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The Raymond Group Inc. v. St. Paul Fire & Marine Insurance Company

Zelle Hofmann's West Coast insurance practice group won an order compelling arbitration and staying all litigation proceedings in a lawsuit over unpaid workers' compensation premiums, despite the absence of a signed arbitration agreement between the parties. Los Angeles partner Marc Shrake convinced the U.S. District Court for the Central District of California that an insurance carrier has the right to enforce an unsigned arbitration agreement against the insured based on conduct of the parties that otherwise evidences assent to the contract. The insured claimed that it was not aware of, and certainly had not agreed to, an arbitration provision. The Court agreed with the insured that "a party is not bound by an arbitration agreement to which it has not assented." However, the Court held that "evidence that a party has agreed to a written arbitration agreement is sufficient to bind the party even if the party's signature is not on the document containing the required writing." The Court found that the insurance carrier met this standard based on evidence that the parties had conducted at least one retrospective premium transaction under the terms of the unsigned contract. The Court also held that the case involves interstate commerce, a threshold inquiry under the Federal Arbitration Act, and rejected the application of an earlier federal decision that held that insurance contracts do not involve commerce.

© 2008 Zelle Hofmann/ Not Certified by the Texas Board of Legal Specialization
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