# HOUSTON CASUALTY COMPANY v. KINSALE INSURANCE COMPANY

> District Court, D. New Jersey · September 30, 2025

URL: https://www.frixlaw.com/law-library/cases/11154124

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** September 30, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11154124

## How later opinions describe it (automated extraction)

- describing that “quasi-estoppel” prevents an individual from “taking a position inconsistent with prior conduct, if this would injure another, regardless of whether that person has actually relied thereon”
- noting that “if there was a dispute as to the scope of First American’s coverage or duty to defend, the result would also likely be different because plaintiffs would be seeking to take advantage of specific terms in First American’s policy”
- discussing the requirements of the “knowingly exploits” theory

## Opinion text

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

HOUSTON CASUALTY COMPANY,
Civil No.: 2:24-cv-7866 (KSH) (SDA)
Plaintiff,

v.
KINSALE INSURANCE COMPANY,
OPIN ION
Defendant.

Katharine S. Hayden, U.S.D.J.
I. Introduction
This insurance coverage dispute is before the Court on a motion brought by defendant
Kinsale Insurance Company (“Kinsale”) to compel arbitration and to dismiss or to stay this
action pending arbitration. (D.E. 21.) For the reasons set forth below, Kinsale’s motion will be
granted, and the matter will be stayed.
II. Background & Procedural History
The coverage dispute arises from an apartment complex construction project (the
“project”) in Englewood, New Jersey. (D.E. 1, Compl. ¶¶ 7-16.) BBC Englewood LLC owns
the property and hired ARC New Jersey LLC (“ARC”) as the general contractor. (Id. ¶¶ 7-9.)
ARC hired FM Construction Group LLC (“FM”) as a subcontractor, and FM hired Don Carlos
Construction LLC (“Don Carlos”) for roofing and siding work. (Id. ¶¶ 10-11.) On August 24,
2021, Jose Luis Melgar Castillo (“Castillo”)—an employee of Don Carlos—was injured while
installing gutters. (Id. ¶¶ 12-13, 15.) Castillo sued BBC Englewood LLC, ARC, and FM in the
Essex County Law Division, alleging negligence (the “underlying action”). (Id. ¶¶ 12, 14.)
BBC Englewood LLC and ARC brought a third-party action against Don Carlos for contribution
and indemnification. (Id. ¶ 16.) Eventually, FM was also added as a defendant. (Id. ¶ 47.)
Before Don Carlos started work on the project, Kinsale issued it two general liability
policies, one primary (the “Kinsale Policy”) and one excess. (Id. ¶¶ 27, 36.) The Kinsale Policy

provided limits of $1,000,000 for each occurrence and $2,000,000 aggregate. (Id. ¶ 29 & Ex. 5,
Kinsale Policy, at 2.) While Don Carlos is the only named insured, the Kinsale Policy defined
“additional insureds” to be “[b]lanket, as required by written contract, executed prior to the start
of work on the project” at “[l]ocations as required and specified by written contract, executed
prior to the start of work on the project.” (Id. ¶ 29 & Ex. 5, Kinsale Policy, at 67, 70.) The
Kinsale Policy also provided contractual liability coverage for damages “assumed in a contract
or agreement that is an ‘insured contract,’ provided the ‘bodily injury’ . . . occurs subsequent to
the execution of the contract or agreement.” (Id. ¶ 35 & Ex. 5, Kinsale Policy, at 7.)
The Kinsale Policy included an arbitration clause:
BINDING ARBITRATION

All disputes under this Policy shall be subject to binding arbitration as follows:

a. All disputes over coverage or any rights afforded under this Policy, including
whether an entity or person is a Named Insured, an insured, an additional insured,
or entitled to coverage under the Supplementary Payments provisions of this
Policy or the effect of any applicable statutes or common law upon the contractual
obligations owed, shall be submitted to binding arbitration, which shall be the sole
and exclusive means to resolve the dispute. Either party may initiate the binding
arbitration.

