Title: Ex Parte Dees
Citation: 594 So. 2d 77
Docket Number: 1910070
State: Alabama
Issuer: Alabama Supreme Court
Date: January 31, 1992

594 So. 2d 77 (1992)
Ex parte Beverly DEES.
(Re Beverly DEES v. AARCO INSURANCE AGENCY, INC., et al.)
1910070.

Supreme Court of Alabama.
January 31, 1992.
*78 Patrick M. Sigler and Stephen C. Moore, Mobile, for appellant.
Abe L. Philips, Jr. and David M. O'Brien of Reams, Philips, Killion, Brooks, Schell, Gaston &amp; Hudson, P.C., Mobile, for appellees.
ALMON, Justice.
Beverly Dees petitions this Court for a writ of mandamus directed to the Honorable Ferrell D. McRae, Judge of the Mobile County Circuit Court. Judge McRae granted a stay of proceedings in a declaratory judgment action filed by Dees pending arbitration of the underlying dispute over coverage under a policy of marine insurance, and Dees seeks to have the stay set aside. The declaratory judgment action named as defendants Aarco Insurance Agency, Inc.; North American Fishing Insurance Mutual Association, Limited ("NAFIMA"); and N-Surance Outlets, Inc.
Beverly Dees owns a shrimp boat, the Captain Bill. On August 2, 1990, she applied, through Aarco, for insurance on the boat. The application was handled through insurance brokers, and a "cover note" was issued on September 14, 1990, whereby a London broker notified N-Surance Outlets, Inc., that "In accordance with your instructions we have effected insurance" with NAFIMA. The cover note stated that the insurance was
A marine surveyor made an inspection of the Captain Bill on August 3, 1990, pursuant to a contract for a condition and valuation report together with "such recommendations as found necessary in accordance with marine underwriting." His report listed 14 recommendations, and the report was forwarded to NAFIMA. On September 17, NAFIMA sent a letter to N-Surance Outlets stating that certain of the recommendations should be complied with within 30 days and others within 60 days and that the surveyor should confirm the compliance. The letter concluded: "Any claim for loss, damage, liability, costs, or expenses arising directly or indirectly as a consequence of failing to comply with said recommendation may be precluded from cover. We trust the assured will be guided accordingly."
Dees began making premium payments through N-Surance Outlets, Inc., on or about September 12, 1990. On December 26, 1990, the Captain Bill was damaged by fire. Dees notified Aarco of the loss on December 26, and, on December 28, submitted a written claim. The surveyor inspected the vessel on January 7 and issued a report on January 10, including the following:
NAFIMA therefore took the position that the fire was caused by a failure to comply with the surveyor's recommendations and it cancelled the coverage, effective as of the date of issue.
When Dees filed this declaratory judgment action, NAFIMA filed a motion to dismiss or to stay proceedings pending arbitration. NAFIMA attached its Rule 47, "Disputes and Arbitration." Rule 47.1.1 reads:
NAFIMA asserts that it is not an insurance company, but instead is a mutual insurance association made up of shipowners who are members of the Association.
In support of her petition for the writ of mandamus, Dees cites Ala.Code 1975, § 8-1-41(3): "The following obligations cannot be specifically enforced: ... An agreement to submit a controversy to arbitration." Dees acknowledges that recent cases have held that the Federal Arbitration Act, 9 U.S.C. § 1 et seq., preempts § 8-1-41(3) with regard to contracts in interstate commerce.[1]Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985); York International v. Alabama Oxygen Co., 465 U.S. 1016, 104 S. Ct. 1260, 79 L. Ed. 2d 668 (1984); Southland Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79 L. Ed. 2d 1 (1984); Ex parte McKinney, 515 So. 2d 693 (Ala.1987); Ex parte Costa &amp; Head (Atrium), Ltd., 486 So. 2d 1272 (Ala.1986); Ex parte Alabama Oxygen Co., 452 So. 2d 860 (Ala. 1984). She argues, however, that NAFIMA is not entitled to avail itself of the Federal Arbitration Act, either because it is not qualified to do business in Alabama or because it denies that the contract is in effect.
NAFIMA is not qualified to do business in Alabama; instead, its policy was issued under the "surplus line insurance" provision of Ala.Code 1975, § 27-10-20: "If certain insurance coverages cannot be procured on terms acceptable to the insureds from authorized insurers, such coverages, designated `surplus lines,' may be procured from unauthorized insurers subject to" certain conditions. Dees argues that NAFIMA should not be allowed to take advantage of Alabama statutory law by writing insurance pursuant to § 27-10-20 and then to circumvent other provisions of Alabama statutory law, namely, § 8-1-41(3). We fail to see how this argument refutes the principle of preemption. As we understand the argument, its necessary consequences would prohibit any party that accepts some benefit of Alabama law from asserting that the Federal Arbitration Act is applicable to that party's interstate contract. Such a result is obviously contrary *80 to the holdings of the United States Supreme Court and this Court in the cases cited above.
Dees also argues that NAFIMA cannot invoke the arbitration provision, made a part of the contract by the incorporation of NAFIMA's rules, and, at the same time, deny that a contract exists. The true import of NAFIMA's position, however, is that no coverage exists because of Dees's failure to comply with the contractual conditions for coverage. Again, we fail to see how this argument overcomes the requirements imposed by Southland Corp. v. Keating and the other cases cited above. Similarly, Dees's argument that NAFIMA waived the arbitration provision by not raising it until she filed this declaratory judgment action is without merit. See Ex parte McKinney, supra; Ex parte Costa &amp; Head, supra.
Finally, Dees argues that NAFIMA is estopped to deny coverage because it accepted premiums after receiving notice of a loss. This argument does not diminish the effect of the arbitration clause. The question whether it has any merit is for the arbitrators.
WRIT DENIED.
MADDOX, ADAMS, STEAGALL and INGRAM, JJ., concur.
[1]  A contract of maritime insurance is a maritime contract subject to admiralty jurisdiction, Offshore Logistics Services, Inc. v. Mutual Marine Office, Inc., 639 F.2d 1168 (5th Cir.1981), and is subject to the Federal Arbitration Act, 9 U.S.C. § 2; Triton Lines, Inc. v. Steamship Mut. Underwriting Ass'n (Bermuda) Ltd., 707 F. Supp. 277 (S.D.Tex.1989).