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Sturgeon v Allied Professionals Insurance Co.

Case No. ED94605 (MO Ct. App., E. Dist., Mar. 8, 2011)



Introduction

Allied Professionals Insurance Co., A Risk Retention Group, Inc. (Appellant) appeals from the trial court’s judgment denying its motion to compel arbitration. We affirm.

Factual and Procedural Background

On May 21, 2007, Mary Sturgeon (Respondent), a resident of Missouri and a licensed massage therapist, was covered by a professional liability insurance policy issued to her by Appellant when the massage table on which she was massaging a client in her Missouri employer’s business collapsed, causing the client to fall and incur injuries. The client sued Respondent for her personal injuries. Respondent contacted Appellant and asked Appellant to provide her with a legal defense pursuant to her insurance policy. Appellant denied coverage and refused to defend Respondent in the personal injury suit, so Respondent hired her own legal counsel. The lawsuit against Respondent was ultimately dismissed.

On December 21, 2009, in the Circuit Court of the City of St. Louis, Respondent filed a breach of contract action against Appellant, alleging that Appellant’s failure to defend her constituted a breach of the insurance contract, and seeking damages in the amount of the attorney’s fees she incurred as a result of Appellant’s failure to defend her.

On March 3, 2010, Appellant filed a motion to compel arbitration, pursuant to the mandatory arbitration clause in the insurance contract, to-wit:

V. GENERAL CONDITIONS



C. Arbitration. If a dispute or claim shall arise with respect to any of the terms or provisions of this Policy, or with respect to the performance by any of the parties to the Policy, then any party or that party’s authorized representative may, by notice as herein provided, require that the dispute be submitted within fifteen (15) days to an arbitrator in good standing with the American Arbitration Association under the Commercial Arbitration Rules of the American Arbitration Association then in effect. Any arbitration undertaken pursuant to the terms of this section shall be governed by the Federal Arbitration Act and shall occur in Orange County, California.

 

 

Judge(s): Sherri B. Sullivan
Jurisdiction: Missouri Court of Appeals, Eastern District
Related Categories: Contracts
 
Trial Court Judge(s)
Elizabeth Hogan

 
Court of Appeals Judge(s)
Clifford Ahrens
Lawrence Mooney
Sherri Sullivan

 

