OVERDORFF v. NAU COUNTRY INSURANCE COMPANY

Filing 14

MEMORANDUM ORDER granting 8 Motion to Dismiss. Signed by Magistrate Judge Maureen P. Kelly on 9/12/2018. (ndf)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
BRADLEY OVERDORFF,

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Plaintiff,
V.

Civil Action No. 18-750
Chief Magistrate Judge Maureen P. Kelly

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NAU COUNTRY INSURANCE COMPANY,
Defendant.

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MEMORANDUM ORDER

KELLY, Chief Magistrate Judge
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Plaintiff Bradley Overdorff (~~flaintiff' or "Overdorff') initiated this action on June 7,
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2018, against Defendant NAU Counttyinsurance Company ("Defendant" or "NAU"), with a
Complaint;{b Vacate Award of Arbit~~tor. ECF No. 1. This is Overdorf:fs second action
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challenging an arbitrator's conclusion that Overdorff failed to timely initiate arbitration of an
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underlyirig crop insurance dispute and therefore is barred from obtaining relief. This Court
dismissed Overdorf:f s first action, filed at No. 18-79, pur~uant to Rule 12(b)(6) for failure to
state a claim. Overdorffv. NAU Country Insurance Company, No. 18-79, 2018 WL 3637471
(July 31, 2018).
The underlying insurance dispute arises out of damag·e to a 2011 corn crop. Overdorff
presented a claim for his losses to NAU under the terms of a federally-reinsured crop insurance
policy. NAU paid the claim in the amount of $13,417. In March 2013, pursuant to its oversight .
function, the Federal Crop Insurance Corporation ("FCIC")/Risk Management Agency
("RMA"), determined that Overdorff had not sustained a covered loss. Based upon this

determination, on July 17, 2013, NAU served Overdorffwith a Notice of Debt equal to the
indemnity payment remitted. In the Notice of Debt, NAU demanded payment and advised
Overdorff of his ability to seek review within thirty days, and stated that such review "does not
take the place of or limit your right to arbitration."
Under applicable federal regulations, and the terms of the policy at issue, arbitration
proceedings were required to be initiated "within one year of the date we denied your claim or
rendered the determination with which you disagree, whichever is later." ECF No. 1-2 at 3-4.
Overdorff failed to initiate arbitration proceedings within one year of the disallowance of his
indemnity payment, and he has not repaid the indemnity amount deemed owing. Accordingly,
pursuant to applicable federal regulations, Overdorff is ineligible for federally insured or
reinsured crop insurance for any subsequent crop year until the amount owed is repaid. 7 C.F.R.
§ 457.8 Section 2.
Overdorff first sought to challenge the July 2013 overpayment determination by initiating
arbitration relative to a letter dated July 22, 2015, wherein NAU notified him that reconsideration
of the initial determination would not be afforded. The arbitrator issued a Final Award on
January 18, 2017, recognizing that the dispute before him was predicated on the July 18, 2013
Notice of Debt, and was subject to the policy's one-year limitation to commence arbitration
proceedings. Because more than one year had elapsed since the issuance of the Notice of Debt,
the arbitrator ruled that the dispute was time barred. Further, because the limitation period was
jurisdictional, he did not have authority to decide the dispute before him. No. 18-79, ECF No. 13.
Overdorff thereafter sought review of the arbitrator's decision in this Court, contending
that the arbitrator exceeded his authority by interpreting the terms of the policy at issue, a

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function vested in the FCIA, when he concluded that the July 2013 Notice of Debt was a
"determination" subject to arbitration. This Court concluded that the word "determination" did
not require interpretation, and therefore the timeliness of Overdorff' s resort to arbitration was an
issue properly before the arbitrator. Overdorffv. NAU Country Insurance Company, 2018 WL
3637471 at *6. Accordingly, this Court granted NAU's Motion to Dismiss for failure to state a
claim, and an appeal from the Order is pending in the United States Court of Appeals for the
Third Circuit. Overdorffv. NAU Country Insurance Company, No. 18-2940 (3d Cir. Aug. 31,
2018).
With regard to this action, Overdorff initiated arbitration proceedings relative to a Notice
of Debt received on April 10, 2017, informing him that he remains ineligible for crop insurance
due to the outstanding overpaid indemnity. ECF No. 11-2 at 22. The assigned arbitrator
concluded that the limitations period to challenge the overpayment determination could not be
extended or restarted each time Overdorff receives a Notice of Debt. Because the instant
arbitration proceeding was commenced on November 8, 2017, more than four years after NAU's
letter disallowing the indemnity payment, the arbitrator concluded that he was without authority
and jurisdiction to decide the claim at issue; i.e., the propriety of the determination that
Overdorff' s 2011 claim should be disallowed. Id. Overdorff thereafter filed this action with a
Complaint to Vacate Award of Arbitrator.
Pending now before the Court is a Motion to Dismiss filed on behalf of NAU for failure
to state a claim upon which relief may be granted. ECF No. 8. Overdorff responds candidly that
"[m]any of the issues before the Court on the Defendant's Motion to Dismiss in this case are the
same as was before the Court in its previous decision of July 31, 2018. Having said that, the

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Plaintiff will resubmit the arguments that he unsuccessfully made in the Defendant's prior
motion with certain additions." ECF No. 11 at 2.
The Court has reviewed Overdorffs arguments in opposition to NAU's Motion to
Dismiss, and again concludes that for each of the reasons set forth in this Court's Opinion dated
July 31, 2018, Overdorff cannot establish that the arbitrator exceeded the authority granted under
the policy at issue, and thus has failed to state a claim upon which relief may be granted. The
following Order is entered:

ORDER
AND NOW, this/i~eptember, 2018, upon consideration of the Motion to
Dismiss filed on behalf of Defendant NAU Country Insurance Company, and the briefs and
exhibits filed in support and in opposition thereto, it is hereby ORDERED that the motion is
GRANTED, and the Complaint to Vacate Award of Arbitrator is dismissed.
IT IS FURTHER ORDERED that, pursuant to Rule 4(a)(l) of the Federal Rules of
Appellate Procedure, if the Plaintiff wishes to appeal from this Order he or she must do so within

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thirty (30) days by filing a notice of appeal as provided in Rule 3, Fed. R. App. P., with the Clerk
of Court, United States District Court, 700 Grant Street, Room 3110, Pittsburgh, PA 15219.

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