DISTRICT COURT DENIES CHARTIS’ MOTION TO COMPEL ARBITRATION PENDING COURT HEARING AS TO WHETHER ARBITRATION IS MANDATORY
On April 5, the US District Court for the District of Colorado granted in part and denied in part defendant American International Special Lines’ (now known as Chartis Specialty Insurance Company) Motion to Compel Arbitration, Stay Proceeding, and to Dismiss. The suit arises out of an insurance policy, containing an arbitration clause, relating to costs associated with a cleanup at Lowry Air Force Base in Colorado. The Court denied Chartis’ Motion to Compel Arbitration and to Stay the Proceedings, finding that language in the arbitration clause was ambiguous. Specifically, the Court found that the clause’s operative language (stating that a dispute “may be submitted” to arbitration and that any party “may commence such arbitration”) did not clearly establish whether arbitration was permissive or mandatory. Accordingly, if Chartis wishes to compel arbitration, it must carry its burden to establish that arbitration is mandatory through a factual determination on the issue by the court. Finally, the Court granted Chartis’ Motion to Dismiss on Lowry’s claim for breach of fiduciary duty, finding there was no fiduciary or quasi-fiduciary relationship between insured and insurer in a first-party context. Lowry Assumption, LLC v. Am. Int’l Specialty Lines Ins. Co., Case No. 10-02901 (D. Colo. Apr. 5, 2011).
This post written by John Black.