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the law governing the interpretation of insurance contracts of any state, (holding that kansas statute excluding contracts of insurance from valid arbitration agreements was not the regulation or taxation of such business by the several states. courts in other jurisdictions have addressed the issue of whether the mccarran-ferguson act prevents a missouri. respondent entered into the insurance contract in missouri. respondent's above. the interpretation of the insurance policies promulgated by appellant's business 16 federal preemption of a state statute regulating the insurance industry") and clark, 106 any state law shall not be applied for the purposes of this chapter, factual and procedural background foods, 94 s.w.3d at 438. standard of review entitled "validity of arbitration agreement," provides that such provisions are invalid, ("the mccarran-ferguson act, 15 u.s.c. sections 1101 et seq., prevents inadvertent introduction contracts of adhesion, to submit to arbitration any controversy thereafter arising between operates to bar the faa's preemption of the missouri arbitration act's exclusion of f.3d 1037, 1040 (7th cir.1998) ("congress passed the mccarran-ferguson act to insure state laws that would "make unlawful, or regulate, directly or indirectly, the operation of insurance policy. appellant denied coverage and refused to defend respondent in the policies. again, some historical background will assist the reader and is set forth as in its first point, appellant claims the trial court erred in denying its motion to responsible for the group's regulation. id., see 15 u.s.c. section 3902(a)(1). retention group. the purpose of section 435.350 of the missouri arbitration act is to applies to this case. accordingly, point iii is denied. regulating insurance in that it was designed to regulate the operation of an insurance missouri business, and the insurance covered her work in missouri at that missouri any of the parties to the policy, then any party or that party's authorized northland ins. co. v. bess, 869 s.w.2d 157, 159 (mo.app. e.d. 1993). our legislature may not pass laws that keep risk retention groups from operating as insurance companies; the continuation of risk retention groups, the national home insurance co. court section 193; sheehan, 44 s.w.3d at 397; am. country co., 25 s.w.3d at 487; atlas ins. company, 879 f.2d at 354. premiums had increased dramatically, and some faa); mutual reinsurance bureau v. great plains mut. ins. co., inc., 969 f.2d 931, 932 (10th cir. 1992 ) unless such act specifically relates to the business of insurance.... important factor of all. respondent lives in missouri. respondent works in missouri at a transit casualty co., no. 96-4173-cv-c-2, 1996 wl 938126 at *2 (w.d. mo. june 10, 14 appellant also maintains that the arbitration agreement is governed by the faa, has held that a state law regulates the business of insurance even though it addresses only their own insurance company to insure against their liability exposures. id. the risk the business of insurance."). lawrence e. mooney, j., concur. in its third point, appellant maintains the lrra exempts appellant, as a risk federal law from inadvertently invalidating, impairing, or superseding state laws enacted to regulate the on december 21, 2009, in the circuit court of the city of st. louis, respondent 491 (1993). in this case, the faa does not relate to insurance and its application will effect on risk retention groups. in accord, national home ins. co., 291 f.supp.2d at 531 injuries. the client sued respondent for her personal injuries. respondent contacted 2009). "the laws and judicial decisions of our state, as well as the applicable principles may regulate the formation and operation of such a group. county, california. based on these enumerated contacts, we find that missouri has the most accordingly, point i is denied. contracts which warrant new homes against defects in construction and the mccarran-ferguson act and the exception to faa preemption2 would be against missouri public policy, because it would allow the enforcement of an subject to the laws of the several states which relate to the regulation or ... ohio, 601 f.3d 505, 512 (6th appellant and asked appellant to provide her with a legal defense pursuant to her such grounds as exist at law or in equity for the revocation of any contract. mary sturgeon, ) ed94605 for all the foregoing reasons, point ii is denied. insurance policy is contrary to our public policy." allen foods, inc. v. lawlor, 94 s.w.3d 1996 wl 938126, *2 (w.d. mo. 1996); stephens, 66 f.3d at 43. in united states v. three considerations have evolved from the body of law set forth above that must contracts of adhesion, to submit to arbitration any controversy thereafter thereafter arising between the parties is valid, enforceable and irrevocable, warranty ins. risk retention group, inc., no. 4:09-cv-1123 (cej), 2009 wl 5062137 at a written agreement to submit any existing controversy to arbitration or a spreading all, or any portion, of the liability exposure of its group members; and (b) employs the most significant relationship test. dillard v. shaughnessy, fickel & scott thus, in summary, a "risk retention group" is defined as any corporation or other in her missouri employer's business collapsed, causing the client to fall and incur ________________________________ groups. id. which state has the most significant relationship to the transaction and parties: (a) the arbitration clause in an insurance contract. therefore, the california choice of law under the conventional application of the supremacy clause and rules of statutory a risk retention group...." 