National Union Fire Insurance Company of Pittsburgh, PA v. Beelman Truck Company et al

Filing 43

ORDER: This case represents Round Two in federal court of a dispute between the parties regarding an arbitration. Round One was initiated by a Petition to Compel Arbitration. See Nat'l Union Fire Ins. Co. v. Beelman Truck Co., 15 CV 8799 (AJN) (hereafter, "8799 Action). Judge Nathan granted that petition and ordered the parties to arbitration. The parties were ordered to select their arbitrators by September 2016. Memorandum & Order, Dkt. 81, 8799 Action. Since then, th ere has been a fair amount of back and forth between the parties; the current state of play is that each side has selected its party arbitrator, but the party arbitrators have not selected an umpire. Petitioner now asks the Court to select the umpi re. For the reasons herein, the Court GRANTS the Petition and appoints PETER BICKFORD as the umpire for this arbitration. As that is the only relief sought in this case, the Clerk of Court is respectfully directed to close the case, without prejudice to either party reopening the case within thirty days if Mr. Bickford is unable or unwilling to serve as umpire in this matter. Any application to reopen must be filed within thirty days of this Order; any application to reopen filed after that date may be denied on that basis alone. (Signed by Judge Valerie E. Caproni on 7/17/2017) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------------------------------- X
In the Matter of the Arbitration between
:
NATIONAL UNION FIRE INSURANCE
:
COMPANY OF PITTSBURGH, PA, on behalf of :
itself and each of the related insurers that provided :
coverage to Respondents,
:
:
Petitioner,
:
:
-against:
:
BEELMAN TRUCK COMPANY, BEELMAN
:
LOGISTICS, LLC,
:
GRANITE CITY SLAG, LLC, BEELMAN RIVER:
TERMINALS, INC., RACEHORSE
:
INVESTMENTS, LLC, TRANSHOLD, INC.,
:
BEELMAN MATERIALS, LLC, BEELMAN AG :
SERVICE, LLC, AND TRANSLOAD REALTY, :
LLC,
:
:
Respondents. :
-------------------------------------------------------------- X

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 7/17/2017
17-CV-2946 (VEC)
ORDER

VALERIE CAPRONI, United States District Judge:
This case represents Round Two in federal court of a dispute between the parties
regarding an arbitration. Round One was initiated by a Petition to Compel Arbitration. See Nat’l
Union Fire Ins. Co. v. Beelman Truck Co., 15 CV 8799 (AJN) (hereafter, “8799 Action”). Judge
Nathan granted that petition and ordered the parties to arbitration. The parties were ordered to
select their arbitrators by September 2016. Memorandum & Order, Dkt. 81, 8799 Action. Since
then, there has been a fair amount of back and forth between the parties; the current state of play
is that each side has selected its party arbitrator, but the party arbitrators have not selected an
umpire. Petitioner now asks the Court to select the umpire. For the reasons that follow, the
Court GRANTS the Petition and appoints PETER BICKFORD as the umpire for this arbitration.

