Ytech 180 Units Miami Beach Investments LLC v. Certain Underwriters at Lloyd’s, London, et al.

At a glance

Parties

Ytech 180 Units Miami Beach Investments LLC (plaintiff, insured) v. Certain Underwriters at Lloyd's, London, et al. (defendants, insurers)

Case no.

No. 18-24770-CV-GRAHAM (Case 1:18-cv-24770-DLG)

Court

U.S. District Court, Southern District of Florida, Miami Division

Forum and rules

Court proceeding under the New York Convention (9 U.S.C. §§ 201–208) and the Federal Arbitration Act; the arbitration clause provides for a New York seat and New York law

Treaty

New York Convention, Articles II(1) and II(3)

Court

Donald L. Graham, United States District Judge

Sector

Property insurance; hurricane damage

Outcome

Motion to compel arbitration granted, motion for remand denied, and the action dismissed with prejudice.

Amount

No amounts stated. Each party bears its own costs and attorney's fees, except as the parties agreed.

The dispute

The plaintiff, a U.S. limited liability company, owned a property in Florida known as Grand Beach. On 10 September 2017 Hurricane Irma caused significant damage to it. The plaintiff claimed under a series of all-risk insurance contracts (the "Policy") issued by the defendants, at least two of which are not U.S. citizens, and asked for the claim to go to appraisal. The defendants refused, saying that the Policy provides for arbitration, not appraisal. The plaintiff sued in the Eleventh Judicial Circuit of Miami-Dade County for declarations that the arbitration clause was ambiguous and unenforceable. It argued that the clause conflicts with the Policy's Suits Against Us, Applicable Law and Service of Suit provisions. The defendants removed the case to federal court under the New York Convention and moved to compel arbitration; the plaintiff moved to remand.

Key holdings

1. Remand denied. The court has subject-matter jurisdiction under the Convention. The test for jurisdiction on removal is a limited one, based on the pleadings, and the validity, enforceability and interpretation of the arbitration clause are not part of it. The clause is an agreement in writing: it is contained in a Policy between the same parties and appears to be signed by their representatives. pp. 9–12
2. The dispute relates to the arbitration agreement, because the complaint seeks a declaration on whether the clause is enforceable. A dispute over whether the seat is New York or Florida does not affect jurisdiction, because both are in the United States. p. 9 n. 2; p. 12
3. The arbitration clause can be severed from the rest of the Policy. The alleged conflicts with other Policy provisions therefore do not prevent the court from enforcing it, and the motion to compel is not premature. pp. 15–16
4. The words "all matters in difference ... including its formation and validity" are a clear and unmistakable delegation of arbitrability to the arbitrator, as in Parnell. The plaintiff attacked the clause as a whole, not the delegation clause specifically, and so did not meet the Rent-A-Center standard. Whether New York or Florida law applies is left to the arbitrator. pp. 20–21 & n. 5
5. The Convention's jurisdictional prerequisites are met and none of its defenses applies; the plaintiff raised none. Its challenge to the requirement of arbitration in a Convention State rested on the clause's validity, and the delegation clause sends that question to the arbitrator. The parties must arbitrate, and the action is dismissed with prejudice. pp. 22–24

Procedural history

1. 10 September 2017Hurricane Irma damages the insured property.
2. The plaintiff files a single-count complaint in the Eleventh Judicial Circuit of Miami-Dade County. The defendants remove the case to federal court under the Convention and move to compel arbitration; the plaintiff moves to remand.
3. 13 February 2019Omnibus Order (entered on the docket 13 February 2019): arbitration compelled, remand denied, case dismissed with prejudice and closed.

Tribunal, counsel and experts

Decided by

• Donald L. Graham Judge, U.S. District Court, Southern District of Florida

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Keywords

• New York Convention
• Article II(3)
• agreement in writing
• removal
• 9 U.S.C. § 205
• motion to compel arbitration
• motion to remand
• delegation clause
• arbitrability
• Rent-A-Center
• severability
• Hurricane Irma
• all-risk insurance
• Lloyd's
• appraisal
• Parnell v. Cashcall

Summary generated with AI from the published documents — refer to the award for the authoritative text.