RPNA OBTAINS APPELLATE OPINION FINDING WORKERS' COMP FINANCE AGREEMENTS SUBJECT TO DISCLOSURE AND REGULATION

Los Angeles, CA, June 2, 2009—Nicholas Roxborough and Drew Pomerance, along with associate Michael L. Phillips, obtained on June 2, 2009 a successful appellate opinion from the Fourth Appellate District, Division 3 of the Court of Appeals for the State of California. The case is titled Ceradyne Inc. v. Argonaut Insurance Company, Court of Appeals Case No.G039873.

In their opinion, the Court found that because workers’ compensation insurance programs are to be closely scrutinized and are highly regulated, workers' comp finance agreements or—in the case of Argonaut—an Insurance Program Agreement, are subject to disclosure and regulation by the Insurance Commissioner and the WCIRB.  The opinion stated this, finding these agreements as “part and parcel” of the complete insurance plan offered in workers' compensation high deductible programs.

As the Court of Appeals unanimously stated: “[I]f dispute resolution by arbitration was intended to be part of the insurance program, we conclude the provision required review and approval by the Insurance Commissioner and the WCIRB.” (emphasis added) In so determining, the Court found the arbitration clause to be void as the “well hidden” arbitration clause was “unenforceable.”

Roxborough, Pomerance, Nye, & Adreani LLP (RPNA) is a Los Angeles-based law firm providing expert legal counsel and representation to the California business community. Established in 1995, the firm offers a broad range of legal services in all facets of civil litigation, with its primary focus on litigation, legislation and policymaking issues involving insurance and business related concerns.

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