Mountain Valley Property, Inc. v. Applied Risk Services, Inc., No. 16-2189 (1st Cir. 2017)Annotate this Case
The arbitrator did not manifestly disregard the law and did not exceed his powers in concluding that the dispute in this case could not be arbitrated as a matter of law.
Plaintiff Mountain Valley Property, Inc. (MVP) purchased a comprehensive insurance package (the program) from Applied Underwriters, Inc. (AU). As part of the program, MVP entered into a reinsurance participation agreement with Applied Underwriters Captive Risk Assurance Co., Inc. (AUCRA) that contained a mandatory arbitration clause and a Nebraska choice-of-law clause. MVP later filed a complaint against AU, AUCRA, and Applied Risk Services, Inc. (collectively, Applied) alleging breach of contract and various tort claims arising from its participation in the program. The district court referred the claims against AUCRA to arbitration. The arbitrator concluded that the dispute could not be arbitrated as a matter of law due to the McCarran-Ferguson Act and the Nebraska Uniform Arbitration Act. AUCRA unsuccessfully moved to vacate the arbitration award under the FAA and to transfer the case to the District of Nebraska. Applied appealed from the denial of the motion to vacate. The First Circuit affirmed, holding that the arbitrator did not manifestly disregard the law and did not exceed his powers.