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UNITED STATES 14 September 2023 DAK Property
United States District Court, Middle District of Florida, Fort Myers Division, 14 September 2023, Case Nos.: 2:23-cv-417-SPC-KCD; 2:23-cv-497-SPC-KCD (DAK Property Holdings, Inc. v. Independent Specialty Insurance Company and Certain Underwriters at Lloyd’s ... Read more
United States District Court, Middle District of Florida, Fort Myers Division, 14 September 2023, Case Nos.: 2:23-cv-417-SPC-KCD; 2:23-cv-497-SPC-KCD (DAK Property Holdings, Inc. v. Independent Specialty Insurance Company and Certain Underwriters at Lloyd’s London, Subscribing to Certificate Number B604510568622021)
UNITED STATES 14 September 2023 DAK Property
DAK filed two actions against the defendants for breach of contract, alleging that the defendants failed to fully pay its Hurricane Ian insurance claims. In both actions, the Magistrate Judge granted the defendants’ motion to compel arbitration, finding that the four jurisdictional requirements for compelling arbitration under the New York Convention were satisfied (there was an arbitration agreement in writing, providing for arbitration in a Convention State, the United States, and arising from a commercial legal relationship, and at least one of the parties was not a US citizen), and that none of the affirmative defenses under the Convention applied: the arbitration agreement was not null and void, inoperative, or incapable of being performed. The Judge rejected in particular DAK’s argument that the arbitration agreement was null and void because Florida law prohibits arbitration clauses in insurance contracts, and the McCarran-Ferguson Act states that federal law cannot overturn state statutes regulating insurance. DAK reiterated this argument before the District Court, which found, however, that the Judge had properly rejected it, because the Convention supersedes the McCarran-Ferguson Act, which only applies to domestic arbitration. (See the decisions of the Magistrate Judge rendered on 31 July 2023 and 2 August 2023.)
The court discusses whether a certain dispute could be settled by arbitration, and the law applicable to that determination.