Effective Date: October 2, 2006 Property Subrogation Arbitration

Transcription

1 Effective Date: October 2, 2006 Property Subrogation Arbitration Table of Contents Definitions...page 2 Agreement Article First... page 4 Article Second... page 4 Article Third... page 5 Article Fourth... page 5 Article Fifth... page 6 Article Sixth... page 6 Rules & Regulations Preamble... page 7 Section One - Jurisdiction... page 7 Section Two - Procedure... page 9 Section Three - Hearings... page 13 Section Four - Decisions... page 15 Section Five - Awards... page 15 Section Six - Administration... page 16 Sample Forms Application Form... page 17 Contentions Sheet... page Arbitration Forums, Inc. 10/06 RR-P

2 PROPERTY ARBITRATION DEFINITIONS The following are definitions of terms as applied to the Property Arbitration Agreement and Rules. Words that appear in bold throughout this book can be found in the following definition section and those that are italicized can be found on the Application Form. Adjournment An interruption of a hearing at the discretion of the arbitrator(s) for a maximum of 30 days. Affirmative Defense A complete defense that does not address the allegations, but instead, asserts reasons that preclude the arbitrator(s) from accepting jurisdiction and ruling on the disputed issue(s). Applicant The company initiating the proceeding by filing an application (P-Form and Contentions Sheet). Collateral Estoppel A bar by judgment that precludes the relitigation of issues litigated by the same parties on a different or the same cause of action. Commercial Property - Coverage for businesses, institutions, or organizations to protect their property and/or business. Commercial Property coverage includes, but is not limited to, risks such as fire, burglary, theft, goods in transit covered by inland marine insurance, floaters, or endorsements. Companion Claim Any additional claim(s) by or against a participating party(ies) arising out of the same accident, occurrence, or event, which falls under Property Arbitration or another AF compulsory forum. Counterclaim A claim, resulting from the same accident or loss as the original claim, presented by the original Respondent (Counter- Applicant) against the original Applicant (Counter-Respondent) in an arbitration proceeding. Deferment A postponement of a hearing for one-year from the date of filing. Denial of Coverage A company s assertion that the entity (ies) and/or individual(s) involved in the accident, occurrence, or event in dispute is not covered under the company s policy of insurance, or that there was no policy in effect at the time of the accident, occurrence, or event. (It is not a denial of coverage as long as the company admits that the parties are an insured under the policy in 2008 Arbitration Forums, Inc. 10/06 RR-P

3 effect at the time of accident, occurrence, or event i.e., primaryexcess coverage, policy limits, or the claim is being handled under a reservation of rights.) Jurisdictional Error Occurs when an arbitrator(s) improperly proceeds with a hearing without resolving a pled potential jurisdictional impediment or dismisses a case where a party(ies) has not raised an objection of jurisdiction. Legal Fees Attorney fees, court costs, and all other expenses directly related to the prosecution or defense of a lawsuit. Noninsurer A noninsurer member shall mean a member who is neither a Trade Association member nor an insurer member and who has a direct financial interest in the claims being arbitrated. Personal Property - Coverage to protect individuals for damage to their property other than automobile. Personal Property coverage includes, but is not limited to, homeowners insurance, tenant or renters insurance, watercraft or boat owners insurance and watercraft endorsements, and personal inland marine coverage. Publication Date The date when AF transmits or mails the decision to all interested parties. Res Judicata A judgment, decree, award, or other determination that is considered final and bars relitigation of the same matter. Reschedule An extension of the hearing date granted by AF at the request of a party(ies) or at AF s discretion to an arbitration hearing, not to exceed 60 days. Respondent The company or companies against whom the Applicant initiates arbitration. All references to Respondent apply to all answering companies. Self-Insured An entity that meets the state requirements of being self-insured: one that assumes the risk directly for covering losses involving its property, or one whose deductible or retention is equal to or exceeds the amount of the loss in dispute. Written Consent A documented agreement to binding arbitration by the party (ies). Answering a filing without an objection to jurisdiction is considered written consent Arbitration Forums, Inc. 10/06 RR-P

