Indiana Insurance v. Noble Ex Rel. Jordan

265 N.E.2d 419, 148 Ind. App. 297, 1970 Ind. App. LEXIS 353

• Court: Indiana Court of Appeals
• Decided: December 30, 1970
• Docket: 569A84
• Status: Published

Opinions

Sharp, J.

This action was commenced by the filing of a complaint in the Noble Circuit Court on September 25, 1968, by the Appellee, Shirley Jordan Noble, by her next friend, Earl Jordan. Said complaint alleges that on the 16th of April, 1966, Appellant, Indiana Insurance Company, issued a certain automobile liability insurance policy to the Appellee, Shirley Jordan Noble. Said complaint further alleges that on October 14, 1967, Appellant, Indiana Insurance Company, was notified by certified mail that a suit for damages had been filed by said Appellee against one Eugene Donat for injuries sustained in an accident between the Appellee and said Donat on April 20, 1966. The Appellant Company was asked to join in said suit because of the uninsured motorist clause in said insurance policy but denied any claim on said policy by the Appellee on October 25, 1967. On June 22, 1968, judgment was entered for the Appellee against Donat for the sum of $20,000.00.

On the 6th day of December, 1968, the Appellee filed its unverified motion for summary judgment supported by the affidavit of Attorney Kenneth A. King. The essential allegations of said motion for summary judgment are as follows:

“1. That it enter, pursuant to Sec. 2-2524 Burns’ Indiana Statutes Annotated, 1965 Replacement, a summary judgment in plaintiff’s favor on the ground that there in no genuine issue as to any material facts and that the plaintiff is entitled to judgment as a matter of law;

“2. That, in the alternative, if summary judgment is not rendered in plaintiff’s favor upon the whole case or upon the relief asked, and trial is necessary, the Court, at the hearing on the motion, by examining the pleadings and evidence before it, and by interrogating counsel ascertain what material facts are actually in good faith controverted, and, thereupon, make an Order specifying the facts that appear without substantial controversy and directing such further proceedings in the action as are just;

“3. That this motion is based on the undisputed following facts and admitted by the defendant;

a. That there was in effect at the time of the accident a policy of insurance carrying an uninsured motorists clause in the amount of Ten Thousand Dollars ($10,000) and on which a premium of Three Dollars ($3.00) was paid for said insurance;

b. That there was also in effect at said time a medical payment clause in said insurance policy in the amount of One Thousand Dollars ($1000) for which the premium was paid in the amount of Fifteen Dollars ($15.00) by the defendant;

c. That the plaintiff recovered judgment against Eugene Donat and that said Eugene Donat did not have any insurance

The essential allegations of the affidavit of Kenneth A. King are as follows

“1. That the defendant, through his agent, K. L. Zimpleman, Claims Supervisor, by oral conversation and by writing was notified at the time the suit of Shirley Jordan by her next friend, Earl Jordan against Eugene Donat was filed and that said defendant refused to enter into said law suit;

“2. That said defendant did admit, through his agent, K. L. Zimpleman, Claims Supervisor and Lyle D. Brucker, Vice President of said defendant company that there was an ‘uninsured motorists clause’ in effect at the time of the accident in which a judgment was rendered against the defendant Eugene Donat for personal injury in the amount of Twenty Thousand Dollars ($20,000) ;

“3. That said defendant, through his agent Lyle D. Bruckner, Vice President admits that there was a medical expense provision in said policy and that they did pay out the sum of Four Hundred Forty Seven Dollars and Eighty Three Cents ($447.83) for medical expense;

“4. That there is no genuine issue as to any material facts and that plaintiff is entitled judgment as a matter of law.”

On the 12th day of December 1968, the Appellant Insurance Company filed an unverified “Showing in Opposition to Motion for Summary Judgment”, the essential allegations of which are:

"1. A motion for summary judgment lies only at the appropriate time when it appears there is no material issue of fact before the court.

“2. Defendant at this time has not filed answer to plaintiff’s complaint, at which time the defendant will deny that the contract referred to in plaintiff’s complaint, which is not attached to plaintiff’s complaint, is not applicable to the present suit of plaintiff.

“3. Defendant asserts that said contract upon which plaintiff relies affirmatively prohibits such an action as is brought by plaintiff to recover on a judgment secured without the written consent of this defendant.

“4. Said contract provides for conditions precedent to any action or recovery from this defendant by plaintiff, which conditions precedent have not been met by plaintiff.

“5. In no event can defendant be liable to plaintiff if in fact there is no negligence on the part of the so-called uninsured motorist, and when there is contributory negligence on the part of the plaintiff. It is respectfully submitted that the evidence will demonstrate that there was no negligence on the part of the uninsured motorist, and that there was negligence on the part of plaintiff in stopping her vehicle in a blinding rain storm in a travelled lane of the highway directly in front of the uninsured motorist’s vehicle.

“6. While defendant has not been furnished by plaintiff an exact copy of the contract of insurance upon which she relies, the defendant attaches hereto and makes a part hereof a document marked Exhibit A which purports to be a certified copy of a specimen policy believed to be the policy issued to plaintiff.

“7. Attached hereto, made a part hereof and marked Exhibit B is the affidavit of William L. Wilks based upon his personal knowledge.

“8. Attached to the affidavit of Mr. Wilks are portions of his file including the police report of the investigating police, officers, a statement of Eugene Donat, the alleged uninsured motorist, the statement of Shirley Jordan, plaintiff herein, and a letter of November 5, 1968, of explanation of the Indiana Insurance Company by Lyle D. Brucker, Vice President, to the Insurance Commissioner of Indiana.”

Said unverified showing was also supported by the affidavit of William L. Wilkes, which stated:

“1. Deponent believes that a policy of insurance was issued to plaintiff containing the terms and provisions of the family automobile policy which is a part of this showing and marked Exhibit A.

“2. Said policy of insurance, and particularly in Part IV thereof contains the following provision:

‘Coverage U — Family Protection (Damages for Bodily Injury) To pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called “bodily injury”, sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile; provided, for the purposes of this coverage, determination, as to whether the insured or such representative is legally entitled to recover such damages, and so if the amount thereof, shall be made by agreement between the insured or such representative and the company or, if they fail to agree, by arbitration.

‘No judgment against any person or organization alleged to be legally responsible for the bodily injury shall be conclusive, as between the insured and the company, of the issues of liability of such person or organization or of the amount of damages to which the insured is legally entitled unless such judgment is entered pursuant to an action prosecuted by the insured with the written consent of the company.’

