Filed 7/24/20
                     CERTIFIED FOR PUBLICATION




       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                      SECOND APPELLATE DISTRICT

                              DIVISION FOUR


 HELENE STORM,                             B299277
                                           (Los Angeles County
         Plaintiff and Appellant,           Super. Ct. No. BS173538)

         v.

 THE STANDARD FIRE
 INSURANCE COMPANY,

         Defendant and Respondent.



       APPEAL from an order of the Superior Court of Los Angeles
County, Georgina Torres Rizk, Judge. Reversed and remanded, with
directions.
       Robert Alan Sheinbein for Plaintiff and Appellant.
       Manning & Kass, Ellrod, Ramirez, Trester, Zubin Farinpour and
Mae G. Alberto for Defendant and Respondent.
     This appeal emanates from an underinsured motorist arbitration
between appellant Helene Storm and her insurer, respondent the
Standard Fire Insurance Company (Standard Fire). During the
pendency of arbitration, Storm served a Code of Civil Procedure section
998 offer to compromise her claim,1 which Standard Fire did not accept.
Following a two-day hearing, the arbitrator awarded Storm damages
exceeding her section 998 offer.
     Storm petitioned the trial court to have the arbitration award
confirmed as a judgment. She also requested an award for arbitration
and post-arbitration costs as a prevailing party under sections 998 and
1293.2. Because the arbitration award did not reference costs, the court
confirmed the arbitration award without costs, but suggested Storm
could request costs at a later time. When Storm subsequently filed a
memorandum of costs in the trial court, Standard Fire filed a motion to
tax costs and argued that the parties’ insurance agreement provided for
the division of costs incurred during arbitration. The court agreed that
the insurance agreement precluded recovery of costs. In light of that
finding, the court granted the motion to tax and struck Storm’s
memorandum of costs in its entirety.
     On appeal, Storm contends that the insurance agreement did not
preclude her from recovering under section 998 the costs she incurred
during the arbitration, or from recovering under section 1293.2 the
costs she incurred during the judicial proceedings to confirm the



1    Unspecified statutory references are to the Code of Civil Procedure.


                                     2
arbitration award. In response, Standard Fire argues that the
arbitration provisions of the policy precluded recovery of arbitration
costs under section 998 (it does not mention post-arbitration costs under
section 1293.2), and that in any event Storm’s failure to request
arbitration costs from the arbitrator precluded recovery from the trial
court.
     We conclude that the relevant policy language, which stated that
“[e]ach party will . . . [p]ay the expenses it incurs [in arbitration]” and
“[b]ear the expenses of the arbitrator equally,” does not preclude the
recovery under section 998 of arbitration costs, or the recovery under
section 1293.2 of post-arbitration costs. In short, specifying how the
costs are to be paid in first instance says nothing about whether such
costs may be recouped later under the cost-shifting provisions of
sections 998 or 1293.2.
     We further conclude that the insurance policy strictly limited the
decisional authority of the arbitrator to two issues—Storm’s entitlement
to damages, and the amount thereof. It did not give the arbitrator the
power to award costs. Thus, we find the decision in Heimlich v. Shivji
(2019) 7 Cal.5th 350 (Heimlich) distinguishable. The arbitration
agreement in that case granted the arbitrator powers broad enough to
encompass an award of costs, and thus the failure to request costs from
the arbitrator precluded recovery. That holding does not apply here,
given the very limited issues that the parties agreed to submit to
arbitration. Accordingly, we reverse the trial court’s order striking
Storm’s memorandum of costs and remand the matter with directions



                                      3
for the trial court to consider whether the costs as claimed by Storm are
recoverable within the meaning of sections 998 and 1293.2.


