COURT DECLINES TO COMPEL ARBITRATION UNDER “NARROW” ARBITRATION PROVISION
Union Insurance Company and other insurers entered into an “Agency-Company Agreement,” with broker Hull & Company, providing Hull with binding authority. Hull bound risk from the Thirsty Parrot Bar and Grill, including umbrella coverage from Union. The Thirsty Parrot ultimately settled a covered assault claim against one its former employees, to which Union contributed $800,000. Union sought recompense from Hull, alleging that Hull breached underwriting guidelines which were incorporated by reference into the Agency-Company Agreement. Union sought to compel arbitration of its claim, but Hull resisted. The Court refused to compel arbitration under a provision allowing arbitration of disputes pertaining to “misunderstanding as to the interpretation or application of any provision of this Agreement.” The Court found that the dispute over underwriting guidelines was not related or collateral to interpretation of the Agency-Company Agreement, because it found that Union failed to establish that the underwriting guidelines were incorporated by reference into the Agreement, and thus the dispute did not come within the Agreement’s arbitration provision. Union Ins. Co. v. Hull &Company, Inc., Case No. 4-00337 (USDC S.D. Iowa Dec. 19, 2011).
This post written by John Pitblado.
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