Applied Underwriters’ Loses Another Arbitration – Appeals

Arbitration is frequently the venue of choice for Applied Underwriters. For one thing, its EquityComp and SolutionOne reinsurance participation agreements include mandatory arbitration provisions, often in out-of-state locales, and using other state’s laws. However, the Berkshire Hathaway (NYSE: BRK.A) subsidiary is headed back to the courts again after a federal district court refused to throw out a $280,000 arbitration award in favor of a former insured.

This isn’t the first time.

Applied is now asking the Ninth Circuit Court of Appeal to overturn the award to Barker Management. The case began with Applied demanding an additional $123,000 that it alleged Barker owed Applied for its time in the EquityComp program.

The case went to the federal court system when Applied challenged the original arbitration award. Applied argued that the arbitrator “acted in manifest disregard of the law” when he rejected Applied’s argument that employers lack a private right of action to enforce California’s filing requirements in insurance code section 11658.

Applied maintained a similar position on the private right of action in its fight with the California Department of Insurance in the Shasta Linen case and failed. It later agreed to settle that dispute and the settlement left intact the precedential nature of the Shasta Linen decision and its findings.

As of deadline, the Ninth Circuit had not ruled on Applied’s petition. For past coverage of the Barker case see Applied Underwriters Loses Two