         FACTUAL AND PROCEDURAL BACKGROUND
     Storm was injured after the car she was driving was struck by
another motorist. When the motorist’s insurer paid a policy limit lower
than Storm’s own insurance coverage, she filed an underinsured
motorist claim with her insurer, Standard Fire.
     Standard Fire disputed the amount of Storm’s claimed damages.
The parties arbitrated the claim based on Storm’s uninsured motorist
insurance agreement with Standard Fire. The insurance agreement set
forth numerous paragraphs under a heading entitled “ARBITRATION.”
The first paragraph stated that if Standard Fire and Storm did not
agree “1. Whether [Storm] is legally entitled to recover damages under
this coverage; or [¶] 2. As to the amount of damages,” the matter would
be settled by an arbitrator, whose decision would be binding as to the
legal entitlement of damages and the amount thereof. The second
paragraph provided that “[e]ach party will: [¶] 1. Pay the expenses it
incurs; and [¶] 2. Bear the expenses of the arbitrator equally.”
     During the pendency of arbitration, Storm served Standard Fire a
section 998 offer to compromise her claim for $195,000. The offer
expired without Standard Fire’s acceptance, and the matter went to
arbitration. Following a hearing, the arbitrator awarded Storm
$219,976.08 for past medical and general damages.
     Storm filed a petition in the superior court to confirm the
arbitration award, and for an award of an unspecified amount of costs

                                    4
Storm had incurred during the arbitration and post-arbitration
proceedings. Standard Fire opposed the petition, and argued that it
was an improper attempt to confirm costs because Storm had not
requested costs from the arbitrator, and the award did not reference
costs. In her reply, Storm argued that the arbitration was limited to
ascertaining the amount of recoverable damages exclusive of costs. The
court granted the petition confirming the arbitration award “without
reference to the costs requested” by Storm, but suggested that Storm
could “determine whether to bring any additional motion or file
anything else.” The court entered judgment confirming the award,
without costs, on April 10, 2019.
     Storm subsequently filed a memorandum of costs totaling
$39,960.02 and a motion to augment the judgment with costs. The
requested costs were for filing fees for Storm’s petition to confirm the
arbitration award and motion to augment the judgment ($123.30);
expert fees of four doctors who testified at the arbitration ($23,450);
court reporter and interpreter fees incurred during the arbitration
($525 and $335); electronic filing and service fees ($31.20); and Storm’s
portion of the arbitrator’s fee ($14,793.75).
     Standard Fire filed a motion to tax costs and an opposition to the
motion to augment the judgment. It asserted that Storm was precluded
from recouping any costs because the insurance agreement provided
that each party “will pay the expenses it incurs.”
     Storm opposed the motion to tax costs and argued that the
insurance agreement did not bar recovery of costs. In the alternative,
Storm argued the policy language was contrary to the statutory right of

                                     5
prevailing parties to recoup costs under sections 998, 1032, 1033.5,
1293.2, and Civil Code section 3291.
     In its reply, Standard Fire asserted that the Supreme Court’s
recent decision in Heimlich, supra, 7 Cal.5th 350, precluded Storm from
recovering costs because she failed to request them from the arbitrator
in the first instance. As we shall discuss, the Heimlich court held that
when the parties do not limit the issues to be arbitrated, the party
seeking arbitration costs must first request them from the arbitrator
prior to requesting them from the trial court. (Id. at p. 358.)
     On May 24, 2019, the court granted Storm’s motion to augment
the judgment with costs “subject to a hearing on [Standard Fire’s]
motion to tax.” At the motion to tax hearing on July 3, 2019, Storm
argued that the insurance agreement was silent on the right to recover
costs as stated in sections 998 and 1293.2, and that she did not waive
such a right. To the extent the court interpreted the language to bar
recovery of costs, Storm argued the language was unenforceable
because it defeated her reasonable expectation and constituted an
unduly oppressive provision in violation of public policy. Standard Fire
suggested that while section 998 applied to judicial arbitrations, it did
not apply to contractual arbitrations (“the situation we’re dealing with
here is a contractual arbitration”).
     Following argument of counsel, the court granted the motion to
tax costs and struck Storm’s memorandum of costs in its entirety. The
court found the policy language requiring each party to pay their own




                                       6
fees or expense was “consistent” with section 1284.2.2 In light of that
finding, the court did not consider whether the requested costs were
reasonable or necessarily incurred within the meaning of sections 998
or 1293.2. The court entered an amended judgment on July 22, 2019.
      Storm filed timely notices of appeal from the orders and
judgments of May 24, July 3, and July 22, 2019.


