Eagle Star Insurance v. Highlands Insurance

MEMORANDUM **

ACE Property and Casualty Insurance Company (“ACE”) appeals the district court’s denial of ACE’s motion to dismiss or stay the third-party complaint of Highlands Insurance Company (“Highlands”) in favor of arbitration.

Preliminarily, we conclude that Highlands and ACE both are parties to the Quota Share Agreement, signed in 1970 by representatives of Cravens Dargan & Company, Pacific Coast, formerly Cravens Dargan & Company (collectively “Cravens”) and Aetna Insurance Company, predecessor to ACE.

The Quota Share Agreement established the terms by which ACE would provide reinsurance to the insurance pools managed by Cravens. It contains a broad arbitration clause, covering “any dispute or difference of opinion [that] shall arise with reference to the interpretation of this Agreement or the rights with respect to any transaction involved.” When there is a broad arbitration clause such as this one, *531 the test is whether the factual allegations “‘touch matters’ covered by the contract containing the arbitration clause.” Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir.1999). The existence of an arbitration agreement establishes a federal presumption in…