(dissenting).
I respectfully dissent.
On the issue of compelling arbitration, I would require Cincinnati to go to arbitration, award State Farm reasonable attorney fees for having to bring this matter to court, and remand to the district court to stay the underlying lawsuit between Michelle Miller and respondent’s insured Glen Meyer.
To me, it is questionable law, and bad ;public policy, egregious public policy, not to compel State Farm and Cincinnati to abide by the terms of their arbitration agreement. Minnesota’s strong public policy of providing for public safety on our highways, as exemplified by our mandatory insurance law, Minn.Stat. § 65B.48, subd. 1 (2000), is trashed and turned over to the whims and caprice of each individual insured, in this case, Meyer, who is allowed to blithely state, I can give the benefits of my liability coverage to anyone I please and withhold it from anyone I please, and I am accountable to no one, neither the law nor the party I have injured.
I will discuss the arbitration issue first. The two insurance companies, State Farm and Cincinnati, are both signatories to an inter-company arbitration agreement. Several insurance companies belong to the arbitration agreement, the purpose of which is simple and exemplified by the facts in this case. State Farm supplies collision insurance to Michelle Miller, who sustained approximately $2,000 in property damage when Meyer drove into Miller’s vehicle, which was stopped in his driveway. Miller has a $500 collision deductible. State Farm honored their policy and paid Miller the property damage minus the deductible, and pursuant to the inter-company arbitration agreement, served notice on Cincinnati that they wished to arbitrate the matter of their $1,500 out-of-pocket expense plus Miller’s $500 deductible. Cincinnati refused to arbitrate and blamed it on their insured Meyer. They said Meyer had refused to tender the defense to them, had told them in no uncertain terms that he did not want coverage and would handle the matter on his own and, therefore, Gee, our hands 'are tied; we have to honor our policyholder’s (Meyer’s) request. It is worth noting' that the briefs and Cincinnati’s position at oral argument are replete with manifestations of good faith (obviously to avoid a bad-faith lawsuit). Cincinnati insisted time after time that there is liability coverage for Meyer and that they are ready, willing, and able to stand in and do their duty. It is just that they cannot move because Mr. Meyer .doesn’t want us to.
The district court and the majority bought Cincinnati’s argument that tender by Meyer is such an integral part of his liability policy and the inter-company arbitration agreement that everyone’s hands are tied in this matter until Meyer gives the go-ahead, and he has not done so yet. I suggest that is bad law. The automobile-subrogation-arbitration agreement is in evidence, and all parties agree on its wording. It says in pertinent part that
[signatory companies are bound to fore-go litigation and in place thereof submit to arbitration any questions or disputes which may arise from any automobile physical damage subrogation or property damage claim not in excess of $100,000.
This articles shall not apply to
any claim as to which a company asserts a defense of lack of coverage on grounds other than
(1) delayed notice
(2) no notice
(3) noncooperation [.]
*548(Emphasis added.) The majority confuses noncooperation, which is specifically not a bar to arbitration, with the word tender. As to noncooperation, Meyer’s actions are the classic essence of noncooperation. The record shows that Meyer, from the start, refused to disclose the identity of the liability insurance company to Miller. That forced Miller to apply to State Farm under her own collision policy for coverage. Thus, State Farm and Miller had to sue Meyer for the approximate $2,000 in property damage, meaning State Farm’s payment of approximately $1,500 plus Miller’s $500 deductible.
Meyer continued to refuse to cooperate in any way and continued to refuse to notify his insurance company, Cincinnati. When State Farm learned on its own that Cincinnati provided automobile insurance coverage for Meyer and contacted Cincinnati to start the arbitration process, Meyer instructed Cincinnati not to pay the claim, not to cover him, and not to defend him. The record is clear as to Meyer’s stubborn position. He has such a questionable driving record that Cincinnati informed him that even on this $2,000 fender-bender, he was in danger of having his insurance with Cincinnati not renewed. It can be safely assumed that Meyer would then have to go into the open market and pay even more to get new insurance coverage (as stated, Minnesota has a mandatory insurance law, which is a condition precedent to obtain vehicle license plates and to be allowed to drive legally). Thus, Meyer, to keep his insurance with Cincinnati (who is complicit in this scheme), arbitrarily takes the position that he is going to withhold his liability coverage from Miller and force her to deal with him directly. Meyer is an attorney. The file reflects that his actions in instructing Cincinnati not to defend him, and his countersuit against the Millers for his property damage, are delaying tactics to hopefully wear down Miller and State Farm and get them to settle for approximately fifty cents on the dollar. The record reflects an offer by Meyer to settle State Farm’s and Miller’s claim for fifty percent, meaning $1,000. Meyer has calculated that $1,000 out of his own pocket is less expensive than not getting renewed by Cincinnati and running the risk of having to get another insurance company to cover him.
To put it bluntly, Meyer’s pecuniary interests are not part of the inter-company arbitration agreement to which State Farm and Cincinnati are signatories. Cincinnati concedes that Meyer is not. To cover exactly this type of situation, the inter-company arbitration agreement excludes as a defense noncooperation. As stated, you could not find a better definition of noncooperation than Meyer’s actions. This entire matter resolves itself simply, peacefully, and with judicial economy if Cincinnati steps forward and arbitrates a $2,000 fender-bender. State Farm stipulated on the record that if Cincinnati goes to arbitration, it and the Millers will drop their lawsuit in district court for property damage. That would in no way prejudice Meyer’s counterclaim for property damage, as that is a stand-alone issue. He has a right to sue Miller and see if he can prevail. He does not need Cincinnati’s permission to sue Miller. He simply has to take his case into court and proceed.
