Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 1 of 19 A TTORNEY S FOR A PPELLANT John D. Papageorge Jeffrey D. Stemerick Taft Stettinius & Hollister, LLP Indianapolis, Indiana A TTORNEY FOR A PPELLEE Brad M. Gordon Grotefeld, Hoffman, Schleiter, Gordon, Ochoa, & Evinger, LLP Chicago, Illinois



### IN THE 

# COURT OF APPEALS OF INDIANA

Watts Water Technologies, Inc. , Appellant

- Defendant ,
v. 

### State Farm Fire & Casualty Co. a/s/o Richard Lucka , Appellee

- Plaintiff

. December 27, 20 16 Court of Appeals Ca se No. 45A04

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- 831 Appeal from the Lake Superior Court The Honorable Diane Kavadias Schneider, Judge Trial Co urt Cause No. 45D11

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- 125

Brown , Judge
.Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 2 of 19 [1] Watts Water Technologies, Inc. (“Watts”) appeals the trial court’s order denying its motion to compel arbitration. Watts raises three issues which we consolidate and restate as whether the trial court erred in denying its motion. We affirm.


### Facts and Procedural History

[2] Watts and State Farm Fire & Casu alty, Co. (“State Farm”) were signatories to a Property Subrogation Arbitration Agreement (the “Arbitration Agreement”) , which provided in part:
By signing this Agreement, the company accepts and binds itself to the following:
Article First Compulsory Provisions Signatory companies must fo rego litigation and submit any personal, commercial, or self

- insured property subrogation claims to Arbitration Forums, Inc. (herein after referred to as AF).
* * * * *
Article Fourth Non

- Compulsory Provisions
The parties may, with written consent, submit a claim: (a) that exceeds this forum’s monetary limit (b) where a non

- signatory wants to participate. Once a company gives written consent, all Articles and Rules of this forum are applicable, and the company may not revoke its consent.
* * * * *Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 3 of 19 Article Fifth AF’s Function and Authority AF, representing the signatory companies, is authorized to: (a) make appropriate Rules and Regulations for the presentation and determination of controversies under this Agreement; (b) determine the location, and the means by which, arbitration cases are heard; (c) determine qualification criteria and provide for the selection and appointment of arbitrators; (d) establish fees; (e) invite other insurance carriers, noninsurers, or self

- insureds to p articipate in this arbitration program, and compel the withdrawal of any signatory for failure to conform to the Agreement or the Rules issued there under.
* * * * *
Article Sixth Withdrawals Any signatory company may withdraw from this Agreement by noti ce in writing to AF. Such withdrawal will become effective sixty (60) days after receipt of such notice except as to cases then pending before arbitration panels. The effective date of withdrawal as to such pending cases shall be upon final compliance wi th the finding of the arbitration panel on those cases. Appellant’s Appendix at 41

- 42

.

[3] In November 2014, Arbitration Forums gave notice to the parties that it intended to amend the Arbitration Agreement. The notification stated:
Effective January 1, 2015, the following changes to AF’s Property Program will be implemented:Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 4 of 19 A new exclusion to Article Second of the Property Subrogation Arbitration Agreement to read:

• “No company shall be required, without its written consent, to arbitrate any claim or suit if: (i) it is a product liability claim arising from an alleged defective product.”

* * * * *
While the use of the Property Program to resolve disputes involving product liability claims arising from an alleged defective product will no longer be comp ulsory as of January 1, 2015, cases filed prior to January 1, 2015, will remain in arbitration’s jurisdiction and will be processed to hearing.

Id. at 74.

[4] Effective January 1, 2015, the amended Arbitration Agreement (the “Amended Arbitration Agreement”) provid ed :

Article Second Exclusions
No company shall be required, without its written consent, to arbitrate any claim or suit if:

* * * * *
(i) it is a product liability claim arising from an alleged defective product.

