577 F.Supp.3d 284
S.D.N.Y.2021Background
- Plaintiffs bought travel (accommodations and/or flights) and associated trip-cancellation insurance sold through Vrbo (Vrba.com); Generali underwrote the insurance and denied COVID-19–related claims.
- Vrbo’s online Terms of Service contained a broad arbitration clause (Section 19) stating that "companies offering products or services through us" are beneficiaries and that "any and all Claims" will be resolved by binding arbitration.
- Purchases were completed by users clicking an "Agree & continue"/"Continue" button that linked to the Vrbo Terms; the insurance purchase was made on Vrbo’s site and charged with the reservation payment.
- Generali moved to compel arbitration for multiple named plaintiffs (and moved to dismiss some claims); the court applied the FAA and New York law.
- The court granted Generali’s motion to compel arbitration for the named Vrbo purchasers (including Oglevee as to her Vrbo purchase), found no conflict between the Vrbo Terms and the insurance Policies, and stayed the covered claims pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the insurance Policies preclude arbitration | Policies show intent not to arbitrate; "Legal Actions" section limits remedies | Policies contain no forum restriction; nothing expressly precludes arbitration or conflicts with Vrbo Terms | Court: Policies do not evidence an intent to avoid arbitration; no conflict with Vrbo Terms; arbitration stands |
| Whether a reasonable user would expect to arbitrate claims against Generali | No reasonable person would expect Vrbo agreement to bind them to arbitrate with an insurance underwriter | Insurance purchase occurred on Vrbo site and was tied to the reservation; Section 19 expressly covers companies offering products through Vrbo | Court: Close nexus and explicit beneficiary language make arbitration foreseeable and applicable |
| Whether Generali can enforce the Vrbo arbitration clause (third-party beneficiary) | Vrbo’s language does not grant Generali a mechanism to invoke arbitration | Section 19 expressly names companies offering products/services through Vrbo as beneficiaries entitled to enforce arbitration | Court: Plain language shows intent to benefit third parties; Generali may enforce the clause |
| Whether lack of mutuality (Plaintiffs cannot force Generali to arbitrate) invalidates clause | Arbitration is illusory if only Generali can invoke it | Plaintiffs could have initiated arbitration per Section 19; precedent permits non‑mutual invocation in this context | Court: Mutuality not required; clause valid and enforceable |
| Whether Generali waived the right to arbitrate through litigation conduct/delay | Generali litigated (motions to dismiss, case management); delay caused prejudice and waiver | Delay and limited litigation activity were not so extensive or prejudicial as to waive arbitration; plaintiff must prove prejudice | Court: No waiver—plaintiffs failed to show prejudice or sufficiently extensive litigation |
Key Cases Cited
- Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016) (summary-judgment–type standard for deciding motions to compel arbitration)
- Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012) (courts may decide arbitrability where no genuine issue of material fact)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S. 2009) (state law governs validity and enforceability defenses to arbitration agreements)
- Spear, Leeds & Kellogg v. Central Life Assurance Co., 85 F.3d 21 (2d Cir. 1996) (third‑party beneficiary may enforce arbitration agreement)
- Doctor's Assocs., Inc. v. Distajo, 66 F.3d 438 (2d Cir. 1995) (mutuality not required to enforce arbitration clause)
- Muzak Corp. v. Hotel Taft Corp., 133 N.E.2d 688 (N.Y. 1956) (specific contract provisions control over general ones)
- Thyssen, Inc. v. Calypso Shipping Corp., S.A., 310 F.3d 102 (2d Cir. 2002) (waiver of arbitration requires showing of prejudice from litigation participation)
- Sweater Bee by Banff, Ltd. v. Manhattan Indus., Inc., 754 F.2d 457 (2d Cir. 1985) (party opposing arbitration bears burden to show waiver)