Title: Little v. Allstate Insurance Co.

State: vermont

Issuer: Vermont Supreme Court

Document:

Little v. Allstate Insurance Co.  (95-063); 167 Vt. 171; 705 A.2d 538

[Filed 10-Oct-1997]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                            No. 95-063

Don and Joan Little                          Supreme Court

                                             On Appeal from
    v.                                       Windsor Superior Court

Allstate Insurance Company                   April Term, 1997

Alan W. Cheever, J.

Bruce M. Lawlor of Lawlor & Koitto, Springfield, for plaintiffs-appellants

Michael J. Gannon and Joshua L. Simonds of Affolter Clapp Gannon, Ltd., 
  Burlington, for defendant-appellee

PRESENT:  Gibson, Dooley, Morse and Johnson, JJ., and Allen, C.J. (Ret.), 
          Specially Assigned

       DOOLEY, J.   This case presents the single issue of whether the
  Federal Arbitration Act (FAA) preempts the Vermont Arbitration Act (VAA)
  and makes irrevocable an agreement to arbitrate an uninsured motorist
  coverage dispute.  This issue was left open in Preziose v. Lumbermen's Mut.
  Casualty Co., 152 Vt. 604, 607, 568 A.2d 397, 398-99 (1989) because the
  arbitration agreement in that case was entered into before the effective
  date of the VAA.  We now decide that the FAA does preempt the VAA, and the
  agreement to arbitrate is irrevocable. We affirm.

       Plaintiffs Don and Joan Little have a dispute with defendant Allstate
  Insurance Co. over uninsured motorist coverage for injuries sustained in an
  automobile accident.  Pursuant to a provision in the policy, defendant
  seeks to submit the dispute to arbitration.  Plaintiffs want the Windsor
  Superior Court to resolve the dispute.  That court sided with defendant and
  dismissed this action.

       The single issue involves the interrelationship of three statutes. 
  The first is § 2 of the

 

  FAA which provides:

          A written provision in . . . a contract evidencing a
     transaction involving commerce to settle by arbitration a
     controversy thereafter arising out of such contract . . . or the
     refusal to perform the whole or any part thereof, or an agreement
     in writing to submit to arbitration an existing controversy arising
     out of such a contract, transaction, or refusal, shall be valid,
     irrevocable, and enforceable, save upon such grounds as exist at
     law or in equity for the revocation of any contract.

  9 U.S.C. § 2.

       The second statute is the provision of the VAA that excludes from its
  coverage "arbitration agreements contained in a contract of insurance."  12
  V.S.A. § 5653(a) (Cum. Supp.1996).  The effect of this provision is to
  leave the law governing such arbitration agreements to the common law,
  which allows revocation of such an agreement at any time up to the
  publication of an award.  See Fairchild v. West Rutland Sch. Dist., 135 Vt.
  282, 286,