COA: Insurance Policies Covering Car Involved in Florida Accident Are Governed by the NC Uniform Arbitration Act

Tuesday the COA held that insurance policies covering a car involved in an accident in Florida were governed by the North Carolina Uniform Arbitration Act. The case is N.C. Farm Bureau v. Sematoski.

This case involved a insurance coverage dispute stemming from a car accident in Florida in which Semtoski was injured. Sematoski was a named beneficiary on insurance policies issued by plaintiffs, and attempted to collect underinsured motorist coverage. These policies were applied for and issued in North Carolina, and they specified that bodily injury claims involving an underinsured motorist would be decided by arbitration. Sematoski filed a motion to compel arbitration and stay the proceedings. Defendants argued that they were entitled to judgment as a matter of law on the issues of underinsured motorist coverage.

The COA concluded that the dispute should be submitted to arbitration. The COA reasoned that the policy was governed by North Carolina's Uniform Arbitration Act and not the Federal Arbitration Act because the insurers were North Carolina corporations, the policies were applied for and entered into in North Carolina, and the covered vehicles were registered and garaged in North Carolina. Even though the accident occurred in Florida, the COA noted that there was no evidence in the record that the collection of insurance premiums or payment of insurance benefits involved or affected commerce outside of North Carolina. The COA also held that Sematoski did not waive her contractual right to arbitration when she filed a lawsuit against plaintiffs in a Florida state court, and that plaintiffs' arguments to the trial court concerning the merits of the coverage issue should be heard by the arbitrator because they did not concern the scope of or a defense to arbitrability.