“3. No agreement as provided by said policy provision was entered into between plaintiff and defendant, and no determination made as to whether the insured was legally entitled to recover such damages, nor was any arbitration proceeding instituted or finalized.

“4. The action prosecuted by plaintiff against the alleged uninsured motorist was not prosecuted with the written consent of the Indiana Insurance Company, and in fact, plaintiff’s attorney was at all times advised that the Indiana Insurance Company would not consent to said suit nor participate therein nor be bound by any judgment obtained therein.

“5. Said policy of insurance also contained the following provision;

‘Arbitration. If any person making claim hereunder and the company do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this Part, then, upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this Part.’

“6. No submission to the American Arbitration Association was ever made by anyone as required by the terms of the contract voluntarily entered into between plaintiff and defendant.

“7. In any event, even were the conditions precedent met by plaintiff, which they were not, prior to the institution of the present action, said policy of insurance limits the liability of Indiana Insurance Company to Ten Thousand Dollars ($10,000.00).

“8. A review of the file of investigation of the Indiana Insurance Company, including the statements taken of both drivers, which are attached hereto, and of the report of the investigating police officers, which report is also attached to this affidavit, indicates to the deponent that a serious question exists as to whether or not liability exists between the uninsured motorist and plaintiff by virtue of the apparent contributory negligence on the part of the plaintiff in stopping her vehicle in the travelled portion of the highway contrary to statute and common law in the face of following traffic. The police report fails to indicate negligence on the part of the uninsured motorist, but the police officers place the blame essentially on the weather conditions at the time when plaintiff’s vehicle was stopped in the travelled portion of the highway.

“9. Plaintiff’s attorney has been fully cognizant of the Indiana Insurance Company position and their refusal to consent or participate in a suit against the uninsured motorist as evidenced by the letter of explanation to the Department of Insurance by Mr. Lyle D. Brucker of Indiana Insurance Company which outlines in detail the various contacts with plaintiff’s attorney and communications with him and asserts the Indiana Insurance Company position.

“10. At the appropriate time and after plaintiff has furnished to defendant a copy of the policy upon which this action is apparently based, the defendant, through deponent, as its attorney, intends to file an answer denying that plaintiff’s failure to perform the conditions precedent to an action on the policy and by virtue of the expressed provision prohibiting the exact method being attempted by plaintiff to recover on said policy, and further intends to deny that liability exists to the plaintiff from the uninsured motorist.”

Among the facts which are disclosed by the various exhibits attached to the affidavit of William L. Wilkes is the undisputed showing that Appellant, Shirley R. Jordan, was seventeen years of age at the time of the accident in question on April 20, 1966.

On February 18, 1969, the trial court entered the following judgment:

“1. That on April 16, 1966, defendant and plaintiff entered into a contract of automobile insurance, which contained the following clauses: (The provisions of said policy of insurance above referred to are here set out). That said policy was in full force and effect on April 20, 1966, and that on said date plaintiff was involved in an automobile accident with an uninsured motorist.

“2. That on October 14, 1967, defendant was notified by certified mail that a suit for damages had been filed against said uninsured driver and that defendant was requested to join in said suit under the terms of the above policy.

“3. That on October 25, 1966, defendant refused to join in said suit and made no demand for arbitration.

“4. That on July 22, 1968, plaintiff recovered judgment against said uninsured motorist in the sum of $20,000.00, and that no part of said judgment is collectible against defendant.

“5. That the limits of liability under the said policy of insurance was $10,000.00, and that defendant has heretofore paid out $447.83 for medical expense.

“6. That there is no material issue of fact involved in this cause and that plaintiff should prevail on her motion for summary judgment as a matter of law.

“7. And that plaintiff shall have and recover from defendant the sum of $--

“It is now therefore considered, adjudged, and decreed by the court that the plaintiff shall have and recover from the defendant the sum of $9552.17, together with her costs in this matter made and taxed at $--”

The Appellant claims that the entry of said summary judgment is erroneous.

We must determine this case on the basis of the law of Indiana as it was on April 16, 1966. It is therefore elementary that Acts 1969, ch. 340, as found in Burns’ Ind. Stat. Anno., § 3-227, et seq., can have no application to this case.

The Appellant argues that Acts 1852, ch. 3, § 1, as amended by Acts 1939, ch. 22, § 1, found in Burns’ Ind. Stat. Anno. (1968 Repl.), § 3-201, applies and specifically recognizes arbitration. However, § 3-201 by its own express terms excepts infants. Under the law of Indiana a seventeen year old girl is certainly an infant in this regard. It is also undisputed from material which the Appellant Insurance Company placed before the court that. Appellant was seventeen years of age at the time the policy in question was issued and at the time of the accident. Even more liberal arbitration statutes which provide for the arbitration of future disputes have been held inapplicable to minors. McCarthy v. M.V.A. I.C., 16 App. Div. 2d 35, 224 N. Y. S. 2d 909, affirmed, 12 N. Y. 2d 922, 188 N. E. 2d 405, 238 N. Y. S. 2d 101 (1963) ; Hickey v. Insurance Co. of N. America, 239 F. Supp. 109 (D.C. Tenn. 1965) ; Kessler v. Cosmopolitan Mut. Ins. Co., 33 Misc. 2d 824, 218 N. Y. S. 2d 357 (1961) ; Scheck v. M.V.A.I.C., 40 Misc. 2d 575, 243 N. Y. S. 2d 288 (1963). See also 43 Notre Dame L.J. at p. 19. Therefore, Burns’ Ind. Stat. Anno., § 3-201, is not authority for the Appellant in this case. In addition, Burns’ Ind. Stat. Anno., § 3-201, applies to “any controversy existing” and does not provide for the arbitration of a future dispute.

In 1965 the Indiana General Assembly by Acts 1965, ch. 138, as found in Burns’ Ind. Stat. Anno. (1965 Repl.), §39-4310, provided:

“No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability-imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in Acts 1947, chapter 159, sec. 14 [§ 47-1057], as amended heretofore and hereafter, under policy provisions approved by the commissioner of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; Provided, That the named insured shall have the right to rej ect such coverage (in writing) and Provided further, That unless the named insured thereafter requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer. [Acts 1965, ch. 138, § 1, p. 215.]”

