Justices enforce arbitration in Hurricane Ike case

By David Yates | Nov 10, 2010

The Ninth Court of Appeals of Texas recently issued an opinion forcing a plaintiff, who sued her insurance company following Hurricane Ike, into arbitration.

Liberty County resident Phoebie Yarbrough Stahlecker filed suit against Ranchers and Farmers Mutual Insurance, accusing the company of fraud and breach of contract for allegedly not fully restoring her hurricane-ravaged home.

Ranchers responded by filing a motion to compel arbitration, arguing that Stahlecker agreed to arbitrate any claims against the company when she purchased her policy, court papers say.

Shortly afterwards, Liberty County Judge Chap B. Cain III of the 253rd District Court denied the motion, prompting Ranchers to file an appeal on June 17.

On appeal, Ranchers contended that Judge Cain erred by denying the motion to compel arbitration because Stahlecker's contractual and extra-contractual claims fall within the scope of the arbitration agreement, court papers say.

Ninth Court justices found no evidence to the contrary, reversing the judge's ruling and remanding the case last Thursday, Nov. 4.

"Because Stahlecker's claims fall within the scope of the arbitration agreement, and the agreement is neither procedurally unconscionable nor substantively unconscionable, we hold that the trial court erred by denying Ranchers' motion," states the court's opinion, authored by Justice Steve McKeithen.

"We sustain Ranchers' sole issue, reverse the trial court's order denying Ranchers' motion to compel arbitration, and remand this cause to the trial court for further proceedings consistent with this opinion."

Farmers is represented by Forth Worth attorney Coby Smith.

Stahlecker is represented by Houston attorney Gregory F. Cox of the Mostyn Law Firm.

Liberty County case No. CV0901665
Appeals case No. 09-10-00286-CV

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