Jade Apparel, Inc. v. United Assur., Inc., No. A-2001-14T1, 2016 N.J. Super. Unpub. LEXIS 2250 (N.J. Super. Ct., App. Div., Oct. 13, 2016).
Similar to the case discussed above, a New Jersey appellate court affirmed an order compelling arbitration under a workers’ compensation reinsurance participation agreement and a request to bind coverage and services agreement against non-signatory parties to the agreement.
The dispute arose when the insureds claimed they were overcharged and refused to make premium payments. After the policies were cancelled and replacement coverage was obtained, the insureds sued the parties to the workers’ compensation program. The insurer and producer parties moved to compel arbitration and stay the litigation. The motion court granted that relief.
The appellate court affirmed in part and reversed in part. The court found that there was an agency agreement here that incorporated the reinsurance participation agreement by reference and, therefore, was sufficiently broad to cover the dispute between the insureds and the affiliates of the reinsurer. The court also held that the arbitration clause was unambiguous and that the agreements were between sophisticated business entities. The arbitration clause was broad enough to encompass all claims, including claims of enforceability of the agreement.
Where the appellate court reversed was in the composition of the arbitration panel. The motion court ordered that arbitration take place before a retired judge. The appellate court found that the requirements for the panel members set forth in the arbitration provision were unobjectionable. The court held that to enforce the unilateral change to the agreement would essentially rewrite the terms of the parties’ agreement, which was not proper.