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One Beacon Insurance Group v. McLam

July 29, 2009

IN THE MATTER OF THE ARBITRATION BETWEEN ONE BEACON INSURANCE GROUP, COMMERCIAL UNION INSURANCE COMPANY AND INTERNATIONAL MARINE UNDERWRITERS PETITIONER,
v.
THOMAS MCLAM, RESPONDENT.



The opinion of the court was delivered by: Seybert, District Judge

MEMORANDUM AND ORDER

On March 20, 2007, Petitioner One Beacon Insurance Group, Commercial Union Insurance Company and International Marine Underwriters ("Underwriters") commenced this action seeking to enforce an arbitration award issued by the Honorable Harry E. Seidell. Respondent, Thomas McLam ("McLam" or "Respondent"), cross moves to vacate the award on the grounds that the Arbitrator's decision was irrational and unfounded in light of the evidence presented. Respondent also argues that he was not properly served in this action. For the reasons stated below, the Court GRANTS Petitioner's motion to enforce the Award.

BACKGROUND

Underwriters and McLam entered into insurance contract No. CJJ A03870 covering McLam's yacht for a period of one (1) year from December 12, 2001 to Decemeber 12, 2002. The policy provides in pertinent part:

LOSSES NOT COVERED (EXLCUSIONS)

We will not pay any loss, damage or expense caused by or resulting from:

1. wear and tear; gradual deterioration; weathering; bubbling; osmosis; blistering; delamination of fiberglass or plywood; corrosion; rusting; electrolysis; mold; rot; inherent vice; vermin; insects or marine life;

2. your failure to maintain the covered yacht in good condition and repair.

ARBITRATION

If you make a claim under this policy and we disagree about whether the claim is payable or about the amount due to you under the policy, the disagreement must be resolved by binding arbitration . . . .

Pet. Ex. 1

In August of 2002, McLam filed a claim for $12,000 in repairs to his vessel when the transmission failed. Underwriters denied the claim on the grounds that the loss was covered by the "wear and tear" and/or the "failure to maintain in good condition" provisions and was thus excluded under the policy. Consistent with the policy terms, the parties entered into binding arbitration to resolve the dispute. Accordingly, Underwriters sent Respondent a letter confirming that the arbitrator's findings and award would be final, regardless of the outcome.

The parties chose National Arbitration & Mediation, Inc. to oversee the arbitration, and the Honorable Harry E. Seidell was chosen as the arbitrator. The National Arbitration & ...


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