Nat'l Union Fire Ins. Co. of Pittsburgh v. Wynn Las Vegas, LLC

509 F.Supp.3d 38

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., on behalf of itself and each of its related companies that provided insurance coverage to Respondents/Defendants, Petitioner,

v.WYNN LAS VEGAS, LLC and Tutor-Saliba Corporation, Respondents.

20 Civ. 3139 (ER)

United States District Court, S.D. New York.

Signed December 23, 2020

Yoav Michael Griver, Michael Steven Davis, Zeichner Ellman & Krause LLP, New York, NY, for Petitioner.

Justin Scott Weitzman, Rosenberg & Estis, P.C., Ryan O. Miller, Bryan W. Kishner & Associates, New York, NY, Kristopher Zeppenfeld, Kravitz, Schnitzer & Johnson, Chtd., Las Vegas, NV, for Respondent Wynn Las Vegas, LLC.

Robert Nida, Nida & Romyn, P.C., Los Angeles, CA, for Respondent Tutor-Saliba Corporation.

OPINION AND ORDER

Ramos, D.J.:

Petitioner National Union Fire Insurance Company of Pittsburgh, Pa. ("National Union") seeks to compel arbitration to determine whether it was entitled to a reimbursement Respondent Wynn Las Vegas, LLC ("Wynn") made to it, in connection with a separate lawsuit involving Respondent Tutor-Saliba Corporation ("Tutor-Saliba"). Pending before the Court is National Union's motion to compel arbitration and Wynn's countermotion to dismiss for lack of personal jurisdiction, improper venue, and forum non conveniens. Docs. 28 and 32.

For the reasons set forth below, National Union's motion to compel arbitration is GRANTED, and Wynn's countermotion to dismiss is DENIED.

I. BACKGROUND

A. Factual Background

1. Agreements Between the Parties

Wynn is a company that operates a resort-casino in Nevada. It underwent a construction project, hiring Tutor-Saliba as a general contractor for the project. In connection with that project, National Union issued a policy of general liability insurance to Tutor-Saliba (the "Policy"). Tutor-Saliba was the named insured under the Policy, and Wynn was named as an additional insured. The Policy obligated Respondents to reimburse National Union for certain losses and expenses that accrued while they were covered.

On May 15, 2006, National Union and Respondents entered into an agreement governing the Respondents’ payment obligations under the Policy (the "Payment Agreement"). Doc. 29-2 at 2. Under the Payment Agreement, Respondents agreed to be jointly and severally liable for any amounts due under the terms of the Policy. The Payment Agreement states that Respondents agreed "to pay [National Union] all [of their] Payment Obligation and to perform all [their] other obligations according to [the Payment Agreement] and Schedule for all entities covered by the Policies ," which includes the Policy. Id. at 4. Under the Payment Agreement, "Payment Obligation" means "the amounts that [Respondents] must pay [National Union] for the insurance and services in accordance with the terms of the Policies , [the Payment Agreement], and any similar primary casualty insurance policies and agreements with [National Union] incurred before the inception date" of the Payment Agreement. Id. at 12–13. The Payment Agreement also contains an arbitration provision and a forum selection clause. Id. at 9–10, 14.

2. The Continental Litigation

On April 18, 2013, Tutor-Saliba filed suit in Nevada state court against Continental Fire Sprinkler Company ("Continental") and another company not party to the instant suit, for claims arising out of Continental's work on the construction project (the "Continental Litigation").¹ Doc. 33-2 at 2. Continental had entered into a subcontract agreement with Tutor-Saliba, whereby Continental agreed to provide work, materials, and equipment for the purposes of installing and furnishing the fire sprinkler system for the project. Id. at 13. In its complaint, Tutor-Saliba alleged that Continental's improper installation caused leakage in the project's fire sprinkler system, causing damage. Id. at 4.

The subcontract agreement between Tutor-Saliba and Continental incorporated the Policy, and Continental was named an additional insured. On April 17, 2013, Continental filed a claim with National Union as an insured under the Policy for defense and indemnity in the Continental Litigation. Doc. 33-3 at 4–7. National Union eventually agreed to pay the fees and costs for Continental's defense in that suit.

In 2019, National Union demanded $481,958.68 from Wynn as a reimbursement obligation in connection with the defense of Continental in the Continental Litigation. On January 2, 2020, Wynn paid the reimbursement amount under protest. Doc. 50-5 at 2. Wynn soon after sought return of that payment, threatening to bring suit in Nevada if it was not repaid. Doc. 50 ¶¶ 15–16. On April 1, 2020, National Union served Respondents with an arbitration demand, seeking a determination that all amounts billed by and paid to National Union were valid, including the defense costs reimbursed by Wynn as part of the Continental Litigation. Id. ¶ 17; Doc. 1 ¶¶ 23–24.