The provisions of the above statute must be considered a part of every automobile liability policy the sanie as if written specifically therein. Bonfils v. Pacific Auto. Ins. Co., 165 Cal. App. 2d 152, 331 P. 2d 766 (1958) ; Page v. Insurance Co. of North America, 256 Cal. App. 2d 374, 64 Cal. Rptr. 89 (1967). Even where the policy fails to provide such uninsured motorist coverage, the insured is entitled to its benefits unless expressly waived in the manner provided by law. Voris v. Pacific Indem. Co., 213 Cal. App. 2d 29, 28 Cal. Rptr. 328 (1963). See also Eliopulos v. North River Ins. Co., 219 Cal. App. 2d 845, 33 Cal. Rptr. 449 (1963).

Where the provisions of a policy regarding uninsured motorist coverage are more restrictive than the relevant statutory provisions requiring the same, the requirements of the statute will prevail. Ampy v. Metropolitan Casualty Ins. Co., 200 Va. 396, 105 S. E. 2d 839 (1958). See also Phoenix Ins. Co. v. Kincaid, Fla. App., 199 So. 2d 770 (1987) ; Stephens v. Allied Ins. Co., 182 Neb. 562, 156 N. W. 2d 133, 26 A. L. R. 3d 873 (1968).

The legislative purpose in the enactment of statutes providing for uninsured motorist endorsement should be interpreted in the light that such endorsement is designed to protect the insured, and any operator of the insured’s automobile with insured’s consent, against any injury caused by negligence of uninsured or unknown motorists. Buck v. U.S. F. & G., 144 S. E. 2d 34, 265 N. C. 285 (1965).

Purpose and object of uninsured motorist coverage must be considered in the statutory framework of minimum coverages required by law. Carrignan v. Allstate Ins. Co., 108 N. H. 131, 229 A. 2d 179 (1967).

Uninsured motorist legislation is remedial in nature and should be liberally construed. Guthrie v. State Farm Mut. Auto. Ins. Co., 279 F. Supp. 837 (D.C. 1968) ; Katz v. American Motorist Ins. Co., 53 Cal. Rptr. 669, 224 Cal. App. 2d 886 (1966) ; Stevens v. American Service Mut. Ins. Co., D.C. App. 1967, 234 A. 2d 305; Bendelow v. Travelers Indem. Co., 293 N. Y. S. 2d 629, 57 Misc. 2d 237 (1968) ; Moore v. Hartford Fire Ins. Co. Group, 270 N. C. 532, 155 S. E. 2d 128 (1967) ; Harleysville Mut. Cas. Co. v. Blumbling, 429 Pa. 389, 241 A. 2d 112 (1968) ; Gunnels v. American Liberty Ins. Co., 161 S. E. 2d 822, 251 S. C. 242 (1968), McDaniel v. State Farm Mut. Auto. Ins. Co., 205 Va. 815, 139 S. E. 2d 806 (1965) ; State Farm Mutual Auto. Ins. Co. v. Automobile Underwriters, 371 F. 2d 999 (7th Cir. 1967) ; Arnold v. State Farm Mutual Auto. Ins. Co., 260 F. 2d 161 (7th Cir. 1958) ; Wright v. Fidelity and Casualty Co. of N.Y., 270 N. C. 577, 155 S. E. 2d 100 (1967) ; McCaffery v. St. Paul Fire and Maine Ins. Co., 108 N. H. 373, 236 A. 2d 490 (1967) ; Nationwide Mut. Ins. Co. v. Sours, 205 Va. 602, 139 S. E. 2d 51 (1964) ; Andeen v. County Mut. Ins. Co., 70 Ill. App. 2d 357, 217 N. E. 2d 814, cert. den., 385 U. S. 1036, 17 L. Ed. 682, 87 S. Ct. , reh. den., 386 U. S. 939, 17 L. Ed. 2d 812, 87 S. Ct. 953. See also 7 Appleman, Insurance Law and Practice, § 4331.

An attempt by the insurer to dilute or diminish uninsured motorist statute protection is contrary to public policy. Prosk v. Allstate Ins. Co., 82 Ill. App. 2d 457, 226 N. E. 2d 498, 25 A. L. R. 3rd 1294 (1967).

An uninsured motorist endorsement that contravenes the requirement of the statute is, to that extent, invalid regardless of the insurance department’s approval of it. Davidson v. Eastern Fire & Casualty Ins. Co., 245 S. C. 472, 141 S. E. 2d 135 (1965).

Following this enactment by the General Assembly in 1965 the insurance industry in Indiana developed certain standard coverages which pertain to uninsured motorists. The coverages which are relevant to this case are set forth in the complaint, supra.

In the trial court and in this court the arguments of the parties centered around the validity and interpretation of the so-called uninsured motorist’s coverage as above set forth. The appellee cites and relies heavily upon the decision of Judge Beamer in Lerma v. Allstate Ins. Co., 301 F. Supp. 361 (N.D. Ind. 1968), which stated in part:

The final principle enunciated by the courts of this state which bears upon this question is that a common law submission of a present dispute to arbitration may be revoked at any time prior to an award, but once an award has been made, the parties are bound thereby. Grand Rapids & I. Ry. Co. v. Jaqua (1917), 66 Ind. App. 113, 115 N. E. 73; Heritage v. State (1909), 43 Ind. App. 595, 88 N. E .114. Against this legal background, the defendant could have the court find that, where the contract provided, submission of a dispute to arbitration is a condition precedent to suit on the contract, even though the arbitration award would not be binding upon the parties. This presents two possibilities. Either the plaintiff would submit the case to arbitration but revoke the submission before an award for fear that the award would be binding under the cases just cited, or he would await the award and then attempt to maintain a suit on the contract. In either case the unwilling plaintiff would be forced to do a useless act which would add to the cost, delay and frustration of litigation. It is an axiom of the law that the court will not require a useless act, and none would be more useless than unbinding arbitration between unwilling parties.

“Furthermore, the issues to be submitted to arbitration under this type of insurance contract encompass far more than the amount of damages to be covered. By its terms, the arbitration clause would require the parties to submit legal issues of liability on the contract to persons other than a court of competent jurisdiction. Even in those cases where the Appellate Courts have upheld arbitration, it has been directed solely to the amount of damages to lie recovered. The futility of toothless arbitration is only heightened by broadening the issues to be determined. The court finds that under Indiana law, a contractual provision such as this, requiring future disputes to be submitted to arbitration which is not and cannot be binding, is of no effect.