4 PROPERTY SUBROGATION ARBITRATION AGREEMENT By signing this Agreement, the company accepts and binds itself to the following: ARTICLE FIRST Compulsory Provisions Signatory companies must forego litigation and arbitrate any personal or commercial property subrogation or self-insured property claims through Arbitration Forums, Inc. (herein after referred to as AF). ARTICLE SECOND Exclusions No company shall be required, without its written consent, to arbitrate any claim or suit if: a) it is not a signatory company nor has given written consent. b) such claim or suit creates any cause of action or liabilities that do not currently exist in law or equity; or c) its policy is written on a retrospective or experience-rated basis; or d) any payment which such signatory company may be required to make under this Agreement is or may be in excess of its policy limits. However, an Applicant may agree to accept an award not to exceed policy limits and waive their right to pursue the balance directly against the Respondent s insured; or e) it has asserted a denial of coverage; or f) any claim which a lawsuit was instituted prior to, and is pending, at the time the Agreement is signed; or g) it is a watercraft claim(s) arising from accidents on waters under federal or international jurisdiction; or 2008 Arbitration Forums, Inc. 10/06 RR-P

5 h) under the insurance policy, settlement can be made only with the insured s consent. The decision of the arbitrator(s): ARTICLE THIRD Decisions a) shall be based on local jurisdictional law and consistent with accepted claim practices. b) is final and binding without the right of rehearing or appeal except when allowed under the Procedure section of the rules. However, this does not preclude AF from correcting a clerical or jurisdictional error of an arbitrator(s) or AF staff. c) is neither res judicata nor collateral estoppel to any other claim or suit arising out of the same accident, occurrence, or event except where an Applicant seeks recovery of supplemental damages as allowed under the Awards section of the rules. The decision is conclusive only of the issues in the matter submitted to the arbitrator(s) and only as to the parties to the arbitration. The admissibility of the decision in any other proceeding is not intended, nor should be inferred from this Agreement. All matters concerning an arbitration proceeding shall be held in strict confidence. ARTICLE FOURTH Non-Compulsory Provisions The parties may, with written consent, submit a claim: a) that exceeds this forum s monetary limit, or b) where a non-signatory wants to participate. Once a company gives written consent, all Articles and Rules of this forum are applicable, and the company may not revoke its consent. ARTICLE FIFTH 2008 Arbitration Forums, Inc. 10/06 RR-P

6 AF s Function and Authority AF, representing the signatory companies, is authorized to: a) make appropriate Rules and Regulations for the presentation and determination of controversies under this Agreement; b) determine the location, and the means by which, arbitration cases are heard; c) determine qualification criteria and provide for the selection and appointment of arbitrators; d) establish fees; e) invite insurance carriers, noninsurers and/or self-insureds to participate in this arbitration program, and compel the withdrawal of any signatory for failure to conform to the Agreement or the Rules issued there under. The signatories, directors, officers, staff, agents, and AF employees, as well as the arbitrators, are not liable to and will be held harmless by any party(ies) for any negligence, act, or omission concerning the processing, administration, or hearing of any arbitration conducted under this Agreement. ARTICLE SIXTH Withdrawals Any signatory company may withdraw from this Agreement by notice in writing to AF. Such withdrawal will become effective sixty (60) days after receipt of such notice except as to cases then pending before arbitration panels. The effective date of withdrawal as to such pending cases shall be upon final compliance with the finding of the arbitration panel on those cases Arbitration Forums, Inc. 10/06 RR-P

