to subsection of contract I. binding (1) proceed of this section shall part arbitration.” Section Farm contends State (“No Fault”) Insur- the Motor Vehicle (1990 Supp.), C.R.S. extin 4A - (No Act). Act Fault 10-4-701 ance §§ to courts be guishes (1991 Supp.). State Farm’s cause section removes aris cause of action for requires The No Fault Act automobile Fault from a trial to policies ing under the No Act have insurance owners to court, provid- without coverage personal jury for before a district provide insureds intercompa- previously argued riding bicycle Engholm when hit 3. State Farm 2. Gaal was binding ny mandatory was constitu- made a him with her car. Gaal claim Automobile Insur- April tional Mutual Engholm’s policy, and on served Inc., Cabs, (Colo. Co. ance for On State Farm with demand arbitration. 1988). arbitration, August after the arbitrators Gaal, awarding entered an award favor attorney’s approved wages, expenses, ch. sec. 4. Act June him lost travel 458-61. Colo.Sess.Laws fees. (10th Cir.1985). Rather, ing right review a district the federal de novo following an adverse arbitration of access to courts has been located in the After careful consideration of the award.5 Due Process Clause Fourteenth guarantee, Amendment,7 we find no viola- constitutional in the First Amendment’s tion of of access to provision securing petition courts. government grievances,8 redress Privileges in the and Immunities Clause of

A. the Fourteenth Amendment.9 Right of Access to Courts Supreme The United States Court has posits State Farm’s contention noted that the of access to courts and right guaran that to courts access guarantees process of due have devel- litigants jury tees Colorado a trial to before oped response challenges by in to defen- disputes arising a district court for involuntarily dants haled into the formal Act, scope the No Fault and that the Connecticut, judicial process. Boddie v. appellate While review be de novo. we 371, 375, 780, 784, 401 91 U.S. S.Ct. 28 scope previously have evaluated the Thus, (1970).10 L.Ed.2d 113 whether liti- courts, right of access to we gants adequate are afforded constitutional passed on the contentions raised access to courts often sounds due mandatory binding Farm in the context of See, process analysis. under federal e.g., disputes arising arbitration of under the id.; Co., Logan v. Zimmerman Brush 455 resolving inquiry, No Fault Act.6 In this 422, 5, 1148, 5, n. 102 U.S. 430 S.Ct. 1154 n. jurisdic thus look to the law of other we (1982).11 71 L.Ed.2d 265 The Tenth Circuit guidance. tions for Appeals, construing prison Court of in- access, right mates’ has stated that The United States Constitution does not “[ajccess ‘encompasses expressly provide right for a to the courts all the access to petitioner might Berry Corp., courts. v. Beech means a defendant or re- Aircraft 670, (Utah 1985); quire get hearing judi- 717 P.2d 674 see also to a fair from the Milliken, 851, Nordgren ciary charges brought against v. 762 F.2d 853 on all him or 873, (Colo. right Corp., 5. The of access to courts the Colorado Curtiss v. GSX 774 P.2d 876 1989). provides Constitution as follows: justice. Equality justice Courts of shall Milliken, 851, (10th Nordgren 7. v. 762 F.2d 853 every open person, speedy remedy and a Cir.1985) (relying Ryland Shapiro, on v. 708 every injury person, property afforded for 967, (5th Cir.1983), F.2d 971 and v. Wolff character; right justice or and and should be McDonnell, 2963, 418 U.S. 94 S.Ct. sale, delay. administered without denial or 2986, (1974)). 41 L.Ed.2d 935 Const, II, Colo. art. 6. State Farm also asserts II, 3, rights to access under article Nordgren, (relying Ryland, 8. 762 F.2d at on 853 provides which as follows: 971, Transport 708 F.2d at and Motor California rights. persons Inalienable All have cer- Unlimited, 510, Trucking Co. v. 404 U.S. 92 natural, rights, tain essential and inalienable (1972)). S.Ct. 30 L.Ed.2d 642 among right be reckoned the defending enjoying and their lives and liber- Nordgren, (relying Ryland, 762 F.2d at on 853 ties; acquiring, possessing protecting and 971). 708 F.2d at property; seeking obtaining and of their safety happiness. 10. The Boddie Court determined welfare Const, II, § Colo. art. recipients pay prerequisite unable to fees bringing deprived a divorce action were of their 6. This court has construed the constitutional access to courts. right guaranteeing of access as that courts will they be available to effectuate if accrue considering litigant 11. In whether a was denied Sigman under law. v. Limited Partner Employment under the Illinois Fair Seafood (Colo.1991) Act, ship, (relying 533 Logan Practices Court found that Productions, Disney O'Quinn analogous v. Walt "provide[d] of access cases meth- (1972)). reasoning analysis supporting 493 P.2d 344 This court has simul od of here.” [its] taneously recognized Logan Brush U.S. v. Zimmerman 455 provision prevent legislature does not 71 430 n. 102 S.Ct. 1155 n. L.Ed.2d changing Id.; rights. laws which create 265 see also

