United States Court of Appeals For the First Circuit
No. 05-2303
CONSTRUCTORA ANDRADE GUTIÉRREZ, S.A.,
Plaintiff, Appellee,
v.
AMERICAN INTERNATIONAL INSURANCE COMPANY OF PUERTO RICO,
Defendant/Third-Party Plaintiff, Appellee,
C&M CONSTRUCTORA, S.A.,
Third-Party Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Jay A. García-Gregory, U.S. District Judge]
Before Torruella and Lynch, Circuit Judges, and Hansen,* Senior Circuit Judge.
Thomas E. Abernathy, IV, with whom Iván R. Fernández-Vallejo was on the brief for appellant. Jennifer L. Swize, with whom Jaime Brugueras and Donald B. Ayer were on the brief for appellee Constructora Andrade Gutiérrez, S.A. Francisco A. Rosa-Silva for appellee American International Insurance Company of Puerto Rico.
October 27, 2006
* Of the United States Court of Appeals for the Eighth Circuit, sitting by designation. HANSEN, Senior Circuit Judge. C&M Constructora, S.A. (C&M)
appeals from the July 13, 2005, amended judgment nunc pro tunc of
the district court in which the district court granted summary
judgment in favor of Constructora Andrade Gutierrez, S.A. (CAG) on
its claim against American International Insurance Company of
Puerto Rico (AIICO); granted summary judgment in favor of AIICO on
its third-party claim for indemnification against C&M; and
dismissed C&M's cross-claims against CAG on the basis that the
cross-claims were subject to mandatory arbitration. We affirm
those portions of the district court's judgment that are properly
the subject of this appeal.
I. Background
C&M, a construction company headquartered in the Dominican
Republic, entered into an agreement titled "Agreement on Grouping
Enterprises" (hereinafter "Joint Venture Agreement") in November
1995 with CAG, a Brazilian corporation, for the sole purpose of
bidding on the reconstruction of the Pont Sondé-Mirebalais Highway
in the Republic of Haiti. In the event that the joint venture won
the contract, CAG agreed to provide 100% of the guarantees for
performance and payment to the Republic of Haiti, and C&M agreed to
provide counter-guarantees to CAG for C&M's participation in the
project.
The Republic of Haiti awarded the project to the joint venture
in May 1996. Pursuant to the Joint Venture Agreement, CAG obtained
-2- a performance and payment bond on behalf of the joint venture for
the benefit of the Republic of Haiti, and C&M obtained a bond from
AIICO for the benefit of CAG in proportion to C&M's participation
in the construction project. The AIICO bond stated that it was "an
irrevocable and unconditional guarantee . . . for the completion by
the contractor of its obligations to [CAG] pursuant to the
stipulations of the contract dated May 6, 1996." (Appellant's App.
at 165.)
The parties were unable to settle disputes that developed
during the construction project, and on February 11, 1998, C&M and
CAG entered into an agreement titled "Modifications to Agreement of
Enterprise Group" (Modifications Agreement) in which participation
in the construction project was reallocated 99% to C&M and 1% to
CAG. The Modifications Agreement incorporated a letter of the same
date (Letter Agreement) written by C&M and approved by CAG, wherein
the parties agreed that C&M would pay $967,000 to CAG as
reimbursement for expenses incurred by CAG, to the extent that
amount was supported by a to-be-performed audit, and C&M would pay
$440,000 to CAG for loss of business and profits. The Letter
Agreement contemplated that C&M would provide CAG with a bank bond
or insurance guarantee for the amounts specified in the Letter
Agreement. Although C&M provided two surety bonds, CAG returned
the bonds, and no additional bonds were ever issued on the Letter
Agreement.
-3- The subsequent audit performed pursuant to the Letter
Agreement revealed that CAG was responsible for cost overruns while
it controlled the project, and that C&M's resulting losses far
exceeded the amounts C&M had agreed to pay in the Letter Agreement.
C&M thereafter refused to pay the agreed-upon amounts pursuant to
the terms of the Letter Agreement. On July 19, 1999, CAG filed a
complaint against AIICO in the United States District Court for the
District of Puerto Rico, invoking the district court's diversity
jurisdiction and seeking to recover on the AIICO bond for the
amounts specified in the Letter Agreement that C&M refused to pay.
