                                                                  NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 _____________

                                      No. 16-3541
                                     _____________

    FIN ASSOCIATES LP; SB MILLTOWN ASSOCIATES LP; LAWRENCE S.
  BERGER; ROUTE 88 OFFICE ASSOCIATES LTD; SB BUILDING ASSOCIATES
                 LP; ROUTE 18 CENTRAL PLAZA LLC,
                               Appellants

                                             v.

                   HUDSON SPECIALTY INSURANCE COMPANY
                                ____________

                     Appeal from the United States District Court for
                                the District of New Jersey
                             (D.C. Civ. No. 2-15-cv-02245)
                        District Court Judge Susan D. Wigenton
                                    ______________

                      Submitted Under Third Circuit L.A.R. 34.1(a)
                                    July 12, 2017
                                  ______________


               Before: McKEE, AMBRO, and RESTREPO, Circuit Judges

                                   (Filed: July 25, 2018)

                                           _____

                                        OPINION *
                                         _____

RESTREPO, Circuit Judge.



       *
         This disposition is not an Opinion of the full Court and, pursuant to I.O.P. 5.7,
does not constitute binding precedent.
       Appellants appeal the decision of the District Court granting the motion of

Appellee Hudson Specialty Insurance Company (“Hudson”) to compel arbitration. We

will affirm.

                                              I

       Hudson, a property and casualty company based in New York, issued a policy to

insure a group of New Jersey property owners in July of 2012. The policy covers twenty

properties, nineteen of which are located in New Jersey and one of which is located in

Pennsylvania. The insured properties’ value exceeds $9,000,000, 1 and the policy owners

initially paid a base premium insurance rate of $250,000. Appellants (“the Insureds”)

employed a commercial insurance broker to negotiate the terms of the policy, 2 which

states that it was “written in a form bargained for, reviewed, and accepted by the parties.”

App. 72. The policy contains a choice-of-law provision, which states that “[t]his policy

shall be interpreted solely according to the law of the State of New York.” App. 72. The

policy also contains an arbitration clause, providing that any dispute as to the terms and

conditions of the policy, or as to the adjustment or payment of a claim, “shall be

submitted to the decision of a Joint Arbitrator that the Insured and Company shall appoint

jointly.” App. 72.

       In October 2012, Hurricane Sandy damaged many of the New Jersey properties and,



1
       While the total value of all the insured properties is unclear from the record, one of
the properties is valued at $9,000,000.
2
     The Appellants are owned and managed by US Land Resources, which is the
named insured on the policy.

                                             2
in 2013, the Insureds filed suit asserting several causes of action related to Hudson’s

alleged refusal to adjust their insurance claims.      Hudson filed a motion to compel

arbitration or to dismiss the operative Complaint. On August 18, 2016, the District Court

granted the motion to compel arbitration and denied the motion to dismiss the complaint

as moot. On appeal, the Insureds argue that the choice-of-law provision should not be

enforced and that under New Jersey law the arbitration clause is unenforceable.

                                             II

       The District Court had jurisdiction pursuant to 28 U.S.C. § 1332. We have

jurisdiction to review the District Court’s order compelling arbitration and denying

appellee’s motion to dismiss the Complaint pursuant to 28 U.S.C. § 1291.

       The District Court’s interpretation of the terms of the insurance policy is a

question of law, over which we exercise plenary review. Ramara, Inc. v. Westfield Ins.

Co., 814 F.3d 660, 674 (3d Cir. 2016). We review the District Court’s findings of fact

for clear error and will set aside these findings only if they are clearly erroneous. Fed. R.

Civ. P. 52(a)(6).

                                             III

       The Insureds contend that the District Court erred by enforcing the choice-of-law

provision and granting Appellee’s motion to compel arbitration. We disagree.

