The Sixth Circuit Court of Appeals affirmed a Michigan district court order confirming an arbitration award for Farmers Mutual Hail Insurance Company of Iowa. The award ordered Edgar Miller to return the extra payments he received from Farmers Mutual after it was discovered that, due to Miller’s poor record-keeping, Farmers Mutual had overpaid him under his crop insurance policy. After the award was rendered in favor of Farmers Mutual, the parties had the overpayment issue considered by the Federal Crop Insurance Corp. (FCIC), a body created by Congress to establish and regulate rules for crop insurance coverage. The FCIC determined that Farmers Mutual was permitted to seek reimbursement from Miller, and Farmers Mutual subsequently filed a petition to confirm the arbitration award in Michigan federal court.
Where, as here, the FCIC provides an interpretation after the arbitrator has acted, the award must be reviewed to determine if it is consistent with the FCIC’s view. The award must be nullified if it is determined that any inconsistency materially affected the award. Here, the district court ruled, and the Sixth Circuit agreed, that the award was not inconsistent with the FCIC’s determination that a crop insurer may reject a claim for coverage based on poor record-keeping alone and may obtain retroactive reimbursement for an overpaid claim on that basis. The Sixth Circuit rejected Miller’s argument that the arbitrator nonetheless exceeded its authority by placing the burden of proof on him with respect to reimbursement. The court also rejected Miller’s claim preclusion argument, finding there had been neither a final decision on the merits nor an identical claim raised in two lawsuits.
Farmers Mutual Hail Insurance Co. of Iowa v. Miller, No. 20-1978 (6th Cir. July 20, 2021).