“The court recognized that the legislature of this state has provided for a statutory submission of present disputes to arbitration. Burns’ Indiana Statutes, § 3-201, et seq. This statute has been effective for some time and has not been construed as creating any public policy in favor of arbitration. The court also recognizes that other jurisdictions have upheld arbitration clauses such as this. Miller v. Allstate Insurance Company, 238 F. Supp. 565 (W.D. Pa. 1965); Norton v. Allstate Insurance Company, 226 F. Supp. 373 (E.D. Mich. 1964). The cases cited dealt with Pennsylvania and Michigan law respectively. Michigan has a statute, set out in the case, that validates arbitration in insurance contracts. Unfortunately, no such statute exists in Indiana, and this court is bound to follow Indiana law.

“The court, therefore, finds that the arbitration clause in question is not binding upon the parties and that arbitration is not a condition precedent to maintenance of this lawsuit.”

We believe that the reasoning and result which Judge Beamer reached in Lerma is substantiated by a well recognized body of case law. In at least thirteen states the common law has been modified only insofar as to sanction agreements to arbitrate present disputes. Indiana is clearly one of those states as reflected in Burns’ Ind. Stat. Anno., § 3-201. In jurisdictions such as Indiana, at the time of this dispute, the validity of agreements to arbitrate future disputes has generally been held invalid. Therefore, under the law of Indiana as it applies to this case, the uninsured motorist’s coverage in question is an agreement to arbitrate a future dispute and is therefore invalid. This result was generally contemplated early in the development of uninsured motorist’s coverage. In the 1960 proceedings of the American Bar Association, Section of Insurance, Negligence and Compensation Law, in an article entitled “Recovery Procedure Under Uninsured Motorist”, at page 285 it is stated:

“The administration of law by arbitration is very popular but it is to be noted that in some jurisdictions arbitration procedure is not in harmony with the law of the place where the coverage might be executed. An arbitration agreement cannot restrict one of the parties from enforcing his rights by the usual legal proceedings in an ordinary tribunal. In Oklahoma, Arkansas and Illinois, and I am sure in_ other states, agreements to arbitrate future disputes are void and against public policy.”

In Boughton v. Farmers Insurance Exchange, Okla., 354 P. 2d 1085, 79 A. L. R. 2d 1245 (1960), the Supreme Court of Oklahoma which, like Indiana, did not recognize arbitration of future disputes, stated:

“In the instant case the insured made known to the insurer that she would not submit the issues to arbitration and she in no way participated in any arbitration proceedings. The arbitration provision provided a means whereby the insured and insurer would settle all future controversies as no controversies existed when the policy of insurance was issued. The arbitration provision deprived the insured of a judicial examination and determination of the issues involved and under the authority of Wilson v. Gregg, supra, we hold such provision is contrary to public policy and unenforceable and the trial court did not err in so holding.

“Since the arbitration provision was unenforceable, what effect if any, did the ‘no action’ provision have upon the rights and obligations of the insured and insurer. In this connection, Exchange, the insurer, contends no action can lie against it unless- there has been full compliance with the terms of the policy, and since insured refused to submit to arbitration she did not comply with the terms.

“We cannot sustain Exchange’s contention that if the arbitration provision is unenforceable or the ‘no action’ clause is void, all parts of the insuring agreement dealing with uninsured motorists’ coverage are void. The insured paid consideration for the insurance whereby she was protected against uninsured motorists. The primary and essential part of the contract was insurance coverage, not the procedure for determining liability. Exchange prepared the policy and is charged with knowledge that stipulations to arbitrate future controversies are unenforceable and contracts restricting a party thereto from enforcing his rights by the usual legal proceedings in the ordinary tribunals are void. If insurer imposed provisions in the policy which were unenforceable and void it cannot deny liability under the insuring agreement because of the unenforceable and void provisions. Such provisions cannot invalidate or hold for naught a liability which the insurer agreed by contract to assume. A contrary rule would, in effect, be giving legal force to provisions which are unenforceable and void. We therefore hold the insuring agreement dealing with uninsured motorists’ coverage is not void.

“Having determined the arbitration provision to be unenforceable and the ‘no action’ clause void, we must now determine if Exchange can relitigate the question of liability of the uninsured motorist and the amount of damages sustained by plaintiff. In this connection, plaintiff contends these issues can not be relitigated as the judgment against the uninsured motorist determined these issues. On the other hand, Exchange contends that even though such judgment determined the liability of the uninsured motorist and established the damages insured was entitled to recover from the uninsured motorist, such judgment is not binding on it as it was not a party to that action and such issues must be relitigated to determine Exchange’s liability.

“Exchange was not a party to the action against the uninsured motorist and it is apparent the judgment rendered therein is not binding upon Exchange in a sense that is a judgment against Exchange. However, this action is not for the collection of that judgment, but an action to recover under the terms of the policy which provides the insurer agrees ‘to pay all sums which the insured shall be legally' entitled to recover as damages from the owner or operator of an uninsured automobile.’

“Exchange became liable under the terms of the policy to pay all sums which the insured shall be legally entitled to recover; Exchange had notice of the pendency of that action and knowledge that that action was instituted for the determination of the legal liability of the uninsured motorist and the amount of damages insured was legally entitled to recover; it was furnished with a copy of the petition and a copy of the summons; it was urged to participate either in the prosecution or defense of that action, and to do whatever is felt necessary; it was notified that it would be liable under the terms of the policy for such adjudication.

“Instead of protecting its rights in that action, Exchange chose to rely on the arbitration provision and the ‘no action’ clause in the policy. We held the arbitration provision to be unenforceable and the ‘no action’ clause to be void. Therefore, should Exchange be permitted to retry and relitigate the question of damages and liability of the uninsured motorist when it agreed to pay all sums insured shall be legally entitled to recover, where such questions were litigated and determined in a previous action which Exchange had notice of and an opportunity to defend?

“Exchange agreed to pay all sums plaintiff was legally entitled to recover as damages. The judgment against the uninsured motorist determined that plaintiff was entitled to recover from an uninsured motorist and established the amount she was entitled to recover. Exchange cannot now say, under the facts of this case, that it is entitled to relitigate these issues when it agreed to pay that which has already been determined. We, therefore conclude the question of damages and legal liability of the uninsured motorist may not be relitigated in the present action and that the judgment against the uninsured motorist is conclusive of the issues therein determined, subject however, to any defenses Exchange may have against it.”

