Applied Underwriters Dispute May Not Be Arbitrated, Calif. Appeals Court Rules

SAN JOSE, Calif. — A lawsuit targeting Applied Underwriters Inc.’s EquityComp workers’ compensation program should not be arbitrated because the arbitration provision in one of the agreements was never approved by the California insurance commissioner and is therefore void, a California appellate court has affirmed.

In a March 28 opinion, the California Court of Appeal, 6th District, concluded that the arbitration provision was a “collateral agreement” requiring regulatory approval.

AUI sold a workers’ compensation insurance policy to Jackpot Harvesting Inc., Blacky Trucking Company Inc., and L&J Farms (collectively, Jackpot) as part of the EquityComp program.

As part of its …