                               DISCUSSION
      Storm contends that the trial court’s interpretation of the
insurance agreement was erroneous. We agree. As we explain, the
policy language providing that the arbitrator decides the legal
entitlement of damages and the amount thereof, and also providing that
“[e]ach party will . . . [p]ay the expenses it incurs; and [¶] . . . [b]ear the
expenses of the arbitrator equally,” did not limit Storm’s ability under
section 998 to recoup costs she incurred during the arbitration. Nor did
the insurance agreement limit her ability under section 1293.2 to
recoup costs she incurred during the judicial proceedings to confirm the
arbitration.




2      Section 1284.2 provides that “[u]nless the arbitration agreement
otherwise provides or the parties to the arbitration otherwise agree, each
party to the arbitration shall pay his pro rata share of the expenses and fees
of the neutral arbitrator, together with other expenses of the arbitration
incurred or approved by the neutral arbitrator, not including counsel fees or
witness fees or other expenses incurred by a party for his own benefit.”


                                       7
1.   Governing Law on Arbitrations of Underinsured Motorist Claims
     and the Cost-Recovery Provisions of Sections 998 and 1293.2

     The Uninsured Motorist Act (Ins. Code, § 11580.2 et seq.) requires
auto insurance policies to provide underinsured motorist coverage for
motorists whose liability insurance is less than the limits carried on the
injured motorist’s insurance plan. (Id., § 11580.2, subd. (p)(2).)
     Coverage disputes for underinsured motorists are subject to
contractual arbitration. (Ins. Code, § 11580.2, subd. (f).) Absent
language in the insurance agreement expanding the issues to be
arbitrated (Rangel v. Interinsurance Exch. (1992) 4 Cal.4th 1, 11),
underinsured motorist arbitrations contemplate only two issues—
“whether the insured shall be legally entitled to recover damages, and if
so entitled, the amount thereof.” (Ins. Code, § 11580.2, subd. (f).) In
this context, the term “damages” refers to the amount of damages the
insured is entitled to recover from the underinsured motorist; “‘it does
not include determination of the extent of coverage and the amount of
money the insurance company is obligated to pay the insured.’”
(Weinberg v. Safeco Ins. Co. of America (2004) 114 Cal.App.4th 1075,
1082 (Weinberg), italics omitted, disapproved on another ground in
Barnett v. First National Ins. Co. of America (2010) 184 Cal.App.4th
1454; accord Croskey et al., Cal. Practice Guide: Insurance Litigation
(The Rutter Group 2019) ¶ 6:2416.1, p. 6G-71.)
     Because underinsured motorist arbitrations are contractual in
nature, the parties to an underinsured motorist insurance agreement
may contract for their own division of arbitration costs consistent with
the California Arbitration Act (CAA) (§ 1281 et seq.). Section 1284.2 of

                                     8
the CAA provides that “[u]nless the arbitration agreement otherwise
provides or the parties to the arbitration otherwise agree, each party to
the arbitration shall pay his pro rata share of the expenses and fees of
the neutral arbitrator . . . not including counsel fees or witness fees or
other expenses incurred by a party for his own benefit.” (Accord, Austin
v. Allstate Ins. Co. (1993) 16 Cal.App.4th 1812, 1815 (Austin) [section
1284.2 “sets forth the legislative policy of this state that arbitration
costs are to be borne by the party incurring them, unless the arbitration
agreement provides otherwise”].)
     However, the application of section 1284.2 to underinsured
motorist arbitrations is not inconsistent with applying the cost-shifting
provisions of section 998 for recovery of costs incurred during the
arbitration. (Pilimai v. Farmers Ins. Exchange Co. (2006) 39 Cal.4th
133, 142 (Pilimai) [“We . . . conclude that an uninsured motorist
arbitration pursuant to Insurance Code section 11580.2 is an
‘arbitration’ within the meaning of Code of Civil Procedure section 998
and subject to the latter statute’s cost-shifting provisions”].)
     Section 998 provides: “(b) Not less than 10 days prior to
commencement of trial or arbitration . . . of a dispute to be resolved by
arbitration, any party may serve an offer in writing upon any other
party to the action to allow judgment to be taken or an award to be
entered in accordance with the terms and conditions stated at that
time. [¶] . . . [¶] (d) If an offer made by a plaintiff is not accepted and
the defendant fails to obtain a more favorable judgment or award . . . ,
the court or arbitrator, in its discretion, may require the defendant to
pay a reasonable sum to cover postoffer costs of the services of expert

                                      9
witnesses . . . in addition to plaintiff’s costs.” The other cost-shifting
provision at issue in this case, section 1293.2, provides that “[t]he court
shall award costs upon any judicial proceeding under” the CAA to
confirm, correct, or vacate an arbitration award. (See Austin, supra, 16
Cal.App.4th at pp. 1815–1816) [“the Legislature has distinguished
between costs incurred in an arbitration proceeding and costs incurred
in superior court to enforce an arbitration award”].)