It should be noted that the language “to pay all sums which the insured shall be legally entitled to recover” is identical in Boughton and this case.

A like result was reached in Hill v. Seaboard Fire & Marine Ins. Co., Mo. App., 374 S. W. 2d 606 (1963) ; Barnhart v. Civil Service Employees Ins. Co., 16 Utah 2d 223, 398 Pac. 2d 873 (1965); American Southern Ins. Co. v. Daniel, Fla. App., 198 So. 2d 850 (1967) ; State Farm Mutual Automobile Ins. Co. v. Craig, Mo. App., 364 S. W. 2d 343 (1963); Spillman v. U.S. F. & G., La. App., 179 So. 2d 454 (1965) ; Dominici v. State Farm Mutual Ins. Co., 143 Mont. 406, 390 Pac. 2d 806 (1964) ; Levy v. American Automobile Ins. Co., 31 Ill. App. 2d 157, 175 N. E. 2d 607 (1967) ; (The result in Levy was later changed by the enactment of a new arbitration statute in Illinois) ; Childs v. Allstate Ins. Co., 237 S. C. 455, 117 S. E. 2d 867 (1961); Heisner v. Jones, 184 Neb. 602, 169 N. W. 2d 606 (1969) ; Ellison v. Safeguard Mut. Ins. Co., 209 Pa. Super. 492, 229 A. 2d 482 (1967) ; Donahue v. Associated Indem. Corp., 101 R. I. 741, 227 A. 2d 187 (1967) ; and MaCaluso v. Watson, La. App., 171 So. 2d 755 (1965).

This is a basic inter-relationship and inter-dependence between the arbitration provisions of the uninsured motorist’s coverage here involved and the related section regarding judgment obtained against the uninsured motorist without the written consent of the appellant insurance company. This inter-relationship is clearly reflected in a recent decision by the Supreme Court of Nebraska in Heisner v. Jones, 184 Neb. 602, 169 N. W. 2d 606 (1969), in which the court stated:

“We, therefore, come to the conclusion that the compulsory arbitration clause involved in this insurance policy and considered in the context of an uninsured motorist’s coverage is void and of no force and effect because it contravenes public policy expressed in German-American Ins. Co. v. Etherton, supra, in that it operates ‘to oust the courts of their legitimate jurisdiction.’ The problem then becomes: Does the insurer, Protective, have an available and adequate remedy to settle the issues of liability and damages giving rise to its contractual duty? We note here also as significant the contractual provision in which Protective becomes subrogated to the insured’s right against the tort-feasor. Its coverage is limited and the insured’s right of action may be a very valuable one both to recover damages in excess of the coverage and as a means of enforcing the contractual subrogation obligation of the insured. It, therefore, appears that if the clause in the policy requiring consent by the insurer before it becomes bound in an action between the insured and the uninsured motorist is valid, the insured, absent consent, would be compelled to bring two lawsuits to properly protect his rights. The insured would be required to sue the uninsured motorist to obtain a judgment which may be in excess of the limits on the uninsured motorist’s coverage he possesses. This lawsuit, not complying with the consent provision, would necessitate a second suit against the insurer to litigate the issues of liability and damages due from the insurer under the uninsured motorist’s clause. Such a multiplicity and confusion of issues and the attendant expense should be avoided if possible. There is no issue in this case with reference to notice or the overreaching of Protctive. The evidence shows that at all times Protective had full notice of the actions of the insured, of the suit against the tort-feasor, and that it deliberately took the position that it now takes in this case. The issue then is whether the ‘consent to be bound’ provision is valid between the insured and Protective.

“It seems to us apparent that, although separately printed and stated in the policy, the consent to be bound provision and the arbitration clause provision are mutually complementary and mutually reciprocal, and inducive to each other, and therefore must be stricken as a part of an arbitration scheme which is void as against public policy.

“We hold that the uninsured motorist carrier, Protective, is fully protected as to all of its rights by permitting it to intervene in the litigation, as was present here, between the insured and the tort-feasor. * * * It is apparent that the questions litigated and the action between the insured and the uninsured tort-feasor, for liability and damages, are the identical issues which determine liability of Protective under the insurance policy and which give rise to Protective’s contractual duty to pay the insured. Protective has a direct interest in the matter of litigation within the meaning of our intervention statute.

“Other courts faced with this same situation have come to the same conclusion. In State ex rel. State Farm Mutual Automobile Ins. Co. v. Craig, (Mo. App.), 364 S. W. 2d 343, 95 A. L. R. 2d 1321, intervention was permitted by the insurer in an action by its insured against an uninsured motorist. The court found that State Farm would be bound by the judgment on the issues of liability and damages giving rise to its contractual duty to pay sums which the insured is legally entitled to recover, and therefore concluded that the insurer may be bound by a judgment in the action within the meaning of Missouri’s intervention statute.

“In Dominici v. State Farm Mutual Automobile Ins. Co., 143 Mont. 406, 390 P. 2d 806, the Supreme Court of Montana struck down both an arbitration clause and a ‘consent to be bound’ clause and suggested that intervention would protect the insurer against being required to pay under its contract based upon a judgment where liability and damages were not adequately litigated. The court said: ‘We must admit that this, or any other, insurance carrier is thrown upon the horns of a dilemma by this interpretation of this type of insurance contract. However, this harshness may be ameliorated through the use of intervention (See State of Missouri ex rel. State Farm Mutual Automobile Insurance Co. v. Craig, Mo. App., 364 S. W. 2d 343), or possibly a plaintiff’s use of joinder. This court appreciates the problems involved in such insurance coverage and the benefits to be derived by society in general. But we cannot countenance unreasonable obstructions which restrict the use of the courts to be placed in the path of a just recovery. So long as proper and timely notice is given an insurance carrier so their rights are not prejudiced we do not feel that they are being imposed upon.’

