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Baugh v. Allied Professionals Insurance Co.

United States District Court, D. Utah

March 26, 2019

BREVAN BAUGH, Plaintiff,
v.
ALLIED PROFESSIONALS INSURANCE COMPANY, A RISK RETENTION GROUP, Defendant.

          MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS (ECF NO. 8)

          Evelyn J. Furse, United States Magistrate Judge

         District Judge Dee Benson Magistrate Judge Evelyn J. Furse Defendant Allied Professionals Insurance Company, A Risk Retention Group, Inc. (“Allied Professionals”) moves the Court[1] to compel arbitration of Plaintiff Dr. Brevan Baugh's claim for coverage and to stay proceedings pending the completion of arbitration. (Def.'s Mot. to Compel Arbitration & Stay Proceedings, or in the Alternative to Transfer the Case, (“Mot.”) 1, ECF No. 8.) In the alternative, Allied Professionals requests that the Court transfer the case to the Central District of California, Southern Division only if the Court determines it lacks jurisdiction to grant the motion to compel. (Id.) Allied Professionals requests its attorneys' fees for bringing this motion pursuant to the “attorney fee provision of the agreement.” (Id. at 2.) Allied Professionals moves to compel arbitration based on the arbitration clause in the professional liability insurance policy Dr. Baugh signed. (Id. at 2, 4-9.) Dr. Baugh argues the Court should not enforce the arbitration clause because Utah law makes the clause unenforceable. (Pl.'s Mem. Opposing Def.'s Mot. to Compel, Stay Proceedings, or in the Alternative, Transfer the Case (“Opp'n”) 2-6, ECF No. 11.) Dr. Baugh contends that because the clause is unenforceable, this Court should hear the case. (Id. at 6.)

         On November 1, 2018, the Court held argument on Allied Professional's Motion and took the motion under advisement. (See Minute Entry, ECF No. 15.) Having considered the briefing, oral argument, and the materials submitted for and against Allied Professionals' Motion, the Court GRANTS the Motion to Compel Arbitration and Stay Proceedings because of the policy's specificity.

         FACTUAL BACKGROUND

         This case arises out of Dr. Baugh's attempt to have Allied Professionals defend or indemnify him from a lawsuit brought by a former patient. Dr. Baugh holds a naturopathic physician's license in Utah and a certification in Prolozone therapy from the American Academy of Ozonotherapy. (Compl. for Declaratory Relief (“Compl.”) ¶ 11, ECF No. 2-2.) Dr. Baugh maintained a professional liability policy with Allied Professionals. (Decl. of Michael J. Schroeder (“Schroeder Decl.”) ¶¶ 13-14, Ex. A, ECF No. 8-1.)

         On September 11, 2014, Dr. Baugh injected patient Randall Grover's knees with Prolozone. (Compl. ¶ 8, ECF No. 2-2.) Dr. Baugh allegedly injured Mr. Grover when he administered the injection, and on or around June 6, 2016, Mr. Grover sent Dr. Baugh a Notice of Intent to commence a legal action against Dr. Baugh for his injuries. (Id. at ¶¶ 9-10.) Dr. Baugh's professional liability policy with Allied Professionals offers coverage for naturopathic services. (Id. at ¶ 12.) Dr. Baugh tendered Mr. Grover's claim to Allied Professionals, who denied his claim. (Id. at ¶ 14; Schroeder Decl. ¶ 16, Ex. A ECF No. 8-1.) After Allied Professionals denied his claim, Dr. Baugh filed an action for declaratory relief in state court to declare the parties' rights and obligations under the policy. (Compl., ECF No. 2-2.) Allied Professionals removed the action to federal court (Notice of Removal, ECF No. 2), and filed the instant motion. (Mot., ECF No. 8.)

         The arbitration clause at issue states the parties will resolve all disputes or claims between the parties to the policy by binding arbitration. (Prof'l Liab. Ins. Policy (“Policy”), Ex. C, ECF No. 11-3 at 7.) The policy further reads:

This provision is intended to, and shall, encompass the widest possible scope of disputes or claims, including any issues a) with respect to any of the terms or provisions of this Policy, or b) with respect to the performance of any of the parties to the Policy, or c) with respect to any other issue or matter, whether in contract or tort, or in law or equity. Any person or entity asserting such dispute or claim (the “Claimant”) must submit the matter to binding arbitration with the American Arbitration Association, under the Commercial Arbitration Rules of the American Arbitration Association then in effect. … All procedures, methods, and rights with respect to the right to compel arbitration pursuant to this Article shall be governed by the Federal Arbitration Act. The arbitration shall occur in Orange County, California. The laws of the State of California shall apply to any substantive, evidentiary or discovery issues. Any questions as to arbitrability of any dispute or claim shall be decided by the arbitrator. If any party seeks a court order compelling arbitration under this provision, the prevailing party in such motion, petition or other proceeding to compel arbitration shall recover all reasonable legal fees and costs incurred thereby and in any subsequent appeal, and in any action to collect the fees and costs. A judgment shall be entered upon the arbitration award in the U.S. District Court, Central District of California, or if that court lacks jurisdiction, then in the Superior Court of California, County of Orange.

(Id. at 7-8.)

         DISCUSSION

         A. This Court has Subject Matter Jurisdiction

         Allied Professionals asserts this Court has jurisdiction to compel arbitration in the Central District of California pursuant to the parties' arbitration agreement because “[Dr.] Baugh agreed to arbitrate in Orange County, California and cannot now challenge the validity of that agreement.” (Mot. 7-9, ECF No. 8.) Dr. Baugh does not contest this Court's jurisdiction. (Opp'n, ECF No. 11.) Nonetheless, the Court must assure itself of its own subject matter jurisdiction. Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006) (citing Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999)).

         Allied Professionals argues the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (“FAA”), applies to the parties' policy. (Mot. 5, ECF No. 8.) Section 4 of the FAA provides:

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action … of the subject matter of a suit arising out of the controversy between the parties, for an ...

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