535 ” guarantee, example, constitutional Nordgren, him.’ alleged by grievances Lynch, legislature free to allocate access to the (quoting Gilmore v. is F.2d at 853 762 (N.D.Cal.1970), system judicial system using any or F.Supp. formal aff'd Gilmore, 404 U.S. Younger totally arbitrary sub nom. is not classification which (1971)(per L.Ed.2d long system S.Ct. as access is not so Ap euriam)). Accordingly, the Court of exercise of a essential fundamental has Fifth held peals for the Circuit Tortorich, right. Bazley v. constitutional ‘compelling interest’ standard (La.1981) “[b]efore (finding no 397 So.2d scrutiny applied, of strict employee where was denied violation to vindicate access plaintiffs seek compensation to sue tort under worker’s right.” fundamental courts must be a statute). Valley Authority, Wayne Tennessee The Utah access courts Cir.1984) (5th (citing n. 9 F.2d courts “guarantees 788) Boddie, 91 S.Ct. at 401 U.S. procedure that is on fairness based prod- of limitations (holding that statute equality.” Corp., Beech Aircraft deprive home- liability action did not ucts P.2d at 675. Utah courts construe the con- through due access to courts owners of ex- stitutional of access to process). amining history plain language, its Colorado, however, thirty-seven one of is relationship to to addition its functional diverged from the federal states which provisions. Id. The other constitutional creating express an stitutional model Supreme accordingly Court has noted Utah right independent to courts access and the guarantees. due constitutional process clause “are related both (cit- P.2d 674 Corp., 717 at Beech Aircraft origins some historical and to extent their McGovern, Variety, E. The Francis in their constitutional functions.” Id. Constitutionality Product Policy and “complementary provisions are thus two Repose, Am. 30 Liability Statutes of wholly overlap, they are not and even but (1981)); 615 n. 218 U.L.Rev. Lankford pow- duplicative. Both act to restrict the Sullivan, Long Hagerty, 416 So.2d legislature.” of both the courts and the ers (Ala.1982). Id. evaluating In access Court, Supreme The Nebraska converse Constitution, Justice Shores the Alabama interpreted the constitutional ly, has origins of has noted that “merely of a access a declaration as Magna can be traced back to the Charta. principle.” Prender general fundamental enough Although language is broad Nelson, 256 N.W.2d 199 Neb. gast subject varying interpretations, to to be (1977). Prendergast, In the court generally incorporate it said to can impose to legislature’s power upheld prin- into constitution a fundamental our special procedures before resort courts. fairness, vaguely con- ciple perhaps Nebraska courts Id. The court noted that important limitation notion of ceived but duty safeguard primary have “the ... infringe power government on rights provision’s] declaration [the upon rights, and act arbi- individual remedies.” Id. are, de- what trarily. What those gree infringement permitted, Colorado, provi to courts In the access inquiries justification, much with how will be avail guarantees sion long- subject of which have been the rights that accrue under to effectuate able standing debate.... Prods., O’Quinn Disney v. Walt law. omitted). (citation Id. Inc., Court, 776 Inc. v. Firelock District thirty-seven constitutional While the 1090, 1096(Colo.1989). This has similar,” ap- P.2d “essentially their visions are on a “[generally, a burden stated that plication the Louisiana has varied. Under (Utah 1985). Corp., Berry v. Beech Aircraft Act in the courts will be The Uniform Arbitration turn con- party’s right of access to jurisdiction en- upheld long as it is reasonable.” Fire fers on Colorado courts to so recently lock, judgments enter on arbitration P.2d at 1096.13 We force and 13-22-219, (1987). right of access under the 6A observed that the awards. C.R.S. § “protects initial ac may apply Parties to courts to confirm Colorado Constitution DeFoor, 824 State v. pursuant cess to the courts.” awards made to sec- (Colo.1992). examining initial 10-4-708(1.5). 13-22-213, In P.2d 783 § courts, exam we are essence (1987). access to may apply Parties also to courts to judicial process. ining to the formal where the arbitrators ex- vacate awards powers ceeded their or where an award B. fraud, procured by corruption, was or other 13-22-214, undue means. § Applied Access As Right (1987). apply Parties also to courts to Arising Statutory Claims Under modify or correct arbitration awards where Fault Act the No there an evident mistake or where the case, present In State Farm calls premised award was on a matter not sub- its access to the this court to evaluate 13-22-215, mitted to the arbitrators. 6A § in the No Fault judicial process as set out (1987). Finally, parties may appeal C.R.S. Disputes arising under the No Fault Act. “in the manner and to such court orders proceed binding before Act judg- extent from orders or the same 10-4-708(1.5), 4A resorting courts. 13-22-221, ments in civil actions.” 6A (1990 Supp.). party to the C.R.S. Each C.R.S. arbitrator, and these arbitration selects determining dispute whether this reso- a third. Id. The two arbitrators select scheme secures lution place for a arbitrators then set time judicial process, of access to the we are hearing, mutual consent of the with the guided by requirements process. of due may parties. issue sub- Id. Arbitrators Supreme The United States Court has con- compel produc- poenas for witnesses and sistently process requires held that due tion of evidence. Arbitrators must file an hearing—the opportunity some form of to order the insurance commissioner time, meaningful be heard at a and a days hearing. ten Id. within Such vacated, modified, meaningful Eldridge, manner. may or correct- Mathews order pursuant 424 U.S. 96 S.Ct. ed to the Uniform Arbitration (1975). Act. L.Ed.2d 18 Firelock, constitutionality personal injury protection 13. In we evaluated the benefits Mandatory Secondly, Arbitration Act. The Manda- under the No Fault