Republic Mortgage Insurance issued policies to lender Countrywide insuring against default by Countrywide’s borrowers. Each policy contained an arbitration clause providing that Countrywide “may elect to settle by arbitration a controversy, dispute, or other assertion of liability or rights which it initiates arising out of or relating to this policy.” A dispute arose after Republic denied claims, contending that coverage had been rescinded due to misrepresentations allegedly made by Countrywide in applying for the policies and by its borrowers in applying for loans. Republic filed suit in state court seeking a declaration that its rescissions were consistent with policy terms; Countrywide moved to compel arbitration. Republic opposed the motion, arguing that Republic had “initiated” the dispute, and that the arbitration provision only requires disputes that Countrywide “initiates” to be arbitrated. The trial court rejected this argument and granted Countrywide’s motion to compel. The appellate court affirmed, holding that Republic’s proposed interpretation would frustrate the purpose of the agreement. The court also noted how Republic’s interpretation is commercially unreasonable because it would promote procedural gamesmanship, i.e., attempting to avoid arbitration by filing a declaratory judgment action before Countrywide filed a demand for arbitration. Republic Mortgage Ins. Co. v. Countrywide Fin. Corp., No. 06292 (N.Y. App. Div. August 18, 2011).