B. Procedural History

National Union filed the instant petition on April 20, 2020. Doc. 1. In its petition, National Union requests that the Court compel the parties to arbitrate their dispute regarding what amounts were due as a result of the Continental Litigation. Id. National Union also asserts three claims in the event that the Court denies its request to arbitrate: (1) breach of contract, (2) unjust enrichment, and (3) declaratory judgment. Id.

Meanwhile, on May 8, 2020, Wynn filed suit against National Union and Tutor-Saliba in a federal court in the district of Nevada. Doc. 29-3 at 2. That suit also concerns the parties’ obligations in connection with the Continental Ligation. In that suit, Wynn asserted three claims against National Union: (1) breach of the implied covenant of good faith and fair dealing, (2) conversion, and (3) violation of the Nevada Unfair Claims Settlement Practices Act. Id. That case remains pending before the Nevada court.²

Following a pre-motion conference, National Union filed the instant motion to compel arbitration on September 1, 2020. Doc. 28. On September 22, 2020, Wynn filed its response, also including a request that the Court dismiss the petition for lack of personal jurisdiction, improper venue, and forum non conveniens.³ Doc. 32.

II. DISCUSSION

A. Motion to Compel Arbitration⁴

1. Legal Standard

Section 4 of the Federal Arbitration Act requires courts to compel arbitration in accordance with the terms of the arbitration agreement upon the motion of either party to the agreement, provided that there is no issue regarding its creation. AT&T Mobility LLC v. Concepcion , 563 U.S. 333, 344, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) (citing 9 U.S.C. § 4 ). Whether the parties agreed to arbitrate is generally a question decided by the court unless the parties "clearly and unmistakably provide otherwise." AT&T Techs., Inc. v. Commc'ns Workers of Am. , 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). Determinations of arbitrability may be delegated to an arbitrator "if there is clear and unmistakable evidence from the arbitration agreement, as construed by the relevant state law, that the parties intended that the question of arbitrability shall be decided by the arbitrator." Shaw Grp. v. Triplefine Int'l Corp. , 322 F.3d 115, 121 (2d Cir. 2003) (quoting Bell v. Cendant Corp. , 293 F.3d 563, 566 (2d Cir. 2002) (internal quotation marks and emphasis omitted)). In the absence of clear and unmistakable evidence that the parties intended to submit the question of arbitrability to the arbitrator, courts assume they, not arbitrators, were intended to decide "certain gateway matters, such as whether the parties have a valid arbitration agreement at all or whether a concededly binding arbitration clause applies to a certain type of controversy." Green Tree Fin. Corp. v. Bazzle , 539 U.S. 444, 452, 123 S.Ct. 2402, 156 L.Ed.2d 414 (2003).

To determine whether to compel arbitration, the Court must weigh four primary considerations: "(1) whether the parties in fact agreed to arbitrate; (2) the scope of the arbitration agreement; (3) if the parties assert federal statutory claims, whether Congress intended those claims to be nonarbitrable; and (4) if the court concludes that some, but not all, of the claims in the case are arbitrable, whether to stay the balance of the proceedings pending arbitration." Application of Whitehaven S.F., LLC v. Spangler , 45 F. Supp. 3d 333, 342 (S.D.N.Y. 2014) (citing JLM Indus., Inc. v. Stolt-Nielsen SA , 387 F.3d 163, 169 (2d Cir. 2004) ), aff'd , 633 Fed. Appx. 544 (2d Cir. 2015). "A party resisting arbitration on the grounds that the arbitration agreement ... does not encompass the claims at issue[ ] bears the burden of proving such a defense." Kulig v. Midland Funding, LLC , 13 Civ. 4715 (PKC), 2013 WL 6017444, at *2 (S.D.N.Y. Nov. 13, 2013) (citing Green Tree Fin Corp. v. Randolph , 531 U.S. 79, 92, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) ).

Moreover, "[f]ederal policy strongly favors arbitration as an alternative dispute resolution process," so "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration," and "[f]ederal policy requires [courts] to construe arbitration clauses as broadly as possible." Collins & Aikman Prods. Co. v. Bldg. Sys., Inc. , 58 F.3d 16, 19 (2d Cir. 1995) (quotations omitted). "[U]nless it may be said with positive assurance that the arbitration clause" does not cover the disputed issue, the court must compel arbitration. Id. (quoting David L. Threlkeld & Co., Inc. v. Metallgesellschaft Ltd. (London) , 923 F.2d 245, 250 (2d Cir. 1991) ).

2. Analysis

As an initial matter, it is undisputed that National Union and Wynn entered into the Payment Agreement. It is also disputed that the Payment Agreement contains "a valid agreement to arbitrate" certain disputes between the parties. Hartford Accident & Indem. Co. v. Swiss Reinsurance Am. Corp. , 246 F.3d 219, 226 (2d Cir. 2001) (quotation omitted). Further, Wynn never argues that the Payment Agreement's arbitration provision...