15 u.s.c. section 3902; swanco ins. company, 879 f.2d at state statute regulated insurance under the mccarran-ferguson act, thus, it was not preempted by the agreements in insurance contracts to be invalid. in accord, standard security life ins. co. dispute is resolved may have an affect [sic] on the substantive outcome of the litigation." 436, 438 (mo.app. e.d. 2003), citing fidelity & deposit co. of maryland v. grand nat. for the protection of the insured. as set forth above in the historical background, the is invalid under missouri law because it is prohibited by section 435.350, and nor does section 435.350 of the missouri arbitration act prohibiting mandatory id.; see also generally erie railroad v. tompkins, 304 u.s. 64 (1938). "the fact that the business of insurance free from the inadvertent preemption by federal statutes of national home insurance co. v. king, 291 f.supp.2d 518 (e.d. ky. 2003) general applicability. could be issued, its reliability, interpretation, and enforcement.'" clark, 106 s.w.3d at clifford h. ahrens, j., and dealing with the permissible scope of state regulation of risk retention and purchasing ) of the city of st. louis group in missouri, e.g., subject to missouri's prohibition against arbitration clauses in the lrra exempts risk retention groups from state laws that directly or indirectly the lrra provides: five potentially significant contacts to be considered in a contract case when determining section 2. insurance contracts. standard sec. life ins. co., 127 f.supp.2d at 1067. accordingly, the lrra's protection of risk retention groups is based on states' possible determining the state of applicable law. restatement (second) of conflict of laws statute declaring arbitration clauses in insurance contracts to be void somehow disturbs the insured and the insurer does not prevent it from being an integral part of their 15 u.s.c. section 1012(a), (b). see also stephens, 66 f.3d at 43-44, and standard sec. ) filed: march 8, 2011 this law is not contrary to a fundamental policy of missouri, we will honor the parties' group, inc., 565 f.3d 1175, 1179 (9th cir. 2009) and riverview health institute llc v. medical mutual of insurance contracts was enacted for the purpose of regulating the business of insurance, security life ins., 267 f.3d at 824; datacor, 2009 wl 5062137 at *2.3 insurance and to preempt certain state laws that prohibited or hindered the formation of life ins. co., 44 s.w.3d 389, 396 (mo.app. e.d. 2000); emerson elec. co. v. crawford 17 a written agreement to submit any existing controversy to arbitration or a insurance co., a risk retention ) provision in a written contract, except contracts of insurance and treasury v. fabe, 508 u.s. 491, 501 (1993). section 435.350, which is in fact an ins. co., no. 4:09-cv-1401 (cdp) 2009 wl 5216999 at *2 (e.d. mo. december 30, arbitrate pursuant to the agreement because missouri law prohibits mandatory arbitration of the missouri arbitration act clauses in insurance contracts and, although an arbitration clause in a contract is generally contracts applies to insurance companies across the board, and has no discriminatory s.w.3d at 486 ("regulating the business of insurance is clearly within the duties of the the second factor is satisfied as well. following reasons. insurance co., 291 f.supp.2d at 531. therefore, arbitration provisions from insurance contracts contained in section 435.350. standard prescribing the application of california law is valid and should be enforced by this group, inc., ) appellant as a risk retention group is not so broad as to exempt appellant's policies from f.supp.2d at 1068. "[section] 435.350 is an integral part of the policy relationship such grounds as exist at law or in equity for the revocation of any contract." 9 u.s.c. risk retention group except that the jurisdiction in which it is chartered 1996). "common sense suggests that [section] 435.350 regulates the business of the first and third factors are satisfied. reinsurance contracts are not `contracts of insurance or contracts of arbitration agreement" is without merit. for the reasons hereinbefore stated, it is not intermodal trucking serv., inc. v. united fire & cas. co., 973 s.w.2d 174, 178 policy had a california choice of law provision and the operation of appellant's [emphasis added.] 6 retention group to abide by this statute puts it on equal footing with all other insurers who shall be construed to invalidate, impair or supersede any law enacted by any state for the 15 u.s.c. section 3902 of the lrra provides in pertinent part as follows: law should be applied to this case. preempted by the faa); washburn v. corcoran, 643 f.supp. 554, 555-56 (s.d.n.y. 1986) (explaining that of the arbitration agreement to the claim is governed by the faa. we disagree for the risk retention groups and risk purchasing groups recognized state regulation of insurance. swanco ins. company-arizona v. hager, 879 (b) no act of congress shall be construed to invalidate, impair, or (mo.app. e.d. 1998). favorable rates either by forming self-insurance pools called risk retention groups or by as for the second factor, the missouri statute prohibiting mandatory arbitration of industry as a whole. subparagraph (a). 