Id. at 72.Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 5 of 19 [5] On July 23, 2015, State Farm a/s/o Richard Lucka filed a complaint against Watts alleging that Lucka purchased a water heater with a Wat ts brand connector and that the connector failed on November 30, 2014, causing water damage to Lucka’s home and property. The complaint alleged : Count I, “Products Liab ility

– Defective Manufacturing; ” Count II, “Products Liability

– Defective Design; ” Count III, “Products Liab ility

– Negligent Manufacturing;” Count IV, “Negligent Design; ” and Count V, “Breach of Implied Merchantabi lity. ” Id. at 11

- 13 (capitalization removed)

. State Farm alleged that it was subrogated to the rights of the insured, Lucka, to the extent of its payments to or for Lucka. On October 28, 2015, State Farm filed an amended complaint correcting the address where the inc ident occurred.

[6] On December 17, 2015, Watts filed a Motion to Dismiss or, In the Alternative, to Stay Proceedings and Compel Arbitration. On March 22, 2016, the court denied Watts’s motion. Specifically, the order states:
Findings of Facts
1. [State F arm] filed a claim against [Watts] for, among other things, a product liability claim.

2. This cause of action stems from a defective Watts water heater connector that failed resulting in water damage on November 30, 2014 to the home of Richard Lucka, Sta te Farm insured.
3. The water damaged Mr. Lucka’s home and property resulting in State Farm paying $27,805.00 under his insurance policy.Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 6 of 19 4. An engineer inspected the Wat t s water heater connector and determined it was defective on January 7, 2015.

5. State Farm did not make a final payment to Mr. Lucka until January 29, 2015.
6. State Farm and Watts are members of Arbitration Forums, Inc. (hereinafter referred to as AF).
7. AF has the ability to [] make appropriate Rules and Regulations for the present ation and determination of controversies under an agreement with AF.
8. AF exercised their right and changed the articles of their Property Subrogation Arbitration Agreement that added the exclusion and now reads, “No company shall be required, without it s written consent, to arbitrate any claim or suit if: (i) it is a product liability claim arising from an alleged defective product.”
9. This new exclusion was effective as of January 1, 2015.

Conclusions of Law

10. The determination of whether an enforc eable agreement to arbitrate exists is a matter of contract interpretation, and most importantly, a matter of the parties’ intent. Precision Homes of Indiana, Inc. v. Pickford , 844 N.E.2d 126 (Ind. Ct. App. 2006) [, trans. denied ]

. 11. State law governs the initial question of whether the parties entered into a valid agreement to arbitrate. Mislenkov v. Accurate Metal Detinning, Inc. , 743 N.E.2d 286 (Ind. Ct. App. 2001).Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 7 of 19 12. A court may order arbitration of a particular dispute on ly where the court is satisfied that both parties agreed to arbitrate that dispute. Granite Rock Co. v. Int’l Brotherhood of Teamsters, et al. , 130 S. Ct . 2847 (2010).
13. “An agreement to arbitrate is a matter of contract: ‘it is a way to resolve those disputes

– but only those disputes

– that the parties have agreed to submit to arbitration.” Chiron Corp. v. Ortho Diagnostic Sys., Inc. , 207 F.3d 1126 (9th Cir. 2000).
14. State Farm and Watts were both members of AF and gave AF the ability to make rule s and regulations as AF saw fit.
15. AF wrote a notification about a new policy was [sic] sent in November of 2014. The new exclusion was to be effective January 1, 2015.
16. The notification draws the attention of the parties to understand that, “While the use of the Property Program to resolve disputes involving product liability claims arising from an alleged defective product will no longer be compulsory as of January 1, 2015, cased [sic] filed prior to January 1, 2015, will remain in arbitration’s j urisdiction and will be processed to hearing.”
17. This statement by AF makes the filing date the triggering event for the new policy not the date of the injury.
18. As a part of the AF agreement, participants had a way to withdraw from the services of AF.
19. Neither, State Farm nor Watts withdrew from the AF agreement. By not withdrawing from participating in AF, State Farm and Watts subjected themselves to the new exclusion.Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 8 of 19 Id. at 7

- 9

.


### Discussion

[7] The issue is whether the trial court erred in denyin g Watts’s motion to compel arbitration. 1 Watts argues that neither the Amended Arbitration Agreement nor Arbitration Forum s ’ notice terminated its right to arbitrate State Farm’s property subrogation claim that accrued prior to January 1, 2015

. Watts ass erts that Arbitration Forums is a nonparty to the Arbitration Agreement and that its “take on the subject is simply not relevant to the intent of Watts or State Farm.” Appellant’s Brief at 16. Watts contends that this C ourt should avoid an interpretation of the Arbitration Agreement that would render State Farm’s agreement to arbitrate illusory. It argues that State Farm is collaterally estopped from relitigating the issue of whether the Arbitration Agreement in effect when its claim accrued governs the arbitrability of the claim. Watts also asserts that State Farm did not allege a product liability claim subject to the product liability e xclusion.