2.    Recoupment of Costs Incurred During Arbitration
      We consider first whether the policy prohibits Storm from
recovering the costs of arbitration under section 998.
      To determine the meaning of the insurance agreement, we review
it de novo and adhere to well-established rules of contract
interpretation. (The Ratcliff Architects v. Vanir Construction
Management, Inc. (2001) 88 Cal.App.4th 595, 602 (Ratcliff Architects).)
The rules of contract interpretation “‘are based on the premise that the
interpretation of a contract must give effect to the “mutual intention” of
the parties. “Under statutory rules of contract interpretation, the
mutual intention of the parties at the time the contract is formed
governs interpretation. (Civ. Code, § 1636.) Such intent is to be
inferred, if possible, solely from the written provisions of the contract.
(Id., § 1639.) The ‘clear and explicit’ meaning of these provisions,
interpreted in their ‘ordinary and popular sense,’ unless ‘used by the
parties in a technical sense or a special meaning is given to them by
usage’ (id., § 1644), controls judicial interpretation. (Id., § 1638.)”’



                                      10
[Citation.]” (Ameron Internat. Corp. v. Insurance Co. of State of
Pennsylvania (2010) 50 Cal.4th 1370, 1378 (Ameron).)
     “An insurance policy provision is ambiguous when it is susceptible
of two or more reasonable constructions. [Citation.] If ambiguity exists,
however, the courts must construe the provisions in the way the insurer
believed the insured understood them at the time the policy was
purchased. (Civ. Code, § 1649.) In addition, if, after the court evaluates
the policy’s language and context, ambiguities still exist, the court must
construe the ambiguous language against the insurer, who wrote the
policy and is held ‘“responsible”’ for the uncertainty. [Citation.]”
(Ameron, supra, 50 Cal.4th at p. 1378.) We will not to add a term to an
agreement about which it is silent. (Ratcliff Architects, supra, 88
Cal.App.4th at p. 602; see Civ. Code, § 1641.)
     Here, by their plain meaning, the relevant provisions of the
insurance agreement do not limit Storm’s ability to recover costs under
section 998. The policy language provides that each party shall “pay”
its own arbitration expenses and shall “bear” the expense of the
arbitrator equally. The word “‘“Pay” is defined as “money [given] in
return for goods or services rendered.”’” (Ferra v. Loews Hollywood
Hotel, LLC (2019) 40 Cal.App.5th 1239, 1247, fn. 4, quoting American
Heritage Dict. (4th ed. 2000) p. 1291; see Scott v. Continental Ins. Co.
(1996) 44 Cal.App.4th 24, 29 [courts utilize dictionaries to ascertain
ordinary meaning of words].) The word “Bear” is defined as: “To hold
up; support. . . . To be accountable for.” (American Heritage Dict. (2d
College ed. 1985) p. 164.) The plain meaning of these terms makes



                                     11
clear that the parties agreed, in the first instance, to pay their own
arbitration expenses and to be equally accountable for the arbitrator’s
fee. But these terms say nothing about limiting the statutory right to
recover those expenses under sections 998’s cost-shifting provisions.
(See Ratcliff Architects, supra, 88 Cal.App.4th at p. 602 [courts will not
add terms as to which the insurance agreement is silent].)
       Moreover, to the extent there is any ambiguity (there is not), we
note that both parties have agreed that the provisions were designed to
mirror section 1284.2’s default rule for payment of arbitration costs—
that is, absent a contrary agreement, arbitration costs are to be borne
by the party incurring them.3 But, as case law makes clear, section
1284.2 provides only for the equal payment of arbitration costs; it does
not limit a party’s ability to recover those costs under section 998. (See
Pilimai, supra, 39 Cal.4th at p. 150 [“section 1284.2 does not conflict
with . . . section 998, subdivision (d)’s authorization of arbitration
plaintiffs under appropriate conditions to obtain costs incurred for their
own benefit”].) Thus, interpreting the policy in accordance with the
reasonable expectations of both parties at the time they executed the
agreement (Ameron, supra, 50 Cal.4th at p. 1378), the agreement does
not forbid Storm from recovering the costs of arbitration under section
998.



