Justia Arbitration & Mediation Opinion Summaries

This case concerned a dispute between an insurance carrier (Plaintiff) and its insured (Defendant) regarding Plaintiff’s obligation to pay underinsured motorist benefits. An arbitration panel concluded that the issue of whether the relevant policy provisions provided coverage for the claim should be resolved under the choice of law rules governing claims sounding in tort, rather than claims sounding in insurance and contract, and therefore, that New Jersey law rather than Connecticut law governed Defendant’s claim for uninsured motorist benefits under the policy. The trial court vacated the arbitration award, and the Appellate Court affirmed. The Supreme Court affirmed, holding that the Appellate Court, in its opinion adopting the decision of the trial court, properly applied sections 6(2), 188 and 193 of the Restatement (Second), contract choice of law, to determine that Connecticut law governed the claim. View "Gen. Accident Ins. Co. v. Mortara" on Justia Law

Flintkote was a major supplier of asbestos-based products and was covered by insurance policies from London insurance firms, including Aviva, one of the world’s largest insurers. It became apparent that claims under these policies would result in protracted disputes regarding the scope of coverage. In 1985, Flintkote and several insurers, but not Aviva, entered into the Wellington Agreement, which required that coverage disputes be resolved through ADR consisting of open mediation, binding arbitration, and an expedited appellate process; that the insurers make payments to Flintkote; and that Flintkote reimburse with interest, if it also received those same payments from another insurer. In 1989, Flintkote and Aviva entered into a separate agreement, similar to the Wellington Agreement, including as to reimbursement for claims also paid by other insurers. The1989 Agreement explicitly reserves each party’s right to resolve disputes through litigation. Flintkote filed for bankruptcy in 2004. In 2006, invoking the Wellington Agreement, Flintkote initiated coverage-related mediation with the insurers. Aviva, although not obligated to participate, opted to join. During mediation, Flintkote reached settlements with some insurers, but not with Aviva. In 2012, Aviva and the remaining other insurers sought reimbursement or off-set with respect to prior payments and interest under the Wellington Agreement. Flintkote took no action. Aviva, acting separately, moved to lift the automatic bankruptcy stay. Before the Bankruptcy Court ruled on Aviva’s motion, Flintkote moved to compel arbitration pursuant the Federal Arbitration Act. The district court granted Flintkote’s motion to compel arbitration, concluding that Aviva was equitably estopped from avoiding arbitration by virtue of its participation in the lengthy mediation process. The Third Circuit reversed. View "Flintkote Co v. Aviva PLC" on Justia Law

The Providers supply outpatient cardiac telemetry (OCT) services, used by doctors to monitor cardiac arrhythmias. The device differs from conventional technology in that it transmits electrocardiographic (EKG) data in real time to certified technicians, who forward the data to a physician. OCT is approved by the FDA, and has long been covered by Medicare and commercial insurers. CIGNA administers employer sponsored health benefit plans. CIGNA pays its in-network providers directly for the services rendered to patients. In 2007, the Providers joined CIGNA’s network by Agreements that set the reimbursement rate and define “Covered Services.” In 2012, CIGNA issued a statement that it would no longer cover OCT “for any indication because it is considered experimental, investigational or unproven.” The 2012 Policy acknowledged that this new position would be trumped by any conflicting language in the coverage policies themselves. In arriving at the new policy, CIGNA relied on the same medical literature it had previously relied upon in concluding that OCT should be covered. The Providers claim that CIGNA indicated that its motive was financial, but refused to reconsider the 2012 Policy. The district court found that the Providers’ claims fell within the arbitration clause of the Agreement. The Third Circuit vacated. The clause at issue is limited in scope to disputes “regarding the performance or interpretation of the Agreement” and the claims at issue do not relate to the performance or interpretation of the Agreement.View "Cardionet Inc v. Cigna Health Corp." on Justia Law

A contract for reinsurance between National and Meadowbrook required both parties to submit any reinsurance disputes to a three-member arbitration panel to be comprised of “two arbitrators and an umpire” who were “active or retired disinterested officials of the insurance or reinsurance companies, or Underwriters at Lloyd’s, London, not under the control of either party.” After Meadowbrook initiated arbitration, National named Rosen and Meadowbrook named Schlaybaugh as arbitrators. They deadlocked in selecting an umpire, exchanged slates of candidates, and chose Greene, who disclosed that he was a personal friend of Rosen and that both were members of the reinsurance industry group The panel adopted orders that, “Ex parte communications with any member of the Panel shall cease upon the filing of the parties’ initial pre-hearing briefs.” The panel issued a unanimous Interim Final Award, resolving issues of liability in favor of National, but did not calculate a final damages award at that time. Rosen resumed ex parte communications and National disclosed those communications. After the panel rejected Meadowbrook’s submissions concerning damages, Meadowbrook claimed that it had disenfranchised Schlaybaugh. National claimed that a swift decision was needed, that Schlaybaugh was on vacation and could not be reached, and that his participation would have made no difference. The district court enjoined proceedings. The Sixth Circuit reversed, noting that judicial review of arbitral decisions is narrow and deferential.View "Savers Prop. & Cas. Ins. Co. v. Nat'l Union Fire Ins. Co." on Justia Law

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