Enforcement of Arbitration Agreement
Vose Avenue Apartments Urban Renewal, LLC v. Certain Underwriters at Lloyd’s London, et. al, No. 2:22-cv-05691-SDW-JRA (D.N.J. Mar. 8, 2023) (Wigenton, J.)
All thirteen of Mound Cotton’s clients were dismissed from a Hurricane Ida coverage action on the ground that the insured had not complied with an insurance policy’s mandatory arbitration provision. The suit, originally filed in the state court system, had alleged that Mound Cotton’s clients breached their contracts and the duty of good faith, and it also sought a declaratory judgment in favor of coverage for hurricane damage at a residential rental construction project in New Jersey. Partners Wayne Glaubinger and Jared Markowitz removed the action to federal court and sought an immediate pre-answer dismissal without prejudice, arguing that the insured should be compelled to arbitrate any dispute pursuant to federal law.
Judge Susan D. Wigenton, writing for the United States District Court for the District of New Jersey, agreed with MCWG and granted the motion:
“These sophisticated parties both contracted for both the SAC [Suit Against Companies] Clause and the Arbitration Clause; thus, both accepted the existence and applicability of each Clause…Consequently, in accordance with [a federal statute, an international treaty], and the explicit terms of the Policies, this matter must proceed to arbitration.”
The court then compelled arbitration and granted MCWG’s motion to dismiss.
You can read the opinion here.