Opinion ID: 780850
Heading Depth: 2
Heading Rank: 1

Heading: The RPA's arbitration provision makes this dispute arbitrable

Text: 12 The Federal Arbitration Act, 9 U.S.C. § 1, et seq. (the FAA), mandates that any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); see also Battaglia v. McKendry, 233 F.3d 720, 727 (3d Cir.2000) ([A]n agreement to arbitrate a particular dispute `should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.') (quoting AT & T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986)). Moreover, the presumption [in favor of arbitrability] is particularly applicable where the [arbitration] clause is ... broad. AT & T Techs., 475 U.S. at 650, 106 S.Ct. 1415. 13 Here, the RPA's arbitrability provision is broad in scope, sweeping into its reach any dispute ... between the Company and Insured with reference to the interpretation of [the RPA], or their rights with respect to any transaction involved. See ACE Capital Re Overseas Ltd. v. Cent. United Life Ins. Co., 307 F.3d 24, 30 (2d Cir.2002) (noting that the identical clause has a broad scope) (quoting Hartford Accident & Indem. Co. v. Swiss Reinsurance Am. Corp., 246 F.3d 219, 224 (2d Cir.2001)); Houston Gen. Ins. Co. v. Realex Group N.V., 776 F.2d 514, 516-17 (5th Cir.1985) (compelling arbitration because the language any dispute ... with reference to ... [the parties'] rights with respect to any transaction involved is as broad as the language any dispute ... as to the rights or liabilities incident to this Agreement). The language any transaction involved in the arbitration provision in our case is ambiguous. However, in light of the federal policy mandating that we interpret ambiguous contractual language in favor of arbitration, we read any transaction involved to mean any business dealing relating, in whole or in part, to the RPA. Because all of Brayman's claims present a dispute under the RPA or concern a transaction involved with the RPA dispute — Home's alleged mishandling of the workers' compensation claim — the entire dispute is covered by the RPA's arbitration provision. 14 Brayman argues, however, that this dispute concerns whether Home acted in good faith as required by the Policy, rather than whether Brayman owes Home a premium under the RPA. It cites Tippins, Inc. v. The Home Indemnity Co., Civil Action No. 97-1564 (W.D.Pa. Mar. 16, 1998) (slip op.), which addressed a situation virtually indistinguishable from that presented here (as well as the same defendant, Home). Tippins, like Brayman, argued that its dispute concerned the insurer's good faith, not whether it owed an additional premium. The Tippins Court agreed, saying that [t]he relevant issue... is whether Home breached a duty of good faith and fair dealing.... Whether Tippins may [or] may not owe a premium payment to Home at the end of the day is incidental. Id. at 7. The District Court in this case found Tippins controlling. 15 Home cites district court caselaw from other circuits that takes the opposite view. Svedala Industries, Inc. v. The Home Insurance Co., 921 F.Supp. 576 (E.D.Wis. 1995), also involved a bad-faith claim and premium agreement language essentially identical to that here and in Tippins. In Svedala, which applied Wisconsin law, the Court held that the bad-faith claim was subject to arbitration because the transaction involved language in the premium agreement was sufficiently broad to bring the claim within the premium agreement's arbitrability provision. Id. at 579-80. In re Home Insurance Co., 908 F.Supp. 180 (S.D.N.Y.1995), involved the same parties and facts as Svedala and reached the same result. 16 While Tippins is both plausible and well-reasoned, we forego following its path and instead concur more with the Svedala Court's reasoning. In light of the breadth of the arbitration provision at issue here, as well as the federal policy counseling that doubts be construed in favor of arbitration, the District Court should have held this dispute arbitrable. 17 That the RPA says [n]othing in this Agreement shall modify, alter, or amend any of the terms and conditions of the Policies relating to the insurance afforded thereunder does not alter our conclusion. We read this provision, by virtue of the language relating to the insurance afforded thereunder, to declare only that the RPA does not modify the insurance coverage afforded by the Policy. The RPA, by its own terms, modifies other aspects of the relationship between Brayman and Home. For example, it requires Brayman to pay a retrospective premium where the Policy itself does not so prescribe. 18 We also reject the notion that this dispute is not subject to mandatory arbitration because Brayman's breach-of-contract and bad-faith claims arise under the Policy rather than the RPA. See Polselli v. Nationwide Mut. Fire Ins. Co., 126 F.3d 524, 530 (3d Cir.1997) (holding that bad-faith claims under § 8371 arise under insurance policies). Polselli does not necessarily preclude the conclusion that Brayman's claims also relate sufficiently to the RPA that they are swept into the RPA's broad arbitration clause. If the allegations underlying the claims `touch matters' covered by [an arbitration clause in a contract], then those claims must be arbitrated, whatever the legal labels attached to them. Genesco, Inc. v. T. Kakiuchi & Co., Inc., 815 F.2d 840, 846 (2d Cir.1987) (holding civil RICO and Robinson-Patman Act claims subject to arbitration based on an arbitration provision in sales-confirmation forms). 19 Finally, we note that there is no language in the Policy that is incompatible with this cause of action being resolved in an arbitral forum. The Policy does not provide that it is to be enforced in court or specify a choice of forum. Compare ITT Hartford Life & Annuity Ins. Co. v. Amerishare Investors, Inc., 133 F.3d 664, 670 (8th Cir.1998) (noting that the agreement at issue provided that Amerishare consents to the personal jurisdiction of the Minnesota courts with respect to the loan documents). 20