C&M attempted to intervene in CAG's complaint against AIICO to
protect its interests. Meanwhile, AIICO filed a third-party
complaint against C&M in the original action, seeking to invoke the
separate indemnity agreement it had entered into with C&M to cover
any payments that AIICO might be required to make on the bond it
had issued on C&M's behalf in favor of CAG. Thereafter, C&M filed
cross-claims against CAG, claiming that CAG had breached the Joint
Venture Agreement.
After much litigation, the district court filed an Opinion and
Order on February 26, 2003, granting summary judgment in favor of
CAG on its original claim against AIICO in the amount of
$1,407,000, finding that the bond issued by AIICO was in actuality
an unconditional guarantee essentially payable on demand. In an
Opinion and Order filed on February 27, 2003, the district court
-4- granted CAG's motion to dismiss C&M's cross-claims without
prejudice, finding that the claims were subject to mandatory
arbitration. The district court then entered judgment on CAG's
claim against AIICO and on C&M's cross-claims against CAG on
February 27, 2003, in accordance with the aforementioned Opinions
and Orders.
On November 1, 2004, the district court filed a Memorandum and
Order finding that C&M was liable to AIICO on the third-party
complaint against C&M for indemnification of the amounts that AIICO
was ordered to pay to CAG pursuant to the February 26, 2003,
Opinion and Order. The district court then filed an amended
judgment on November 1, 2004, amending the February 27, 2003,
judgment to add the judgment against C&M in favor of AIICO.
Finally, on July 13, 2005, the district court granted CAG's motion
to include prejudgment interest on the amount of $1,407,000 that
AIICO was ordered to pay to CAG in the February 26, 2003, order.
The district court entered an Amended Judgment Nunc Pro Tunc
reflecting the three prior judgments and the newly awarded pre-
judgment interest.
From this final judgment, both C&M and AIICO filed separate
notices of appeal. AIICO's appeal was docketed as No. 05-2302, and
its caption does not list C&M as a party to that appeal. C&M's
appeal was docketed as No. 05-2303. The appeals were consolidated
for oral argument. AIICO eventually settled its dispute with CAG
-5- by paying $1,600,000 to CAG and moved to dismiss its appeal in this
court on November 2, 2005. Accordingly, this court dismissed
appeal No. 05-2302. C&M's appeal No. 05-2303 is therefore the
subject of the case before us.
II. Issues on Appeal and Standard of Review
C&M filed its notice of appeal on August 3, 2005, in which it
appealed
from a final amended judgment nunc pro tunc (and memorandum and order) entered on July 13, 2005 by the Hon. Jay A. Garcöa [sic], amendingan [sic] amended judgment (and memorandum and order) entered on November 1, 2004 granting defendant and third-party plaintiff [AIICO]'s motion for summary judgment and ruling that C&M was obligated to indemnify AIICO for any disbursements made to plaintiff, [CAG], as well as any costs and attorneys fees resulting from the court's February 25, 2003 judgment and February 27, 2003 Opinion and Order entered in CAG's favor.
(Appellant's App. at 1067.) One week later, C&M filed an amended
notice of appeal, which was nearly identical in language to the
original notice of appeal, but added the phrase "dismissing C&M's
cross claims against plaintiff [CAG], without prejudice, finding
that they were subject to mandatory arbitration" to its description
of which portions of the July 13, 2005, amended judgment nunc pro
tunc it was appealing.2 (Id. at 1071-72.) AIICO filed its notice
of appeal on the same date, specifying the district court's
judgment granting CAG $1,407,000 plus prejudgment interest.
2 The amended notice of appeal also changed "February 27, 2003 Opinion and Order" in the last line to "February 26, 2003 Opinion and Order." This does not affect our analysis.
-6- In their briefing to this court, both CAG and AIICO declined
to address the validity of the district court's judgment ordering
AIICO to pay CAG on the bond. CAG claims that the issue is moot in
light of its settlement with AIICO. AIICO claims that the validity
of the underlying judgment ordering AIICO to pay CAG on the bond is
irrelevant because C&M entered into a separate unconditional
indemnity agreement that was not contingent on the correctness of
the district court's judgment against AIICO.
Putting the issues of the relevance and the mootness of the
underlying judgment aside, we question first whether the separate
order of February 26, 2003, finding that the bond was an
unconditional guarantee and ordering AIICO to pay $1,407,000 to
CAG, is even properly before this court as a part of C&M's appeal.
As quoted above, C&M filed a very specific original notice of
appeal and an even more specific amended notice of appeal.