7 PROPERTY ARBITRATION RULES AND REGULATIONS PREAMBLE AF created the following Rules and Regulations under the authority of Article Fifth (a) of the Property Subrogation Arbitration Agreement (referred to as the Agreement in the rules). The company, known as signatory in the rules, signs the Agreement with AF. As a condition precedent to using these Rules and Regulations, the parties should attempt to settle the subject dispute prior to filing arbitration. The filing company, at a minimum, must list the correct and current representative s name and address, insured name, and claim file number for the adverse party(ies). Failure to list current and correct information may cause the decision to be voided. SECTION ONE Jurisdiction 1-1 The Agreement between signatory companies and AF limits jurisdiction to the United States, Puerto Rico, and the U.S. Virgin Islands. 1-2 When a matter which should have been referred to arbitration under the Agreement is placed in litigation: (a) the party filing in litigation must dismiss the suit upon notification. (b) the Applicant will have 60 days to file arbitration from the date of suit dismissal. (c) If the case is filed after the 60-day timeframe, the expiration of the statute of limitations, if raised, is a valid affirmative defense. 1-3 Compulsory arbitration is applicable to a maximum of $100,000 per claim: (a) AF considers a claim and Counterclaim as two separate claims Arbitration Forums, Inc. 10/06 RR-P

8 (b) AF considers a claim and Companion Claim(s) for different lines of coverage as separate claims. (c) The legal fees are not considered part of the program limit unless the policy limit includes legal fees. (d) The deductible is not included as part of the monetary limit. 1-4 A Respondent may implead and/or argue the negligence of a non-signatory party(ies), but must implead any additional signatory parties by filing an amended P-form with AF and the other companies in compliance with rules 2-2 and 2-3. The Respondent must provide the impleaded party with a copy of the Applicant s contentions. (a) The arbitrator(s) will apportion liability between all parties and award damages, if any, against the Respondent(s). (b) Non-signatories may be impleaded only if they give written consent as per Article Fourth. (c) If the negligence of a non-member is argued, the Applicant may: i. withdraw its application prior to the hearing and pursue recovery by other means; or ii. proceed with arbitration, agreeing to accept an award against any participating company and waive their right to pursue the balance directly against the non-member. 1-5 When filed as a companion to Special and/or Personal Injury Protection (PIP), the Special and PIP rules regarding arbitrators will prevail Arbitration Forums, Inc. 10/06 RR-P

9 SECTION TWO Procedure 2-1 Any signatory making a claim, or having a claim made against it, shall identify itself as a signatory to the Property Arbitration Agreement and inform all interested parties. If a signatory discovers that it has inadvertently entered litigation with another signatory, it must withdraw from that litigation within 30 days of notice. Failure to dismiss an action improperly filed by a signatory in litigation shall subject the responsible signatory to payment of the other party (ies) s reasonable court costs and attorney s fees expended to cause removal from litigation. These fees may be included in the Legal Fees section of the P-Form. However, when defending a suit instituted by a nonsignatory, a signatory may seek recovery of their damages from another signatory in that litigation. This is not to be regarded as a separate and distinct cause of action. 2-2 The Applicant commences an arbitration proceeding by filing a completed P-Form and Contentions Sheet with AF and the representative of each involved party being filed against. Any amendments must be received by AF and any other parties by the close of business prior to ten (10) business days before the hearing date. The Applicant must submit all other documents to AF by the close of business prior to ten (10) business days before the hearing date. Documents not received within this time frame will not be sent to hearing. 2-3 The Respondent answers by filing its copy of the P-form and Contentions Sheet with AF and all other involved parties by the close of business prior to ten (10) business days before the hearing date. Any amendments must be received by AF and any other parties by the close of business prior to ten (10) business days before the hearing date. A Respondent must check the box on the P-Form 2008 Arbitration Forums, Inc. 10/06 RR-P

