United Ohio Insurance Co. v. Central Mutual Insurance Co.

Headnotes

H1: Civil Procedure > Alternative Dispute Resolution > Arbitration > General Overview

Government > Courts > Authority to Adjudicate

Under O.R.C §2711.10, a trial court has limited power to vacate an arbitration award, because the arbitration awards are presumed valid and binding. However, a trial court may vacate an arbitration award if an arbitrator acts outside his or her powers. If an award is arbitrary, capricious, or unlawful, the trial court may vacate the agreement. Arbitration awards must be awarded based on a rational nexus between the agreement and the award. 

H2: Civil Procedure > Alternative Dispute Resolution > Arbitration > General Overview

Business & Corporate Compliance > Pretrial Matters > Alternative Dispute Resolution > Validity of ADR Methods

Arbitration awards are generally presumed to be valid, and an appellate court may not substitute its judgment for that of an arbitrator. When a dispute is submitted to binding arbitration, the parties agree to accept its result, whether or not the result is legally and factually accurate. 

H3: Business & Corporate Compliance > Pretrial Matters > Alternative Dispute Resolution > Judicial Review

Civil Procedure > ADR > Arbitration > General Overview

Courts will presume that arbitration awards are valid and will try to avoid disturbing the award. The courts avoid disrupting the arbitration process because this would defeat the agreement made by the parties and be contrary to the public policy that favors settlement of grievance disputes. 

 

Summary of Case

Procedural Posture: Plaintiff has come before the court with a motion to vacate the arbitration award. Defendant has also come before the court with a motion to affirm the arbitration award.     

Overview: Both Plaintiff and Defendant are corporations that issue insurance contracts for property damage. As such, Plaintiff and Defendant participate in “inter-company” arbitration, so as to resolve claims outside of court.

Plaintiff’s insured installed a defective roof for the Defendant’s insured. Defendant filed a claim with Plaintiff and Plaintiff responded with a response stating that the loss was not covered under the policy and the claim was denied. According to the arbitration agreement between the parties, if an affirmative defense of “denial of coverage” was presented then the arbitration proceedings were to cease on the matter for lack of jurisdiction. The arbitrators in this matter failed to dismiss for lack of jurisdiction and awarded an amount that was contrary to the evidence.  

Outcome: The Court vacated the award from the arbitrators, as the arbitrators acted contrary to law when they did not dismiss the action for lack of jurisdiction.  

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