Berkshire Hathaway Homestate Insurance Company v. Messer-Bowers Company
8:24-cv-00295
D. Neb.Jun 5, 2025Background
- Berkshire Hathaway Homestate Insurance Company (Berkshire), an Omaha, Nebraska-based insurer, sued Messer-Bowers Company (Messer-Bowers), an Oklahoma insurance agency, related to a policy issued for Don’s Doors LLC’s commercial property in Oklahoma.
- Messer-Bowers represented to Berkshire that Don’s Doors’s property had a P-2 fire alarm system; this proved incorrect after a 2022 fire loss, as the property had no such alarm.
- Berkshire, relying on Messer-Bowers’ representation, paid out a $1,050,000 insurance claim to Don’s Doors—despite believing coverage was excluded—and then sued Messer-Bowers seeking reimbursement under indemnification provisions of their 2016 agency agreement.
- Messer-Bowers moved to compel arbitration citing an arbitration clause in the agency agreement, claiming it broadly covered disputes between the parties.
- The magistrate judge granted the motion to compel arbitration and stayed the case pending arbitration, but Berkshire objected, arguing the arbitration clause was narrowly limited to commission/money owed disputes.
Issues
| Issue | Plaintiff's (Berkshire) Argument | Defendant's (Messer-Bowers) Argument | Held |
|---|---|---|---|
| Scope of arbitration clause: Broad or narrow? | Clause only covers commission/monies owed disputes. | Clause is broad; covers all disputes arising out of agreement. | Held to be narrow; covers only money owed to Messer-Bowers. |
| Whether claims for indemnification must be arbitrated | No; not related to commission or monies owed. | Yes; claim arises out of contractual relationship. | Claims do not fall within arbitration clause's scope. |
| Magistrate judge’s interpretation (clearly erroneous?) | Misconstrued clause and complaint; ignored contract limits. | Reasonable alternative interpretation; not clearly erroneous. | Magistrate’s order was clearly erroneous and reversed. |
| Stay of the action pending arbitration | Should not apply since arbitration is inapplicable. | Appropriate pending arbitration per agreement. | Stay lifted; litigation may proceed in court. |
Key Cases Cited
- Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) (Courts can only order arbitration where parties agreed to arbitrate particular disputes)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (Arbitration agreements must be enforced per the parties' intent)
- Catamaran Corp. v. Towncrest Pharm., 946 F.3d 1020 (8th Cir. 2020) (Arbitration clauses are interpreted like any contract)
- Harris v. The Epoch Group, LC, 357 F.3d 822 (8th Cir. 2004) (Contracts should give effect to all terms; avoid superfluity)
- Meierhenry Sargent LLP v. Williams, 915 F.3d 507 (8th Cir. 2019) (Arbitration clauses limited to specified disputes are interpreted as narrow)