Jackpot Harvesting, Inc. v. Applied Underwriters, Inc.

*724 Applied Underwriters, Inc. and two entities associated with it appeal the trial court's denial of Applied's motion to compel arbitration. Applied offered workers' compensation insurance to Jackpot Harvesting, Inc. and two related companies through a number of agreements and documents, one of which contained an arbitration agreement. After its insurance premiums rapidly increased, Jackpot believed that Applied and the two entities had mishandled *320 claims made under the policy and had wrongfully failed to disclose how they calculated insurance premiums. Jackpot filed suit in Monterey County Superior Court.

Applied sought to compel arbitration of the dispute based on the arbitration agreement contained in one of the agreements. Jackpot opposed the motion to compel, arguing that the arbitration agreement was invalid under the California Insurance Code. Applied contended that, pursuant to the Federal Arbitration Act, only the arbitrator could decide the threshold question of whether the arbitration agreement was enforceable, and the trial court did not have the authority to make this determination.

In a written order, the trial court rejected Applied's arguments and denied…