       A federal court exercising diversity jurisdiction generally applies the choice-of-

law rules of the forum state, which in this case is New Jersey. See Hammersmith v. TIG

Ins. Co., 480 F.3d 220, 226 (3d. Cir. 2007) (citing Klaxon v. Stentor Electric Mfg. Co.,

313 U.S. 487 (1941)). New Jersey courts generally uphold contractual choice-of-law


                                              3
provisions in insurance agreements so long as they do not “violate New Jersey’s public

policy.” Instructional Systems, Inc. v. Computer Curriculum Corp., 614 A.2d 124, 133

(N.J. 1992). The public policy exception — intended to protect less powerful parties in

asymmetric negotiations — is generally not violated when similarly sophisticated parties

have negotiated the choice-of-law provision and the plain language of the policy conveys

that both parties intended for the laws of the named state to govern the provisions of the

insurance contract. See Diamond Shamrock Chemicals Co. v. Aetna Cas. & Sur. Co., 609

A.2d 440, 460 (N.J. Super. Ct. App. Div. 1992); Fairfield Leasing Corp. v. Techni-

Graphics, Inc., 607 A.2d 703, 707 (N.J. Super. Ct. Law. Div. 1992). Choice-of-law

provisions allow the parties to provide uniformity of interpretation when the policy

insures properties in multiple states, and will be enforced if the contract was freely

entered into by two commercial entities with relatively equal bargaining power. See

Walters v. Am. Home. Assur., No. 09-4637, 2011 WL 4409170, *8 (D. N.J. Sept. 21,

2011) (upholding a choice-of-law provision in a multistate policy between two equally

sophisticated corporations); ERG Renovation & Const., LLC v. Delric Const. Co., 2014

WL 7506759, *6-7 (N.J. Super. Ct. App. Div. Jan. 12, 2015); Johnson Matthey Inc. v.

Pennsylvania Mfrs.’ Ass’n Ins. Co., 593 A.2d 367 (N.J. Super. Ct. App. Div. 1991).

       Here, the District Court properly found that Appellants are owned and managed by

“a sophisticated commercial entity with insurable interests in over twenty different

properties,” one of which, as noted, was valued at $9,000,000. App. 7. The Insureds

obtained their policies with Hudson by employing the use of a commercial insurance

broker. While the insured properties were primarily located in New Jersey, a provision


                                              4
designating a governing body of law was reasonable given that the policy also insured

property in Pennsylvania and potentially insured mortgages originating in other states as

well. Further, the plain language of the choice-of-law provision clarifies that the clause

“is written in a form bargained for, reviewed and accepted by the parties,” which conveys

that the policy terms were the result of individualized negotiations between the

policyholder and insurance provider. App. 72. Given that the terms of the policy were

negotiated by a policyholder with relatively equal bargaining power, the District Court

correctly found the policy’s choice-of-law provision enforceable. Accordingly, New

York law governs whether the policy’s arbitration clause is enforceable.

                                             IV

       The Insureds also contend that the arbitration clause would fail under New Jersey

law because the plain text does not explicitly waive the right to litigate a dispute in

court. They concede, however, that if New York law controls, the District Court

properly applied New York law in finding the clause enforceable. Appellant Br., 24.

While we take no position concerning New Jersey law in this regard, we agree no such

waiver is required by New York jurisprudence. See Williams v. Progressive

Northeastern Ins. Co., 41 A.D.3d 1244, 1245 (N.Y. App. Div. 2007); Matter of Ball

(SFX Broadcasting), 236 A.D.2d 158, 162 (N.Y. App. Div. 1997). Where, as here, an

agreement enforced by New York law contains a broad arbitration provision, “the

court’s inquiry is limited to whether or not the subject matter of this dispute is

encompassed by its provisions.” Shazo v. Hierschler, 282 A.D.2d 257, 258 (N.Y. App.

Div. 2001). The Insureds’ claims arise from Hudson’s alleged failure to pay or adjust


                                             5
    insurance claims, which fall within the purview of the policy’s arbitration clause. 3 We

    therefore affirm the District Court’s ruling to grant Appellee’s motion to compel

    arbitration.




3
          The Arbitration Clause Endorsement of the insurance policy is as follows:

          If there is any dispute or disagreement as to the interpretation of the terms
          and conditions of this policy or the development, adjustment, and/or payment
          of any claim, they shall be submitted to the decision of a Joint Arbitrator that
          the Insured and Company shall appoint jointly. App. 72.

                                                 6
