Shipp v. Peterson
Shipp v. Peterson, 2021 UT App 25 (Christiansen Forster, J.)
Shipp and Peterson formed a company, and Peterson took out a life insurance policy. Peterson died, and Shipp collected the life insurance proceeds. The company sued Shipp to recover the life insurance proceeds, and the parties went to arbitration, per the company’s operating agreement. The company was not named in the arbitration document executed on the day of the arbitration, but it did file documents in the arbitration. The arbitrator awarded the proceeds to the company. Shipp filed a motion to vacate, and the district court reversed the award, reasoning that the arbitrator exceeded the scope of authority because the company did not sufficiently participate in the arbitration to become a de facto party. A second arbitrator awarded the proceeds to Shipp. The Utah Court of Appeals reversed, holding:
- The district court incorrectly vacated the first arbitration award. The company was a party to the arbitration under the arbitration clause in the company’s operating agreement. And the parties framed their arguments to the arbitrator and whether the company was the proper recipient of the insurance proceeds. Thus, the first arbitrator did not exceed the scope of the authority by awarding the proceeds to the company.