Plaintiff, Technical Security Integration, Inc., a Washington company, sold certain security and surveillance equipment and services. It hired Corey Tharp as a sales associate in Oregon, to tap his connections to that state’s gaming casinos, and later terminated him. After the casinos Tharp sold contracts to refused to renew their contracts with Plaintiff, and instead signed on with the company that later employed Tharp, Plaintiff brought suit against Tharp and his employer, alleging interference with contract and related claims. Tharp and his employer asserted counterclaims, and Plaintiff sought coverage from its CGL carrier, the defendant, Philadelphia Indemnity. Philadelphia declined coverage, citing the policy’s employment-related practices exclusion, and Plaintiff thereafter brought a coverage action in federal court. Philadelphia moved to compel arbitration, citing the policy’s arbitration endorsement. Plaintiff objected. The matter was heard by a Magistrate, who held that Washington law applied, and that, pursuant to Revised Code of Washington § 48.18.200(1)(b), which prohibits insurance contracts from “depriving the courts of this state of the jurisdiction of action against the insurer,” the arbitration agreement was invalid. The Magistrate therefore denied the motion to compel arbitration. Philadelphia sought de novo review by the District Judge, who approved and adopted the Magistrate’s recommended ruling. , No. 3:14-cv-01895-SB (USDC D. Ore. May 27, 2015) (Magistrate’s report and recommendation); , No. 3:14-cv-01895-SB (USDC D. Ore. July 30, 2015) (approving and adopting Magistrate’s report).
This post written by John Pitblado.
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