10 clearly showing a Counterclaim is being filed. Unless a Counterclaim is filed and heard with the original arbitration case, the Respondent company with the Counterclaim is precluded from pursuing its Counterclaim against the adverse member company, unless it can show through documentary evidence that its claim was created by payment to its insured less than ten (10) business days prior to the hearing date or anytime thereafter. Filing a Counterclaim is the only way a Respondent may collect its damages. The Respondent must submit all other documents to AF by the close of business prior to ten (10) business days before the hearing date. Documents not received within the above time frame will not be sent to hearing. Personal representation will not be allowed in cases when an answer has not been filed as outlined above. If one of the involved parties questions compliance, the burden of proving delivery is upon that party. 2-4 If seeking legal fees, a company must list these amounts on the P-Form. 2-5 The parties must raise and support affirmative pleadings or defenses in the Affirmative Defenses/Pleadings section of the Contentions Sheet. If a denial of coverage is being plead, a copy of the denial letter, to the insured, must be provided. 2-6 If a party (ies) contests damages, it must present its arguments on the Contentions Sheet and provide its damages amount under the Itemization of Damages section of the Contentions Sheet. If this section is left blank, damages are not at issue. 2-7 All companion claims will be heard together, if; (a) filed with the original Property Arbitration filing; or (b) the related docket number is listed on the P-Form Arbitration Forums, Inc. 10/06 RR-P

11 2-8 The Applicant must immediately notify AF if it has resolved the disputed issue(s) before the hearing. Upon notification, AF will withdraw the case from arbitration. 2-9 If the Respondent raises an objection to jurisdiction as a proper affirmative defense against compulsory arbitration and the panel or AF withdraws the case from arbitration in response to that pleading; the applicable AF office will remove the case from its active docket. After removal, if it is discovered that the case was properly placed in arbitration and the Applicant refiles the case, the Respondent company must reimburse the Applicant for all reasonable legal expenses and court costs resulting from the improper objection to jurisdiction. AF will charge a reinstatement fee Each party may be granted one reschedule of the hearing date if requested at least three business days prior to the hearing as long as Rule 2-2 or Rule 2-3 has been complied with. AF will notify all parties of the new hearing date and charge the requesting party a fee Any party may request a deferment on the P-Form. AF will charge the requesting party a deferment fee. Justification for the deferment must be included in the Deferment Justification section of the Contention Sheet. If a deferment is requested, the case will still proceed on the scheduled hearing date to determine the validity of the request. If the request is upheld, the case will be deferred for one year. If the request is denied, the arbitrator will continue to hear the disputed issues. The party granted the deferment may withdraw the deferment. The case will proceed to the next available hearing. Any subsequent deferment requests will follow the above procedure Arbitration Forums, Inc. 10/06 RR-P 11

12 2-12 Any party may appeal a decision wherein the Company Claim Amount is $25,000 and above. AF will charge a substantial, non-refundable fee to the party filing the appeal. (a) The appeal must be received by AF s Service Quality Department located at corporate headquarters via certified mail with a recommended courtesy copy to all parties within thirty (30) days of the decision publication date and must set forth a specific objection to the decision and the basis for the objection. (b) The adverse party(ies) then has thirty (30) days from AF s notification letter to submit their response to the appeal stating their position and the basis for it. If their response is not timely received, they waive their right to respond. (c) AF will forward the original file, decision and appeal positions to a new three-person panel. No new evidence, witnesses, or personal representation will be introduced in the appeal process. No arbitrator from the original panel will sit on the appeal panel. (d) The appeal panel will consider only the original file and each party s appeal position. The appeal panel s decision will be final and binding For products liability cases, reasonable accommodations should be made for the inspection of the alleged defective product(s). Failure to do so may result in case withdrawal if raised as critical to defense of the claim. SECTION THREE Hearings 3-1 AF will transmit or mail Hearing Notices to all parties at least 30 days prior to the initial hearing date, unless waived. 3-2 The arbitrator(s) will hear the case even if the Respondent Arbitration Forums, Inc. 10/06 RR-P

