Justia Arbitration & Mediation Opinion Summaries

At issue in this case was whether federal law preempts Neb. Rev. Stat. 25-2602.01(f)(4), which generally prohibits mandatory arbitration clauses in insurance contracts. Here, Allied Professionals Insurance Company (APIC), which is registered with the Nebraska Department of Insurance as a foreign risk retention group, issued a professional liability insurance policy to Dr. Brett Speece that included a provision requiring binding arbitration. After Speece filed an action seeking a declaration that APIC was obligated to provide coverage for his defense in a Medicaid proceeding, APIC filed a motion to compel arbitration. The district court overruled the motion, concluding that the arbitration clause in the policy was not valid and enforceable pursuant to section 25-2602.01, and that neither the Federal Arbitration Act (FAA) nor the Liability Risk Retention Act of 1986 (LRRA) preempted the state statute. The Supreme Court reversed the district court’s order overruling APIC’s motion to compel arbitration, holding (1) the FAA does not preempt section 25-2602.01(f)(4), but the LRRA does preempt application of the Nebraska statute to foreign risk retention groups; and (2) therefore, the district court erred when it determined that section 25-2602.01(f)(4) prohibited enforcement of the arbitration clause in the parties’ insurance contract in this case. View "Speece v. Allied Prof’ls Ins. Co." on Justia Law

In 2006, Lincoln T. Griswold purchased an $8.4 million life insurance policy. Griswold established a Trust for the sole and exclusive purpose of owning the policy and named Griswold LLP as the Trust’s sole beneficiary. In 2008, the Trust sold its policy to Coventry First LLC. The written purchase agreement contained an arbitration clause. After learning that the policy was sold for an allegedly inflated price that included undisclosed kickbacks to the broker, Griswold sued. Coventry moved to dismiss the case for lack of standing or, in the alternative, to compel arbitration. The district court denied the motion, concluding that both Griswold and the LLP had standing and that the arbitration clause was unenforceable as to the plaintiffs, who were non-signatories. Coventry appealed. The Third Circuit (1) concluded that it lacked appellate jurisdiction to review the district court’s denial of Coventry’s motion to dismiss; and (2) affirmed the district court’s denial of the motion to compel arbitration against the plaintiffs, as they never consented to the purchase agreement. View "Griswold v. Coventry First LLC" on Justia Law

Plaintiff filed suit challenging the decision of an arbitrator that had denied his claim under a crop insurance policy obtained from ProAg. On appeal, ProAg challenged the district court's grant of plaintiff's motion to vacate the award and motion for summary judgment, vacating the arbitrator's decision. The court concluded that the district court erred in vacating the arbitrator's decision because the arbitrator was entitled to conclude that ProAg had the authority under the policy to set a reasonable deadline for the receipt of necessary documentation in support of the claim; plaintiff's failure to comply with the deadline was an adequate basis for ProAg's denial of his claim; the arbitrator was entitled to make his findings without first seeking a formal opinion of the FCIC; and plaintiff waived any argument based upon the arbitrator's failure to deliver his decision and award within the time limitations provided by the policy. Accordingly, the court reversed and remanded. View "Davis v. Producers Agricultural Ins." on Justia Law

The Montana Association of Counties Joint Powers Insurance Authority (MACo/JPIA) obtained catastrophic property insurance from Allianz Global Risks US Insurance Company to cover damages over $100,000. The Lincoln County Port Authority (Port) insured a building in its industrial facility through the MACo/JPIA self-insured risk pool. After the building's roof collapsed, MACo/JPIA informed the Port that it would no longer insure the building. The building was subsequently destroyed by a fire, and MACo/JPIA and Allianz refused to cover the loss. The Port filed this suit against Allianz. The district court concluded that the Allianz policy insured the Port and awarded $6,060,980 based on the findings of an appraisal panel. The Supreme Court (1) affirmed the district court's determination that Allianz's policy provided coverage for the building; (2) affirmed the district court's refusal to reform the Allianz policy; (3) reversed the district court's award of "replacement cost" for those portions of the building that the Port had slated for demolition; and (4) remanded to allow the district court to calculate post-judgment interest owed to the Port for the damages owed under the policy. View "Lincoln County Port Auth. v. Allianz Global Risks US Ins. Co." on Justia Law

The issue on appeal to the Supreme Court in this case stemmed from district court decisions regarding an uninsured motorist claim between Plaintiffs-Appellants Sam and Deva Ferrell and Defendant-Respondent United Financial Casualty Company (United Financial, d.b.a. Progressive Insurance Company). The parties underwent arbitration, and the Ferrells subsequently filed a petition that sought confirmation of the arbitration award and an award of costs and attorney fees. The district court ordered confirmation of the arbitration award and interest based upon an agreement of the parties. On the issue of attorney fees, the district court found that arbitration began five months prior to the amendment of I.C. 41-1839 which explicitly allowed attorney fees in arbitration, and therefore the statute as it existed did not provide for attorney fees in this case. The Supreme Court reversed in part and remanded the case back to the district court.View "Ferrell v. United Financial Casualty Co." on Justia Law