Act. the district tory pilot project Act was then a that Arbitration Mandatory court Arbitration Act noted imposed mandatory on all civil ac- arbitration imposed agree- there was no arbitration where districts, any eight judicial tions filed in one of disputes, ment to arbitrate while 10-4- money damages sought where the amount of 708(1.5) requires only where con- $50,000. Firelock, did not exceed 776 P.2d at disputes incorporated resolve arbitra- tracts to argued right 1092-93. Firelock that its of access by operation of tion law. by to courts was violated forced purposes Section 10-4-708 serves different by requirement party requested that a a who Mandatory than the Arbitration Act. Titled required pay trial de novo was benefits,” "Prompt payment of direct it estab- improve by party position costs if the did not its lishes a limited time frame in which insurance percent. concluding Id. at least ten 1096. In quickly pay companies must claims violated, that Firelock’s of access was not personal injury protection provisions insureds’ many we noted that burdens on the Per- of their automobile insurance contracts. “present sys- access to courts were within our Colorado; injury protection required sonal justice.” tem of Id. guarantees of automobile acci- it that victims present disputes, In the the district court dis- adequately compensated in a time- dents will be First, tinguished grounds. Firelock on two -708, ly 4A C.R.S. fashion. 10-4-702 to §§ Mandatory district court noted that the Arbitra- injury protec- Supp.). & 1990 Personal application: tion Act had broad to all civil compensation $50,000 tion insurance assures without sought damages actions where the were 10-4-708(1.5), regard conversely, See 10-4- to fault in accident. or less. Section has focus, extremely only 706(l)(b), applying narrow scheme, piecemeal litigation leveling play- Under the hearing avoiding field the risks that clearly by has the insur- evidence, present all the State Farm can superior ers would use their economic to it. the defenses available raise all by subjecting resources contested claims has the to resort to State Farm also litigation. coverage to undue To sub- system should it find an judicial the formal ject findings by factual made arbitrators interest. order adverse arbitrator’s ... review de novo that State Farm is not We thus conclude would, cases, in many make those judicial process deprived its access to ceedings way merely stations under the Colorado Constitution. courts, thereby create and would very compulsory in our risks not alone determination. that arbitra- are designed for the Appeals Fourth Cir- to avoid. Court cuit “it is too late in the has observed that similarly Id. We have noted that the No arbitration, day compulsory argue Fault Insurance Act seeks to reduce tort law_ se, per process of Con- denies due litigation, serves and that arbitration long gress require arbitration so end.14 We that State Farm conclude has procedures provided fair and ultimate deprived not been of its Republic is available.” In review 10-4-708(1.5).15 under section dustries, Teamsters Inc. v. Joint Council (4th Cir.1983). No. 718 F.2d II. come to party “may Where a the district State Farm contends enforce, or modify court to vacate an arbi (1990 Supp.), vio award, party] is denied trator’s [the parties’ jury lates the to a trial as meaningful Courts.” Textile guaranteed 23 of Article II by section Dye Fund v. Workers Pension Standard Constitution, the Colorado Rule 38 (2d F.2d Finishing Procedure.16 Colorado Rules Civil Cir.1984) (upholding compulsory, binding holding in State Farm relies on our Fire- arbitration, Republic in reliance on Indus- Mandatory lock that Arbitration Act ). tries parties’ rights to trial did not violate Supreme Court has sim Connecticut novo jury provided because it de review ilarly mandating upheld statutory scheme district Inc. v. court. Firelock District judicial providing review sub arbitration (Colo.1989). Court, 776 1097 P.2d in stantially similar to that available Firelock, recognized by In that “trial we present v. case. Aetna Cas Chmielewski in not a matter jury a a action is Co., civil ualty 218 Conn. 591 Surety and Constitution.” 101, 109(1991). under the Colorado doing, A.2d In so the court provides by a to trial Id. C.R.C.P. 38 noted: however, money is jury, in actions where Indeed, scope novo of review of a de Like all rules of claimed on contract. questions would be inconsistent factual procedure, 38 does not al- civil C.R.C.P. purposes compulsory with the ar- actions; subject section, ways apply it is to civil provision of that name- bitration 81(a), out in C.R.C.P. ly, avoiding congestion of the courts with the limitations set arbitration,” Kentucky compulsory the court Baumgart Farm found v. Bureau Mut. See Co., parties Ins. Colo. 607 P.2d 1003 199 available to review Cabs, (1980); Mut. Auto. Co. v. State Farm Ins. provided a alternative remedies reasonable Inc., (Colo.1988). 65 n. 5 751 breach contract. available for common-law Id. not, action, Farm did in either raise State quo. quid pro Su- issue of preme Connecticut pertinent provides, in II 16.Section 23 of Article however, Court, rejected considered and by jury part, re- of trial shall "[t]he quid quo challenge pro a Chmielewski cases; jury but a criminal main inviolate in Casualty Surety Conn. Aetna may consist of less civil cases all courts ... (Conn.1991). Based on 591 A.2d 111-12 may prescribed by persons, as than twelve "safeguards surrounding the arbitration process” law.” aggregate and "the benefits associated necessary proper rules do not to decide differ- provides that which “[t]hese arbitrators, any spe- by appointed by procedure practice ences to be govern they insofar as statutory proceeding agreement parties mutual cial may in conflict with the controversy are inconsistent or who choose that mode by appli- practice provided powers cedure and adjustment. and duties of cable statute.” prescribed by such shall be as arbitrators law. 81(a), we have interpreting