Compliance with Federal Rule of Appellate Procedure 3, specifying
the contents of a notice of appeal, is jurisdictional and cannot be
waived. See Torres v. Oakland Scavenger Co., 487 U.S. 312, 317
(1988). We must therefore determine which orders are encompassed
within C&M's amended notice of appeal before we proceed to the
merits of the appeal. See Diaz-Rodriguez v. Pep Boys Corp., 410
F.3d 56, 58 (1st Cir. 2005) (addressing appellate jurisdiction even
though it was not raised by the parties).
A notice of appeal must "designate the judgment, order, or
-7- part thereof being appealed," Fed. R. App. P. 3(c)(1)(B), before it
confers jurisdiction on a court of appeals to hear a case, see
Nieves-Marquez v. Puerto Rico, 353 F.3d 108, 122 (1st Cir. 2003).
"[T]he general rule is that '[i]f an appellant . . . chooses to
designate specific determinations in his notice of appeal-rather
than simply appealing from the entire judgment-only the specified
issues may be raised on appeal.'" United States v. Universal Mgmt.
Servs., Inc., 191 F.3d 750, 756 (6th Cir. 1999) (quoting McLaurin
v. Fischer, 768 F.2d 98, 102 (6th Cir. 1985)), cert. denied, 530
U.S. 1274 (2000). The failure to include a particular issue in a
notice of appeal can be fatal to this court's jurisdiction over
that issue. See Poy v. Boutselis, 352 F.3d 479, 486 (1st Cir.
2003) (declining to address an issue on appeal concerning another
party that was not raised in the notice of appeal); see also Lehman
v. Revolution Portfolio L.L.C., 166 F.3d 389, 395 (1st Cir. 1999)
("Failure to make a sufficient specification ordinarily debars the
appellant from arguing the propriety of an unspecified ruling on
appeal."); Spound v. Mohasco Indus., Inc., 534 F.2d 404, 410 (1st
Cir. 1976) ("Nor was plaintiff correct in his further allegation
that his specific and limited prior appeal raised matters contained
in entirely different paragraphs."), cert. denied, 429 U.S. 886
(1976), abrogated on other grounds by Pioneer Inv. Servs. Co. v.
Brunswick Assocs. Ltd. P'ship, 507 U.S. 380 (1993).
Notwithstanding the jurisdictional nature of the Rule 3
-8- requirements, we construe those requirements liberally, analyzing
"the notice of appeal in the context of the entire record."
Blockel v. J.C. Penney Co., Inc., 337 F.3d 17, 23-24 (1st Cir.
2003). "This principle of liberal construction does not, however,
excuse noncompliance with the Rule. Rule 3's dictates are
jurisdictional in nature, and their satisfaction is a prerequisite
to appellate review." Smith v. Barry, 502 U.S. 244, 248 (1992).
This case involves multiple parties; three separate
substantive claims: CAG's original claim against AIICO on the bond,
AIICO's third-party claim against C&M for indemnity, and C&M's
cross-claims against CAG for breach of the Joint Venture Agreement;
and three separate district court orders addressing each claim.
Following the district court's amended judgment nunc pro tunc, C&M
specifically appealed from the district court's order requiring C&M
to indemnify AIICO. C&M then filed an amended notice of appeal,
adding to its appeal the district court's order dismissing C&M's
cross-claims because they were subject to arbitration. AIICO
separately appealed the district court's order holding it liable on
the bond but dismissed that appeal upon settlement with CAG. While
C&M's amended notice of appeal mentioned the February 26, 2003,
order that determined that AIICO was liable on the bond, the notice
of appeal was specifically limited to "any costs and attorneys fees
resulting from" that order. (Appellant's App. at 1071-72.)
Given the circumstances of this case and the specific nature
-9- of C&M's notice of appeal and amended notice of appeal, we conclude
that C&M did not appeal the district court's February 26 order
requiring AIICO to pay on the bond. C&M knew the limited scope of
its original notice of appeal as evidenced by its amended notice,
in which it added another of the district court's specific rulings.
Even after AIICO dismissed its appeal, C&M did not attempt to
include the underlying judgment on the CAG claim against AIICO
within its own appeal. C&M's actions bring to mind the ancient
maxim, "expressio unius est exclusio alterius" (the expression of
one thing is an intention to exclude all others). Kotler v. Am.