15 u.s.c. section 3901(a)(4). appellant is a risk retention group, not insurance policies regulates the business of insurance. without merit according to the terms of section 3901(b) of the lrra itself, as set forth business of insurance, or which imposes a fee or tax upon such business, appellant maintains the choice of law provision in respondent's insurance policy insurance. therefore, the philosophy behind section 435.350 and 15 u.s.c. 3902(a)(1) is analysis the most significant relationship test as set forth in restatement (second) of conflict of appeals from the trial court's judgment denying its motion to compel arbitration. we of common law are essential in determining whether an arbitration provision in an contracts of insurance, nor does the lrra provide preemption on this basis. f.supp.2d at 1067; see also generally, united states dep't of treasury v. fabe, 508 u.s. 13 the administration of an insurance policy, and not its substantive terms. see unum life the interpretation of their contractual rights and duties. tri-county retreading, inc. v. issued to her by appellant when the massage table on which she was massaging a client between the insurance company and the insured because it addresses the forum where all in its third point, appellant asserts the trial court erred in holding that the an appellate court's review of a trial court's denial of a motion to compel regulating the business of insurance; and (3) whether the application of the federal law non-discrimination principle underlying the lrra; to the contrary, requiring a risk governed by the federal arbitration act and shall occur in orange has expressed missouri's public policy in the enactment of section 435.350. see allen purpose of regulating the business of insurance ... unless such act specifically relates to regulating the business of insurance,' from preemption and leaves the regulation of the 2002); am. country co. v. palumbo, 25 s.w.3d 484, 487 (mo.app. e.d. 2000). allied professionals insurance co., a risk retention group, inc. (appellant) interstate commerce, see teltech, inc. v. teltech communications, inc., 115 s.w.3d 441, communications relating to the contract's formation occurred in missouri. regulate the business of insurance. "the missouri statute was enacted for the purpose of state's statute from being preempted by the faa. see e.g., stephens, 66 f.3d at 43, 45-6 (finding that the the states' interpretation of those insurance contracts is not part of the preemption as set forth in our discussion of point ii regarding choice of law, missouri law the whole or any part thereof, ... shall be valid, irrevocable, and enforceable, save upon governs this matter because respondent's purchase of the policy involved interstate business of insurance; (2) whether the state law at issue was enacted for the purpose of respondent is not required to arbitrate her dispute against appellant under the faa. 12 held that insurance was commerce and therefore subject to the federal antitrust laws. in nguyen v. glendale const. co., inc., 782 p.2d 1110, 1114 (wash.app. 1989). as set retention group, from missouri's restriction against arbitration provisions in insurance on the part of the congress shall not be construed to impose any barrier to missouri has decided, as have other states, that mandatory arbitration clauses in appellant is domiciled in arizona and conducts business in california. ) any insurance contract are void and against public policy. appellant in effect argues that although the foregoing analysis is dispositive of this point, we also note that as such, appellant's proclamation in its reply brief that "[appellant] is entitled save upon such grounds as exist at law for the revocation of any contract. representative may, by notice as herein provided, require that the dispute unenforceable and revocable: place of contracting, (b) the place of negotiation of the contract, (c) the place of retention group is chartered in the group's state of domicile and this state is primarily valid. and enforcement without giving effect to the principles of conflict of laws. in 1981, congress enacted the product liability risk retention act, pub.l. no. based on the foregoing authority, we find that the mccarran-ferguson act businesses reportedly were unable to obtain coverage at any price. id. the pllra are prohibited from enforcing arbitration clauses in agreements with their insureds). certain underwriters at lloyd's of london, 1996 wl 938126, *2 (w.d. mo. 1996). created an exception to this general preemption by ensuring that the states can regulate arbitration statute, applies to the processing of disputed insurance claims in the insurance in section 435.350 to be preempted by the lrra. appellant has not demonstrated forth above, section 3902(a)(1) of the lrra only exempts a risk retention group from (a) the business of insurance, and every person engaged therein, shall be insurance but all types of liability insurance. id. the lrra also includes provisions on march 3, 2010, appellant filed a motion to compel arbitration, pursuant to the relationship to the transaction. the insured risk is in missouri, which is the most 417.050 validity of arbitration agreement; exempt agreements enforceable under the faa, which preempts any contrary missouri statute. standard sec. business of insurance. see humana inc. v. forsyth, 525 u.s. 299, 306-07 (1999); see also ojo v. farmers as a general rule, an arbitration clause contained in a contract would be cir. 2010). 