Rule Change Created No Vested Right to Arbitrate

State Farm Gen. Ins. Co. v. Watts Regulator Co., No. B271236 (D2d8 Nov. 30, 2018)

A bunch of insurers are members of an outfit that arbitrates some of the subrogation claims they tend to bring against each other. The subrogation issues here, which involve product liability, would have been arbitrable under the version of the organization’s rules that were in force at the time of the insurable loss. But between the loss and the making of the subrogation claim, the outfit changed its rules to say that going forward, product liability cases would no longer be subject to mandatory arbitration. All the member carriers got notice of the change and had the right to withdraw their membership at any time. So under the circumstances, the trial court correctly found that the rules in place at time of the claim, not the loss, could be fairly applied because the members didn’t have any vested right to arbitrate product liability subrogation claims that had yet to be made at the time of the amendment. The motion to compel arbitration was properly denied.
 
Affirmed.