The parties have a contract that includes an arbitration provision. Verified Petition for
the Appointment of an Umpire (“Pet.”) ¶ 25, Dkt. 5. Under the terms of the arbitration
agreement, the parties’ arbitrators are supposed to appoint the umpire, but they have not done so.
Petitioner, relying on the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., and the
arbitration agreement itself, asks the Court to appoint an umpire. Respondents argue that the
Petition should be denied and the party arbitrators should be ordered to select one of the
candidates before them. Alternatively, Respondents request that the Court select one of
Respondents’ candidates. Respondents’ Memorandum in Opposition to Petitioner’s Petition for
the Appointment of an Umpire (“Resp. Mem.”) at 3, 13, Dkt. 39.
Having reviewed the parties’ submissions, the Court concludes that it has the power
pursuant to the FAA and the parties’ agreement to appoint the umpire. Both parties named their
party arbitrator on September 15, 2016, but the party arbitrators have failed to agree on an
umpire. Pet. ¶¶ 33, 35, 63. Pursuant to the parties’ agreement, “if the two arbitrators fail to
agree on a third party arbitrator within 30 days of their appointment, either party may make
application to a court of competent jurisdiction in . . . New York.” Id. ¶ 38. That is consistent
with section 5 of the FAA, which, upon application of a party to the dispute, directs the district
court to “designate and appoint an arbitrator . . . or umpire, as the case may require,” following
“a lapse in the naming of an arbitrator . . . or umpire.” 9 U.S.C. § 5. More than thirty days have
elapsed since the naming of the party arbitrators, and it is undisputed that they have not agreed
on an umpire.
Pursuant to the parties’ agreement, arbitrators (including the umpire) “must be executive
officers or former executive officers of property or casualty insurance or reinsurance companies
or insurance brokerage companies, or risk management officials in an industry” similar to that of
Respondents (in this case, trucking). Pet. ¶ 38. In accordance with that provision, the Court has
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before it eight candidates: five proposed by Petitioner, three of which Petitioner proposed prior
to this litigation, and three proposed by Respondents. Id. ¶¶ 46-48. All of Petitioner’s
candidates have deep experience in the insurance and reinsurance business, see Petitioner’s
Memorandum of Law in Support of Its Petition for the Appointment of an Umpire (“Pet. Mem.”)
at 19-20, Dkt. 3; all of Respondents’ candidates have deep experience in the risk management
aspects of the trucking business, see Resp. Mem. at 5-6, 12-13. Thus, the selection of any as the
umpire would be appropriate.
Respondents object to Petitioner’s candidates because all are certified by AIDA
Reinsurance and Insurance Arbitration Society (“ARIAS”), a nonprofit corporation dedicated to
“’improv[ing] the insurance and reinsurance arbitration process for the international and
domestic markets.’” Pet. ¶ 50; Pet. Mem. at 8, 15. According to Respondents, the process for
becoming ARIAS-certified is skewed towards those with insurance company experience and,
therefore, ARIAS-certified arbitrators are more likely to be partial to the insurance company.
Resp. Mem. at 15.1 Respondents argue that the contract does not require that the umpire be
certified by ARIAS or by any other arbitration association, such as the American Arbitration
Association (“AAA”), and they urge the Court not to place special emphasis on whether a
candidate is ARIAS-certified. Id. at 8, 15.
Petitioner objects to Respondents’ candidates because they do not appear to have
experience with arbitration, and Petitioner believes that such experience is necessary to be an
effective umpire. Pet. Mem. at 9.
The Court agrees with Respondents that the parties’ agreement does not require ARIAS
certification or specific arbitration experience in order to serve as the umpire. See Pet. ¶ 38.

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There is no evidence in the record from which the Court can credit Respondents’ argument that ARIAScertified arbitrators are partial to insurance companies because of their backgrounds.

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Nevertheless, reason dictates that the umpire, who, by virtue of being the neutral in the panel,
needs to manage the arbitration “in an organized, efficient, and fair manner,” In re Travelers
Indem. Co., 3:04-MC-196 (TPS), 2004 WL 2297860, at *3 (D. Conn. Oct. 8, 2004), should be an
experienced arbitrator. None of the candidates proposed by Respondents appears to have any
experience as an arbitrator or as an umpire. One candidate proposed by Respondents, John
Spiros, is represented to have “a vast amount of experience dealing with mediations,” but there is
no indication that experience was as a mediator as opposed to as a participant. Affirmation of
Samuel J. Thomas in Support of Petitioner’s Petition to Compel the Appointment of an Umpire
(“Thomas Aff.”), Ex. Y at 1, Dkt. 6-26. Similarly, Joel Paska has experience as an in-house
attorney at several trucking companies where he appears to have had some responsibility
overseeing the company’s participation in arbitrations, Thomas Aff., Ex. AA at 1, Dkt. 6-28, but
there is no indication in his resume that he has ever served as an arbitrator himself. See Thomas
Aff., Ex. AA.
In contrast, all of Petitioner’s candidates have a wealth of experience serving as
arbitrators and as umpires. Of the three candidates whose names were exchanged prior to this
litigation, Peter Bickford is the most qualified to serve as an umpire in this case. Thomas Aff.,
Ex. S, Dkt. 6-20. Mr. Bickford has been an officer of both life insurance and property and
casualty insurance companies. Id. at 1-2. He has been appointed as an umpire in twenty-four
arbitrations, id. at 2; in twelve of those arbitrations, he acted as umpire through to a final award
after an evidentiary hearing, id. at 3. He has the experience to serve as the umpire in this case,
and the Court finds that he is the best candidate to manage this arbitration.2

2

The Court notes that to the extent alleged partiality is really Respondents’ concern (rather than simply
wanting to delay the arbitration), they should have proposed candidates with arbitration experience who were not
ARIAS-certified. Both AAA and JAMS have extensive rosters of experienced arbitrators. It is hard for the Court to
believe that Respondents could not have found someone at one of those organizations who has experience in
trucking or insurance and has arbitration experience.

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Accordingly, the Court exercises its authority to appoint Mr. Bickford as umpire. As that
is the only relief sought in this case, the Clerk of Court is respectfully directed to close the case,
without prejudice to either party reopening the case within thirty days if Mr. Bickford is unable
or unwilling to serve as umpire in this matter. Any application to reopen must be filed within
thirty days of this Order; any application to reopen filed after that date may be denied on that
basis alone.

SO ORDERED.

____________________________
_
_________________________________
VALERIE CAPRONI
United States District Judge

Date: July 17, 2017
New York, New York

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