The issue of tender on which the district court and the majority hang their analysis is not before us. The inter-company arbitration agreement specifically excludes noncooperation as an issue. In another lawsuit, not ours, it is possible that Cincinnati and Meyer might have a tender issue. Assume that Miller had extensive property damage and personal injuries to the point where Meyer wanted coverage. Assume Meyer’s actions, lack of tender, and other *549noncooperative actions were egregious. Cincinnati, as any insurance company, would have the right to go into district court and seek a declaratory judgment that they had no obligation to defend and indemnify their insured because cooperation with the insurance company is a boilerplate phrase in every insurance contract written. Obviously, even a self-interested insurance company has a right to expect its insured to give it the details of what happened so they are in a position to evaluate coverage, legal tactics, protect the insured’s interests, and evaluate the potential claim for loss-reserve purposes. That is not our case. Between Cincinnati and Meyer on another set of facts, lack of tender and noncooperation could be an issue. See, e.g., Rieschl v. Travelers Ins. Co., 313 N.W.2d 615 (Minn.1981) (insurer brought action seeking to declare that insured breached cooperation clause of policy). Between State Farm and Cincinnati, noncooperation is not an issue. It is written right out of the arbitration agreement and cannot constitute a bar to arbitration.
Now to the issue of public policy. This refusing-to-tender tactic (entirely at the whim of the insured) increases the litigation burden on the court system and results in payments to an injured party taking significantly longer than if the insurance companies were involved. This defeats the principles behind the No Fault Act, including injured parties receiving prompt payment of benefits and easing the burden of litigation on courts. See Minn.Stat. § 65B.42(4) (2000). Notably, another purpose of the No Fault Act is
[t]o create a system of small claims arbitration to decrease the expense of and to simplify litigation, and to create a system of mandatory intercompany arbitration to assure a prompt and proper allocation of the costs of insurance benefits between motor vehicle insurers!.]
Minn.Stat. § 65B.42(4). Meyer is not a signatory to the arbitration agreement. His participation, or lack thereof, does not affect the agreement between two insurers to arbitrate.
Judicial economy, public policy, and the intent of mandatory auto insurance require that signatories to the inter-company auto-insurance arbitration agreement comply with the letter and spirit of their agreement and the mandatory auto-insurance statute.
Assume that Meyer caused both property damage and personal injury to Miller or hit a pedestrian walking in the vicinity. Under Cincinnati’s and Meyer’s theory, he could still refuse coverage to save himself money in future auto premiums and force the injured victims to take their chances on whether any judgment would be collectible.
It is bizarre to put the issue of who has insurance in the hands of a driver whose record with his own company is so questionable that over a routine $2,000 fender-bender with no personal injuries, the company stands ready not to renew his policy. The majority’s decision permits Meyer to avoid the problem that he, not Miller, created, simply by snapping his finger and saying, I don’t want insurance on this claim! See Minn.Stat. § 645.17(1) (2000) (stating legislature does not intend absurd result). Minnesota’s mandatory auto-insurance law is effectively eliminated if any driver can opt out whenever he feels it is advantageous to do so.
According to the Minnesota Department of Public Safety, Office of Traffic Safety, [a]t the end of the 2001 calendar year, 3,685,499 people held Minnesota driver licenses and 4,376,815 motor vehicles were registered in the state. Minnesota Dep’t of Pub. Safety, Minnesota Motor Vehicle Crash Facts (2001).
*550It is beyond comprehension that 3.6 million different individuals control Minnesota’s mandatory liability-insurance ■ law without any legislative standards or accountability of any kind! It is egregious public policy to give each individual driver, after requiring them to carry liability insurance to drive legally in this state, the power to vest pocket their liability insurance; bestow it on those people that they like and in those situations that they want to; but withhold it from injured victims they do not like in other situations, as Meyer is doing. Even Cincinnati concedes that Meyer is doing this to avoid the possibility of them not renewing his automobile insurance because of his past driving record. I ask one simple question in this dissent. Is the letter and the spirit of Minnesota’s mandatory liability-insurance law to protect bad drivers or injured victims?
I dissent. I would reverse the ruling of the district court and compel Cincinnati to proceed to arbitration. I would award State Farm reasonable attorney fees for having to go to district court and then this court to compel arbitration. I would remand to the district court to stay the property-damage lawsuit of State Farm and Miller against Meyer, and Meyer’s property damage counterclaim against Miller until State Farm and Cincinnati have finished arbitration. I would instruct the district court to then allow Meyer to proceed on his counterclaim against the Millers for his property damage.
This described sequence gives a reasonable interpretation to not a difficult word, noncooperation. It serves the purpose and the public policy of the inter-company arbitration agreement, serves the strong public policy of the State of Minnesota as evidenced by the No-Fault Act and the mandatory insurance law, allows Meyer to proceed on his property-damage claim in a court of law, and judicial economy and integrity are furthered. Meyer and Cincinnati, as of now, mock both.