The arbitration forum and process shall be agreed to by the parties. In the event
the parties cannot agree on an arbitration forum and process, the matter shall be
submitted to the American Arbitration Association. The arbitration shall be
before a panel of three arbitrators, unless the parties agree to one arbitrator, all of
whom shall have experience in insurance coverage of the type afforded by this
Policy. If the parties select a panel of three arbitrators, each party shall select an
arbitrator and the chosen arbitrators shall select a third arbitrator. The American
Arbitration Association shall decide any disputes concerning the selection of the
Arbitrators. The potential arbitrators from which the arbitrators shall be selected
shall not be confined to those provided by the American Arbitration Association.
Each party shall bear the costs of its arbitrator and shall share equally the costs of
the third arbitrator and arbitration process. In the event of a single arbitrator, the
cost shall be shared equally by the parties. The decision of the arbitration is final
and binding on the parties.

(Ex. 5, Kinsale Policy, at 25-26.)
A subcontract between Don Carlos and FM was executed before Don Carlos began work
on the project. (D.E. 1, Compl. ¶ 30.) It required Don Carlos to obtain general liability
insurance coverage—which it ultimately got through Kinsale—and stated
[i]t is hereby agreed and understood that the Contractor [FM] and Owner [defined
as “the owner of any job sight”] are named as additional insured. The coverage
afforded to the additional insured under this policy shall be primary insurance. If
the additional insured has other insurance, which is applicable to the loss, such
other insurance shall be in excess or contingent basis.

(Id. ¶ 23 & Ex. 4, FM/Don Carlos Contract, at § 11(A)(iii).) And to the extent that FM was
required “to designate any person or entity as additional insured under [its] policies of liability
insurance,” the contract provided that “such person or entity also shall be named as additional
insured on the policies procured by” Don Carlos. (Id. ¶ 24 & Ex. 4, FM/Don Carlos Contract, at
§ 11(A)(iv).) Don Carlos further agreed to defend and indemnify FM and the “Owner” “from
any and all claims, losses, costs and damages” because of injury to any person arising out of Don
Carlos’s work. (Id. ¶ 26 & Ex. 4, FM/Don Carlos Contract, at § 9.)
FM had executed a subcontract with ARC before it entered into the contract with Don
Carlos. (Id. ¶ 20.) That subcontract required FM to name ARC, the “Owner, and all other
parties reasonably requested by Contractor” as additional insureds in its general liability
insurance policy and stated FM’s insurance applied on a primary and non-contributory basis for
the additional insureds. (Id. & Ex. 3, ARC/FM Contract, at § 3.1.)
Houston Casualty Company (“HCC”), the plaintiff in this federal action, alleges that the
FM/Don Carlos subcontract and the ARC/FM subcontract required BBC Englewood, ARC, and
FM to be named as additional insureds under the Kinsale Policy. (Id. ¶ 31.) HCC comes into the
picture because it issued an insurance policy (the “HCC Policy”) to ARC, which HCC alleges

also named BBC Englewood LLC and FM as insureds. (Id. ¶¶ 40-42 & Ex. 7, HCC Policy, at
133-150.) The HCC Policy applies in excess of other primary insurance available to the named
insureds. (Id. ¶ 43 & Ex. 7, HCC Policy, at 91.)
On September 25, 2023, counsel for BBC Englewood LLC and ARC sent a letter to Don
Carlos and Kinsale “to confirm” that Don Carlos “will be providing a defense, indemnification,
and insurance coverage to” BBC Englewood LLC and ARC in the underlying action, pursuant to
the insurance policies and contracts discussed supra. (Id. ¶ 44 & Ex. 8, at 10.) Kinsale refused,
stating that it did not have enough information to make a coverage decision. (Id. ¶ 45 & Ex. 9.)
Defense counsel in the underlying action made two more demands for defense and
indemnification, one before and one after FM was added as a defendant. (Id. ¶¶ 46-47 & Exs.

