c there are two questions race at the outset maybe you can help me with this is a kind of an unusual insurance policy and those of us who once had automobiles and things like yes or maybe even explain a little bit  it works because i gather it's the it's the insurance company that has paid too much that's a very and let me put it this way my client is a subcontractor that engages with general contractors on large tracts subdivisions these were located in southern california and surrounding areas in order to qualify as a building contractor to get under an r f p or otherwise they need to present insurance policies that are issued by insurance companies having am best ratings of this and that and while my client is essentially self insured if you will because it purchases what we call the fronting policy it up to change these policies by admitted insurers who meet the requirements for the r f p but essentially they're very high deductible policies so it's a two million dollars policy with a two million dollars deductible and so the insurance companies role is to adjust the claims when they come in and then to essentially calculate the amount due my client collateralize in advance that's why this payment agreement existed essentially a financing or a collateral izing agreement for the amounts that the insurance company may have to expend when it makes payment and then it builds my client to collect back essentially just remind me of the decide construction construction related your honor so the my client is sub contractor does carpentry type of work or there are injuries on the job or in this case what we had in this matter what we had were multiple these are multiple track subdivisions and i used to joke that you can set your watch by the statute of limitations for when a condo association will bring its construction defects litigation claim because these are homeowner subdivisions and inevitably as the statute of limitation approaches the homeowner subdivisions identify the defects they've seen around their their buildings and then they bring an action against the contractors the developers etc so the general contractors are named as additional insureds to my client's policies clause minus covering it doesn't govern because it doesn't address coverage issues that arise under the policies specifically or rather there are two provisions two portions of the arbitration clause one says it relates to amounts do under the payment agreement the other is various times referred to as a catchall i don't think it's a catch all because it says any other dispute arising out of this payment agreement so there are those that language in those arbitration clauses limits it circumscribes the scope of what's arbiter will do things that relate to the payment dispute not the coverage determination and that's exclusively what my client essentially beefs about these things my client maintains that adji in adjusting the claims failed to properly analyze the exceptions to coverage the exclusions that were included in the policy that should have barred coverage and instead extended coverage we believe frankly that a i g was spending not their own money but the other people's money my clients money and so they were pretty forthcoming about extending coverage when coverage was sought payment agreement specifically refer clause says if you dispute any part of your payment obligation then you go into the definition section in a different part of the payment agreement and your payment obligation is defined to be the amounts we determine that you owe in accordance with this agreement and the policies so that's in accordance with the policies that means not in contravention of the policy so as not to contravene the policies why the policies even get referenced there because the policies include a bolted on large risk rating plan indorsement this is your argument is that the payments were not needed in accordance with the policy argument is that the coverage determinations were separable and distinct from any payment dispute because of coverage as determined by the policy correct under the terms of the policies only the largest grading plan is bolted on to these policies it's not normally part of an insurance policy it's what converts this policy essentially to the front and policy to the self insured type policy and it includes a lot of things in there that are necessary for arbitrator's to determine the amount of payment due for instance a fee schedule for the claims services if the claims adjuster has to do this or if the examiner has to go up to the site and do that or if certain it has a schedule of fees a menu of fees so no arbitrator determining issues of payment could ever do it without looking to the policies and seeing what's the fee schedule say this amount should be that doesn't mean that the coverage determinations which relate to what is or is not covered under the insuring agreement or the endorsements there to the exclusions there too would suddenly become arbitrary that sweeps everything into a very narrow and remote phrase look if if actually wanted that outcome they could have put a simple declarative sentence in their agreement that said coverage disputes like any other dispute we cover in this agreement will be arbitrated they didn't do that a simple declarative sentence would have done  that the court is not asking the questions about the the court below deciding matters of arbitron i don't believe there's any question as to that there are conflicting provisions us to that and we believe that the moves actually yes your honor we commenced our action in central district of california because that's where these projects are located that's where these policies were finalized essentially the exchange of the agreements with took place in california and so we believe that the most appropriate form and in fact the coverage determinations in the contract law issues would be subject to california law as a result on briefing and throughout this process has been no dispute that c york solely because under the payment agreement there after we commenced our california action brought in order to run an action here in new york because there's a venue provision under the payment agreement and this just goes to the crux of the dispute which is a i g says this is all a payment dispute your coverage issues are nothing but part of a payment dispute that should be arbitrated through the new york courts and sent to arbitration and we say no it's not it's a coverage dispute it relates to what is and is not covered under the policy and that's a matter of contract than the district court appreciate because of the delegation clause and last there's an objection from your hours i'd like to start with the delegation clause i think this co delegate delegation clause i think it's important for this court to start there because i was just trying to get the word sure i'm sorry if i didn't articulate it i think the court should start there because the issues logically an that's what the f a a tells you to do i think it's important to bring this case in line with this court's delegation clause precedents they go back to send down which your honor just parker wrote they touch on wells fargo be sapping