Following Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, this decision affirms an order denying a motion to compel arbitration of a dispute between an employer and its workers’ compensation insurer. Though the contract contained a clear and unmistakable delegation of arbitrability issues to the arbitrator, the delegation clause was void because it was added by an endorsement that had not been filed with and approved by the Insurance Commissioner. The entire arbitration agreement was void for the same reason. But the fact that the same defense was directed at both the delegation clause specifically and the arbitration agreement, in general, did not run afoul of Rent-A-Center West Inc. v. Jackson (2010) 130 S.Ct. 2772. The decision also follows Citizens of Humanity, LLC v. Applied Underwriters, Inc. (2017) 17 Cal.App.5th 806 in holding that the arbitration agreement is void under Nebraska law which the policy chose as the law governing the policy. Nebraska law forbids arbitration provisions in insurance contracts. That law reverse preempts the FAA under the McCarren-Ferguson Act.
California Court of Appeal, First District, Division 4 (Reardon, J.); December 4, 2018 (published January 3, 2019); 30 Cal. App. 5th 970