13 fails to answer. 3-3 AF will assign arbitrator(s) based upon the company claim amount using the following criteria: (a) Under $12,500 one (1) arbitrator (b) $12,500 and above one (1) arbitrator unless three (3) are requested on the P-Form Any party requesting a three-person panel will be charged a threeperson panel fee. 3-4 The arbitrator(s) may grant an adjournment for cause or to request briefs of law or clarification of submitted materials. AF will notify all parties of the new hearing date. If the requested documents are not received prior to the adjourned hearing date, the hearing will proceed. 3-5 The arbitrator(s) will only consider: (a) Those affirmative defenses or objections to jurisdiction included in the Affirmative Defense/ Pleading section of the Contentions Sheet (b) Deferment requests included in the Deferment Justification section of the Contentions Sheet (c) Evidence listed on the Contentions Sheet (d) Amount entered as the Company Claim Amount and/or Legal Fees on the P-Form. (e) Contested damages at issue if specifically plead on the Itemization of Damage section of the Contentions Sheet. 3-6 Procedure at arbitration hearings is informal. Formal rules of evidence do not apply Arbitration Forums, Inc. 10/06 RR-P 13

14 3-7 A party(ies) may present witnesses or attend an arbitration hearing. To do so, the party(ies) must indicate such intent on the original or an amended P-Form. Insureds or witnesses may not appear without the presence of a company representative. Personal appearances are for the sole purpose of ensuring the arbitrator s understanding of the evidence submitted and are not subject to cross examination. Representatives may not be present while the arbitration panel is deliberating. 3-8 No person shall serve as an arbitrator over any matter in which he/she personally or his/her company has any direct or indirect material interest. 3-9 Should the Respondent fail to deny coverage before the hearing, the Respondent may do so, in writing to AF, up to 60 days from the publication of the decision, if: (a) Applicant made its filing at least 120 days before the Statute of Limitations expires; and (b) Respondent pleads its defense at least 60 days before the Statute of Limitations expires; and (c) No prior response had been filed. Upon notifying AF of the coverage denial following the hearing, the Respondent will be assessed a charge equal to the filing fee. SECTION FOUR Decisions 4-1 Arbitration panels may not render default judgments. Decisions must be based on the evidence submitted. 4-2 Pursuant to Article Third, the arbitrating companies must provide written notice of a clerical or jurisdictional error to AF within 30 days after the decision s publication date. AF may also find and correct errors without notice from the arbitrating companies within 30 days after the publication of Arbitration Forums, Inc. 10/06 RR-P

15 the decision. 4-3 AF will transmit or mail the decision to all interested parties. SECTION FIVE Awards 5-1 The parties shall honor all awards within thirty (30) days of decision publication date. 5-2 When a party (ies) does not honor the award within thirty (30) days after publication: (a) The prevailing company s local representative must immediately send a written request for payment to the adverse company s local senior representative, addressing him/her by name. (b) If the award remains unpaid thirty (30) days after written request for payment, the company should send a copy of the letter to AF requesting assistance with award payment. (c) AF will notify the non-paying Company and charge a fee. (d) If the award remains unpaid for an additional thirty (30) days, the company may seek legal recourse in pursuit of collection and is entitled to statutory interests and all costs incurred in pursuing collection until the award is paid. 5-3 Payments made as a result of the award are to be made only to the applicant. Payments must include any deductible interest, if applicable, in the interest of good will between the companies. An Applicant can file for supplemental damages if they are paid within ten (10) business days of the original hearing or anytime thereafter. The original liability decision is res judicata. The sole issue in this filing is the supplemental damages Arbitration Forums, Inc. 10/06 RR-P 15

16 SECTION SIX Administration 6-1 Upon filing, the Applicant incurs a filing fee payable to AF. A Respondent who files a Counterclaim shall also pay the prescribed fee. 6-2 AF will return photographs, if requested, as an Administrative Request on the Contentions Sheet and a selfaddressed, stamped envelope of sufficient size and postage is provided. All other material will be destroyed following the hearing Arbitration Forums, Inc. 10/06 RR-P

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