3 (1) make unlawful, or regulate, directly or indirectly, the operation of a congress declares that the continued regulation and taxation by the several these groups. id. adhesion' for purposes of the arbitration provisions of this section. (2) insurance contracts. limited liability association (a) whose primary activity consists of assuming and an exception to federal preemption is sometimes referred to as "reverse preemption" or "inverse architects, inc., 943 s.w.2d 711, 715 (mo.app. w.d. 1997). section 188(2) identifies insurance program requires that california law applies to this case. south-eastern underwriters association, 322 u.s. 533, 553 (1944), the supreme court and the definitions of liability, personal risk liability, and insurance under in that it was designed to regulate the operation of an insurance contract. id.; see also 9 specifically found that "[p]rohibiting the enforcement of an arbitration clause does not "the [mccarran-ferguson] act applies to `the type of state regulation that centers in support of its argument that this court should enforce the california choice of largely exempts the business of insurance from the federal antitrust laws, and explicitly nothing in this chapter shall be construed to affect either the tort law or [emphasis added.] this section makes clear that missouri law deems arbitration insurance because it only exempts insurance contracts." standard sec. life ins. co., 127 a valid arbitration agreement whose scope covers respondent's claim, and the application significant relationship to the insurance contract at issue, and thus missouri law applies to points on appeal insurance contracts. section 435.350's arbitration clause prohibition has nothing to do accordingly, we conclude that applying california law to respondent's claim law provision, appellant relies on california law. however, such reliance is putting the [section] 435.350 addresses an arguably procedural aspect of the relationship between lynch, pierce, fenner & smith, inc., 841 f.2d 508, 510 (3rd in the missouri court of appeals 2009). rule, regulation, or order would- significantly, in an action between parties to an insurance contract, the principal armstrong business services, inc. v. h & r block, 96 s.w.3d 867, 872 (mo.app. w.d. laws section 188 when resolving choice of law issues. sheehan v. northwestern mut. be governed by and construed in accordance with the laws of the state of terms or provisions of this policy, or with respect to the performance by the interpretation and enforcement of the insurance policy. united states dep't of point i arbitration agreement under the faa sherri b. sullivan, p.j. 11 involves a kentucky statute regarding the validity of arbitration agreements virtually response to south-eastern, congress in 1945 passed the mccarran-ferguson act, which compel arbitration pursuant to the faa, in that the faa requires respondent to arbitrate law rule against judicial enforcement of arbitration agreements. osterneck v. merrill v. ) life ins. co., 127 f.supp.2d at 1067 ("under mccarran-ferguson, [n]o act of congress preemption." reverse preemption is a form of inverse preemption that prevents a generally applicable the motion was briefed and argued before the trial court, and on march 17, 2010, group does not excuse it from section 435.350's prohibition of arbitration clauses in "mccarran-ferguson preserves state statutes, enacted `for the purpose of disputes concerning the policy will be resolved." id. "where and by whom a contractual rules of the american arbitration association then in effect. any purposes of regulating the business of insurance do not yield to conflicting federal 10 exception. standard sec. life ins. co., 127 f.supp.2d at 1067, transit casualty co., to missouri public policy, because section 435.3501 a risk purchasing group. personal injury suit, so respondent hired her own legal counsel. the lawsuit against cir. 2001); datacor, inc. v. heritage life ins. co., 127 f.supp.2d at 1067, citing transit casualty co. in receivership v. 18 regulate their operation, and missouri's statute prohibiting arbitration provisions in based on the foregoing, we conclude that appellant's status as a risk retention exception for insurance contracts. the faa provides in pertinent part that "[a] written the same, the protection of the consumer. of a written arbitration agreement whose scope covers the instant dispute; respondent's and thus presumably missouri's invalidation of it is preempted by the federal act. separate states"). the judgment of the trial court is affirmed. the trial court denied the motion, finding that respondent cannot be compelled to this appeal follows. were to be treated with the same respect due any other contract. osterneck, 841 f.2d at 486, quoting sec v. nat'l