For twenty years, Defendants, various entities of OneBeacon American Insurance Company (collectively, “OneBeacon”), had a program known as Multiple Line Excess Cover (“MLEC Program”) under which OneBeacon entered into reinsurance contracts (“MLEC Agreements”) with various reinsurers. Employers Insurance Company of Wausau, National Casualty Company, and Swiss Reinsurance America Corporation (“Swiss Re”) participated as reinsurers in the MLEC Program. Some of the MLEC Agreements Wausau entered into with OneBeacon were practically identical to OneBeacon’s MLEC Agreements with Swiss Re. In 2007, OneBeacon demanded arbitration with Swiss Re seeking reinsurance recovery for losses arising out of claims against OneBeacon by policyholders. The arbitration panel decided in favor of Swiss Re. In 2012, OneBeacon demanded arbitration with Wausau and National Casualty for, according to Wausau, the same claims OneBeacon arbitrated and lost against Swiss Re. Wausau and National Casualty petitioned for a declaratory judgment that the prior arbitration award between OneBeacon and Swiss Re had preclusive effect on the arbitration pending between OneBeacon and Wausau. The district court denied the petition. The First Circuit Court of Appeals affirmed, holding that judicial confirmation of an arbitration award “does not warrant deviation from the general rule that the preclusive effect of a prior arbitration is a matter for the arbitrator to decide.” View "Nat'l Cas. Co. v. OneBeacon Am. Ins. Co." on Justia Law

The NECA-IBEW Health and Welfare Fund provides health benefits to members of a local union of electrical workers. The Fund negotiated a Local Agreement with Sav-Rx, a provider of prescription-drug benefits, under which Sav-Rx reimburses pharmacies for dispensing medication and then invoices the Fund for some of its costs. The Local Agreement does not call for arbitration. A few months later, Sav-Rx negotiated a different agreement with the national organization of the IBEW, with which the local is affiliated. The National Agreement offers locals reduced charges and more services than the Local Agreement and contains a mandatory arbitration clause. Local unions and funds could opt into the National Agreement, but the Fund's trustees never voted on the matter. Over the next eight years the Fund accepted from Sav-Rx services provided by the National Agreement. The Fund sued Sav-Rx for invoicing the Fund at rates not authorized by either the Local or National Agreement. The district court dismissed, finding that Fund had accepted the benefits of the National Agreement and was bound to it; Sav-Rx established that the Fund knew it was accepting benefits under the National Agreement. The Seventh Circuit affirmed. View "NECA-IBEW Rockford Local Union 364 Health & Welfare Fund v. A&A Drug Co." on Justia Law

The parties disputed ownership of life insurance policies and, according to their contract, submitted the dispute to a rabbinical arbitration panel. The arbitration panel appointed by the parties entered an award mandating the immediate transfer of the insurance policies at issue to Kolel and appellants subsequently appealed. The court concluded that the district court properly denied vacatur based on claims of bias and corruption; properly denied vacatur based on claims of premature decision and failure to consider evidence; and properly denied appellants' motion for reconsideration. Therefore, appellants have not presented any evidence that meets the high burden of proof necessary to vacate an arbitration award, and therefore the district court properly denied their motion for vacatur and granted Kolel's motion for confirmation of that same arbitration award. View "Kolel Beth Yechiel Mechil v. YLL et al." on Justia Law

The Providence School Board (Board) provided health insurance to active employees and retirees. In 2006, the Providence Teachers Union (Union) filed a grievance protesting a difference in the increase of premium costs for retirees compared with a more modest increase in premium costs for active employees. The Union argued that the Board's action violated three provisions of the collective bargaining agreement (CBA) between the board and the union. An arbitrator ruled in the Union's favor, concluding that the Board violated the CBA by failing to include retirees and active employees in a single group when it calculated the healthcare premium rates. The trial justice vacated the arbitration award, concluding (1) the Union did not have standing to pursue a grievance on behalf of retirees, and (2) the issue of the calculation of the group premium rate was not arbitrable. The Supreme Court affirmed, holding (1) pursuant to Arena v. City of Providence and City of Newport v. Local 1080, the Union could not pursue this grievance on behalf of the retirees; and (2) because the Union had no standing to pursue this particular grievance, the grievance was not arbitrable. View "Providence Sch. Bd. v. Providence Teachers Union, Local 958" on Justia Law

This case arose out of the payment of benefits pursuant to an Aflac accident insurance policy. Defendant and the decedent's siblings challenged the district court's entry of summary judgment and order compelling arbitration of defendant's claims against Aflac and its agents. At issue was whether defendant's affidavit, which included her opinion that the signature on the arbitration acknowledgment form was a forgery, was sufficient to create a genuine issue of material fact. The court concluded that defendant's affidavit was never made part of the summary judgment record before the district court and therefore failed to create a genuine issue of material fact on the authenticity of the decedent's signature. Accordingly, the court affirmed the district court's judgment. View "American Family Life Assurance Co. of Columbus v. Biles, et al" on Justia Law