“In C.R.C.P. procedure Relating that the rules of civil do not Farm cites In re held Bill special statutory Arbitration, apply there is a Compulsory where 9 Colo. (and remedies proceeding (1886), sets forth P. 474 where we were called on to procedure are inconsistent the rules of civil provide review “A Bill for an Act to for the therewith).” or in conflict adjustment grievances and dis- amicable Cabs, Inc., 751 P.2d Mut. Auto. Ins. Co. putes employers arise between Hansen, (Colo.1988)(citing Brown v. employees, and to authorize the cre- City 493 P.2d 1086 per In ation of Board Arbitration.” Court, 167 Colo. v. District Westminster opinion, curiam we stated “that section (1968); Wright v. Tins P.2d 537 XVIII, contemplates article neither nor ad- (1961)). 365 P.2d 691 ley, Colo. providing compulsory mits of a law for the Cabs, Inc., determined that arbitration we submission of differences to A arbitration. under the Arbitration Act is a Uniform submission of differences to the decision of statutory proceeding. P.2d at special agreement must be arbitrators mutual found that the Uniform Arbitra- 65. We parties controversy.” Id. at statute, applicable, tion Act was made 630, 21 P. at 475. State Farm relies on this disputes companies re- between insurance language support as sole for its contention garding and that the rules reimbursement Assembly impermissibly that the General procedure generally apply. did not of civil imposed of their resolution Id. at 64-65. 10-4-708(1.5). dispute under section disagree. case, present