[8] State Farm argues that Arbitration Forums, pursuant to t he rule

- making authority expressly granted to it by Watts, clearly made the date of filing determinative. State Farm contends that by carving out an exception for only claims which had been filed prior to January 1, 2015, the only reasonable

1 On July 25, 2016, Watts filed a motion to strike material not in the record. Specifically, it argued that the Declaration of Timothy McKernan, which State Farm included in its Addendum, was not filed in the trial court and is not part of the record on appeal. By separate order, we grant Watts’s motion to strike.Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 9 of 19 co nstruction of Arbitration Forum s ’ amendment is that the excl usion would apply to all other unfiled claims, notwithstanding whether a party could have filed a claim in 2014 or earlier. It argues that to extend the Amended Arbitration Agreement to include product defect cases filed in 2015 would contradict the plain language of the rule and the i ntentions of Arbitration Forums and the signatories it represented as expressed in that language. It further contends that Watts’s argument that Arbitration Forums’ own rule is extrinsic evidence is mistaken because the Arbi tration Agreement expressly authorized all rules and regulations issued by Arbitration Forums. State Farm also argues that Watts has no vested right to arbitration of any matter until a claim is formally filed and that Watts had only a contingent right to arbitrate claims based on the parties’ mutual status as signatories

. It states that the Amended Arbitration Agreement is not illusory because a disputed claim filed prior to a revision of the rules must be arbitrated with Arbitration Forums , and that it alleged a product liability claim subject to the product liability exclusion.

[9] Our standard of review in this case is de novo

. Showboat Marina Casino P’ship v. Tonn & Blank Constr. , 790 N.E.2d 595, 597 (Ind. Ct. App. 2003) (citing Mislenkov v. Accurate M etal Detinning, Inc. , 743 N.E.2d 286, 290 (Ind. Ct. App. 2001)). It is well settled that Indiana recognizes a strong policy favoring enforcement of arbitration agreements. Homes By Pate, Inc. v. DeHaan , 713 N.E.2d 303, 306 (Ind. Ct. App. 1999). Neverthe less, arbitration is a matter of contract, and a party cannot be required to submit to arbitration unless the party has agreed to do so. Id.Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 10 of 19 [10] Under Indiana contract law, the party seeking to compel arbitration has the burden of demonstrating the existence of an enforceable arbitration agreement. Showboat Marina Casino P’ship , 790 N.E.2d at 597

- 598 (citing Wilson Fertilizer & Grain , Inc. v. ADM Milling Co. , 654 N.E.2d 848, 849 (Ind. Ct. App. 1995), trans. denied ). In determining whether the parties have agreed to arbitrate a particular dispute, the court “ will decide whether the dispute, on its face, is covered by the language of the arbitration provision.” St. John Sanitary Dist. v. Town of Schererville , 621 N.E.2d N.E.2d 1160, 1162 (Ind. Ct. App. 1993)

. When determining whether the parties have agreed to arbitrate a dispute, we also apply ordinary contract principles governed by state law. Showboat Marina Casino P’ship , 790 N.E.2d at 598 (citing Mislenkov , 743 N.E.2d at 289 (citing St. John Sanitary D ist. , 621 N.E.2d 1160 at 1 162) )

. “In addition, ‘ [w]hen construing arbitration agreements, every doubt is to be resolved in favor of arbitration,’ and the ‘ parties are bound to arbitrate all matters, not explicitly excluded, that reasonabl y fit within the language used.’” Id. (quoting Mislenkov , 743 N.E.2d at 289 (citing St. John Sanitary Dist. , 621 N.E.2d at 1162) )

. However, parties are only bound to arbitrate those issues that by clear language they have agreed to arbitrate; arbitration agreements will not be extended by construction or implication. Id.

