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In a case where both parties had waived objections to the trial court deciding an offset, the Washington Supreme Court held that a judge has the power to concomitantly confirm an arbitration award and decide any applicable offsets.
In Sherry v. Financial Indem. Co., No. 78667-4, 2007 WL 1631437 (Wash. June 7, 2007), Sherry was struck by a car driven by an uninsured motorist. Sherry had uninsured motorist coverage through Financial Indemnity Company (FIC). Sherry and FIC disagreed over the benefit amount owed to Sherry and submitted their dispute to arbitration. The arbitrator awarded Sherry $42,938.38.
Sherry moved to confirm the award. FIC asked the trial judge to amend the award to reflect Personal Injury Protection (PIP) benefits it had already paid. Both Sherry and FIC waived any objections to the trial judge deciding the offset issue during the confirmation action.
The judge issued a judgment in Sherry's favor for $34,792.38, which included an offset for PIP payments made by FIC, less a pro rata portion of Sherry's attorney fees. Sherry appealed. The appellate court ruled FIC had not fully compensated Sherry for his injuries and was therefore not entitled to an offset. FIC petitioned for review.
The Court held, "a single judge may exercise both the power to confirm an arbitration award and the power to decide what balance is owing after offsets are included." Although the Court held in Price v. Farmers Ins. Co., 946 P.2d 388 (Wash. 1997), that confirming an arbitration award was a special proceeding rather than part of the trial court's general jurisdiction powers, the Court was merely referring to the trial court's statutory powers in Price.
The trial court correctly treated the matter as if both parties had joined a declaratory judgment to a motion to compel arbitration, as both parties had waived any objection. The Court therefore construed the parties' consent as an amendment to the initial pleadings.
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