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Sparks v. Old Republic Home Prot. Co.

Supreme Court of Oklahoma

May 27, 2020, Decided

Case Number: 115789

Opinion

 [*P0]  Plaintiffs are homeowners who brought suit against Old Republic Home Protection Company, Inc., for breach of contract and bad faith breach of contract of their home warranty policy. Defendant filed a motion to compel arbitration of the underlying dispute pursuant to a contractual provision requiring resolution of disputes through binding arbitration. Plaintiffs argued that mandatory arbitration provisions are prohibited by 12 O.S. 2011 § 1855 (D) in any contract that references insurance and this matter should proceed in district court. The court [**2]  denied defendant's motion for arbitration. Defendant appealed from this interlocutory order and the Court of Civil Appeals affirmed the District Court. We granted certiorari to address the first impression question of whether this home warranty contract constitutes an insurance contract. We hold that the home warranty contract at issue meets the definition of an insurance contract.

EDMONDSON, J.:

 [*P1]  We granted certiorari to address the first impression questions of: (1) whether a home warranty plan meets the definition of an insurance contract, (2) and if it is insurance, whether a forced arbitration clause in such a contract is unenforceable under the Oklahoma Uniform Arbitration Act, (3) whether 12 O.S. 2011 § 1855 of the Oklahoma Uniform Arbitration Act is a state law enacted for the purpose of regulating insurance under the McCarran-Ferguson Act, 15 U.S.C. § 1012 (b), and (4) whether pursuant to the McCarran-Ferguson Act, does § 1855 preempt the application of the Federal Arbitration Act, 9 U.S.C. §§ 1 - 307? We answer all questions in the affirmative.

FACTS AND PROCEDURAL HISTORY

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2020 OK 42 *; 2020 Okla. LEXIS 44 **

WILLIAM B. SPARKS and DONNA SPARKS, Plaintiffs/Appellees, v. OLD REPUBLIC HOME PROTECTION COMPANY, INC., Defendant/Appellant, OLD REPUBLIC INTERNATIONAL and ALL SEASON'S HEATING AND AIR, LLC, Defendants.

Notice: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

Prior History:  [**1] ON WRIT OF CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION NO. II.

Disposition: CERTIORARI PREVIOUSLY GRANTED; OPINION OF THE COURT OF CIVIL APPEALS VACATED; ORDER OF THE DISTRICT COURT AFFIRMED; CAUSE REMANDED FOR FURTHER PROCEEDINGS.

CORE TERMS

arbitration, warranty, repair, preempt, replacement, preemption, Homeowners, appliances, coverage, premium, exempt, sentence

Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, Civil Procedure, Appeals, Appellate Jurisdiction, Interlocutory Orders, Federal Arbitration Act, Orders to Compel Arbitration, Standards of Review, De Novo Review, Constitutional Law, Supremacy Clause, Federal Preemption, Scope, Industry Practices, Federal Regulations, McCarran-Ferguson Act, Insurance Law, Regulators, State Insurance Commissioners & Departments, Authorities & Powers, Arbitration Agreements, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Governments, Legislation, Interpretation, Contracts Law, Defenses, Public Policy Violations, Claim, Contract & Practice Issues, Arbitration, Contract Formation, Antitrust & Trade Law, Consumer Protection