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You are here: Home / Archives for Week's Best Posts

Week's Best Posts

SEVENTH CIRCUIT UPHOLDS DENIAL OF MOTION TO COMPEL ARBITRATION

November 22, 2016 by John Pitblado

Applying Wisconsin law, the Seventh Circuit Court of Appeals determined the parties did not have an agreement to arbitrate because, even though their excess/reinsurance agreement contained “follow form” language, and the underlying contract to which the policy followed form contained an arbitration provision, it nevertheless “merely codifie[d] a procedure whereby the parties can potentially agree to arbitrate.” The procedure required: (1) a demand by the insured; (2) a dispute between the insurers about liability; (3) payment by each insurer of half the disputed amount; and (4) acceptance of payment by the insured.

Although the insured and the insurers on the underlying policy met these steps prompting arbitration, none occurred with respect to the excess/reinsurance policy. The excess/reinsurance insurer never received a request for payment from the insured or made a payment to the insured. As such, the Court determined the parties did not agree to arbitrate a dispute with the excess/reinsurance insurer.

State of Wisconsin Local Government Property Ins. Fund v. Lexington Ins. Co., No. 15-1973 (7th Cir. Oct. 21, 2016).

This post written by Nora A. Valenza-Frost.

See our disclaimer.

Filed Under: Arbitration Process Issues, Week's Best Posts

SPECIAL FOCUS: DODD-FRANK IN A TRUMP ADMINISTRATION

November 21, 2016 by Carlton Fields

There is considerable uncertainty as to how President-elect Trump may proceed with respect to the regulation of the financial services sector of the U.S. economy.  We present one possible approach, based on a pending bill, in a Special Focus article, What Might Be the Future of the Dodd-Frank Act’s Insurance and Reinsurance-Related Provisions in a Trump Administration.

This post written by Rollie Goss.
See our disclaimer.

Filed Under: Reinsurance Regulation, Special Focus, Week's Best Posts

SUIT AGAINST REINSURER IN CALIFORNIA DISMISSED FOR LACK OF PERSONAL JURISDICTION

November 15, 2016 by Rob DiUbaldo

A federal district court in California recently dismissed a lawsuit brought by a cedent against its reinsurer for lack of a personal jurisdiction, where the reinsurer’s only contacts with the state derived from the fact that the operative reinsurance certificates were entered into with a California company and that it attempted resolve the claims at issue by engaging in certain activities in the state.

The lawsuit centered on certain reinsurance certificates between the American Insurance Company (“TAIC”) and R&Q Re, a Pennsylvania corporation, regarding coverage for underlying asbestos claims implicating certain excess policies reinsured by the certificates. When R&Q declined to pay amounts billed under the certificates based upon insufficient notice, TAIC commenced suit, and R&Q moved to dismiss for lack of jurisdiction.

In dismissing the action, the court found that it lacked both general and specific personal jurisdiction over the dispute. With regard to the former, the court held that it lacked general jurisdiction because R&Q Re is a Pennsylvania corporation, even though it is licensed to do business in California and maintains a registered agent in the state for purposes of service of process. As for the latter, the court found that the fact that the reinsurance certificates were entered into with TAIC, a California company, was insufficient to warrant specific personal jurisdiction. Similarly, R&Q’s contacts with TAIC purely related to its resolution of the subject claims were insufficient, even including a visit to California to conduct an audit where the visit occurred because TAIC refused to send files out-of-state. American Ins. Co. v. R&Q Reinsurance Co., Case No. 16-03044 (USDC N.D. Cal. Oct. 12, 2016).

This post written by Thaddeus Ewald, a law clerk at Carlton Fields in Washington, DC .

See our disclaimer.

Filed Under: Jurisdiction Issues, Week's Best Posts

SDNY RESOLVES IMPASSE AND SELECTS UMPIRE FOR ARBITRATION UNDER THE FAA

November 14, 2016 by Rob DiUbaldo

Relying on its authority pursuant to the Federal Arbitration Act (“FAA”) and the language of the operative contract, the U.S. District Court for the Southern District of New York selected an umpire for an arbitration from a list of ten candidates provided by the parties.

9 U.S.C. § 5 directs a district court to “designate and appoint an arbitrator… or umpire, as the case may require” upon “the application of either party to the controversy” following “a lapse in the naming of an arbitrator… or umpire”. The parties’ agreement further provided that “if the two arbitrators fail to agree on a third arbitrator within 30 days of their appointment, either party may make application” to any “court of competent jurisdiction in the City, County, and State of New York.

Petitioner timely selected its arbitrator and, months later, respondent selected theirs. Following the exchange of lists of potential umpires, respondent “largely failed to engage in the process of selecting the umpire”, prompting the filing of the action. In selecting the umpire, the Court was guided by the requirements of the umpire candidates per the parties’ arbitration agreement. Finding a number to be disqualified and others to be technically qualified but far less experienced, the Court made its umpire selection and directed the case be closed.

National Union Fire Ins. Co. of Pittsburgh, PA v. Source One Staffing, LLC, 1:16-cv-06461 (USDC S.D.N.Y. October 13, 2016)

This post written by Nora A. Valenza-Frost.

See our disclaimer.

Filed Under: Arbitration Process Issues, Week's Best Posts

FIFTH CIRCUIT REMANDS TO DETERMINE WHETHER JURISDICTION EXISTED FOR APPEAL OF DENIAL OF MOTION TO COMPEL ARBITRATION

November 8, 2016 by Michael Wolgin

The underlying dispute involved allegations of breach of warranty and deceptive trade practices based on a sale of an allegedly defective car. The Fifth Circuit explained that the FAA, which governed the alleged arbitration agreement in the purchase contact, does not supply jurisdiction in the federal courts, that there was no federal question jurisdiction here, and that there was insufficient information in the record to show that diversity jurisdiction existed. The court ruled: “This Court is not satisfied, based on the record before it, that AutoNation does not share citizenship with the [plaintiffs]. For that reason, we VACATE the district court’s order and REMAND for a determination of subject matter jurisdiction. If diversity is not established, the district court must dismiss the parties’ suit.” Roman v. AutoNation Ford Gulf Freeway, Case No. 16-20047 (5th Cir. Oct. 13, 2016).

This post written by Michael Wolgin.

See our disclaimer.

Filed Under: Jurisdiction Issues, Week's Best Posts

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