Tobacco Co., 981 F.2d 7, 11 (1st Cir. 1992) (holding that a notice
of appeal's exclusion of one order, coupled with the designation of
a distinct and independent order, "loudly proclaims plaintiff's
intention not to appeal from the former order"); see also C&S
Acquisitions Corp. v. Nw. Aircraft, Inc., 153 F.3d 622, 625 (8th
Cir. 1998) (declining to apply the rule that an appeal from a final
order permits the review of issues decided in prior orders because
the notice of appeal specified a grant of summary judgment, which
applied only to one count, and did not encompass the district
court's separate order confirming an arbitration award). C&M is
the master of its notices, and we are limited to reviewing only
those orders fairly raised within those notices. We conclude that
we lack jurisdiction to disturb the district court's judgment
ordering AIICO to pay CAG on the bond, and we limit our discussion
-10- accordingly.
We review a district court’s grant of summary judgment de
novo. Lexington Ins. Co. v. Gen. Acc. Ins. Co. of Am., 338 F.3d
42, 46 (1st Cir. 2003). We apply Puerto Rico substantive law to
this diversity action. See id. (applying state substantive law
when sitting in diversity). Under Puerto Rico law, we accord the
terms of a contract their plain meaning, reading the contract as a
whole. Jewelers Mut. Ins. Co. v. N. Barquet, Inc., 410 F.3d 2, 16
(1st Cir. 2005).
III. Application of the Agreement of Indemnity
Several weeks after issuance of the bond by AIICO to CAG,
AIICO and C&M entered into a separate Agreement of Indemnity, which
provided that
The Principals and Indemnitors [C&M] shall exonerate, indemnify, and keep indemnified the Surety [AIICO] from and against any and all liability for losses and/or expenses of whatsoever kind or nature (including, but not limited to, interest, court costs, and counsel fees) and from and against any and all such losses and/or expenses which the Surety may sustain and incur: (1) By reason of having executed or procured execution of the Bonds. . . . Payment by reason of the aforesaid causes shall be made to the surety by the Principals and Indemnitors as soon as liability exists or is asserted against the Surety whether or not the Surety shall have made payment therefor. . . . In the event of any payment by the Surety the Principals and Indemnitors further agree that in any accounting between the Surety and the Principals, . . . the Surety shall be entitled to charge for any and all disbursements made by it in good faith in and about the matters herein contemplated by this Agreement under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether or not such liability, necessity or expediency existed . . . .
-11- (Appellant’s App. at 138.) Because the bond obligated AIICO "to
pay the aforementioned amount on first demand by" CAG (id. at 165),
the Agreement of Indemnity further required C&M as the Indemnitor
to:
immediately and upon the Surety's first written or simple demand (which shall be conclusive evidence that such sum is due and payable) pay to the Surety or place with the Surety (subject to the Bond amount) the sum required to make such payment without any question or delay and whether or not such demand is in the Indemnitor's opinion a proper demand.
(Id. at 140.)
Puerto Rico law recognizes the relationship between a surety
and a debtor and requires a debtor to indemnify a surety even when
the security is paid without the debtor's knowledge. See 31 P.R.
Laws Ann. § 4911. Furthermore, Puerto Rico law "implicitly allows
for a surety to compromise a debt." U.S. Fid. & Guar. Co. v. PR
Enters., No. 03-1338, 2005 WL 2244283, at *4 (D.P.R. Sept. 15,
2005) (relying on 31 P.R. Laws Ann. §§ 4911-13). Generally, when
an indemnity agreement gives a surety broad discretion to pay
claims triggering the indemnity agreement, the only defense an
indemnitor may raise against a claim by the surety for
indemnification is that the surety committed fraud or collusion, or
otherwise acted in bad faith in paying the claim. See Fireman's
Ins. Co. of Newark, N.J. v. Todesca Equip. Co., 310 F.3d 32, 35-36
& n.6 (1st Cir. 2002) (discussing Rhode Island law and noting
-12- slight variations in other jurisdictions).3
Although we lack jurisdiction to disturb the district court's
ruling that the bond was in actuality an unconditional guarantee,
C&M argues that the district court's alleged error in that ruling
makes the Agreement of Indemnity inapplicable. In other words,
according to C&M, there should have been, and there is, nothing to
indemnify because AIICO should not have been required to pay CAG on
the bond. In limited circumstances third-party defendants "may
raise on appeal claims of error based in the main action," where
the "third-party liability . . . is entirely derivative of the
[underlying] judgment . . ., and will cease to exist if that
judgment is defeated." United States v. Lumbermens Mut. Cas. Co.,
917 F.2d 654, 658 n.5 (1st Cir. 1990) (reversing third-party
judgment against insurance agent in favor of insurer based on
erroneous ruling that insurance policy provided coverage in
underlying suit and refusing to disturb judgment holding insurer
liable where insurer did not appeal underlying judgment). Separate
and apart from appealing the underlying ruling, a third-party
defendant may assert, as the basis for appealing the ruling against
it on the third-party claim, that the underlying judgment was
erroneous. Id. Thus, while we will not disturb (for
3 Puerto Rico law allows a debtor to use against the surety those defenses it would have against the creditor, but only when the surety pays on a debt without informing the debtor. See 31 P.R. Laws Ann. § 4913. C&M does not rely on this defense, and we do not address it.