[11] Whether the parties agreed to arbitrate any disputes is a matter of contract interpretation, and most impor tantly, a matter of the parties’ intent. MPACT Const. Grp., LLC v. Superior Concrete Construc tors, Inc. , 802 N.E.2d 901, 906 (Ind. 2004)

. “Courts in Indiana have long recognized the freedom of parties to enterCourt of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 11 of 19 into contracts and have presumed that contracts represent the freely bargained agreement of the parties.” Id. (quoting Trimble v. Ameritech Publ’ g, Inc., 700 N.E.2d 1128, 1129 (Ind. 1998) )

. Consequently, imposing on parties a policy favoring arbitration before determining whether they agreed to arbitr ate could frustrate the parties’ intent and their freedom to contract. Id. “ The S upreme Court has made this clear

– ‘ arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’” Id. (quoting AT & T Techs., Inc. v. Comm c’ns Workers of Am., 475 U.S. 643, 648, 106 S. Ct. 1415 (1986) ).

[12] To the extent Watts asserts that Arbitration Forums’ notice regarding the amendment is extrinsic or that Arbitration Forums did not have the authority to amend the Arbitration Agreement to provide for the product liability exclusion , we disagree. Watts agreed to the terms of the Arbitration Agreement, and Article Fifth of the A rbitration Agreement stated that Arbitration Forum s , “representing the signa tory companies, is authorized to . . . make appropriate Rules and Regulations for the presentation and determination of controversies under this Agreement . . . .” Appellant’s Appendix at 42. We conclude that the notice and amendment fall within Arbitrat ion Forums’ authority.

[13] As for Watts’s argument that the language of the amendment did not remove the requirement of arbitration from State Farm’s claim, we observe that t he notice from Arbitration Forums regarding the amendment state s : “While the use of th e Property Program to resolve disputes involving product liability claims arising from an alleged defective product will no longer be compulsoryCourt of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 12 of 19 as of January 1, 2015, cases filed prior to January 1, 2015, will remain in arbitration’s jurisdiction and will be processed to hearing.” Id. at 74 (emphasis added). Further, the Amended Arbitration Agreement , which was effective January 1, 2015, provided that “[n]o company shall be required, without its written consent, to arbitrate any claim or suit if . . . it is a product liability claim arising from an alleged defective product.” Id. at 72 (emphasis added). We cannot say that th e language in the notice or amendment is ambiguous. The notice and Amended Arbitration Agre ement indicate that the filing date of a claim or suit determines whether compuls ory arbitration applies to the claim or suit

. State Farm filed its complaint against Watts on July 23, 2015. Accordingly, it is not subject to compulsory arbitration

. See S tate Farm Fire & Cas. Co. v. Watts Regulator Co. (filed September 29, 2016), Ill. App. Ct. No. 2

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- 0275, slip op. at 7 (addressing an event in which Cecilia Montero’s home sustained water damage on September 7, 2013, the Arbitration Agreement , and the Nov ember 2014 notice regarding the amendment effective January 1, 2015, and holding that “[t]he amendment clearly states that cases filed prior to January 1, 2015, will remain subject to compulsory arbitration. Necessarily, if a claim was filed on or after J anuary 1, 2015, the only reading of the amendment is that the claim does not remain subject to the agreement. Here, Montero’s claim was filed on April 15, 2015, and, therefore, it is not subject to compulsory arbitratio n through Arbitration Forums ”).

[14] Wat ts cites Homes by Pate, Inc. v. DeHaan , 713 N.E.2d 303 (Ind. Ct. App. 1999), Chesterfield Mgmt., Inc. v. Cook , 655 N.E.2d 98 (Ind. Ct. App. 1995), reh’g denied ,Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 13 of 19 trans. denied , and Nolde Bros., Inc. v. Local No. 358 , 430 U.S. 243 (1977), for the assertion that State Farm’s duty to arb itrate survived the amendment. The arbitration provisions addressed in those cases did not include language providing an entity with the authority to “make appropriate Rules and Regulations for the presentation and determinati on of controversies under this Agreement , ” language to which the parties in this case expressly agreed upon. Appellant’s Appendix at 42, 73. Nor do those cases involve such an entity providing for a property liability exclusion similar to the language in the notice and Amended Arbitration Agreement. See Homes by Pate, Inc. , 713 N.E.2d at 305