In the disputes dictates that under the No Fault Section 3 of Article XVIII does not ex- proceed binding Act shall pressly prohibit mandatory, binding arbi- pursuant to the Uniform Arbitration Act. previously tration. We have concluded spe- Act Since Uniform Arbitration that section 3 of Article XVIII did not statutory proceeding cial within the mean- prohibit Assembly requir- General 81(a), of C.R.C.P. it follows that State ing parties to submit their to non- Farm does not have a to a trial binding all civil actions under jury disputes. C.R.C.P. for its Mandatory Arbitration Act. Firelock We conclude that State Farm has not been Court, Inc. v. District deprived any right by jury. to trial (Colo.1989). Further, of the No Fault III. incorporated policies Act are into insurance State Farm contends that section in Marquez written Colorado. v. Pruden- (1990 10-4-708(1.5), Supp.), 4A im C.R.S. Co., Property Casualty tial Ins. 620

poses consent, arbitration without its in 29, Farm, (Colo.1980). thus, P.2d 33 State XVIII, 3, violation of Article section of the writing renewing when or insurance con- disagree. Colorado Constitution. We 1, 1990, January through July tracts from provides Section 3 of Article XVIII as 1, 1991, incorporated of sec- follows: 10-4-708(1.5) policies tion into its as a mat- duty general

It shall be the policies ter of law. Both insurance contain assembly pass such laws as be renewal automatic clauses.17 State Farm policy provided days policy 17. Broadnax's as follows: Unless within 59 effective date, we mail or deliver a notice of cancella- 4. Renewal. agree: you, tion to we

539 10-4-708(1.5) that section not con- policies were not find does dispute that the not did Article that travene section 3 of XVIII. in cannot conclude 1990. We renewed mandatory not consent to Farm did State pursuant to section IV. 10-4-708(1.5). State contends that section Farm that We have observed “[a]rbitration im Supp.), efficient, convenient alternative