10, 11.) On June 19, 2024, HCC re-tendered the defense and indemnification of BBC
Englewood LLC, ARC, and FM (the alleged “additional insureds”) to Kinsale. (Id. ¶ 48 & Ex.
12.) Kinsale has not agreed to defend and indemnify the additional insureds, and HCC has been
defending the underlying action to date. (Id. ¶¶ 49, 67-68.)
On July 18, 2024, HCC sued Kinsale in this Court for declarations as to Kinsale’s
obligations under the Kinsale Policy and for reimbursement “for all amounts paid by HCC in
connection with the defense of” the additional insureds. (Id. ¶¶ 50-70.) Specifically, HCC asked
this Court to declare that BBC Englewood LLC, ARC, and FM are additional insureds under the
Kinsale Policy (Count One); that Kinsale has a duty to defend the additional insureds under the
Kinsale Policy (Count Two); that Kinsale has a duty to indemnify the additional insureds under
the Kinsale Policy (Count Three); that the Kinsale Policy provides contractual liability coverage
for Don Carlos’s contractual obligation to indemnify BBC Englewood and FM in the underlying
action (Count Four); and that HCC is entitled to damages due to Kinsale’s “failure to defend” the

additional insureds in the underlying action (Count Five). (Id.)
Kinsale moved to compel arbitration on December 20, 2024, arguing that HCC should be
bound to the Kinsale Policy’s arbitration clause under a theory of equitable estoppel. (D.E. 21-1,
Mov. Br., at 3.) Kinsale argues that HCC is “knowingly exploiting” the Kinsale Policy by
“seeking to enforce the terms of that contract or asserting claims that must be determined by
reference to that contract,” and should therefore be bound to the entire agreement. (Id. at 19.)
Opposing, HCC responds that equitable estoppel does not apply, since it is seeking indirect,
rather than direct, benefits under the Kinsale Policy. (D.E. 31, Opp., at 8-9.) It argues that it
“brought suit under its independent equitable right of contribution, not as a subrogee,” which
“makes all the difference for the equitable estoppel analysis.” (Id. at 9.) In reply, Kinsale

alleges that HCC is seeking direct benefits under the Kinsale Policy as a subrogee of the
additional insureds and is also asserting claims that are entirely dependent on the Kinsale Policy
and must be determined by reference to the policy. (D.E. 36, Reply, at 7.)
III. Standard of Review
Before compelling arbitration, courts look to whether “(1) a valid agreement to arbitrate
exists, and (2) [whether] the particular dispute falls within the scope of the agreement.” Young v.
Experian Info. Sols., Inc., 119 F.4th 314, 318 (3d Cir. 2024) (quoting Kirleis v. Dickie, McCamey
& Chilcote, P.C., 560 F.3d 156, 160 (3d Cir. 2009)).
“The standard by which a court must conduct this analysis can either be under Federal
Rule of Civil Procedure 12(b)(6) (motion to dismiss) or Rule 56(a) (summary judgment).”
Triola v. Dolgencorp, LLC, 2022 WL 16834579, at *2 (D.N.J. Nov. 9, 2022) (Kugler, J.) (citing
Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764, 771 (3d Cir. 2013)). “[W]here

the affirmative defense of arbitrability of claims is apparent on the face of a complaint (or . . .
documents relied upon in the complaint), the [Federal Arbitration Act] would favor resolving a
motion to compel arbitration under a motion to dismiss standard without the inherent delay of
discovery.” Guidotti, 716 F.3d at 773-74 (quoting Somerset Consulting, LLC v. United Capital
Lenders, LLC, 832 F.Supp.2d 474, 481-82 (E.D. Pa. 2011)).
On the other hand, Rule 56 provides the correct standard when “the motion to compel
arbitration does not have as its predicate a complaint with the requisite clarity to establish on its
face that the parties agreed to arbitrate, or the opposing party has come forth with reliable
evidence that is more than a naked assertion that it did not intend to be bound by the arbitration
agreement.” Robert D. Mabe v. OptumRX, 43 F.4th 307, 324-25 (3d Cir. 2022) (quoting

