Bazzone v. Nationwide Mutual , 123 F. App'x 503 ( 2005 )

OPINION OF THE COURT

FISHER, Circuit Judge.

Appellant Michael L. Bazzone appeals from the final orders of the District Court granting Appellee Nationwide Mutual Insurance Company’s motions to compel arbitration and confirming the arbitrators’ award in Nationwide’s favor.¹ We will affirm the District Court’s orders.

Bazzone, a Nationwide agent, submitted a Uniform Application for Securities Industry Registration or Transfer, known as a “Form U-4,” to Nationwide, which Nationwide in turn filed with the National Association of Securities Dealers (“NASD”). In the Form U-4, Bazzone “agree[d] to arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person, that is required to be arbitrated under the rules, constitutions, or by-laws of the organizations with which I register, as indicated in Question 8.” The Form U-4 identified the NASD as the organization with which he was registering. In pertinent part, the NASD’s Code of Arbitration Procedure prescribes arbitration for “any dispute, claim, or controversy arising out of or in connection with the business of any member of the Association, or arising out of the employment or termination of employment of associated person(s) with any member, with the exception of disputes involving the insurance business of any member which is also an insurance company.” NASD Rule 10101 (1997).

Bazzone filed the complaint at issue here advancing several claims against Nationwide based on Nationwide’s alleged “redlining” practices,² which Bazzone claims caused injury to his business.

The District Court had subject matter jurisdiction over Bazzone’s complaint under 28 U.S.C. §§ 1331³ and 1367, and had jurisdiction over Nationwide’s motions to compel arbitration under the Federal Arbitration Act, 9 U.S.C. § 4. We have appellate jurisdiction pursuant to 9 U.S.C. § 16 and 28 U.S.C. § 1291. We review de novo a district court’s resolution of “legal questions concerning the applicability and scope of an arbitration agreement.” Medtronic AVE, Inc. v. Advanced Cardiovascular Sys., Inc., 247 F.3d 44, 53 (3d Cir. 2001) (citation omitted).

The framework in this Circuit for analyzing whether a claim is arbitrable is well settled. “[Djistrict courts need only ‘engage in a limited review to ensure that the dispute is arbitrable — i.e., that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of that agreement.’ ” John Hancock Mut. Life Ins. Co. v. Olick, 151 F.3d 132, 137 (3d Cir.1998) (citation omitted). “In conducting this limited review, the courts must apply ordinary contract principles, with a healthy regard for the strong federal policy in favor of arbitration.” Id. (citations omitted); see also Brayman Const. Corp. v. Home Ins. Co., 319 F.3d 622, 625 (3d Cir. 2003) (Federal Arbitration Act “mandates that ‘any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.’”) (citations omitted). Cardinal among the “ordinary contract principles” we should apply is the tenet that “[i]f the language used by the parties is plain, complete, and unambiguous, the intention of the parties must be gathered from that language, and from that language alone, regardless of what the actual or secret intentions of the parties may have been.” 11 Richard A. Lord, Williston on Contracts § 31.4 (4th ed.1999).

Bazzone argues that (1) the applicable arbitration provisions do not cover his “redlining” claims; (2) that even if the arbitration provisions cover his “redlining” claims, the exception in those provisions for claims relating to “insurance business” exempts his claims from compulsory arbitration; and (3) that the arbitration provisions do not extend to his claims that Nationwide breached any settlement agreement.

We reject these contentions. We agree with Nationwide that the Form U-4 signed by Bazzone, together with NASD Rule 10101, clearly and unambiguously require arbitration of Bazzone’s “redlining” claims. Particularly in light of the strong presumption in favor of arbitrability that binds us, we must follow the unambiguous language of the arbitration provisions compelling arbitration of Bazzone’s “redlining” claims.

We foreclosed Bazzone’s argument that his “redlining” claims fall within the Code’s “insurance business” exception in In re Prudential, 133 F.3d 225 (3d Cir. 1998). There, construing the same arbitration language in a Form U-4 and the Code as obtains here, we held, in effect, that the “insurance business” exception cannot be given any definitive construction in the arbitration context because the term “insurance business” is ambiguous. This ambiguity led us to apply the presumption in favor of arbitrability in In re Prudential, and we are bound to do the same here.

Finally, Bazzone’s claims based on Nationwide’s alleged breach of a purported settlement of Bazzone’s “redlining” claims are also arbitrable. Rule 10101 of the Code, applying broadly to “any dispute, claim, or controversy,” encompasses claims arising out of a purported settlement of claims themselves covered by the Rule. Indeed, we have held explicitly that “[s]ettlement agreements [ ] between parties to a collective bargaining agreement containing a broad arbitration clause are arbitrable when the underlying disputes are arbitrable, except when the parties expressly exclude the settlement agreements from arbitration.” United Steelworkers of America, AFL-CIO-CLC v. Lukens Steel Co., Div. of Lukens, Inc., 969 F.2d 1468, 1475 (3d Cir.1992) (citation omitted). Accordingly, Bazzone’s claims regarding Nationwide’s alleged breach of a settlement agreement are arbitrable as well.

For these reasons, we will affirm the District Court’s orders granting Nationwide’s motions to compel and affirming the arbitrators’ award in Nationwide’s favor.

1 . We may only vacate an arbitration award in limited circumstances, such as when an award was procured by corruption or fraud. See 9 U.S.C. § 10. Although Bazzone appeals the District Court’s confirmation of the arbitration award, he offers no statutorily sufficient basis on which we might overturn that award. We therefore focus on the arbitrability issues.

2 . "Redlining” is defined as the refusal to issue insurance policies to certain persons or groups because they live or are located in an area predominantly inhabited by persons of a particular ethnicity, income level, and/or marital status.

3 . We have federal question jurisdiction because Bazzone advances a claim for violations of the Fair Housing Act, 42 U.S.C. § 3604.