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Philadelphia Indemnity Insurance Co. v. City of Fresno

United States District Court, E.D. California

July 12, 2016

PHILADELPHIA INDEMNITY INSURANCE COMPANY, a Pennsylvania corporation, Petitioner,
v.
THE CITY OF FRESNO, a municipal corporation, Respondent.

          ORDER GRANTING PETITIONER’S PETITION TO COMPEL ARBITRATION.

          JOHN A. MENDEZ, UNITED STATES DISTRICT JUEGE.

         Petitioner Philadelphia Indemnity Insurance Company (“Philadelphia”) petitions the Court for an order compelling The City of Fresno (“Fresno”) to proceed to arbitration in accordance with an alleged arbitration agreement. For the reasons stated below, the Court grants the petition and orders Fresno to proceed with arbitration.[1]

         I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

         Fresno, through SMG Holdings, Inc., entered into a licensing agreement with the California Association of Future Farmers of America (“Future Farmers”) for Future Farmers to use a portion of the Fresno Convention and Entertainment Center. Petition to Compel Arbitration (“Petition”) (Doc. #1) ¶ 5. The licensing agreement required Future Farmers to obtain liability insurance. Id. In accordance with this requirement, Future Farmers entered into a liability insurance policy with Philadelphia (the “Future Farmers Policy”). Id. ¶ 8. The Future Farmers Policy states that either party may demand arbitration if a dispute arises over the scope of coverage. Id. ¶ 10.

         In April 2013, Timothy Sailors (“Sailors”) allegedly slipped and fell in the parking lot of the Fresno Convention Center on his way to a Future Farmers event. Id. ¶ 7; Memorandum (“Memo”) (Doc. #7) at 2. Sailors and his employer, Reef Sunset Unified School District (“Reef”), sued Fresno to recover for his injuries and for the employment benefits Reef paid to Sailors after he was injured. Petition ¶¶ 6-7. The cases were consolidated and Future Farmers was added as a defendant. Id. ¶ 6.

         Fresno has demanded that Philadelphia defend and indemnify Fresno pursuant to the Future Farmers Policy because Fresno contends it is an additional insured under the Policy. Memo at 2. Philadelphia has refused to defend or indemnify Fresno. Id. Philadelphia believes that the dispute over whether Philadelphia must indemnify Fresno should be submitted to arbitration in accordance with the arbitration clause of the Future Farmers Policy. Id. Fresno has declined to acknowledge the arbitration requirement. Id. Philadelphia now moves for an order requiring Fresno to submit the coverage dispute to binding arbitration pursuant to the arbitration clause in the Future Farmers Policy. Petition ¶ 11. Fresno did not oppose Philadelphia’s petition.

         II. OPINION

         A. Judicial Notice

         Philadelphia submitted a request for judicial notice (“RJN”) (Doc. #9) of the following items: (1) Philadelphia’s petition to compel arbitration filed in this action on March 9, 2016 (RJN, Exh. #1); (2) the first amended complaint in Sailors v. City of Fresno, Fresno Superior Court Action No. 14 CE CG 00069 MBS (RJN, Exh. #2); and (3) the complaint in Reef Sunset Unified School District v. City of Fresno, Fresno Superior Court Action No. 14 CE CG 00807 (RJN, Exh. #3). Fresno did not oppose Philadelphia’s request for judicial notice.

         A court may take judicial notice of a fact that is not reasonably disputed if it “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b)(2). Courts are allowed to take judicial notice of “matters of public record.” Northstar Fin. Advisors Inc. v. Schwab Investments, 779 F.3d 1036, 1042 (9th Cir. 2015). Since all three exhibits are part of the public record and are not subject to reasonable dispute, the Court takes judicial notice of all three exhibits.

         B. Legal Standard

         The FAA permits a party “aggrieved by the alleged failure, neglect, or refusal of another to arbitrate” in accordance with a written arbitration agreement to petition a district court for an order directing the parties to proceed to arbitration. 9 U.S.C. § 4. When deciding such a petition, the court’s sole role is “determining [1] whether a valid arbitration agreement exists and, if so, [2] whether the agreement encompasses the dispute at issue.” Lifescan, Inc. v. Premier Diabetic Sevs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). There is a “strong federal policy favoring arbitral dispute resolution, ” Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 720 (9th Cir. 1999), and courts have been directed to resolve “any doubts concerning the scope of arbitrable issues . . . in favor of arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983). As such, the Supreme Court has held that a party seeking to avoid arbitration under the FAA bears the burden of proving that the claims are unsuitable for arbitration. Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 91-92 (2000).

         C. Analysis

         As noted above, Fresno did not oppose Philadelphia’s petition to compel arbitration and therefore failed to challenge “the strong federal policy favoring arbitral dispute resolution.” Simula, 175 F.3d at 720. On that basis alone, the Court could grant Philadelphia’s petition. Green Tree Fin, 531 U.S. at 91 (“the party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.”). Still, the Court must analyze whether the ...


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