Guidotti, 716 F.3d at 774). Under Rule 56, limited discovery may be warranted if a factual
dispute arises, but discovery is not required “when no factual dispute exists as to the existence or
scope of the arbitration agreement.” Cornelius v. CVS Pharmacy Inc., 133 F.4th 240, 249 (3d
Cir. 2025) (quoting Young, 119 F.4th at 319-20).
Here, HCC attaches the Kinsale Policy as an exhibit to its complaint; that policy contains
an arbitration agreement. (See D.E. 1, Compl. & Ex. 5, Kinsale Policy, at 25-26.) The
affirmative defense of arbitrability is therefore apparent based on “documents relied upon in the
complaint.” Guidotti, 716 F.3d at 773-74 (quoting Somerset, 832 F. Supp. 2d at 481). However,
HCC asserts that it is not a signatory to the Kinsale Policy and did not agree to submit to
arbitration. (D.E. 31, Opp., at 2-6.) As such, the Court finds that Rule 56 applies because HCC
has “come forth with reliable evidence . . . that it did not intend to be bound by the arbitration
agreement.” Mabe, 43 F.4th at 325 (quoting Guidotti, 716 F.3d at 774).
Under Rule 56, summary judgment is proper where the movant demonstrates that there is

no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56(a). The moving party bears the burden of showing that no genuine
issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986). On that
showing, the burden shifts to the nonmoving party to “set forth specific facts showing that there
is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (citing
Fed. R. Civ. P. 56(e)). If the nonmoving party fails to meet its burden, summary judgment may
be granted against it. Id. at 249-50.
IV. Discussion
Kinsale’s motion to compel rests on a single legal issue1: does equitable estoppel apply
to compel HCC to arbitrate its claims against Kinsale?

1 Both Kinsale and HCC focus on whether equitable estoppel applies to bind HCC to the Kinsale
Policy’s arbitration agreement. In so doing, neither party raises any factual disputes about the
existence or validity of the arbitration agreement. The Court therefore finds that limited
discovery is not required. See Cornelius, 133 F.4th at 249-50.

Although HCC alternatively requests limited discovery as to “whether Kinsale detrimentally
relied on any conduct by HCC” (D.E. 31, Opp., at 21-22), as discussed infra, while detrimental
reliance may be required for the “intertwinement” theory of equitable estoppel, is not a necessary
element of the “knowingly exploits” theory. See Griswold v. Coventry First LLC, 762 F.3d 264,
272-73 (3d Cir. 2014) (discussing the requirements of the “knowingly exploits” theory). Since
Kinsale does not allege, and this Court does not find, that the “intertwinement” theory applies,
limited discovery as to its requirements is not necessary.
A. Agreement to Arbitrate
A non-signatory to a contract with an arbitration agreement may be compelled to arbitrate
if “‘traditional principles’ of state law allow a contract to be enforced by or against nonparties to
the contract.” Griswold, 762 F.3d at 271 (quoting Arthur Andersen LLP v. Carlisle, 556 U.S.

624, 631 (2009)). The Third Circuit has recognized numerous theories under which a signatory
can bind a non-signatory to an arbitration agreement, but only one theory is at issue here—
equitable estoppel. See E.I. DuPont de Nemours & Co. v. Rhone Poulenc Fiber and Resin
Intermediates S.A.S., 269 F.3d 187, 195 (3d Cir. 2001).
There are two distinct theories of equitable estoppel, the “knowingly exploits” theory and
the “intertwinement” theory. Id. at 199-200. Kinsale argues that HCC should be bound to the
arbitration agreement under the knowingly exploits theory. That theory “prevent[s] a non-
signatory from embracing a contract, and then turning its back on the portions of the contract,
such as an arbitration clause, that it finds distasteful.” Id. at 200; see Griswold, 762 F.3d at 273
(“Equitable estoppel thus prevents a non-signatory from cherry-picking the provisions of a