3     Standard Fire has not suggested that it harbored a different
expectation. Indeed, it has conceded in its appellate brief that “the parties’
arbitration agreement . . . , consistent with section 1284.2, expressly states
that each party pays the expenses it incurs in arbitration.”


                                       12
3.   Storm Was Not Required to Request Costs from the Arbitrator
     We now consider which decision-maker—the arbitrator or the trial
court—is required to rule on Storm’s request for arbitration expenses
under section 998. Relying on Heimlich, supra, 7 Cal.5th 350, Standard
Fire asserts that Storm cannot recover costs because she failed to
request them from the arbitrator. However, Heimlich and the decisions
on which it relied were dictated by the broad powers given to the
arbitrator by language of the arbitration agreements at issue. Because
the arbitration provisions of the policy at issue here are more limited
(submitting only the questions of entitlement to damages and the
amount thereof to the arbitrator), Heimlich is inapposite.
     In Heimlich, an engineer hired an attorney pursuant to a
representation agreement that provided for arbitration “of all disputes,
including those involving legal fees.” (Heimlich, supra, 7 Cal.5th at
p. 357.) After the attorney sued the engineer for $125,000 in
outstanding legal fees, the engineer made two section 998 offers to
compromise ($30,001 and $65,001, respectively), which the attorney did
not accept. (Ibid.) When the parties submitted the claims to
arbitration, each party requested costs, thus “placing that issue
squarely before the arbitrator.” (Ibid.) The arbitrator awarded $0 to
either party and directed that “‘each side will bear their own attorneys’
fees and costs.’” (Ibid.) Days later, the engineer notified the arbitrator
of the section 998 offers and requested costs as the prevailing party.
(Ibid.) The arbitrator replied that it no longer had jurisdiction to take



                                    13
any further action. (Ibid.) When the engineer filed a memorandum of
costs alongside a motion to confirm the arbitration award, the trial
court refused to add costs because the engineer did not request them
from the arbitrator. (Ibid.)
      The Supreme Court agreed with the trial court’s ruling because
the parties’ conduct placed the issue of costs before the arbitrator.
“Arbitration is a matter of consent. [Citation.] Consequently, whether
an arbitrator or court should allocate costs depends on the parties’
agreement, which defines the scope of the arbitrator’s power.
[Citation.]” (Heimlich, supra, 7 Cal.5th at p. 358.) “If the parties’
agreement does ‘not limit the issues to be resolved through arbitration,
the issue of [a party’s] entitlement to . . . costs, as requested in his
complaint, [is] subject to determination in the arbitration proceedings.’
(Corona v. Amherst Partners (2003) 107 Cal.App.4th 701, 706
[(Corona)]; see Moshonov v. Walsh (2000) 22 Cal.4th 771, 776
[(Moshonov)]; Maaso v. Signer [(2012)] 203 Cal.App.4th [362,] 377
[(Maaso)].)” (Ibid.) Finding the parties’ agreement to be “broad” by
committing “the parties to arbitrate ‘all disputes or claims of any nature
whatsoever,’” the court found that the engineer was “required to request
costs from the arbitrator in the first instance. Failure to do so would
have precluded relief.” (Ibid.)
      The cases on which Heimlich relied also dealt with broad
agreements and stipulations to arbitrate. (See Corona, supra, 107
Cal.App.4th at p. 706 [notice of contractual arbitration provided that
“‘[t]he subject contract calls for disputes to be settled by binding



