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Eagle Star Insurance v. Highlands Insurance
Citation: 165 F. App'x 529Docket: No. 04-55518
Court: Court of Appeals for the Ninth Circuit; January 26, 2006; Federal Appellate Court
ACE Property and Casualty Insurance Company appeals the district court's denial of its motion to dismiss or stay the third-party complaint filed by Highlands Insurance Company, advocating for arbitration based on the Quota Share Agreement established in 1970. Both parties are recognized as signatories to this agreement, which outlines ACE's reinsurance obligations to insurance pools managed by Cravens Dargan Company and includes a broad arbitration clause applicable to disputes regarding the agreement's interpretation or rights related to it. The court references precedent indicating that broad arbitration clauses create a federal presumption favoring arbitration, suggesting that any uncertainties regarding arbitrable issues should be resolved in favor of arbitration. Although Highlands's complaint references only Addendum No. 5 of the 1964 Management Agreement, the underlying dispute pertains to matters governed by the Quota Share Agreement, necessitating its interpretation to resolve Highlands's indemnification claim against ACE. Highlands contends it is entitled to a jury trial to ascertain the validity of the arbitration agreement; however, the court concludes that the question of Highlands's status as a party to the Quota Share Agreement can be determined as a matter of law based on established agency principles and the agreement's explicit terms. The court reverses the district court's decision and remands the case, indicating that the dismissal or stay of Highlands's third-party complaint in favor of arbitration is warranted. The court also notes that the district court did not address whether Highlands is a party to the agreement, and ACE's inference regarding the district court's conclusion is deemed overly presumptive. The decision is not intended for publication or citation in this circuit, pursuant to Ninth Circuit Rule 36-3.