contract that it will benefit from and ignoring other provisions that don’t benefit it or that it
would prefer not to be governed by (such as an arbitration clause).”) (internal citation and
quotation marks omitted). Consequentially, if “the non-signatory knowingly exploits the
agreement containing the arbitration clause despite having never signed the agreement,” a court
may hold that party to the arbitration clause. DuPont, 269 F.3d at 199.
A non-signatory “exploits” or “embraces” a contract in two ways: “(1) by knowingly
seeking and obtaining direct benefits from that contract; or (2) by seeking to enforce terms of
that contract or asserting claims” based on the contract. Griswold, 762 F.3d at 272 (quoting
Haskins v. First Am. Title Ins. Co., 866 F. Supp. 2d 343, 350 (D.N.J. 2012) (Schneider, J.)); see
Noble Drilling Servs., Inc. v. Certex USA, Inc., 620 F.3d 469, 473 (5th Cir. 2010). Thus, the
Court must decide whether HCC’s claims are based directly on the Kinsale Policy by looking to
the “core of this case.” Griswold, 762 F.3d at 273-74 (quoting DuPont, 269 F.3d at 201).
The Court finds that all of HCC’s claims seek to enforce the Kinsale Policy or assert

claims based on the Kinsale Policy. Counts One through Four of the complaint seek declaratory
relief “pursuant to the terms of the Kinsale Policies” and stemming from Kinsale’s alleged
breach of the Kinsale Policy. (See D.E. 1, Compl. ¶¶ 1, 50-65.) In Count Five, HCC brings a
“contribution” claim, requesting reimbursement for the costs HCC expended “[a]s a result of
Kinsale’s failure to defend” the additional insureds pursuant to the Kinsale Policy. (Id. ¶¶ 66-
70.) Equitable estoppel therefore applies; although HCC is a non-signatory to the Kinsale
Policy, HCC’s claims are based on, and seek to enforce, the terms of the Kinsale Policy such that
it has “knowingly exploited” the Kinsale Policy. See Hunish v. Assisted Living Concepts, Inc.,
2010 WL 1838427, at *7 (D.N.J. May 6, 2010) (Bumb, J.) (compelling the arbitration of claims
stemming from the defendant’s alleged failure to fulfil a contractual duty).

HCC does not meaningfully discuss why its complaint—which is entirely based on
Kinsale’s alleged wrongful “nonperformance,” i.e., its breach, of the Kinsale Policy and attaches
the policy as an exhibit—does not “seek[] to enforce terms of that contract or assert[] claims”
based on it. Griswold, 762 F.3d at 272; see also Haskins, 866 F. Supp. 2d at 352 (noting that “if
there was a dispute as to the scope of First American’s coverage or duty to defend, the result
would also likely be different because plaintiffs would be seeking to take advantage of specific
terms in First American’s policy”). Rather, HCC argues that it sued Kinsale for contribution and
the declaratory judgment claims all derive from this contribution claim. (D.E. 31, Opp., at 9 &
n.1.) It argues that it is not receiving a direct benefit under the Kinsale Policy because it pleads a
contribution claim, rather than a subrogation claim; its right to contribution exists independently
from its insured’s rights under the Kinsale Policy; and its rights are only indirectly based on the
policy. (Id. at 9-11.) For completeness, the Court addresses this argument, though it notes that
the requirement of “direct benefits”—the standard that HCC focuses on—is a permissible, but
not necessary, part of the relevant standard.2

Contribution and subrogation are distinct legal concepts. Contribution is defined as
“[t]he right that gives one of several persons who are liable on a common debt the ability to
recover proportionately from each of the others when that one person discharges the debt for the
benefit of all.” Sentry Select Ins. Co. v. Clark, 2021 WL 2472705, at *6 (D.N.J. June 17, 2021)
(Rodriguez, J.) (quoting Liberty Int’l Underwriters Canada v. Scottsdale Ins. Co., 955 F. Supp.
2d 317, 327 (D.N.J. 2013) (Hillman, J.)). “[T]he right to equitable contribution arises only when
all of the insurance carriers share the same level of obligation on the same risk as to the same
insured.” Id. at *7 (internal citation omitted). Additionally, this right “exist[s] independently of
the insured’s rights.” Liberty Int’l Underwriters, 955 F. Supp. at 327.