- 306, 309 (addressing a residential building contract and two

- year warranty which required arbitration with respect to disputes as to whether particular repairs were covered by the warranty and holding that a logical reading of the warranty led to the conclusio n that, so long as a defect occurred within the two

year period of warranty coverage, any dispute concerning that cove rage must be arbitrated); Chesterfield Mgm t. Inc. , 655 N.E.2d at 102 (addressing an arbitration provision in a lease and observing that the lease’s arbitration clause provided in part that “ [a]ny dispute under any of the paragraphs of this Lease shall be settled by arbitration” ); Nold e Bros., Inc

. , 430 U.S. at 244, 252

- 254, 97 S. Ct. at 1068, 1072

- 1073 (addressing whether a party to a collective

- bargaining contract may be required to arbitrate a contractual dispute over severance pay pursuant

to an arbitration clause of that agreement even though the dispute, although governed by the contract, arose after its termination, noting that the parties drafted their broad arbitration clause against a backdrop of well

- established federal labor policy favoring arbitration, and holding “ even though the parti esCourt of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 14 of 19 could have so provided, there is nothing in the arbitration clause that expressly excludes from its operation a dispute which arises under the contract, but which is based on events t hat occur after its termination. The contract’s silence, of course, d oes not establish the parties’ intent to resolve post

- termination grievances by arbitration. But in the absence of some contrary indication, there are strong reasons to conclude that the parties did not intend their arbitration duties to terminate automat ically with the contract ”).

[15] With respect to Watts’s argument that State Farm’s duty to arbitrate is illusory, we observe that Watts does not argue that Arbitration Forums ’ duty under the Amended Arbitration Agreement is illusory. Article Sixth of the Agre ement allows any signatory to withdraw from the Agreement by notice in writing to Arbitration Forums. In addition, other categories of damage to property remain subject to compulsory arbitration under the Amended Arbitration Agreement. The Amended Agreem ent and the n otice require that State Farm arbitrate certain claims asserted before January 1, 2015. The fact that product liability claims are not subject to compulsory arbitration under the Amended Agreement does not render the agreement illusory. See Watts Regulator Co. (filed September 29, 2016), Ill. App. Ct. No. 2

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- 0275, slip op. at 8 (rejecting Watts’s argument that State Farm could avoid their obligations to arbitrate).

[16] As for Watts’s assertion that State Farm is collaterally estopped from relitigating the issue of w hether the Arbitration Agreement in effect when its claim accrued governs the arbitrability of the claim, we note that issue preclusion, or collateral estoppel, bars subsequent relitigation of the same factCourt of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 15 of 19 or issue where that fact or issue was necessarily adjudicated in a former lawsuit and that same fact or issue is presented in a subsequent suit. Nat’l Wine & Spirits, Inc. v. Ernst & Young, LLP , 976 N.E.2d 69 9, 704 (Ind. 2012) (citing Hayworth v. Schilli Leasing, Inc. , 669 N.E.2d 165, 167 (Ind. 1996)), reh’g denied , cert. denied , 133 S. Ct. 2780 (2013). Where, as here, a defendant seeks to prevent a plaintiff from asserting a claim that the plaintiff has prev iously litigated and lost, the use has been termed “defensive” collateral estoppel. Small v. Centocor, Inc. , 731 N.E.2d 22, 28 (Ind. Ct. App. 2000), reh’g denied , trans. denied . There are three requirements for the doctrine of collateral estoppel to appl y: (1) a final judgment on the merits in a court of competent jurisdiction; (2) identity of the issues; and (3) the party to be estopped was a party or the privity of a party in the prior action. Nat’l Wine & Spirits , 976 N.E.2d at 704. Furthermore, two additional considerations are relevant in deciding whether the defensive use of collateral estoppel is appropriate: “whether the party against whom the judgment is pled had a full and fair opportunity to litigate the issue, and whether it would be otherwis e unfair under the circumstances to permit the use of collateral estoppel.” Id. (quoting Small , 731 N.E.2d at 28).

[17] The parties cite to various trial court orders from multiple states. Some are in favor of Watts, and others favor State Farm. Specifically , Watts cites to trial court orders from Tennessee, Georgia, Nevada, and Utah. State Farm cites to trial court orders from Georgia, Massachusetts, and Minnesota. As these orders and decisions produce different results, and u nder the circumstancesCourt of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 16 of 19 present ed , we cannot say it would be fair to permit the use of collateral estoppel by Watts

.