ten paine w be back also to bring this case in line with the new york court of appeals decision in monarch which had the exact same provision issue f a a case and held the delegation clause was clear and unmistakable and to bring it in line with the th circuit decision in mohamed which involved an intersection of a venue provision a delegation clause much murkier than this one your honour's in the th circuit had to no problem reconciling the two of course if your honour's think that this delegation clause is muddy and this is for courts to reconcile rather than an arbitrator's would ask for months on that grounds i want to start with the question in delegation case it's the way i stated and st options it's the way this court sta it the parties agree to submit to arbitrary question itself to arbitration answer here is clear yes in two ways the front end of the clause says that arbitrator should have exclusive jurisdiction over the entire matter of dispute that's every bit as clear is in sapping ten where the language is any controversy or dispute is subject to arbitration and this court and force the delegation clause it's every bit as clear is in pain webber v be back where the cla unfolds right the delegation as the arbitrator decides arbiter ability i think the arbitrator will get to the same place that judge act indeed for the reasons that judge acton said but i think it's important for this circuit to get this right and to make clear that it's right not just because i don't think it makes sense to be out of step with monarch on a f a a issue having state courts come out one way having the federal courts come out the other way and that you will file these disputes in a state court in new york if they're above the amount of controversy they'll get removed here and then it's outcome determinative on the delegation issue but because it's really clear on the delegations sure i follow i mean the language says any action  delegation dispute is in arbitron billeted dispute it's a gateway question of arbitrary but the proceeding itself the motion to compel or a motion to stay arbitration is a proceeding concerning arbiter ability when  in terms of just round out the point with mohamed i think the th circuit's decision in mohamed if you're looking for as i said at the outset in mohamed the provisions if anything are murkier than here because it both said that federal courts had exclusive jurisdiction to determine any question related to the contract and it said that arbitrators had exclusive jurisdiction over arbiter ability and the th circuit easily reconcile the two i've just given your honor an easier path than that one is the proceedings concerning arbiter billet which i think is a procedural mechanism the nd is questions of arbiter ability it readily apparent that arbitration is required here i think part of part of the problem in the way that appellant's formulate this dispute is they're they're ignoring what the claim is about this is far from a traditional coverage case in any way look a i g or national union whatever you want to call them here covered there's no dispute about that coverage and less a i g had gone to b m c and asked for payment there's no claim this case isn't isn't anywhere it's only once a i g sends out a bill for payment that there's any controversy to litigate and so that dispute even under appellan formulation sping springs excuse me directly from the payment agreements but it's it's simpler than that i think for reasons your honor touched on judge shannon that the payment obligation provision which appellants didn't touch at all in their opening brief is as judge and confound it incorporates the terms of the policies and that's not a stray provision in terms of doing so whether you want to look at it through the catch all provision or look at the contract on the whole if you look at eighteen for instance the beginning of this contract what is a i g agreed to do we touch on this and page seven of our opening brief we have agreed to provide you insurance and services according to the policies right there in the payment agreement and to extend credit to you for full payment of the entire amount of your payment obligation so you've got the two dollars linked together at the outset and what has been mc agreed to do in that contract to pay us the payment obligation so you've got the two links hand in hand all the way through you read further down on an eighteen contrary to this notion that the two are are somehow divorced at every turn eighteen says this agreement begins on the effective date shown on the st page unless otherwise agreed in writing this agreement will also apply to any policies and schedules that we may issue the two are joined at the hip both in the arbitration provision itself and all throughout this contract and so ultimately appellants what they need to show is not that this couple that this provision could have been clearer or that he could have written it better they have to show under moses cone and eighty technologies verses communication workers of america that the framing in c w a i think is the one that's best where the supreme court said arbitration should not be denied unless it may be said with positive inge assurance that there is no interpretation that covers the governs the dispute and they just can't make out that standard your honor and so we ask that this court affirm on both grounds ability basically it says any action or proceeding concerning arbiter ability not arbitration on arbiter ability which clearly connotes questions of whether something should be arbitrated including motions to compel or to stay arbitration so it's including it's not ex it's not an exclusive or limited list it is a broad empowerment to the court to make those determinations and of significance that was an included or set forth in an addendum to the payment agreement in other words it came out later and changed the basic terms of the payment agreement supplementing them the original language in the payment agreement dealing with courts it's at our betray sun so now they changed it years later to arbiter ability i don't think there's any question of moses cone i want to make one point if i may with regard to moses cohen i think the courts reliance on moses cone below respectfully was a cop out most cone should be applied only as a last resort when the court is left with no other ability to decide whether something should be arbitrated it is a default rule but you only get to that when you have no other way to decide it and what the court had below what the court below had before it was a law petroleum as well as the out of court case as well as the u recordings case two circuit court decisions in a district decision and those decisions lay out a very clear roadmap of how coverage determinations including in sydney new recordings that was under california law coverage determinations arise under the insurance policies not the payment agreement and are not subject to the payment agreements provisions and therefore are not arbitrary will but may be litigated in court thank you thank you ron you know well reserves or yes  take that back to i never knew the man but i will take that back i have many colleagues who did obviously thank you