vides rights existing pairs contract viola Inc., 5, Cabs, n. 751 P.2d at 65 litigation,” II, of Article section of the Colora tion policy of this long has been and “it disagree. do Constitution. We encourage the use of to foster and state provides 11 Article II that Section resolu- dispute as method of impairing obligation ... law “[n]o v.Co. Evans Joint tion.” Judd Constr. passed gener- contracts ... shall be (Colo.1982)(cit- Venture, 924 642 P.2d assembly.” Farm al contends Court, P.2d 635 v. District Sandefer violates section this (Colo.1981), on other 547 overruled at issue because insurance contracts Court, P.2d Sager grounds, v. District entered As- were into before General (Colo.1985); Valley Columbine changed for sembly scheme Directors, 626 Board Co. v. Constr. disputes. payment resolution (Colo.1981); Rocky Moun P.2d 686 Ezell Co., Bean & Elevator tain notes, correctly As State Farm and Colo. art. 232 P. Const. prohibits legislation ap- II of Article 3). XVIII, § See, retroactively. e.g., plies Van Sickle (Colo.1990); Boyes, 797 P.2d 1270-71 again note that one the General Appeals, Assembly’s primary purposes passing Martin v. Board Assessment is, (Colo.1985). There No Fault Act was “to reduce however, application in this litigation arising out of no retroactive of tort amount accidents,” enacting legislation in this case v. Ken case. Baumgart automobile act provides “[sjections and 3 of this Mut. Ins. tucky Bureau (1980), January and shall shall take effect Colo. deliv- apply policies dis that are provide prompt resolution of insurance delivery or adopt issued or renewal on payments. we ered or puted Were approved rely opin after said date.” Act June position solely on an required would ch. sec. Colo.Sess.Laws ion issued we claus- policies contained renewal current demands on the 461. Both overlook both the es, policies were force between judicial system and the need for and the Colorado July 1, protec January payment personal injury prompt ap- prospective acknowledged policies thus fell within benefits that we 10-4-708(1.5). State encouraging plication of section the use when not the contract were decline Farm’s dispute method of resolution. We Accordingly, impaired. we approach. take that (2) your spouse, it in force until the end of a. to continue relative, period; (3) policy any the current or policy policy for next (4) usually b. to renew the drives person who other period we at the rates then you effect unless your car mail to written notice our intention driver’s license under have had his or her your will be to renew. The notice mailed suspension or have been or revocation days known at least 30 before last end of the current address having driv- driving a valid without victed mailing policy period. The days during just before the er’s license proof of it shall be sufficient of notice. poli- during policy or effective date of agreements These to continue and renew cy period. void: (Emphasis original.) you pay premium if when a. fail to policy Gaal entitled due; or injury protection is identical benefits personal following: b. if policy. to Broadnax’s (1)you, challenge Mandatory V. Arbitration Act. Id. We said that Farm that section contends [wjhen governmental interest served 10-4-708(1.5), (1990 Supp.), 4A C.R.S. vio light arbitration is considered in equal protection its lates placed parties, the burden on the we imposes the section a restric laws because concluding have no trouble fundamental tion of the access to [Mandatory promotes Act Arbitration] Farm further courts. State contends that legitimate governmental interest and the scrutiny a strict standard of review must procedures created [Mandatory applied since a fundamental be reasonably Act are related Arbitration] involved.18 to that interest. find a We do not violation of State reject equal We protection State Farm’s protection equal challenge. 10-4-708(1.5). pre- laws under section As discussed, viously we did not find that VI. State Farm’s of access to courts was Lastly, State Farm contends that unreasonably restrained. In the absence right, apply of a fundamental we will Supp.), impermissibly limits district court equal protection rational basis test to chal- jurisdiction under section 9 of Article VI of lenges. People, Tassian v. 731 P.2d the Colorado Constitution because there is (Colo.1987). meaningful no review and inquiry, Under the rational basis because the binding arbitrator’s decision is rationally classifications must be parties. disagree. on all legitimate related to a state interest. Id. provides, Section 9 of in perti- Article VI Additionally, analyzed statutes under the part, nent presumed rational basis test are constitu district courts shall be trial courts party challenging tional. [t]he Id. the stat general of record jurisdiction, prove unconstitutionality ute must be original jurisdiction civil, shall have in all yond a reasonable doubt. Id. cases, probate, except and criminal as already recognized We have the state’s herein, provided otherwise and shall have reducing litigation arising interest tort appellate jurisdiction such pre- out of prompt automobile accidents and in scribed law. payment personal injury protection bene- Again, relies on our decision in Baumgart fits. Kentucky Farm Bu- Court, Firelock Inc. v. District 776 P.2d reau Mut. Ins. (Colo.1989), support of its 1002, 1003; 10-4-708, § Firelock, argument. didwe not find (1990Supp.). prefers This state Mandatory Arbitration Act violat- resolving disputes as a method for because grounds ed section of Article VI on the “promotes quicker it resolution of perform judicial that “arbitrators do not by providing expedited an opportunity for function they possess because do not parties present their cases before an authority final to render and enforce a party.” unbiased third Firelock Inc. v. judgment” and because the decisions at Court, District Id., non-binding. issue in Firelock were By promoting quicker resolution dis- 776 P.2d at 1094. putes, parties’ arbitration thus reduces 10-4-708(1.5)’s dispute costs. Id. Section contemplated by Under the scheme sec- rationally resolution scheme is related to tion and the Uniform Arbitra- legitimate expediting Act, dispute interests authority arbitrators do not have resolution, costs, reducing parties’ decisions, and se- parties to enforce their own curing prompt payment apply of benefits. In must to the courts for confirmation Firelock, rejected equal protection 13-22-213, we an of arbitrators’ awards. 6A 18. State Farm did not articulate how 10-4- 708(1.5) impermissible creates classification.