“We therefore hold that an uninsured motorist’s carrier may intervene in an action between its insured and the uninsured tort-feasor in order to protect itself on the issues of liability and damages arising under the uninsured motorist’s provisions of its insurance policy. It is further clear that our holding herein is conditioned upon and rests upon the compliance by the insured with the fundamentals of procedural due process. The carrier would not be bound unless given full notice and adequate opportunity to intervene and defend when the insured litigates the issues of liability and damages with the uninsured motorist tort-feasor. To give the uninsured motorist’s carrier the right to intervene is to give assurance that it may litigate the issues and at the same time avoid the multiplicity of suits and the harassment of the insured by the necessity to litigate his rights twice. The terms of his contract and the uninsured motorist’s statutes imply that they need to be litigated only once. We have recently held in Stephens v. Allied Mut. Ins. Co., 182 Neb. 562, 156 N. E. 2d 133, that the proper interpretation of our statutes on uninsured motorist’s liabilities is that the uninsured motorist clause is a substitute liability policy. It is true that this may place the carrier in an inconvenient position with respect to the issues of negligence and contributory negligence. We see no difference between this situation and the common situation where the carrier has coverage on two insureds involved in the same accident. Beyond that the carrier receives a separate premium for a policy which on its face requires it to be placed in an ambivalent or inconsistent position and it therefore calculatedly assumes the inconveniences that may arise from that situation. In any event, balancing these considerations, the inconvenience of the insurer must give way to the overriding public policy expressed in our statute protecting an insured against the danger of the uninsured motorist.

“The insurer is bound by the law of the State of Nebraska and the applicable statutes. It was well aware that its arbitration clause was unenforceable and it is apparent that its ‘consent to be bound’ clause was an integral and inducing provision to enforce the requirement of arbitration. It had full notice and an opportunity to intervene but instead chose to rely upon and to test a procedure dictated in its insurance policy provisions which would oust the courts of their jurisdiction and subject their own insured to the harassment and confusion of a multiplicity of suits which is contrary to the basic public policy of the state requiring the insurer to the extent of the coverage required to provide a substitute liability policy for the uninsured motorist tort-feasor.” (Emphasis supplied)

The only definitive treatise on uninsured motorists was published in 1969' by Professor Alan I. Widiss titled A Guide to Uninsured Motorist Coverage. In regard to the consent to sue clause Professor Widiss states at page 258:

“When the enforceability of the permission to sue clause was questioned, many courts upheld it, generally on the ground that the endorsement sets out this provision in clear and unambiguous language. However, at least one court has decided that the claimant was not barred from recovering under the endorsement if he could show that the breach was not prejudicial to the insurance company. And still other decisions concluded that this clause is void or unenforceable, based on one or more of the following rationales:

(1) that it is generally against public policy for the insurance company to restrict the insured’s right to trial by jury of the action against a negligent motorist ; or

(2) that since the insured may be able to collect directly from the negligent motorist (without recourse to the insurance company), he ought to be permitted to make the attempt; or

(3) that since the agreement to arbitrate is enforceable, the insured should be entitled to a determination of the issues of fault and damages in a suit against the uninsured motorist.

In general the opinions in the foregoing cases seem to reflect the idea that the insured should not be prevented or discouraged from attempting to recover directly from the uninsured motorist, and that he should not be penalized for his efforts so long as the position of the insurance company is not prejudiced by his attempt.

“The courts which have invalidated the permission to sue clause have done so in jurisdictions where the arbitration clause is unenforceable. * *

On the basis of the reasoning and authorities in Heisner v. Jones, supra, as substantiated by Professor Widiss, we believe that the consent to sue provision must fall with the arbitration clause because of their fundamental interdependency.

If the arbitration clause in the uninsured motorist coverage is invalid as we have here determined, then the insured, Appellee here, obviously must have the right to pursue her claim against the Appellant Insurance Company if no settlement of the claim is possible. The real question relates to what course of action the insured-claimant must pursue against the Insurance Company. In several cases insurance companies have argued that the insured-claimant must secure a determination of the issues of fault and damages by suing the uninsured motorist before bringing an action against the insurance company under the uninsured motorist’s coverage. This approach has been rejected in the following cases: Hickey v. Insurance Co. of N.A., 239 F. Supp. 109 (E.D. Tenn. 1965) ; Wortman v. Safeco Ins. Co., 227 F. Supp. 468 (E.D. Ark. 1963) ; Hill v. Seaboard Fire and Marine Cas. Ins. Co., Mo. App., 374 S. W. 2d 606 (1963) ; State ex rel. State Farm Mut. Auto. Ins. Co. v. Craig, Mo. App., 364 S. W. 2d 343 (1963) ; Application of Travelers Indem. Co., 226 N. Y. Supp. 2d 16 (1960) ; Wright V. Fid and Cas. Co. of N.Y., 270 N. C. 577, 155 S. E. 2d 100 (1967) ; Barnhart v. Civil Service Employees Ins. Co., 16 Utah 2d 223, 398 P. 2d 873 (1965).

Under the relevant case law the insured-claimant who has a claim against an uninsured motorist has the following options open to him:

1. He may file an action directly against his insurance company without joining the uninsured motorist as a party defendant and litigate all of the issues of liability and damages in that one action. Wortman v. Safeco Ins. Co., supra; Hill v. Seaboard Fire and Marine Ins. Co., supra; Boughton v. Farmers Ins. Exchange, supra; Travelers Indemnity Co. v. Debose, 226 N. Y. S. 2d 16 (1960) ; and State Farm Mutual Auto. Ins. Co. v. Matlock, Tex. Civ. App., 446 S. W. 2d 81 (1969). See also Lawrence v. Continental Ins. Co., La. App., 199 So. 2d 398 (1967).

2. He may file an action joining both the uninsured motorist and the insurance company as party defendants and litigate all of the issues of liability and damages in that action. See American Fid. Fire Ins. Co. v. Hartford Accident and Indem. Co., S. C., 163 S. E. 2d 926 (1968), and Widiss page 273. See also, Hill v. Seaboard Fire and Marine Ins. Co., supra.

3. He may file an action against the uninsured motorist alone without j oining the insurance company as a party defendant and litigate the issues of liability and damages. In such case he gives preliminary and adequate notice of the filing and pendency of such action to the insurance company so that they make take appropriate action including intervention.

4. He may file an action against the uninsured motorist and give no notice to the insurance company.

There can be no question that under options one and two the insurance company is bound by the determination of the issues of liability and damages after all appellate remedies are exhausted. The question, therefore, in this case is whether or not the insurance company is bound by the determination of liability and damages in the situation generally described in option three. There can be no question that the insurance company is not bound by the results in option four.

