On October 13, 2010, the Seventh Circuit handed down their ruling in Lumbermans Mutual Casualty Company v. Broadspire Management Service, Inc, LLC. In Lumbermans, the parties had a contract for Broadspire to purchase an Insurance Administration business from Lumbermans. The purchase agreement set out specific procedures for Lumbermans to submit a “disagreement notice” to the regularly submitted price reports created by Broadspire stemming from the transaction. The contract required that these disagreement notices have “reasonable detail” and an alternative determination of the payment required. Lumbermans submitted four disagreement notices. Broadspire refused to arbitrate the claim under the section of the contract which controlled the choice of dispute resolution for disputes arising from the disagreement notices. It was their contention that the disagreement notices did not comply with the contract and therefore should fall under the general arbitration clause which had different procedures. The court found that the dispute … Read the rest
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