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A Federal District Court in Florida has rejected an attempt to impose a Federal Arbitration Act (FAA) deadline on a non-party to the agreement and proceeding.
In R & Q Reinsurance Co. v. Rapid Settlements, Ltd, No. 06-14329-CIV-MOORE, 2007 WL 1428746 (S.D. Fla. May 14, 2007), R & Q Reinsurance Co. (R&Q) entered into a 1986 settlement agreement with co-defendant Gwendolyn Brown to make periodic payments in connection with the resolution of personal injury claims. This settlement contained a clause prohibiting Brown from assigning her payment rights to a third party.
In 2006, Brown entered into a "transfer agreement" with Rapid Settlements, Ltd. (Rapid), making Rapid the beneficiary of a portion of Brown's payments from R&Q. The transfer agreement contained an arbitration clause.
When a dispute arose between Brown and Rapid over these transfers, the matter was resolved in arbitration, with Rapid being awarded a continuing right to the payments. When R&Q was later notified of the result of the arbitration, it objected, and brought suit seeking to stop its enforcement.
Rapid argued that the FAA imposed a 90-day limit on challenges to arbitration awards, a deadline that R&Q had missed. The Court rejected this argument, stating that the FAA only enforced arbitration agreements between parties that had agreed to them.
More specifically, because R&Q was not a party to either the transfer agreement or the subsequent arbitration, and because its claims did not directly attack the quality of the arbitration itself, the FAA did not apply to R&Q, and its deadline was irrelevant.
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