                                      14
arbitration’”]; Moshonov, supra, 22 Cal.4th at p. 774 [contract called for
arbitration to “‘enforce the terms of this contract or any obligation
herein,’” the stipulation to arbitrate agreed to have the Rules of Court
govern the arbitration, and the award provided an award of costs for
unspecified amount]; Maaso, supra, 203 Cal.App.4th at p. 377
[submission to arbitration and award “included the issue of costs and
interest”].)
      In this case, the parties’ agreement to arbitrate is quite limited.4
Using the language set forth in section 11580.2 of the Insurance Code,
the arbitration provisions in the insurance agreement narrowed the
arbitrator’s power to the determination of two specific issues: “Whether
[Storm] is legally entitled to recover damages under this coverage,” and
“the amount of damages.” (Compare Ins. Code, § 11580.2, subd. (f); see
Weinberg, supra, 114 Cal.App.4th at p. 1082.) Unlike Heimlich and the
authorities on which it relied, the language of the arbitration agreement
here strictly circumscribed the arbitrator’s powers. (See Weinberg,
supra, at p. 1082, italics omitted [when an insurance agreement
restates section 11580.2’s statutory language, “‘arbitration is limited to
issues relating to liability of the uninsured motorist to the insured . . . ;
it does not include determination of the extent of coverage and the
amount of money the insurance company is obligated to pay the



4     Heimlich, Moshonov, and Maaso considered the parties’ stipulation
and/or submission to arbitration to ascertain the arbitrable issues in those
cases. The appellate record in this case does not include the party’s
stipulation or submission to arbitrate Storm’s underinsured motorist claim.


                                      15
insured’”].) Because the arbitrator was expressly granted the authority
only to determine liability and damages—and no other issues or
disputes—Heimlich does not apply here.
     In short, the arbitrator’s powers were expressly limited, and did
not give the authority to rule on Storm’s requests for arbitration costs
under section 998. Hence, Storm was not required to request those
costs from the arbitrator, and the proper forum to hear her request is
the trial court that confirmed the arbitration award.


4.   Recoupment of Costs Incurred During Judicial Proceedings
     Storm contends that the trial court erred in relying on the same
policy language providing for the division of arbitration costs to deny
Storm’s request to recover costs she incurred during the judicial
proceedings to confirm the arbitration award. In its briefing on appeal,
Standard Fire does not dispute the contention, and we conclude that the
contention is well-taken.
     Unless the arbitrator’s award or the parties’ arbitration
agreement negates the enforceability of section 1293.2, a court must
award costs incurred in post-arbitration judicial proceedings to confirm,
vacate, or modify an arbitration award. (Carole Ring & Associates v.
Nicastro (2001) 87 Cal.App.4th 253, 260–261; see Marcus & Millichap
Real Estate Investment Brokerage Co. v. Woodman Investment Group
(2005) 129 Cal.App.4th 508, 513 [award of costs pursuant to section
1293.2 is “mandatory”]; Corona, supra, 107 Cal.App.4th at p. 707
[same].)



                                    16
     Having reviewed the entire insurance agreement in this case, we
find no provision placing a limitation on the payment of, or the right to
recover, post-arbitration costs incurred to confirm, vacate, or modify the
arbitration award. (See Fire Ins. Exchange v. Superior Court (2004) 116
Cal.App.4th 446, 454 [“An insurance policy must be interpreted as a
whole and in context”].) The only provision remotely susceptible of such
an interpretation—that each party “Pay the expenses it incurs”—
appears under the heading “ARBITRATION” (and mirrors section
1284.2, which we have already discussed provides for the division of
arbitration costs). That provision does not appear under the separate
heading in the insurance agreement entitled “LEGAL ACTION
AGAINST US.” Thus, because neither the insurance agreement nor the
arbitrator’s award negated the enforceability of section 1293.2, the
court erred in refusing to consider Storm’s post-arbitration costs.5
                                     //
                                     //
                                     //
                                     //
                                     //
                                     //
                                     //




5     In light of our conclusions, we do not address Storm’s alternative
contentions that the policy language should be void as adhesive and against
public police.

                                     17
                               DISPOSITION
     The order granting the motion to tax costs and striking Storm’s
memorandum of costs is reversed. The matter is remanded with
directions for the trial court to consider whether the costs as claimed by
Storm are recoverable and necessarily incurred within the meaning of
sections 998 and 1293.2. Storm shall recover her costs on appeal.
     CERTIFIED FOR PUBLICATION




                                         WILLHITE, Acting P. J.
     We concur:



     COLLINS, J.



     CURREY, J.




                                    18
