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John Hancock Life Insurance Co. v. Employers Reassurance Corp.

United States District Court, D. Massachusetts

June 21, 2016

JOHN HANCOCK LIFE INSURANCE COMPANY U.S.A. Plaintiff,
v.
EMPLOYERS REASSURANCE CORPORATION, Defendant.

          MEMORANDUM AND ORDER

          DENISE J. CASPER UNITED STATES DISTRICT JUDGE

         ORDER

         I. Introduction

         Plaintiff John Hancock Life Insurance Company U.S.A. (“John Hancock”) brings this “petition and motion for enforcement of arbitration agreement” (“the Petition”). D. 7. Invoking the Federal Arbitration Act (the “FAA”), 9 U.S.C. §§ 4 and 5, John Hancock asks the Court to remove the arbitrator Employers Reassurance Corporation (“Employers”) has appointed to sit on the panel presiding over a pending arbitration between John Hancock and Employers. Id. ¶ 1. John Hancock contends that the arbitrator that Employers appointed does not meet the qualification requirements set out in the parties’ arbitration agreement, Agreement No. EP19A01 (the “Agreement”). Id. For the reasons stated below, the Court DENIES the Petition.

         II. Factual Allegations

         The central facts underlying the Petition are undisputed. John Hancock is an insurance company organized under the laws of Michigan with its principal place of business in Boston, Massachusetts. D. 7 ¶ 2. Employers is a reinsurance company organized under the laws of Kansas with its principal place of business in or around Overland Park, Kansas. Id. ¶ 3. The Agreement between Employers and John Hancock became effective on July 1, 1999. D. 7 ¶ 1; D. 18-3 at 4. Pursuant to the Agreement, John Hancock agreed to cede and Employers to accept a percentage of John Hancock’s retention of liability under specified insurance policies issued prior to the effective date of the Agreement. D. 7 ¶ 7.

         The Agreement provides that any dispute that arises relating to the Agreement shall be resolved by arbitration. D. 3-1 at 12; D. 7 ¶ 1; D. 18 at 1. The Agreement further provides that each party will appoint one arbitrator and those two arbitrators will then select the third arbitrator. D. 3-1 at 12; D. 7 ¶ 10; D. 18 at 3. The second arbitrator must be selected within two weeks after notice is provided that the first arbitrator has been selected. D. 3-1 at 12; D. 7 ¶ 10. The two party-appointed arbitrators are instructed to select the third arbitrator within two weeks of appointment of the second arbitrator. D. 3-1 at 12; D. 7 ¶ 10. The Agreement specifies that “[a]ll three arbitrators must be officers of Life Insurance Companies or Life Reinsurance Companies, excluding however, officers of the two parties to this Agreement, their affiliates or subsidiaries or past employees of any of these entities.” D. 3-1 at 12; D. 7 ¶ 11; D. 18 at 4.

         On August 14, 2015, John Hancock initiated arbitration to resolve a dispute regarding Employers’ right to increase the reinsurance premiums charged to John Hancock under the Agreement. D. 7 ¶ 12; D. 18 at 3. On August 14, 2015, John Hancock sent Employers a letter naming Thomas M. Zurek as an arbitrator. D. 3-2; D. 7 ¶ 13; D. 18 at 3. On August 28, 2015, Employers responded with a letter naming Denis Loring (“Loring”) as an arbitrator. D. 3-4; D. 7 ¶ 14; D. 18 at 3. On September 4, 2015, John Hancock demanded that Employers withdraw Loring; John Hancock contended that Loring could not serve as an arbitrator because Loring was once employed by one of John Hancock’s affiliates, specifically, John Hancock Mutual Life Insurance Company. D. 3-6; D. 7 ¶ 15; D. 18 at 3. Employers refused to withdraw Loring. D. 7 ¶ 16; D. 18 at 3; D. 18-3 at 7-9.

         III. Procedural History

         On October 23, 2015, John Hancock instituted this civil action seeking the removal of Loring. D. 1. That same day, John Hancock filed a “petition and motion for enforcement of arbitration agreement.”[1] D. 7. After a hearing, the Court took the matter under advisement. D. 21.

         IV. Legal Standard

         The FAA “embodies the national policy favoring arbitration, ” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006), and “was designed to promote arbitration.” Soto-Fonalledas v. Ritz-Carlton San Juan Hotel Spa & Casino, 640 F.3d 471, 474 (1st Cir. 2011) (citation and internal quotation mark omitted). Thus, the FAA “provides that written agreements to arbitrate controversies arising out of an existing contract ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C. § 2). In further keeping with its goal of promoting arbitration, the FAA provides for judicial enforcement of written arbitration agreements, Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111 (2001) (citing 9 U.S.C. § 2), and “expedited judicial review to confirm, vacate, or modify arbitration awards” once the awards have been issued. Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 578 (2008) (citing 9 U.S.C. §§ 9-11). With regard to the enforcement of arbitration, “[b]y its terms, the [FAA] leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter, 470 U.S. at 218 (emphasis in original).

         V. Analysis

         A. The FAA Does Not Authorize the Court to Remove an Arbitrator Before a Final ...


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