[18] We next turn to Watts’s argument that State Farm did not allege a product liability claim subject to the product liability e xclusion. Watts cites to the Indiana Products Liability Act, Ind. Code §§ 34

- 20, and asserts that State Farm’s claims do not constitute product liability claims because State Far m did not allege “physical harm ” or “s udden, major damage” to Lucka’s property or home. Appellant’s Brief at 24

- 25. Watts asserts that State Farm’s complaint alleging that the damage happened “[o]n or about” November 30, 2014 , suggests gradually evolving damage and not the phy sical harm necessary for product liability claim s
. Id. (quoting Appellant’s Appendix at 18). Watts also argues that the complaint does not allege the nature of any defect in Watts’s connector or the nature of the risk the defect presented. Watts also asserts that a broad interpretation of the product liabil ity e xclusion would swallow the general rule requiring arbitration.

[19] State Farm argues that nowhere is a signatory required to comply with any particular state’s pleading standard to meet the exception and that whether or not the claim is subject to dismi ssal under Indiana state law has no bearing upon the interpretation of the arbitration a greement s
. State Farm also argues that Watts failed to raise any of the alleged pleading deficiencies to the trial court and has waived this issue. In reply, Watts co ntends that the trial court expressly ruled that State Farm’s claim was a product liability claim and that it did not waive the argument.Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 17 of 19 [20] Even assuming that Watts did not waive this issue and that an examination of Indiana statutory law regarding product s liability is necessary , we cannot say that reversal is warranted. Ind. Code § 34

- 20

- 1

- 1 governs the applicability of the article addressing product liability actions and provides:
This article governs all actions that are: (1) brought by a user or cons umer; (2) against a manufacturer or seller; and (3) for physical harm caused by a product; regardless of the substantive legal theory or theories upon which the action is brought.
Ind. Cod e § 34

- 6

- 2

- 105 provides that “‘[p] hysical harm’, for purposes of I C 34

- 20, means bodily injury, death, loss of services, and rights arising from any such injuries, as well as sudden, major damage to property,” and “[t]he term does not include gradually evolving damage to property or economic losses from such damage.”

[21] Ind . Code § 34

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- 1 is titled “Grounds,” and addresses the grounds for a product liability action as follows:
Except as provided in section 3 of this chapter, a person who sells, leases, or otherwise puts into the stream of commerce any product in a defecti ve condition unreasonably dangerous to any user or consumer or to the user’s or consumer’ s property is subject to liability for physical harm caused by that product to the user or consumer or to the user’s or consumer’s property if:Court of Appeals of India na | Opinion 45A04

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- 831 | December 27, 2016 Page 18 of 19 (1) that user or consumer is in the class of persons that the seller should reasonably foresee as being subject to the harm caused by the defective condition;
(2) the seller is engaged in the business of selling the product; and
(3) the product is expected to and does reac h the user or consumer without substantial alteration in the condition in which the product is sold by the person sought to be held liable under this article.

[22] State Farm alleged: Count I, “Products Liability

– Defective Manufacturing;” Count II, “Products Liability

– Defective Design ;” Count III, “Products Liability

– Negligent Manufacturing;” and Count IV, “Negligent Design.” A ppellant’s Appendix at 18

- 20. State Farm’s amended complaint also alleged that Watts manufactured the connector and/or its compon ents, that the connector failed causing water damage resulting in damages to Lucka’s property, that damages of $27,805 were incurred, and that the connector and/or its components were defective and unreasonably dangerous at the time it left Watts. We cann ot say that State Farm’s claim s did not fall within the exclusion in the Amended Arbitration Agreement which stated: “No company shall be required, without its written consent , to arbitrate any claim or suit if . . . it is a product liability claim arising from an alleged defective product.” Appellant’s Appendix at 72.Court of Appeals of India na | Opinion 45A04

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### Conclusion

[23] For the foregoing reasons, we affirm the trial court’s order denying Watts’s motion to compel arbitration.

[24] Affirmed.
Robb, J., and Mathias, J., concur.