National Union Fire Insurance Company of Pittsburgh, Pa. v. Wynn Las Vegas, LLC

Background

National Union issued a general liability insurance policy to Tutor-Saliba Corporation, which was the named insured. Wynn Las Vegas, LLC was an additional insured. National Union, Wynn, and Tutor-Saliba later entered into a Payment Agreement concerning payment obligations under the policy and related insurance agreements. The agreement made the respondents jointly and severally responsible for amounts due and included both an arbitration provision and a forum-selection clause.

Tutor-Saliba later sued Continental Fire Sprinkler Company in Nevada state court over alleged problems with a fire-sprinkler system. Continental was also an additional insured under the policy. National Union paid defense fees and costs for Continental. In 2019, National Union demanded $481,958.68 from Wynn as reimbursement for those defense costs. Wynn paid under protest and then sought the money’s return. National Union served an arbitration demand seeking a determination that the amounts billed and paid were valid.

National Union filed this proceeding to compel arbitration. Wynn filed a countermotion seeking dismissal for lack of personal jurisdiction, improper venue, and forum non conveniens, which is a request to use a different, more appropriate court. Wynn also argued that the related Nevada federal case was the proper forum. Tutor-Saliba did not oppose arbitration but requested transfer or that arbitration occur in Nevada.

Arbitration

The court held that the dispute fell within the Payment Agreement’s arbitration provision. That provision required arbitration of disagreements about the respondents’ “Payment Obligation” and of other unresolved disputes arising from the agreement. The agreement defined “Payment Obligation” by reference to amounts owed under the policy and related agreements.

Wynn argued that National Union’s demand was really a coverage dispute under the policy, and that the policy itself did not require arbitration. The court rejected that argument. It relied on the language of the Payment Agreement and found persuasive a Second Circuit summary order involving identical arbitration language. The court reasoned that because the dispute concerned whether the policy covered the defense costs, it also concerned the amount of Wynn’s payment obligation under the Payment Agreement. The court further held that it did not matter that Wynn had already paid the disputed amount.

The court therefore granted National Union’s motion to compel arbitration. The court did not decide whether the defense costs were ultimately covered or whether Wynn ultimately owed the money; it ordered that dispute to be decided in arbitration.

Personal Jurisdiction

The Payment Agreement’s forum-selection clause stated that any action concerning arbitrability, including a motion to compel or stay arbitration, could be brought only in a court of competent jurisdiction in New York City, New York State, and New York County. The court found that the clause was reasonably communicated to Wynn, mandatory, and applicable to this proceeding.

The court concluded that the clause was valid and enforceable and that the respondents had consented to personal jurisdiction through it. Wynn did not show that enforcing the clause would be unreasonable or unjust. The court therefore denied Wynn’s request to dismiss for lack of personal jurisdiction.

Venue and Transfer

The court also denied Wynn’s request to dismiss for improper venue. Because the respondents were subject to the valid forum-selection clause and therefore to personal jurisdiction in the district, the court concluded that they were treated as residents of the district for venue purposes.

The court treated Wynn’s forum non conveniens request as a motion to transfer under 28 U.S.C. § 1404(a), because the proposed alternative was another federal court. The valid forum-selection clause required the court to treat the private-interest factors as favoring the selected New York forum. The court considered Wynn’s public-interest arguments, including the Nevada connections, Nevada law, discovery, and witnesses, but found that they did not make this an exceptional case warranting transfer. The court therefore denied Wynn’s request to transfer.

Disposition

The court granted National Union’s motion to compel arbitration and denied Wynn’s countermotion to dismiss for lack of personal jurisdiction, improper venue, and forum non conveniens. The court also denied Wynn’s request for oral argument as moot. The action was stayed pending arbitration, and the parties were directed to inform the court within 48 hours after the arbitration’s outcome. The court denied Tutor-Saliba’s requests to transfer the action to Nevada or require arbitration in Nevada for the same reasons it denied Wynn’s venue and transfer requests.