541 by this court in various contexts. can en- sidered (1987). Only courts district C.R.S. procedural and We have found substantive judgments enter agreements and force by the General Assem- 13-22-219, innovations created the scheme. awards bly Compensation Act to our Workers’ (1987). 6A C.R.S. compatible that section. v. Curtiss Colorado, 774 P.2d 873 Corp. VII. GSX of (Colo.1989); O’Quinn Disney v. Walt Mutual respect to State Farm With 190, Prods., Inc., 177 493 P.2d 344 Colo. Broadnax, v. Insurance Co. Automobile (1972). special held that in cir- We have court’s denial of the district we affirm may enjoin a trial court cumstances Stay Arbitration Farm’s Petition State instituting litigation pro individual from se respect Declaratory Judgment. With and violating right of access standards. without Farm Mutual Automo- to Gaal v. State Winslow, County Board Comm’rs v. district we affirm the bile Insurance (Colo.1985), denied, cert. 706 P.2d 792 Farm’s Motion court’s denial 1204, 1018, 106 S.Ct. 89 L.Ed.2d U.S. Reconsider, affirm the district court’s and 377, 185 Colo. People Spencer, entry of award. (1974). recently in P.2d 1084 Most Court, 1090, P.2d v. District Firelock KIRSHBAUM, J., dissents. (Colo.1989), challenge rejected we LOHR, J., joins in the dissent. II, based on article section Act, Mandatory Arbitration dissenting. of the Colorado KIRSHBAUM Justice (1987), re- 13-2-401 to §§ require- majority states that “the as quiring compulsory arbitration of claims measure process of law” ments of litigation a condition to the initiation judicial of access cases the amount contro- civil wherein II, by article sec- process as established $50,000. exceed the sum of versy did not Constitution tions 3 and of the Colorado cases,1 we posture of those view compul- ultimately concludes that the and required to articulate the nature were not 10-4- provisions of section sory arbitration guarantee of article of access satisfy 708(1.5), Supp.), II, rights it relates to the section legislation Because restrict- that standard. II, 3. This case specified by article section guaranteed right of ing constitutionally requires analysis. such property inter- protect to courts to II, provides as follows: section Article right, requir- abridges a fundamental ests rights. persons All Inalienable analysis, ing heightened scrutiny and be- natural, essential and inalienable certain judicial provisions of the cause the review among may be reckoned rights, scrutiny satisfy either strict statute fail to defending enjoying and their standards, respectfully I or due liberties; possess- acquiring, lives and majority’s from the conclusion. dissent ing protecting property; and seek- and safety happi- obtaining their I ness. Questions concerning scope ap- Const, II, art. Colo. plication of the access to II, as follows: provides section II, Article section have been of article cases, public to fair and efficient Compensation Act we and of the the Workers’ 1. In legal recognized Assembly imposed processes, the General abol- the condition of subject statutory rights, ish common law or representation of access of those on the protections, Court, and for that reason constitutional pro plaintiffs. v. District se In Firelock partic- persons acquire do not vested interests in (Colo.1989), we held that 776 P.2d Corp. Colora- ular remedies. Curtiss GSX do, precondition compulsory did not (Colo.1989); O’Quinn v. II, in view contravene article Prods., Inc., Disney Walt provide legislative de novo ad- determination pro litigation In the se perspective, Firelock judication. From that rights we noted that constitutional occa- cases delays legislatively created dealt with conflicted, sionally particular plain- balanced right. abrogation legislative of such rather than rights tiffs’ of access with the of others Equality justice. justice of of Courts section 25. See Chambers v. Baltimore & every open person, Co., 142, 148, shall be and a Ohio R.R. 207 U.S. 28 S.Ct. remedy speedy every injury 34, afforded for (1907); 52 L.Ed. 143 Berry v. Beech character; person, property or (Utah Corp., 717 P.2d Aircraft right justice should be administered 1985). As Supreme Court stated in sale, delay. denial without or Chambers, Const, II, II, art. 6. Article section right Colo. The to sue and defend in the specific rights guaranteed enumerates orga- is the alternative of force. In an Coloradoans, right all one of which is society right nized it is the conservative protect acquire, possess property. It rights, of all other and lies at the founda- insignificant cap- is not the section orderly government. tion of It is one of rights” tioned “inalienable constitutes highest privileges and most essential provision of the first substantive Colorado citizenship, of and must by be allowed Sears, rights. bill of See Heath v. Roe- each State to the citizens of all other buck 123 N.H. 464 A.2d precise States to the extent it is (1983). Those who drafted our allowed to its own citizens. obviously constitution considered such “es- 207 U.S. at 28 S.Ct. at 35. sential and inalienable” to be of Because the United States Constitution found, “fundamental,” significance. if not express right contains guaran- no II, Article ensures tee, by necessity federal courts have ad- provi- forums will remain accessible for the respect dressed issues with to access to speedy injuries sion of remedies for state courts in the framework of due “person, property or character.” As the process analysis. Connecticut, Boddie v. notes, majority great majority of state 401 U.S. 91 S.Ct. 28 L.Ed.2d 113 language. constitutions contain similar (1971); Milliken, Nordgren F.2d 851 McGovern, Maj.Op. at 535. Francis E. See (10th Cir.1985); Hammock, McKay v. Variety, Policy The and Constitutionali- (10th Cir.1984); F.2d Ryland v. Sha ty Liability Product Statutes Re- of of (5th Cir.1983); piro, 708 F.2d 967 Silver v. pose, 30 Am.U.L.Rev. 615 n. 218 Cormier, (10th Cir.1976). 529 F.2d 161 presence provision The of such a itself, however, firmly is rooted constitution, prominent position our at so petition in the guaranteed by the catalog rights, in article II’s reflects a First Amendment to the United States Con- by conscious decision the framers of that stitution. Transport Motor California depart document to significantly from the Unltd., Trucking Co. v. 404 U.S. federal constitutional model as well as 92 S.Ct. 30 L.Ed.2d 642 from constitutional models of several other 853; Nordgren, 762 F.2d at Ryland, 708 precisely states. It is the absence of F.2d at has also been de- guarantee express such in the United privileges fined as one of the and immuni- engendered States Constitution that has guaranteed by ties to all citizens article 4 process the broad due tests characteristic United States Constitution. Cham in right decisions federal courts bers, 35; atU.S. 28 S.Ct. at Nord cases. access 853; gren, Ryland, 762 F.2d at 708 F.2d at It must also be observed that the stated, Ryland 971. As the adopted though was even rights protected “one of the fundamental separate prohibiting clause Ryland, the Constitution.” 708 F.2d at governmental deprivation unreasonable Boddie, 971. See 401 U.S. at 91 S.Ct. property rights incorporated also into 786; 1367; Silver, McKay, 730 F.2d at rights. Const., II, our bill of Colo. art. 529 F.2d at 163. It seems reasonable to conclude that assessing significance different, State courts the framers intended some if not greater, particular right provisions protection property rights to access pre- tained in their individuals of section 6 state constitutions have dictably than were accorded described the characteristics of the section are fundamental nature. ways. Some have See right in various itself J.M., (Colo. People roots in sections in re P.2d its historical emphasized Magna 1989). right protect v. Sulli Surely Carta. the of the one’s Lankford 996, 999 van, Hagerty, 416 So.2d Long by private from property interests conduct (Ala.1982); ex Glen rel. Cardinal parties allegedly appropriating those inter- Gaertner, Hosp. v. 583 S.W.2d non Mem. concept ests is fundamental to our of or- (Mo.1979). thorough In a liberty. majority’s contrary The dered as- declaring portion a of a opinion thoughtful ignores pur- the sumption language and products liability repose of for statute II, 3. pose of article section state constitutional to be cases violative scrutiny Application analysis of strict Supreme the Utah open guarantees, access requires the circumstances of this case the seeking two-part a test articulated Court compulsory conclusion that the authority to alter legislative the balance provisions of section 4A the fundamental rights and remedies with (1990 Supp.), violate State Farm’s C.R.S. guarantee of access to courts contained right of fundamental the courts Berry, P.2d at constitution. Utah’s protection property for the interests. primary justification advanced persuasive those decisions that I find adoption compulsory of these right guarantees to access conclude that legislative goal provisions is the of reduc- relationship to must be considered ing litigation. Maj. Op. at tort 537. That significance by the advanced through policy legislation is not furthered seeking Wayne v. party such access. See prohibiting person alleging deprivation a a Auth., 730 F.2d Valley Tennessee property by private interests conduct of (5th Cir.1984); Holy Hosp., Cross Woods appropriate judicial parties pursuing Cir.1979). (5th If 591 F.2d 1173 n. 16 justification appear- No other remedies.2 a underlying is fundamental record, provisions cannot stand. right, right of must access itself be analysis requires Such care- fundamental.