On the other hand, subrogation is “[t]he substitution of one person in the place of another
with reference to a lawful claim, demand or right, so that he who is substituted succeeds to the

2 The Court notes that the test set forth in Griswold stems from the Fifth Circuit’s 2010 opinion
in Noble, 620 F.3d 469. However, not all circuits have adopted this two-part standard, including
the Second Circuit. See Certain Underwriters at Llyod’s, London v. Allied Pros. Ins. Co., 2023
WL 4449570, at *8 n.7 (W.D.N.Y. July 11, 2023) (“The Fifth Circuit has held that a
nonsignatory may be estopped from avoiding an arbitration clause ‘(1) by knowingly seeking
and obtaining “direct benefits” from that contract; or (2) by seeking to enforce the terms of that
contract or asserting claims that must be determined by reference to that contract.’ . . . [T]he
Second Circuit has not explicitly adopted the latter standard.”).

As such, the New York caselaw that HCC cites in its opposition only analyzes the “direct
benefits” standard. See id.; Danaher Corp. v. Travelers Indem. Co., 2014 WL 7008939, at *8
(S.D.N.Y. Dec. 12, 2014). But this Circuit permits equitable estoppel based on either standard.
rights of the other in relation to the debt or claim, and its rights, remedies or securities.” Sentry
Select, 2021 WL 2472705, at *7 (quoting Liberty Int’l Underwriters, 955 F. Supp. 2d at 327). In
essence, the insurer “steps into the shoes of its insured, assumes the rights of the insured, and is
subject to the same defenses as the insured. Id. (internal citation and quotation marks omitted);

see Commercial Union Ins. Co. v. Bituminous Cas. Corp., 851 F.2d 98, 100 (3d Cir. 1988) (“The
insurer who pays for a loss obtains the insured’s right of action against a third party ultimately
responsible for the loss.”).
“Subrogation applies where multiple insurers cover different risks.” Sentry Select, 2021
WL 2472705, at *7 (emphasis in original). Courts have found that primary insurance carriers
and excess insurance carriers insure different risks; consequentially, “excess insurers are limited
to equitable subrogation when seeking reimbursement from a primary insurer.” Id. (quoting
Fireman’s Fund Ins. Co. v. Com. & Indus. Ins. Co., 2000 WL 1721080, at *5 (N.D. Cal. Nov. 7,
2000)).
Based on the foregoing principles, the Court concludes that HCC is bringing a

subrogation rather than a contribution claim at Count Five. HCC is not seeking partial
reimbursement of a proportional risk it shares with Kinsale. Rather, it is seeking complete
reimbursement under its theory that it provided an excess insurance policy to the additional
insureds while Kinsale provided primary insurance. (D.E. 1, Compl. ¶¶ 27-43.) Since “primary
and excess insurance carriers insure different risks,” HCC cannot make out a contribution claim,
which in turn requires that insurance carriers provided coverage for “the same risk to the same
insured.”3 Sentry Select, 2021 WL 2472705, at *7.

3 The Court does not opine on whether HCC and Kinsale insure the same insureds.
Courts have found that a subrogee (here, HCC) can be compelled to arbitrate claims
pursuant to a contract between the subrogor (the additional insureds) and the alleged liable party
(Kinsale). See, e.g., Liberty Mutual Fire Ins. Co. v. Harleysville Ins. Co., 2022 WL 2870201, at
*4-5 (D.N.J. July 20, 2022) (Wigenton, J.) (“The Rider’s arbitration clause clearly covers any

dispute between Suffolk and LCS related to the Project, and if Harleysville steps into Suffolk’s
shoes, then Harleysville will be required to arbitrate.”); Ohio Sec. Ins. Co. v. Kinsale Ins. Co.,
2024 WL 5135737, at *4-5 (S.D.N.Y. Dec. 17, 2024) (finding, in an analogous factual situation,
that the plaintiff was estopped from objecting to arbitration of its claims). This Court reaches the
same conclusion here and finds that HCC would receive direct benefits under the Kinsale Policy
if successful on its claim at Count Five.
HCC’s final argument is that “equitable estoppel does not apply in the absence of proof
that the party seeking to compel arbitration detrimentally relied on conduct by the non-
signatory.” (D.E. 31, Opp., at 2, 14-16 (citing Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174
(2013)). However, HCC is conflating the knowingly exploits theory—and that theory’s required

