Creech v. Onebeacon America Insurance Company
Filing
11
ORDER denying Defendant's 5 Motion to Stay Proceedings Pending Arbitration. Signed by Judge J. Randal Hall on 2/16/2016. (jah)
IN THE UNITED
FOR THE
STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
DEBORAH CREECH, as surviving
spouse of Guy Doyle Creech,
*
*
*
Plaintiff,
*
*
v.
*
CV 416-011
*
ONEBEACON AMERICA
*
INSURANCE COMPANY,
*
Ik-
Defendant.
*
ORDER
Presently before the Court is Defendant's motion to stay
proceedings
below,
pending
arbitration
(Doc.
5).
For
the
reasons
Defendant's motion is DENIED.
I.
In
early
insurance policy
2012,
BACKGROUND
Defendant
("policy")
issued
an
accidental
to Plaintiff's husband,
death
Guy Doyle
Creech, for the benefit of his spouse, Plaintiff Deborah Creech.
However,
2012,
since the death of Plaintiff's husband in September
Defendant has denied liability for the policy benefits.
Consequently, Plaintiff filed this suit in the State Court of
Effingham County, Georgia, on January 11, 2016.
After removing the case to this Court, Defendant filed the
instant motion to stay proceedings pending arbitration.
In so
doing,
Defendant
mandates
that
contends
this
arbitrate.
Court
that
issue a
Conversely,
arbitration clause
is
the
policy's
arbitration
stay and order
Plaintiff
unenforceable
argues
the
parties
the
such that no
clause
to
policy's
stay should be
granted.
II.
DISCUSSION
Under the Federal Arbitration Act,
[a] written provision in . . . a contract
evidencing a transaction involving commerce
to
settle
by
arbitration
a
controversy
thereafter arising out of such contract or
transaction, or the refusal to perform the
whole or any part thereof, or an agreement
in writing to submit
to arbitration an
existing controversy arising out of such a
contract, transaction, or refusal, shall be
valid,
irrevocable,
and
enforceable,
save
upon grounds as exist at law or equity for
the revocation of any contract.
9 U.S.C.
§ 2.
Thus,
[i]f any suit or proceeding be brought in
any of the courts of the United States upon
any issue referable to arbitration under an
agreement
the
court
in writing
in
which
for such arbitration,
such
suit
is
pending,
upon being satisfied that the issue involved
in such suit or proceeding is referable to
arbitration under such an agreement, shall
on application
of one of the parties
stay
the trial until such arbitration has been
had in accordance with the terms
of the
agreement.
9
U.S.C.
§
3.
However,
under
provisions
within "any contract
paragraph
(1)
of
Code
Section
Georgia
of
law,
insurance,
33-1-2"
are
as
arbitration
defined in
unenforceable.
O.C.G.A.
§
Residential
9-9-2(c)(3);
Props.
2002)(providing
Continental
Trust,
that
565
S.E.2d
O.C.G.A.
§
Ins.
603,
Co.
604
9-9-2(c)(3)
v.
(Ga.
Equity
Ct.
App.
"invalidates
arbitration agreements in insurance contracts") .
While
law,
ordinarily
federal
law
the McCarran-Ferguson Act
preempts
contradictory
state
prevents such an outcome in this
case:
No Act of Congress shall be construed to
invalidate,
impair,
or supersede any law
enacted by any State for the purpose of
regulating the business of insurance .
unless such Act specifically relates to the
business
15
U.S.C.
§
of
insurance.
1012(b).
In
Eleventh Circuit has held
interpreting
(1)
this
that "[O.C.G.A.]
provision,
the
§ 9-9-2(c)(3)
is
a law enacted to regulate the business of insurance, within the
meaning of the McCarran-Ferguson Act" and (2) that the "Federal
Arbitration
Act
does
not
itself
business of insurance." McKnight v.
F.3d 854,
857,
859 (11th Cir.
specifically
to
the
Chicago Title Ins. Co.,
358
2004).
Therefore,
relate
in this case,
O.C.G.A. § 9-9-2(c) (3) governs over the Federal Arbitration Act.
Given
this
determination,
the
policy's
arbitration
clause
will be unenforceable so long as the policy is a "contract of
insurance, as defined in paragraph (1) of [O.C.G.A. §]
As
the
Georgia
Code
defines
a contract
33-1-2."
of insurance
as
"a
contract which is an integral part of a plan for distributing
individual
losses
whereby
one
undertakes
3
...
to
pay
a
specified
both
parties
O.C.G.A.
this
amount
§
is
found
33-1-2(1),
neither
have
enforcement
at 857-58;
of
the
in
meets
Defendant
Georgia
contends
§
that
O.C.G.A.
this
§
Inc.,
O.C.G.A.
contracts
of
concludes
that
§
insurance
the
Yet,
Court
nor
because
rather
than
provides,
despite this
the
should
See
Eleventh
prevent
McKnight,
the
358
F.3d
614 S.E.2d 47, 49 n.6
(Ga.
for the definition of "contract of
applicable to § 9-9-2 (c) (3) ).
finds
that
9-9-2(c)(3)
inconsistency
9-9-2 (c)(3).
definition.
33-1-2(2)
§
Supreme
contingencies,"
this
should have no effect.
2005) (citing to § 33-1-2(2)
Court
policy
O.C.G.A.
Love v. Money Tree,
insurance"
determinable
O.C.G.A.
as
the
held
upon
However,
§ 9-9-2(c)(3)
argument,
Circuit
that
33-1-2(2).
§
O.C.G.A.
benefits
agree
definition
O.C.G.A.
or
9-9-2(c)(3)
to
be
As
fully
as defined by O.C.G.A.
arbitration
clause
within
a
result,
this
enforceable
§ 33-1-2(2)
the
policy
to
and
is
unenforceable.
III.
For the reasons above,
CONCLUSION
the Court DENIES Defendant's motion
to stay proceedings pending arbitration (Doc. 5).
ORDER ENTERED at Augusta,
February,
Georgia,
this _/^^_ day of
2016.
\NDAL
STATES
HALL
DISTRICT JUDGE
^SOUTHERN DISTRICT OF GEORGIA
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