ful on a case- evaluation of issues facts II However, by-case rejects it basis. con- protect property if Even guarantee that the of access clusion by by access to courts secured interests merely process guarantee—a is due not our constitution is accorded fundamen- jurisdiction ignores the clusion that in this status, due stan- application tal separate process guarantee provided provisions 10-4- dards to section by and tends reduce the our constitution 708(1.5) requires the conclusion II, language of article section to a mere therein judicial review contained principle. analytical statement of That constitutionally inadequate. are many prob- also avoids framework perceived to result from a conclusion lems Assembly has au- Because General is in all contexts rights thority to alter established and reme- fundamental. dies, arguments premised on access to unpersuasive to the case, the context of this the interest rights they a vested are based on extent by right to State Farm—the advanced Corp. analysis. Curtiss v. Colora- GSX property particular interests under tect its do, (Colo.1989). legisla- This one of those contracts—must deemed absolute, however; authority it II, tive is rights by secured article fundamental constitutional con- exercised within must be of the Colorado section Constitution. straints, including the limitations estab- some recently noted that at least II, Assuming by rights lished article section enumerated the inalienable availability contrary, of that rem- property it affirmed 2. The fact that State Farm’s substantive simply No Act is imma- it be edy are defined Fault directed that submitted Assembly did not judicial process. terial. General abolish rather than to the legislation; contract remedies this relationship reciprocal stan- at all. To the extent the the minimal rational benefit delay payments is a reduction in applicable, to in- process analysis dard of due sureds, proce- it is far from clear that the particular the determination whether dures established limiting access to the scheme substantially will achieve such result. legitimate rationally related to courts is requires examination of legislative purpose Assuming validity the constitutional of government interests involved and the the Assembly’s require the General decision to provided, as well as procedural alternatives submission of common-law contract claims private in- significance of the affected arbitration, the compulsory insulating to thus Connecticut, v. 401 U.S. terests. Boddie such claims from adversarial examination 780, 786, testimony, 113 of L.Ed.2d exhibits and witness credibili- S.Ct. minimum, ty procedural evidentiary under the (1971). legislation the must At a process, rules trial associated with the such meaningful op- provide litigant with a the assumption does not answer the serious independent judicial portunity to obtain questions by legislative raised the decision meaningful at a analysis of those interests judicial proceed- to restrict review of such Id.; resolving process. stage dispute ings to the narrow standards established see Mullane v. Central Hanover Bank Act, by the Uniform Arbitration 13-22- §§ Co., 70 S.Ct. and Trust U.S. -223, (1987)(the 201 to Uniform 94 L.Ed. 865 Crowell Act). provisions wholly Those are inade- 45-57, Benson, 52 S.Ct. U.S. quate protect important, if not fun- (1932). 290-95, 76 L.Ed. 598 damental, right here involved. judicial State Farm asserts that re- stringent The Uniform Act contains limi- view of scope judicial tations on the of of review inadequate Supp.), reviewing initial awards. A arbitration rationally legislative pur- to the not related authority has court to vacate arbitration majority pose underlying the Act. The only procured if by award the award was deprived Farm is not of cludes that State fraud, “corruption, or other undue means process judicial access to the because the 13-22-214(l)(a)(I); ...” if there is evi- § provides scheme it with the party’s rights prejudiced dence that a were hearing may evidence corruption because or misconduct or lack presented and defenses raised and “the arbitrators, impartiality by one or more judicial system to resort to the formal 13-22-214(l)(a)(II); if the arbitrators or § it find an order adverse should arbitrator’s powers in one of them acted excess of the Maj.Op. my to its interest.” at 537. Act, granted by the Uniform 13-22- § view, these statements should initiate rath- 214(l)(a)(III); if failed the arbitrators inquiry. end our er than postpone hearing or to hear relevant evi- participate in an dence, prejudice parties, 13-22- § proceeding participate is not a in a or, 214(l)(a)(IV); specified in circum- minimum, judicial proceeding. At a due stances, agree- if there was no arbitration process analysis requires ment, 13-22-214(l)(a)(V). that abolition of reviewing A § judicial justified the traditional forum be may modify only court or correct an award quo quid pro basis. See Chmielewski v. if the award contains miscalculations of Co., figures descriptions, 13- 218 Conn. or mistakes Aetna Cas. Sur. § 22-215(l)(a); upon if it made a matter 591 A.2d As has been and the award noted, not submitted to arbitration Assembly the General did not abol- may affecting the be corrected without common law contract remedies ish appropriately ren- merits of the decision 10-40-708(1.5). adopting section rather It dered, 13-22-215(l)(b); ifor the award is availability directed about form, “imperfect in a matter of not affect- remedy processes, thus such controversy,” 13- the merits of prohibiting determination of those tradi- 22-215(l)(c). tional common-law claims trial. To the reciprocal permit benefit is the elimina- extent Act thus does not Uniform claims, reviewing sufficien- quid pro quo tion of tort there is no court to review the statutory scheme did not satis- proce- the federal propriety evidence or cy standards; Furthermore, fy it did reviewing fairness rulings. dural argu- court practical purposes precluded not assert an access state all court is for Furthermore, evidentiary rulings, although reviewing ment. specific provi- di- upheld compulsory contractual the absence Act, vacate an arbitration large it so rections sions of did misapplied ap- if the arbitrator award even measure because it construed the Dairyland rules law. Cabus plicable articulated stat- review (Colo.App.1982);Mat- 656 P.2d 54 evidentiary Ins. as permit ute to review well Assoc., Inc., 169 A.D.2d arbitrator, rulings sharp ter Weller legal J.M. (N.Y.App.Div.1991); N.Y.S.2d 854 to the narrow review available contrast Ingelheim, Morganti, Boehringer Inc. v. proceedings subject Inc., Conn.App. A.2d of 9 Id. at 641. visions U.S.C. 1-15. §§ Cal. Permanente v. Southern Woodard Fund v. Stan- Textile Workers Pension Cal.App.3d Group, 171 Cal. Med. Co., 725 F.2d 843 Dye Finishing dard of absence of Rptr. In view the Cir.1984), (2d of required also consideration evaluation of evidence judicial initial provisions of 9 U.S.C. judicial the review inalienable, of presence the the issues and 1461(e)(2)(A) 1980 Act. The court fundamental, right meaning- if plaintiffs argument the rejected the judicial to resolve ful the access procedures of compulsory arbitration the disputes involving private prop- contractual 1980 Act violated its of access to the interests, extraordinarily limited erty this Industries, by citing Republic Inc. meaning- review is neither judicial relatively broad the conclusion ful nor reasonable. judicial provisions the 1980 Act review of majority language two quotes plaintiff meaningful of access assured the appeals circuit decisions federal court on the courts. Both cases turned judicial support of its conclusion that availability judicial review provisions of section review greater judicial permitted far evalua- provisions of our constitutional satisfy the permitted tion of arbitration awards than guarantee to courts. Act. our Uniform quotations nor Maj.Op. at 537. Neither the least, very At the they excerpted are opinions from which provisions of re- the Colorado Constitution persuasive here. judicial availability meaningful quire the Industries, Inc. v. Teamsters Republic non-judicial pri- determinations review (4th 718 F.2d 628 No. Joint Council interests. property vate over Cir.1983), question raised the narrow view, 10-40-708(1.5) does not my 1461(e)(2)(A)of the whether 29 U.S.C. § meaningful review of State provide such Multiemployer Pension Plan Amend property interests. Act, (the 29 U.S.C. 1381-1461 ments §§ Act) violated various constitutional Ill upheld the constitu safeguards. The reasons, I foregoing find For scheme, rejecting tionality of the provisions of sec- compulsory arbitration contrary reached the Ninth conclusion Supp.), Appeals in Shelter Fram Circuit Court II, of 3 and article of sections violative Guaranty Corp. Pension Benefit re- I therefore Constitution. Colorado (9th Cir.1983). The Corp., 705 F.2d 1502 contrary conclu- spectfully dissent from appearing Repub sweeping observations majority. by sion reached Industries, Inc., quoted by the ma lic prompted plaintiff’s jority, were J., LOHR, joins in this dissent. “compulsory arbitra broad assertion Industries, Inc., Republic tion is invalid.” plaintiff at 639. The therein as F.2d

serted that review

Case Details

Case Name: State Farm Mutual Automobile Insurance Co. v. Broadnax

Court Name: Supreme Court of Colorado

Date Published: Mar 23, 1992

Citation: 827 P.2d 531

Docket Number: 91SA175, 91SA129

Court Abbreviation: Colo.