The insurance company had a right to intervene in the case brought by the insured against the uninsured motorist. Wert v. Burke, 47 Ill. App, 2d 453, 197 N. E. 2d 717 (1964) ; State ex rel. State Farm Mut. Ins. Co. v. Craig, supra; Dominici v. State Farm Mut. Auto. Ins. Co., 143 Mont. 406, 390 P. 2d 806 (1964) ; Alston v. Amalgamated Mut. Cas. Co., 53 Misc. 2d 390, 278 N. Y. S. 2d 906 (1967) ; Lamb v. Horwich, 48 Ill. App. 2d 251, 198 N. E. 2d 194 (1964) ; Matthews v. Allstate Ins. Co., 194 F. Supp. 459 (E.D. Va. 1961) ; State Farm Mut. Auto. Ins. Co. v. Jiles, 115 Ga. App. 193, 154 S. E. 2d 286 (1967); State Farm Mut. Auto Ins. Co. v. Glover, 113 Ga. App. 815, 149 S. E. 2d 852 (1966) ; Heisner v. Jones, 184 Neb. 602, 169 N. W. 2d 606 (1969) ; Boughton v. Farmers Ins. Exchange, supra. See also cases collected in 95 A. L. R. 2d 1330. I believe the above cases state the desirable rule. For summation of contra authority, see Allstate Ins. Co. v. Hunt, Tex. App., 450 S. W. 2d 668 (1970).

The insurance company was fully advised in detail as to the filing and pendency of the lawsuit by the insured against the uninsured motorist. The insurance company chose to ignore the litigation although the insurance company was certainly no stranger to the dispute. In this regard Professor Widiss at page 268 of A Guide to Uninsured Motorist Coverage states:

“In the event the insured elects to bring an action against the uninsured motorist, many jurisdictions will allow the insurance company which has issued uninsured motorist coverage to intervene for the purpose of presenting defenses on behalf of the uninsured motorist or joining in the defense. Depending on jurisdiction, such intervention may be a matter of right or may depend on permission of the court.

If the insurance company intervenes as a defendant in the insured’s action against the uninsured motorist, by necessity the issues of (1) whether the insured is legally entitled to recover from the uninsured motorist and (2) the amount of such recovery will definitely be resolved as between the insured and the company (as well as between the insured and the uninsured motorist). Therefore, in all probability nothing is left for a subsequent arbitration or litigation.

It seems reasonable to predict that most courts will not give effect to the clause that no judgment against any person or organization will be conclusive as between the company and the insured, especially if the insurer has intervened. While either the claimant or the insurer might argue that in some jurisdictions technically the judgment in such a case is still between the insured and the uninsured, it seems likely that most courts would look through such an argument.”

As is well pointed out in the Heisner case there are very good reasons to avoid an attempt to fit the facts of this case neatly in the classical molds of res judicata as set forth in Mayhew v. Deister, 144 Ind. App. 111, 244 N. E. 2d 448 (1969). Given the insurance company’s right to intervene and its failure and refusal to do so, and given its obvious knowledge of and interest in the case against the uninsured motorist, there is no good reason to put the burden on the insured to relitigate the same issues in a second suit against the insurance company. It is sound legal policy to avoid multiplicity of suits and resolve disputes in one case where possible.

Our decision here is bolstered by the reasoning and result by the Supreme Court of Nevada in Allstate Insurance Co. v. Pietrosh, 454 P. 2d 106 (1969) at page 108:

“An insured who is legally entitled to recover damages from the owner or operator of an uninsured vehicle would seem to have several options available to secure such relief. He may settle his claim with his insurance company; settle with the uninsured motorist; arbitrate with his insurance company; sue his insurance company; sue the uninsured motorist; or sue both, joining them as codefendants. These options, however, are not always open, and whatever course is selected by the insured may engender problems since other policy provisions and state law sometimes provide barriers. For example, settlement with his insurance company may involve that company’s right of subrogation should the insured thereafter proceed against the uninsured motorist. Settlement with the uninsured motorist may require the consent of the insurance company. Arbitration may not be available because of state law. Litigation against the uninsured motorist may be precluded unless consent of the insurance company is obtained. Suit against the uninsured motorist and the insurance company as codefendants may raise problems of joinder and conflicting interests.

The policy before us provides for arbitration in the event of disagreement and upon written demand of either insured or insurer. Since neither demanded arbitration the enforceability of that provision is significant only to the extent that it bears upon the ‘consent’ endorsement — -a matter to which we now turn our attention.

At trial a factual dispute arose as to which of two amendatory ‘consent’ endorsements to the original policy of insurance was applicable at the time of the accident. The district court did not resolve that dispute. Allstate contended that the ‘permission to sue’ clause was in effect. This was an exclusion from coverage provision stating: ‘This section of the policy does not apply to bodily injury of an insured with respect to which such insured or his representative shall, without the written consent of Allstate, make any settlement with, or prosecute to judgment any action against, any person or organization who may be legally liable therefor; * * * *

The insureds urged that a revised endorsement was in force which provided that ‘no judgment against any person or organization alledged to be legally responsible for the bodily injury shall be conclusive, as between the insured and the company of the issues of liability of such person or organization or of the amount of damages to which the insured is legally entitled unless such judgment is entered pursuant to an action prosecuted by an action prosecuted by an insured with the written consent of the company.’ This endorsement, if applicable, would have appeared in the coverage section of the policy.

The first mentioned endorsement was designed to defeat coverage should the insured prosecute an action to judgment against the uninsured motorist without the consent of Allstate. Under the revised endorsement a prosecution to judgment is not treated as an event that will defeat coverage. Its purpose is to preclude the binding effect of such judgment upon the insurance company.

Since the district court failed to decide which of the two endorsements was in effect, we shall consider each of them.

The permission to sue endorsement. Some courts have ruled that the permission to sue clause is void, if the arbitration clause is not enforceable. Boughton v. Farmers Ins. Exchange, 354 P. 2d 1085, 79 A. L. R. 2d 1245 (Okl. 1960) ; Dominici v. State Farm Mutual Auto Ins. Co., 143 Mont. 406, 390 P. 2d 806 (1964) ; State ex rel. State Farm Mut. Auto. Inc. Co. v. Craig, 364 S. W. 2d 343, 95 A. L. R. 2d 1321 (Mo. App. 1963). The reasoning is that if arbitration is not available the insured should be entitled to a court determination of fault and damage in a suit against the uninsured motorist; or that it is against public policy to preclude the insured’s right to trial by jury of his claim against the uninsured motorist. These cases are not particularly persuasive since we have decided that a pre-1967 provision for arbitration is enforceable in this state.