elements as discussed supra—with the intertwinement theory.
As discussed by the New Jersey Supreme Court in Hirsch, “intertwinement of claims and
parties, by itself, is insufficient to warrant application of equitable estoppel.” 215 N.J. at 195.
Instead, a party seeking to compel arbitration under an intertwinement theory should provide
additional evidence of, for example, a “written arbitration clause between the parties, evidence of
detrimental reliance, or at a minimum an oral agreement to submit to arbitration.” Id. at 192-93.
Hirsch squarely deals with the validity of the intertwinement theory under New Jersey law and
does not discuss the knowingly exploits theory or its elements. Further, on another occasion, the
New Jersey Supreme Court contemplated that detrimental reliance is not required in all equitable
estoppel cases. See Heuer v. Heuer, 152 N.J. 226, 237 (1998) (describing that “quasi-estoppel”
prevents an individual from “taking a position inconsistent with prior conduct, if this would
injure another, regardless of whether that person has actually relied thereon”) (citation omitted).
Based on the foregoing, the Court finds that HCC knowingly exploited the Kinsale Policy

under either part of the two-part standard articulated in Griswold. Therefore, the Court may
compel HCC to arbitrate its claims if they fall within the scope of the arbitration agreement.
B. Scope of the Arbitration Agreement
In determining the scope of an arbitration agreement, “there is a presumption of
arbitrability in the sense that an order to arbitrate the particular grievance should not be denied
unless it may be said with positive assurance that the arbitration clause is not susceptible of an
interpretation that covers the asserted dispute.” Century Indem. Co. v. Certain Underwriters at
Lloyd’s, London, 584 F.3d 513, 526, 555 (3d Cir. 2009) (quoting AT & T Techs., Inc. v.
Comm’ns Workers, 475 U.S. 643, 650 (1986)). “[W]hether a dispute falls within the scope of an
arbitration clause depends upon the relationship between (1) the breadth of the arbitration clause,

and (2) the nature of the given claim.” CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165, 172
(3d Cir. 2014).
The Court finds that the arbitration agreement contained within the Kinsale Policy clearly
covers HCC’s claims. The plain terms of the clause state that “[a]ll disputes over coverage or
any rights afforded under this Policy, including whether an entity or person is . . . an additional
insured . . . shall be submitted to binding arbitration.” (D.E. 1, Compl. & Ex. 5, Kinsale Policy,
at 25-26.) HCC’s claims for declaratory judgment at Counts One through Four and its equitable
subrogation claim at Count Five all depend on whether BBC Englewood LLC, ARC, and FM
qualify as “additional insureds” under the Kinsale Policy and the nature of their rights, if any,
under the policy. (Id. ¶¶ 50-70.) These claims are therefore within the scope of the Kinsale
Policy’s arbitration agreement.
C. Stay Pending Arbitration
“Section 3 of the FAA provides that issues within the scope of an arbitration agreement

shall be referred to arbitration, and that court proceedings shall be stayed” on the application of
one of the parties. Neal v. Asta Funding, Inc., 2014 WL 131770, at *3 (D.N.J. Jan. 6, 2014)
(McNulty, J.) (citing 9 U.S.C. § 3). Section 3 provides
[i]f any suit or proceeding be brought in any of the courts of the United States
upon any issue referable to arbitration . . . , the court in which such suit is
pending, upon being satisfied that the issue involved in such suit or proceedings is
referable to arbitration under such agreement, shall on application of one of the
parties stay the trial of the action until such arbitration has been had in accordance
with the terms of the agreement, providing the application for the stay is not in
default in proceeding with such arbitration.

9 U.S.C. § 3. Kinsale requested a stay of this action pending arbitration, which is granted.
V. Conclusion
For the reasons set forth above, Kinsale’s motion to compel arbitration is granted, and the
action is stayed pending the arbitration’s outcome. A separate order accompanies this opinion.

Dated: September 30, 2025 /s/ Katharine S. Hayden
Katharine S. Hayden, U.S.D.J.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11154124. Public record. Not legal advice.