C. v. Starr & Co. v. Boston Reinsurance Corp.

On this appeal from an order denying a petition to compel arbitration, we affirm for the reasons which follow.

Procedural/Factual Background

In 1974 Elmer Fox & Company (Fox), a Denver-based accounting firm, obtained a $10 million professional liability insurance policy from Lloyds of London. In 1981 Fox obtained two policies of “excess” professional liability insurance from Granite State Insurance Company (Granite).

The first Granite policy provided $ 10 million in coverage in excess of the underlying primary Lloyds’s policy. The second Granite policy provided $10 million in coverage in excess of the underlying $20 million coverage (i.e., $10 million from Lloyds and $10 million from the first Granite policy).

At the same time that Granite issued the excess coverage policies to Fox, Granite also obtained reinsurance from various insurers; nine carriers covered $8.5 million of the $10 million coverage of the first Granite policy, and six carriers covered $8.35 million of the $10 million coverage of the second Granite policy.

In 1983, 16 lawsuits were filed against Fox alleging professional misconduct with total claims exceeding $250 million. Plaintiffs in those…