-13- jurisdictional reasons) the district court's judgment holding that
the bond was an unconditional guarantee by AIICO, we can review the
correctness of that ruling as a defense to C&M's liability under
the indemnity agreement if C&M's liability is "entirely derivative"
of CAG's judgment against AIICO. Id.
In this case, C&M's liability to AIICO is not entirely
derivative of CAG's judgment against AIICO. In fact, its liability
is not derivative of the underlying judgment at all. Even if AIICO
had paid on CAG's demand before CAG filed suit, C&M would have been
liable to indemnify AIICO under the very broad terms of the
separate Agreement of Indemnification upon AIICO's good faith
payment on the demand. The sweeping language can be reduced to
five words: "If we pay -- you pay." Regardless of the correctness
of the district court's underlying decision, the fact remains that
AIICO did in fact pay on the bond. Even if we now found that
ruling to be incorrect, it would not change the fact of payment or
alter the judgment as between AIICO and CAG, which is now final as
to those parties. See id. at 662 (refusing to grant relief from an
erroneous judgment to a nonappealing party); Marin Piazza v. Aponte
Roque, 909 F.2d 35, 39 (1st Cir. 1990) (dismissing as untimely an
appeal brought by four defendants following the fifth defendant's
successful appeal and noting that "the inescapable consequence of
failure to appeal a judgment within the time allowed is that the
judgment becomes final" as to the nonappealing party). AIICO would
-14- still be out its payment on the bond. The Agreement of Indemnity
clearly and unequivocally required C&M to indemnify AIICO upon
AIICO's good faith payment on the bond based on AIICO's belief that
it was liable on the claim, "or that it was necessary or expedient
to make such disbursements, whether or not such liability,
necessity or expediency existed." (Appellant's App. at 138.)
Thus, we need not, and do not, decide the correctness of the
underlying judgment in favor of CAG against AIICO; either way, C&M
is liable to AIICO under the Agreement of Indemnity because AIICO
paid on CAG's demand.
We note that in ruling on the underlying claim between CAG and
AIICO, the district court found the bond to be an unconditional
letter of credit and that the two conditions precedent to liability
on the letter of credit had been met, namely that (1) CAG provided
written notice to AIICO prior to the expiration date of the bond,
and (2) the written notification contained the amount to be paid
and stated that C&M had not performed its contractual obligations.
The district court did not address the defenses raised by C&M to
justify its failure to pay on the Letter Agreement, nor did it need
to, given its conclusion that the bond was an unconditional
guarantee. See generally 38A C.J.S. Guaranty § 17 (2006) ("The
general rule that where the principal contract is invalid the
guaranty is rendered invalid does not apply where the contract of
guaranty is an entirely separate and independent contract, such as
-15- an absolute guaranty." (internal footnotes omitted)). The judgment
granted to CAG against AIICO has no effect on the underlying
disputes between CAG and C&M concerning C&M's liability (or lack
thereof or defenses thereto) on the Letter Agreement.
C&M did not argue in its briefs that AIICO's payment on the
bond was made in bad faith, but relied solely on its claim that the
district court erred in holding that the AIICO bond was an
unconditional guarantee. During oral argument, counsel for C&M
argued that AIICO settled the CAG-AIICO appeal in bad faith because
it did not first consult C&M before paying the settlement.
We generally do not address arguments made for the first time
during oral argument, especially when the arguments are contrary to
the arguments made in the briefs. See United States v.
Pizarro-Berríos, 448 F.3d 1, 4 (1st Cir. 2006) ("We have
consistently held that, except in extraordinary circumstances,
arguments not raised in a party's initial brief and instead raised
for the first time at oral argument are considered waived.").
