Opinion ID: 219024
Heading Depth: 2
Heading Rank: 4

Heading: Denial of Motion To Dismiss Arbitration Award

Text: Farmers argues that the district court erred in holding that the E1400 endorsement established the limit of liability in policies that contained both endorsements. Farmers argues that we should reverse the district court, vacate the arbitration award, and remand for new arbitration proceedings with instructions to apply the MN008 endorsement. We conclude that such further proceedings are unnecessary because the arbitrator applied the competitive price standard set forth in MN008 and Minnesota Statutes § 72A.201, subdivision 6(14). Before announcing the amount that Farmers underpaid Alpine, the arbitrator found that Farmers was paying a rate not based upon competitive pricing in the auto glass replacement industry in Minnesota which is a competitive industry. This language is almost identical to the language set forth in MN008 that Farmers will pay the prevailing competitive price and in Minnesota Statutes § 72A.201, subdivision 6(14), requiring that the insurer's payment be based on a competitive price that is fair and reasonable within the local industry at large. The arbitrator's determination that Farmers breached the terms of its insurance policy regardless of which limit of liability is applied, demonstrates that the arbitrator found that Farmers did not satisfy even the MN008 endorsement, which the parties have deemed less generous than the E1400 endorsement. Farmers contends that a new arbitration is required because the arbitrator failed to see a distinction between the two endorsements and thus began his analysis from the false premise that there is no difference in the limitations of liability. Like the district court, we see little distinction between the two standards and echo its question why it would ever be `necessary' to pay more than the `prevailing competitive price.' D. Ct. Order of Feb. 26, 2010, at 10. We understand Farmers's argument that the word necessary denotes reasonableness, but the arbitrator's finding that the rate Farmers was paying was not based upon competitive pricing indicates that he applied a competitive price standard. Nothing in the arbitrator's decision indicates that he applied a reasonableness standard. Accordingly, the arbitrator's determination that the award is the same regardless of which policy endorsement is applicable does not require reversal or new proceedings because the award was based on the finding that Farmers failed to pay the competitive price.