United States District Court, N.D. Mississippi, Aberdeen Division
MEMORANDUM OPINION GRANTING DEFENDANT PERFORMANCE
INSURANCE SERVICES' MOTIONS TO COMPEL
this Court is Defendant Performance Insurance Services'
motions to dismiss, or, in the alternative compel arbitration
[11, 22]. In this case, Plaintiff Fireman's Fund
Insurance Company ("FFIC") alleges the Defendants
failed to provide certain required documents to an insured,
and, as a result FFIC was forced to pay out an insurance
claim in excess of the stated limits of the insured policy.
One of the Defendants, Performance Insurance Services
("Performance") argues that FFIC's claims
against it should be dismissed, or alternatively arbitrated
pursuant to arbitration provisions contained in the
agreements between the two.
Regions Insurance, Inc. ("Regions") has filed an
indemnity cross-claim against Performance. Performance argues
that this cross-claim should also be dismissed, or
alternatively, submitted to arbitration. The Court finds that
these motions should be granted with respect to compelling
arbitration but denied with respect to dismissing the claims.
and Procedural Background
2014, nonparty Dustin Roberts consulted with Casey Johnson,
an employee of Regions, about obtaining insurance coverage
for his business. Compl. ¶¶ 6-7. At that time,
Regions was acting as a producer for Performance selling FFIC
insurance policies, among other insurance products. Compl.
¶ 7. Johnson secured a policy for Roberts through FFIC
that included coverage for several vehicles Roberts owned.
Id. ¶¶ 7-8. By the terms of the policy,
coverage included a single limit of $500, 000 in
non-stacking, uninsured motorists coverage for each
vehicle. Id. ¶ 8.
February 2, 2015, while the policy was in effect,
Roberts' wife, Tiffany, and his daughter, Kaylee, were
driving a vehicle insured under the policy, when they were
struck by an uninsured driver. Id. ¶¶
10-12. Tiffany was killed, and Kaylee was severely injured.
Id. ¶ 12.
filed an insurance claim with FFIC. Id. ¶ 13.
Because the policy provided for non-stacking coverage, FFIC
initially believed that maximum recovery amount was $500,
000. However, while investigating the claim, FFIC discovered
that Roberts was unaware of the difference between stacking
and non-stacking coverage. FFIC also discovered that Roberts
had not executed an uninsured motorists coverage election
form. Id. ¶ 14. Mississippi law requires that
before issuing a policy that provides for non-stacking
coverage, the insurer must inform the insured about the
limits of non-stacking coverage and obtain an election form
from the insured. Miss. Code Ann. §83-11-102.
eventually filed suit against FFIC, asserting FFIC's
failure (through its agents and subagents) to comply with
§ 83-11-102 meant that he was entitled to stack the
coverage of all of his vehicles. Id. ¶ 15.
Despite the fact the policy provided only $500, 000 of
coverage, FFIC believed they could not rely on the policy
language, and therefore settled with Roberts for $3, 132,
946.00. Id. ¶ 16-17.
now brings claims for negligence, negligent training and
supervision, breach of contract, and breach of fiduciary
duties against Defendants, alleging that Johnson (and
therefore Regions, and therefore Performance) failed to
discuss the uninsured motorists coverage with Roberts and
obtain the election form as required by Mississippi law. As a
result, FFIC argues, it was forced to pay Roberts $2, 632,
946 more in insurance proceeds than it should have under the
policy. Regions subsequently filed an indemnity cross-claim
against Performance arguing that Performance must indemnify
Regions for any damages it ultimately pays to FFIC.
filed a motion to dismiss, or in the alternative, compel
arbitration of FFIC's claims against it, arguing that the
arbitration provisions in the agreements executed between
FFIC and Performance requires the parties to arbitrate this
dispute. Performance also filed a motion to dismiss, or in
the alternative, compel arbitration of Regions'
cross-claim, arguing that Regions cross-complaint failed to
state a claim for relief, or alternatively, Regions should be
forced to arbitrate its indemnity cross-claim. The Court now
addresses those motions in turn.
Performance's Motion to Dismiss, or in the Alternative
Compel Arbitration of FFIC's claim
Court generally assesses whether the parties agreed to
arbitrate the dispute in question using a two-step process:
"(1) whether there is a valid agreement to arbitrate
between the parties; and (2) whether the dispute in question
falls within the scope of that arbitration agreement."
See Gross v. GGNSC Southaven, L.L.C., 817 F.3d 169,
176 (5th Cir. 2016). If the Court finds that the parties have
a valid agreement to arbitrate and that the dispute is within
the scope of the arbitration agreement, the Court generally
examines whether any legal constraints foreclose arbitration
of those claims. See Brown v. Pac. Life Ins. Co.,
462 F.3d 384, 396 (5th Cir. 2006) (citing Mitsubishi
Motors Corp., 473 U.S. at 628, 105 S.Ct. 3346)). Courts
must "apply the federal policy favoring arbitration when
addressing ambiguities regarding whether a question falls
within an arbitration agreement's scope, but... do not
apply this policy when determining whether a valid agreement
exists." Sherer v. Green Tree Servicing LLC,
548 F.3d 379, 381 (5th Cir. 2008). See Volt Info. Scis.,
Inc. v. Bd. o/Trs. of Leland Stanford Jr. Univ., 489
U.S. 468, 475-76, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989);
Banc One Acceptance Corp. v. Hill, 367 F.3d 426, 429
(5th Cir. 2004) (citing Will-Drill Res., Inc. v. Samson
Res. Co., 352 F.3d 211, 214 (5th Cir. 2003));
Westmoreland v. Sadoux, 299 F.3d 462, 465 (5th Cir.
2002). The determination of whether a party is bound by an
arbitration agreement is included within the broader issue of
whether the parties agreed to arbitrate. Bridas
S.A.P.I.C. v. Gov't of Turkmenistan, 345 F.3d 347,
355 (5th Cir. 2003) (citing Smith/Enron Cogeneration Ltd.
P'ship, Inc. v. Smith Cogeneration Int'l, Inc.,
198 F.3d 88, 95 (2d Cir. 1999)). "The purpose of the FAA
is to give arbitration agreements the same force and effect
as other contracts-no more and no less." Washington
Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 264 (5th
Cir. 2004) (citing 9 U.S.C. § 2); see Pennzoil Expl.
& Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061,
1064 (5th Cir. 1998) ("[arbitration is a matter of
contract between the parties").
and FFIC do not dispute that a valid arbitration agreement
exists. See PL's Resp. at pp. 1-2. Rather, FFIC
argues that the scope of the arbitration provision does not
apply to the claims it makes against Performance.
Fifth Circuit distinguishes between "broad" and
"narrow" arbitration clauses. Baudoin v.
Mid-Louisiana Anesthesia Consultants, Inc., 306
Fed.Appx. 188, 192 (5 th Cir. 2009) (citing Complaint of
Hornbeck Offshore (1984) Corp.,981 F.2d 752, 754-755
(5th Cir. 1993)). Where the clause is broad, "the action
should be stayed and the arbitrators permitted to decide
whether the dispute falls within the clause."
Hornbeck, 981 F.3d at 754 (citing Sedco v.
Petroleos Mexicanos Mexican Nat'l Oil, 767 F.2d
1140, 1145 n. 10 (5th Cir. 1985)). But if the clause is
narrow, the court should determine whether the dispute falls
within the clause before it refers the matter of arbitration.
Id. Where the scope of the clause is "fairly
debatable or reasonably ...