sec., inc., 393 u.s. 453, 460 (1969). krs section 417.050. with regard to the same issue before us now, i.e., whether a state be submitted within fifteen (15) days to an arbitrator in good standing with identical to section 435.350 of the missouri arbitration act: enacted in 1924, the faa carried out congress' intention to abolish the common cir. 1988); see generally this chapter does not apply to: specifically leaves the interpretation of contracts to the states. of new york v. west, 267 f.3d 821, 824 (8th from any state law, rule, regulation or order to the extent that such law, 97-45, 95 stat. 949 (1981) (plrra). the plrra was congress's response to the construction, the faa, a federal statute, would preempt section 435.350 of missouri's ins. co. of america v. ward, 526 u.s. 358, 374-75 (1999). accordingly, we conclude appellant cannot complain when it is being treated like every other insurance contract." standard sec. life ins. co., 127 f.supp.2d at 1067. the lrra allows risk enforceable under the federal arbitration act (faa), the mccarran-ferguson act notwithstanding this provision, arbitration shall be governed by the the faa and preemption provides that "a provision in a written contract, except contracts of insurance and v. schacht, 84 f.3d 834, 837-38 (7th cir.1996), citing fabe, 508 u.s. at 507. `make unlawful' the ... operation of such a risk retention group." national home defendant/appellant. ) conclusion h.r.rep. no. 96, 68th cong., 1st sess. 1 (1924). henceforth, arbitration agreements (a) except as provided in this section, a risk retention group is exempt the act further provides: provision in respondent's insurance policy is void and unenforceable. missouri law business of insurance to the states." stephens, 66 f.3d at 43. in accord, standard sec. 357. "operation" is the key term in the federal statute's exemption: it means that a state statutes unless federal statutes specifically provide otherwise." american deposit corp. in its first point, appellant maintains that respondent's insurance policy contains state law). standard sec. life ins. co., 127 f.supp.2d at 1068. provision in written contract to submit to arbitration any controversy filed in missouri by a missouri plaintiff, for an accident and injuries occurring in invalidates, supersedes or impairs the state law. standard sec. life ins. co., 127 division three court. the choice of law provision provides: the faa specifically allows arbitration clauses in contracts, and makes no purchasing groups. concomitantly against missouri public policy. as illustrated above, section 435.350 around the contract of insurance' and governs such questions as `the type of policy which states of the business of insurance is in the public interest, and that silence provided by the lrra. in fact, the definitions section of 15 u.s.c. section 3901(b) of problems businesses had encountered in obtaining product liability coverage. swanco all statutory references are to rsmo. 2006, unless otherwise indicated. which is organized for the primary purpose of conducting the activity described under discussion choice of law provision. id. here, the application of california law would allow the the parties is valid, enforceable and irrevocable...." [emphasis added.] therefore, arbitration a controversy thereafter arising out of such contract ... or the refusal to perform supersede any law enacted by any state for the purpose of regulating the relationship." standard sec. life ins. co., 127 f.supp.2d at 1068. the supreme court that the states can regulate the business of insurance `free from the inadvertent preemption missouri law applies to this case and not california law, because respondent's insurance performance, (d) the location of the subject matter of the contract, and (e) the domicile, this case on this basis as well. c. arbitration. if a dispute or claim shall arise with respect to any of the federal arbitration act. cart before the horse. filed a breach of contract action against appellant, alleging that appellant's failure to allied professionals ) 15 we address appellant's second point first, as it involves the issue of which state's q. choice of law. this policy and the rights of the parties hereunder shall section v. general conditions california law is not applicable under a conflict of laws analysis. missouri courts apply 8 on may 21, 2007, mary sturgeon (respondent), a resident of missouri and a follows. eastern district including recognition or qualification of risk retention groups or forming purchasing groups, which purchase group insurance from an existing insurer. id. *2, 3 (e.d. mo. december 16, 2009); tamko building products, inc. v. factory mutual arbitration is de novo. lawrence v. beverly manor, 273 s.w.3d 525, 527 (mo.banc life ins. co., 127 f.supp.2d at 1067, quoting autry v. northwest premium services, 144 defend her constituted a breach of the insurance contract, and seeking damages in the licensed massage therapist, was covered by a professional liability insurance policy taxation of such business. 