UMG RECORDINGS, INC. and Universal Music Group, Inc., Plaintiffs-Appellees, v. AMERICAN HOME ASSURANCE COMPANY, Defendant-Appellant, 378 F. App'x 766

MEMORANDUM American Home Assurance Company (“American Home”) appeals the district court’s denial of its motion to stay proceedings pending arbitration. The district court concluded that the mandatory arbitration provision does not extend to the claims by UMG Recordings, Inc. and Universal Music Group, Inc. (collectively, “UMG”) against American Home. We have jurisdiction pursuant to 9 U.S.C. § 16(a)(1)(A), and we affirm. First, the district court properly reached the issue of arbitrability.

The arbitration provisions in the payment agreements do not contain clear and unmistakable evidence that the parties agreed to arbitrate arbitrability. See First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). For example, they state that arbitrators have exclusive jurisdiction to resolve questions of arbitrability, but they also state that actions concerning arbitrability must be brought in New York courts. Second, the underlying dispute does not arise out of the payment agreements and therefore is not subject to the mandatory arbitration provisions.

American Home concedes that the arbitration provisions do not extend to disputes over the policies, including the claims UMG raises in its complaint. UMG’s contention that it might not be obligated to perform in full its duties under the policies if American Home acted in bad faith does not transform those claims into disputes “arising out of’ the payment agreements. See Mediterranean Enters., Inc. v. Ssangyong Corp., 708 F.2d 1458, 1464 (9th Cir.1983); cf. Alticor, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 411 F.3d 669, 670-72 (6th Cir.2005).

For the foregoing reasons, we AFFIRM the district court’s denial of American Home’s motion to stay proceedings pending arbitration. This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.