GGIS Insurance Services, Inc. v. Lincoln General Insurance
773 F. Supp. 2d 490
M.D. Penn.2011Background
- GGIS and Acunto challenged an arbitration award in consolidated federal actions against Lincoln; Lincoln petitioned to confirm the award.
- PMA (April 2005) authorized GGIS as Lincoln's general agent; Acunto signed a personal guaranty to induce Lincoln to enter the PMA.
- Guaranty incorporated the PMA, but whether it incorporated Article XIX (arbitration) and which parties it bound were disputed.
- Arbitration clause in Article XIX provided broad jurisdiction over the dispute and stated Pennsylvania law governs/arbitration; Lincoln terminated the PMA in 2007.
- Arbitration panel in 2010 held it had jurisdiction over the disputes, including Acunto, and awarded Lincoln (contingent commissions) plus costs; parallel California and Pennsylvania actions were consolidated.
- Magistrate Judge recommended summary judgment for Lincoln; district court adopted, granting Lincoln’s motion and denying GGIS/Acunto’s.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the Guaranty incorporate the PMA arbitration provision? | Acunto argues no incorporation of arbitration. | Lincoln contends Guaranty incorporated entire PMA, including Article XIX. | Guaranty incorporated Article XIX; arbitration applies. |
| Does the Guaranty bind Acunto personally to arbitrate? | Acunto did not expressly reference arbitration. | Guaranty incorporated PMA, making Acunto bound to arbitration. | Acunto personally bound by incorporation. |
| Who decides arbitrability—the arbitrators or the court? | Arbitrators should decide arbitrability where incorporation is clear. | If ambiguity exists, a court decides arbitrability. | Incorporation language and Article XIX assign arbitrability to the panel; review is deferential. |
| Did Lincoln waive arbitration by filing litigation instead of seeking arbitration? | Waiver by pursuing litigation should void arbitration. | Waiver requires inconsistent acts and undue prejudice; no waiver here. | No waiver; actions did not constitute improper waiver or prejudice. |
| Should the arbitration award be vacated or confirmed? | Vacatur may be warranted due to jurisdictional issues. | Award should be confirmed as proper under deference to arbitral decision. | Summary judgment for Lincoln; award affirmed/confirmed; petition to vacate denied. |
Key Cases Cited
- Century Indem. Co. v. Certain Underwriters at Lloyd's, London, 584 F.3d 513 (3d Cir. 2009) (general incorporation can bind non-signatories to arbitration)
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (U.S. Supreme Court, 1995) (arbitrability questions: who decides vs. scope)
- Gen. Elec. Co. v. Deutz AG, 270 F.3d 144 (3d Cir. 2001) (ambiguity on arbitrability; court vs. arbitral panel decision)
- Capek v. Devito, 564 Pa. 267, 767 A.2d 1047 (Pa. 2001) (contract interpretation; incorporation effects)
- Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 429 (Pa. 2001) (contract interpretation; incorporation of arbitration clauses)
- Chimicles v. Gen. Elec. Credit, 447 F.3d 207 (3d Cir. 2006) (incorporation scope and arbitration clauses)
- AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643 (U.S. Supreme Court, 1986) (reserve power to arbitrate matters to arbitrators)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. Supreme Court, 1985) (presumptions regarding arbitrability)
- First Options of Chi., Inc. v. Kaplan, 514 U.S. 938 (U.S. Supreme Court, 1995) (arbitrability: who decides)