Balvin v. Rain and Hail, LLC, No. 18-3018 (8th Cir. 2019)
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Defendant appealed the district court's order vacating an arbitration award, contending that the district court did not properly defer to the arbitrator's decision. Plaintiff cross appealed. In this case, defendant issued a crop insurance policy to plaintiff, a South Dakota farmer, in 2015 and subsequently determined that the appraised value of plaintiff's crop exceeded his policy's guaranteed minimum crop production, denying his claim.
The Eighth Circuit held that the arbitrator did not exceed his powers because the dispute about the interpretation of "appraised value" was not even before the arbitrator. Furthermore, the arbitrator's findings supported the denial of plaintiff's claims on a different ground -- that he abandoned his crop -- despite plaintiff's argument to the contrary in his cross appeal. The court also held that, even if the arbitrator did exceed his powers by making a good farming practices determination, the error was harmless because he did not exceed his powers in denying plaintiff's claim based on the appraised value of plaintiff's crop. Accordingly, the court reversed in part, affirmed in part, and remanded to the district court to enter an order confirming the arbitration award.
Court Description: Gruender, Author, with Smith, Chief Judge, and Benton, Circuit Judges] Civil case - Arbitration. The crop policy in question incorporated American Arbitration Association rules, and by doing so, the parties agreed to allow the arbitrator to determine threshold questions of arbitrability; the arbitrator did not exceed his powers because he was at least arguably construing or applying the contract when he made credibility determinations about the appraisals of Balvin's crops; as a result, he did not exceed his authority by denying Balvin's claim based on the appraised value of the crops; the decision is also supported by the arbitrator's finding that Balvin abandoned the crops; even if the abandonment finding was outside the scope of the arbitrator's power because it required a finding of a good farming practice, the error was harmless in light of the determination regarding appraised value.
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