Patten v. Signator Insurance Agency

Ralph Patten (plaintiff) was a sales agent for John Hancock Mutual Life Insurance Company (Hancock) (defendant) and signed an arbitration agreement with Hancock and its affiliates, including Signator Insurance Agency, Inc. (Signator) (defendant). The agreement stated that all disputes between Patten and Hancock or its affiliates would be arbitrated and that a party had a one-year time limit to notify the other party about any claims. Patten later took a position with Signator and signed a management agreement with the company. The management agreement stated that all disputes would be arbitrated and that the management agreement superseded all previous agreements between Signator and Patten. The management agreement had no stated time limits for bringing claims and was governed by Massachusetts state law. Patten was eventually terminated, and 14 months later, Patten initiated arbitration. Signator and Hancock stated that Patten’s claims were waived because Patten did not notify them of his claim within the one-year statute of limitations created by the arbitration agreement. Patten filed suit in federal district court to enforce the management agreement’s arbitration provision, arguing that the management agreement superseded the previous arbitration agreement. The district court compelled arbitration, and the arbitrator dismissed Patten’s claims as time-barred, finding that even though the management agreement had no stated time limits, it contained an implied one-year limitation on claims. Patten moved to vacate the award in district court. The district court denied Patten’s motion to vacate, and Patten appealed to the Fourth Circuit, arguing that the arbitrator manifestly disregarded the law and failed to draw his award from the essence of the management agreement.