Dispute Does Not Fall Within Arbitration Clause's 'Interpretation' Exception, Judge Rules

SAN FRANCISCO - An insured's request for declaratory relief in a mortgage default insurance dispute is arbitrable and does not fall within the narrow "interpretation" exception in the policy's arbitration clause, a California federal judge has ruled. Countrywide Home Loans v. Mortgage Guaranty Insurance Corp., No. 10-233 (N.D. Calif.).

On Oct. 18, Judge Jeffrey S. White of the U.S. District Court for the Northern District of California ruled that the insured seeks relief on major issues rather than a mere interpretation of the policy language.

Countrywide Home Loans Inc. purchased mortgage default insurance from Mortgage Guaranty Insurance Corp. to cover …