AIICO was not aware until oral argument that the issue of its good
faith settlement of the appeal was at issue.
Even if we were to reach the merits of the bad faith argument,
we could not agree that AIICO's settlement was made in bad faith.
AIICO vigorously disputed its liability on the bond in the district
court and filed an appeal of the final judgment against it.
Whatever its reason for settling after filing its notice of appeal,
-16- we cannot say that compliance with a judgment duly entered by a
United States District Court evidences bad faith on the part of the
losing party.
The district court properly granted summary judgment in favor
of AIICO and against C&M based on the unambiguous and entirely
separate Agreement of Indemnity. See Plaza Athénée, S.E. v. U.S.
Fid. and Guar. Co., No. 01-2597, 2005 WL 1114368, at *9-10 (D.P.R.
May 9, 2005) (granting partial summary judgment in favor of surety
where surety settled claim with creditor without consulting debtor;
nothing in the surety agreement limited surety's discretion or
ability to respond to the creditor's claim).
IV. Cross-Claims Dismissed as Subject to Mandatory Arbitration
Finally, C&M challenges the district court's dismissal of its
cross-claims against CAG, in which C&M claimed that CAG had
breached the Joint Venture Agreement. The Joint Venture Agreement
between C&M and CAG included an arbitration clause, which stated:
Any difference related to the interpretation or the execution of the present agreement will be settled in accordance with the Rules of Reconciliation and Arbitration of the International Chamber of Commerce, by a referee designated under the conditions provided by said rule. The arbitration will take place at Genéve, Switzerland, the applicable law being used i[s] the Canton of Genéve.
(Appellant's App. at 105.) C&M recognizes the enforceability of
mandatory arbitration agreements, but argues that CAG waived its
right to enforce arbitration by bringing the action against AIICO
-17- on the bond in federal court, relying on Jones Motor Co. v.
Chauffeurs, Teamsters, & Helpers Local Union No. 633 of N.H., 671
F.2d 38, 42 (1st Cir.) ("[P]arties are free to waive their rights
to arbitration under a contract and proceed to present their
contractual dispute to a court."), cert. denied, 459 U.S. 943
(1982).
The importance of arbitration agreements in the commercial
world, particularly related to international agreements, is
indisputable. Congress enacted the Federal Arbitration Act (FAA)
to
promote[] a liberal federal policy favoring arbitration and [to] guarantee[] that "[a] written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
Campbell v. Gen. Dynamics Gov't Sys. Corp., 407 F.3d 546, 551-52
(1st Cir. 2005) (quoting 9 U.S.C. § 2) (alterations within internal
quotation in original).
The district court determined that the bond was in actuality
an unconditional guarantee, a determination that permitted the
district court to avoid deciding whether C&M had breached either
the Joint Venture Agreement or the Letter Agreement before it
ordered AIICO to pay on the bond. Even if the district court was
wrong in holding that the bond's character was independent of the
Joint Venture Agreement, an issue we do not decide today, the fact
-18- remains that the district court interpreted only the bond. It did
not construe the Joint Venture Agreement or related amendments in
holding AIICO liable on the bond. In bringing its original action
against AIICO on the bond then, CAG did not invoke federal
jurisdiction to decide issues related to the Joint Venture
Agreement, and it did not waive its right to enforce the
arbitration clause. Accordingly, the district court properly
dismissed C&M's cross-claims because they are subject to mandatory
arbitration.
V. Summary
To the extent C&M attempts to appeal the underlying judgment
in favor of CAG against AIICO, we dismiss that part of its appeal
for want of jurisdiction. We affirm the district court's judgment
holding that C&M was required to indemnify AIICO for the payment it
made to CAG, including costs and attorneys fees pursuant to the
July 13, 2005, order, and we affirm the district court's judgment
dismissing without prejudice C&M's cross-claims against CAG because
those claims are subject to mandatory arbitration. Costs of appeal
are awarded to AIICO and CAG. As it now stands, CAG holds AIICO's
money, and C&M is liable to indemnify AIICO for the amount AIICO
has paid to CAG. Assuming the parties invoke arbitration, the
correct distribution or allocation of those funds held by CAG as
between CAG and C&M will be determined by the results of the
arbitration proceedings in Genéve, in which CAG's claims against
-19- C&M based on the Letter Agreement and C&M's dismissed cross-claims
for breach of the Joint Venture Agreement should be resolved.
Affirmed.
-20-