State Farm Gen. Ins. Co. v. Watts Regulator Co.

*1095 SUMMARY

A nonprofit organization (Arbitration Forums, Inc. or AF) provides arbitration services for insurers and self-insured companies who become members of AF by signing its "Property Subrogation Arbitration Agreement" (the AF arbitration agreement). Plaintiff State Farm General Insurance Company and *1096 defendant Watts Regulator Company are members of AF that signed the AF arbitration agreement many years ago. After notice to its members in November 2014, AF changed the AF arbitration agreement, effective January 1, 2015, to exclude product liability claims from the kinds of claims subject to compulsory arbitration under the agreement.

A few months later, plaintiff filed this lawsuit, alleging subrogated product liability claims against defendant arising from a loss that occurred in November 2012. Defendant filed a motion to compel arbitration, contending it had a vested right, under the AF arbitration agreement in effect before January 1, 2015, to compulsory arbitration of the claim.

We find no basis for any vested right to arbitration under the circumstances of this case, where the parties have agreed to be bound by contractual terms and rules determined by a third…