Federal Ins. Co. v. MTA ( 2019 )

18‐3664
Federal Ins. Co. v. MTA, et al.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST
CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH
THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER
MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 30th day of August, two thousand nineteen.
PRESENT:
PETER W. HALL,
DEBRA ANN LIVINGSTON,
Circuit Judges,
CLAIRE R. KELLY,
Judge.*
FEDERAL INSURANCE COMPANY,
Plaintiff-Appellant,
v. No. 18-3664-cv
METROPOLITAN TRANSPORTATION AUTHORITY, NEW YORK
CITY TRANSIT AUTHORITY,
Defendants-Appellees,
LANMARK GROUP, INC.,
Defendant.
*Judge Claire R. Kelly, of the United States Court of International Trade, sitting by
designation.
For Plaintiff-Appellant: JONATHAN S. BONDY (Marc R. Lepelstat, on
the brief) CHIESA SHAHINIAN &
GIANOTOMASI PC, West Orange, NJ.
For Defendants-Appellees: IRA LIPTON, (Jeffrey A. Miller, on the brief)
HOGUET NEWMAN REGAL & KENNEY, LLP,
New York, NY.
Appeal from a judgment of the United States District Court for the Southern
District of New York (Keenan, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the district court’s judgment is AFFIRMED.
Federal Insurance Company (“Federal”) appeals from the November 14, 2018
judgment of the United States District Court for the Southern District of New York
denying its request for declaratory and injunctive relief and granting the motion of
Metropolitan Transportation Authority and the New York City Transit Authority
(collectively, “NYCTA”) to dismiss Federal’s sole claim against it. In so doing, the
district court determined that Federal, as surety of a performance bond on behalf of
principal Lanmark Group, Inc. (“Lanmark”), was bound by the arbitration provision
contained in the contract between NYCTA and Lanmark (the “Contract”) to arbitrate
all questions concerning the Contract, including the gateway questions of
arbitrability. Federal argues that the district court erred in holding that Federal was
bound by the arbitration clause because that provision is expressly limited to
Lanmark and NYCTA. We assume the parties’ familiarity with the underlying facts,
procedural history, and the arguments presented on appeal.
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We review de novo a district court’s grant of summary judgment, construing
the evidence in the light most favorable to the nonmoving party. Lovejoy-Wilson v.
NOCO Motor Fuel, Inc., 263 F.3d 208, 212 (2d Cir. 2001). We will affirm only if “there
is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.” FED. R. CIV. P. 56(a). Federal’s assertion that it is not bound by
the arbitration clause because the clause applies only to Lanmark and NYCTA is
unavailing. The district court properly concluded that Federal’s argument in this
regard is subject to determination under the arbitration provision of the Contract.
It is well-established that “a broadly-worded arbitration clause which is not
restricted to the immediate parties may be effectively incorporated by reference into
another agreement.” Progressive Cas. Ins. Co. v. C.A. Reaseguradora Nacional De
Venezuela, 991 F.2d 42, 48 (2d Cir. 1993). Here, the bond expressly incorporated by
reference all terms of the Contract. And the arbitration provision within the Contract
states, in pertinent part, “[t]he parties to this Contract hereby authorize and agree to
the resolution of all Disputes arising out of, under, or in connection with, the Contract
in accordance with the [arbitration procedures described later in the provision].” The
provision defines “disputes” as “any . . . challenge or assertion” by Lanmark having
anything to do with the Contract. That language is sufficiently broad to bind Federal
despite it being a nonsignatory to the Contract. See Ibeto Petrochemical Indus. Ltd.
v. M/T Beffen, 475 F.3d 56, 59 (2d Cir. 2007) (holding that the clause “[a]ny and all
differences and disputes of whatsoever nature arising out of this Charter shall be put
to arbitration” bound a nonsignatory to go to arbitration); Progressive, 991 F.2d at 48
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(holding that the clause “[a]ny question or dispute arising between the contracting
parties concerning the interpretation of this agreement . . . shall be settled by
arbitration” was sufficiently broad to require a nonparty to bring its claims to
arbitration.).
Federal also challenges the district court’s determination that the arbitrability
of Federal’s claims is a question for the arbitrator, not the judge. We are not
persuaded. The district court correctly concluded that the question of arbitrability in
this matter is for the arbitrator to decide. The question of arbitrability “is an issue
for judicial determination unless the parties clearly and unmistakably provide
otherwise.” T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d 329, 344 (2d
Cir. 2010) (internal quotation marks omitted). A party may overcome the
presumption in favor of judicial determination of arbitrability by showing that the
parties have entered into a separate agreement that either states “any and all”
controversies are to be brought in arbitration or expressly incorporates the provisions
of another contract that require questions of arbitrability to be decided by an
arbitrator and not the court. John Hancock Life Ins. Co. v. Wilson, 254 F.3d 48, 55
(2d Cir. 2001).
The Contract uses “any and all” language when it states “parties to this
Contract hereby authorize and agree to the resolution of all disputes arising out of,
under, or in connection with, the Contract” through arbitration. App’x 607 (emphasis
added). That language indicates that Federal and NYCTA “clearly and
unmistakably” required the issue of arbitrability to be decided by the arbitrator, not
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the court. The district court correctly ruled that the issue of arbitrability is to be
decided by the arbitrator, not the court.
We have considered all of Federal’s remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the district court’s judgment.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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