McDonnell Douglas Corporation v. Fremont Indemnity Company
Published: Jul. 1, 2003 | Result Date: May 21, 2003 | Filing Date: Jan. 1, 1900 |Case number: 122008137 Arbitration – $16,500,000
Court
Case Not Filed
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Robert N. Hughes
(technical)
Defendant
James M. Sevey
(technical)
Facts
McDonnell Douglas Corporation (MDC), predecessor to The Boeing Company, sought $52 million in damages from Industrial Indemnity Company (IIC), predecessor to Fremont Indemnity Company, under a workers' compensation program. Under the workers' compensation program, IIC could pay a dividend to MDC at the end of a policy year if workers' compensation losses for the prior year so allowed. A Dividend Recapture Agreement (DRA) entered into in 1976, provided that MDC must return a portion of the dividends in the event losses during the previous retrospective period warranted. A Contingent Surcharge Endorsement (CSE) entered into in 1992 provided that MDC pay a surcharge premium in the event losses for the previous retrospective period warranted, and that the amount of the surcharge premium paid would be computed in accordance with the formula in the CSE. In September 2001, a cash payment in excess of $13 million came due under the CSE. MDC paid the $13 million under protest and filed suit against Fremont in the USDC for the Eastern District of Missouri. MDC's first amended complaint claimed damages in excess of $52 million. The parties negotiated a voluntary dismissal of the Missouri federal court action and agreed to submit the matter to binding arbitration in San Francisco before a JAMS panel. The parties narrowed the issue to be arbitrated to one question: "whether or not payments made under the DRA should also be credited as premium payments under the CSE."
Other Information
An arbitration was held before retired justice Edward A. Panelli of JAMS, Arthur Brotter and Donald W. Brown.
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