2 by federal statutes of general applicability.'"). see also datacor, 2009 wl 5062137 at *2 with appellant's status or operation as a risk retention group. therefore, there is nothing 510; shearson/american exp., inc. v. mcmahon, 482 u.s. 220, 225 (1987). lrra and risk retention groups were created for the protection of those needing 4 amount of the attorney's fees she incurred as a result of appellant's failure to defend her. otherwise. point ii choice of law missouri's prohibition of mandatory arbitration clauses in insurance contracts is california, including all matters of construction, validity, performance, v. general conditions insurance group's policies are allowed them. such disparate treatment has absolutely no point iii arbitration agreement under the lrra its insurance policies have allowed mandatory arbitration clauses even though no other insurance company. the lrra's preemption of state law regulating the operation of be satisfied to earn the protection from preemption provided by the mccarran-ferguson from missouri's restriction against arbitration provisions in insurance policies because intern. ins. co., 66 f.3d 41, 43 (2d cir. 1995). however, there are exceptions. although the faa generally preempts state law to the contrary in cases involving bank of st. louis, 69 f.2d 177, 180 (8th cir. 1934). public policy is declared in a statute. retention groups to operate as insurance groups, by entering into insurance contracts, but act. these considerations are: (1) whether the federal statute specifically relates to the arbitration act, a state statute, insofar as it contravenes the faa. stephens v. american liability risk retention act (lrra) does not exempt appellant, a risk retention group, we recognize that generally parties may choose the state whose law will govern necessary to obtain arbitration under the faa, in that appellant established the existence before sherri b. sullivan, p.j., clifford h. ahrens, j., and lawrence e. mooney, j. provision in any ... contract evidencing a transaction involving commerce to settle by residence, nationality, place of incorporation and place of business of the parties. the statute at issue was for the purpose of regulating insurance and therefore, the faa must yield to the the core of the business of insurance includes the insurer-insured relationship and arising between the parties is valid, enforceable and irrevocable, save upon s.w.3d 483, 486 (mo.banc 2003). 15 u.s.c. section 1011 of the act provides: 7 prohibits mandatory arbitration provisions in insurance contracts. section 435.350, affirm. respondent was ultimately dismissed. arbitration clauses in insurance contracts "regulate" the operation of appellant as a risk 2 commerce. (application of an anti-arbitration statute to a risk retention group does not offend the in its second point, appellant maintains the trial court erred in finding that ) honorable elizabeth byrne hogan the american arbitration association under the commercial arbitration attempted to redress the crisis by allowing businesses to purchase insurance at more 1 insurance policy explicitly provides that the faa governs this matter; and the faa however, the lrra preserves the state's traditional role in the regulation of insurance. cir. 1989); state ex rel. american family mut. ins. co. v. clark, 106 mears trans. group, 34 f.3d at 1017. the plrra was amended by the liability risk retention act of 1986, pub.l. analysis resolution of this argument involves some historical and legal background. business. the lawsuit filed against respondent which appellant refused to defend was this dispute, and appellant was entitled to seek the trial court's intervention to order congress intended to reduce the cost and increase the availability of product liability enable risk retention and purchasing groups to provide not only product liability bandag inc., 851 s.w.2d 780, 784 (mo.app. e.d. 1993). as long as the application of appellant's claim in its point that "respondent's insurance policy contains a valid arbitration undertaken pursuant to the terms of this section shall be arbitration clause in an insurance policy to be enforced. such a result would be contrary necessarily invalidate the missouri statute which prohibits mandatory arbitration of plaintiff/respondent, ) appeal from the circuit court f.2d 353, 357 (8th applying these factors to the case at bar, missouri clearly has the most significant & co., 963 s.w.2d 268, 273-74 (mo.app. e.d. 1997). section 188 of the restatement the states' regulation of the contents of insurance contracts. "state laws enacted for the of insurance is subject to missouri law, no different than are the policies of any other 445 (mo.app. w.d. 2003), the passing of the mccarran-ferguson act created an discrimination against them. missouri's prohibition of arbitration clauses in insurance arbitration and stay or dismiss this case; appellant has proven all of the elements location of the insured risk is given greater weight than any other single contact in applies to this case. the arbitration agreement set forth in respondent's insurance policy 3 reasonable justification or backing in the lrra. in fact, as stated above, the lrra under the lrra to operate its business free of any regulation by the individual states" is no. 99-563, 100 stat. 3177 (1986) (lrra), to expand the scope of the preemption to 5 mandatory arbitration clause in the insurance contract, to-wit: section 3 of the lrra allows groups with similar types of risk to form and own


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