The permission to sue endorsement was litigated in two Illinois cases, Levy v. American Auto Ins. Co., 31 Ill. App. 2d 157, 175 N. E. 2d 607 (1961), and Andeen v. Country Mutual Ins. Co., 70 Ill. App. 2d 357, 217 N. E. 2d 814 (1966). The Levy case was decided before Illinois adopted a statute approving agreements to arbitrate future disputes. The Andeen decision was handed down after the enactment of that statute. In each instance the exclusion was held not to bar an action when the insurance company furnished no reason for its refusal to allow the insured to obtain a judgment against the uninsured motorist. In Levy, the court wrote: ‘* * * * the condition of the company’s promise to pay is the ascertainment of the legal liability of the third party. The company can prevent this determination by the simple devise of refusing to grant the insured its written consent to prosecute the action to judgment. There was an implied promise on the part of the Insurance Company that it would not unreasonably or arbitrarily withhold its written consent. The company gave no reason for its refusal to allow the plaintiffs to obtain a judgment against the uninsured motorist.’ 175 N. E. 2d at 611. And in Andeen, where the insurance company was notified of the filing of suit against the uninsured motorist, and did nothing, the court approved the lower court’s remark that the insurance company should have consented to suit or demanded arbitration. Failing to do either, it was bound by the judgment.

Those decisions are on point. Although informed of the accident shortly after it happened, Allstate apparently did nothing. The record does not disclose an attempt to settle the insureds’ claim. When notified of the litigation, no move was made to intervene therein (cf. State ex rel. State Farm Mut. Auto. Ins. Co. v. Craig, 364 S. W. 2d 343, 95 A. L. R. 2d 1321 (Mo. App. 1963), demand arbitration, or consent to the suit. This, we think, was unreasonable conduct on its part which we cannot condone.

An insurance policy is not an ordinary contract. It is a complex instrument, unilaterally prepared and seldom understood by the insured. The parties are not similarly situated. The company and its representatives are expert in the field; the insured is not. Prudential Insurance Co. v. Lamme, 83 Nev. 146, 148, 149, 425 P. 2d 346 (1967). For this reason we do not hesitate to place the burden of affirmative action upon the insurance company. When notified of a claim it should investigate with reasonable dispatch; demand arbitration if that is its desire and settlement can’t be reached; consent to suit against the uninsured motorist when notified of its pendency; or seek leave to intervene and present its contentions. Multiple litigation is not desirable. In short, the insurance company may not ignore its insured and then seek refuge in the fine print of its policy. We hold that the permission to sue endorsement, if in effect at the time of the accident, does not bar recovery in the circumstances of this case.

The revised endorsement. The aim of this endorsement is to preclude the binding effect of a judgment against the uninsured motorist upon the insurance company. The notion is that although the insured may litigate against the uninsured motorist without the insurance company’s permission, any judgment secured will not obviate the necessity for him to arbitrate with or sue his company in order to collect under the policy. The provision is reasonable when the insurance company is not notified of the litigation and is, therefore, without compulsion to intervene, demand arbitration, or take other steps. Its enforcement may be appropriate in a case where the insured secures a default judgment against the uninsured motorist, since an adversary determination of liability and damages is absent. MFA Mutual Ins. Co. v. Bradshaw, 431 S. W. 2d 252 (Ark. 1968). However, where the company is given notice of the action, has the opportunity to intervene, and judgment is thereafter obtained against the uninsured motorist in an adversary proceeding, we hold that the company should be bound thereby despite the contrary policy provision.

We recognize that our holding on this point subverts the requirement of privity normally present with an application of the doctrines of res judicata or collateral estoppel. Privity is absent here. Our holding also forces intervention. However, the avoidance of multiple litigation carries the greater weight. We therefore conclude that the revised endorsement, if in effect at the time of the accident, does not preclude the judgment entered below.”

Allstate Ins. Co. v. Pietrosh, supra, is more persuasive simply because its jurisdiction recognizes arbitration of future disputes, which Indiana did not at the time of this case.

In this case since the insurance company was fully advised as to the filing and pendency of the suit against the uninsured motorist and chose to take no action at all, we hold that in the absence of any showing of fraud, misrepresentation or collusion that the judgment against the uninsured motorist is binding upon the insurance company. See Boughton v. Farmers Ins. Exch., Levy, Childs, Dominici v. State Farm, Allstate Ins. Co. v. Pietrosh.

The record is clear and undisputed in this case that neither the Appellant insurance company or the Appellee insured at any time made an explicit demand for arbitration. Even if the arbitration clause were valid there is a wealth of case law that holds that such constitutes a waiver of arbitration. See 7 Am. Jur. 2d, Automobile Ins., § 139, p. 466; American Southern Ins. Co. v. Daniel, Fla. App., 198 So. 2d 850 (1967) ; Paroy v. Royal Globe Ins. Co., 217 A. 2d 916, 90 N. J. Sup. 454 (1966) ; Allstate Ins. Co. v. Pietrosh, supra; U.S.F. & G. v. Williams, Fla. App., 177 So. 2d 47 (1965) ; Schramm v. Cotz, 23 Wisc. 2d 678, 127 N. W. 2d 779 (1964) ; McCarthy v. M.V.A.I.C., supra. (In the latter case the court held that where neither party served a demand for arbitration, the same was deemed waived).

The record in this case discloses a dispute over the applicable rules of law and no genuine issue as to any material fact is presented. This case is basically in the same posture as Heeter v. The Western Boone County Community School Corp., 147 Ind. App. 153, 259 N. E. 2d 99 (1970) ; Western Casualty and Surety Co. v. State, 146 Ind. App. 431, 256 N. E. 2d 398 (1970) ; Cassidy v. Cain, 145 Ind. App. 581, 251 N. E. 2d 852 (1969); Humphrey v. Commonwealth Life Ins. Co., 145 Ind. App. 341, 251 N. E. 2d 45 (1969) ; Schill v. Choate, 144 Ind. App. 543, 247 N. E. 2d 688 (1969) ; Security Credit Acceptance Corp. v. State of Indiana, 144 Ind. App. 558, 247 N. E. 2d 825 (1969) ; Pan American World Airlines v. Local Readers Service, 143 Ind. App. 370, 240 N. E. 2d 552 (1968); and Wagoner v. Wagoner, 147 Ind. App. 696, 263 N. E. 2d 657, (11-19-70).

In regard to the legal issues we believe the trial court reached the correct conclusion, as a matter of law, and that the granting of summary judgment should be affirmed.

Hoffman, P. J. and Pfaff, J., concur; White, J., dissents with opinion.