St. Paul Fire and Marine Insurance Company, petitioner, Appellant, vs. Deluxe Corporation, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

STATE OF MINNESOTA

IN COURT OF APPEALS

A03-1213

St. Paul Fire and Marine Insurance Company, petitioner,

Appellant,

vs.

Deluxe Corporation,

Respondent.

Filed April 27, 2004

Affirmed; motion denied

Robert H. Schumacher, Judge

Ramsey County District Court

File No. C7033430

Michael R. Cashman, Zelle, Hofmann, Voelbel, Mason & Gette LLP, 500 Washington Avenue South, Suite 4000, Minneapolis, MN 55415 (for appellant)

Mark A. Solheim, Shawn M. Raiter, Larson King, LLP, 2800 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, MN 55101 (for respondent)

            Considered and decided by Wright, Presiding Judge; Schumacher, Judge; and Willis, Judge.

U N P U B L I S H E D   O P I N I O N

ROBERT H. SCHUMACHER, Judge

Appellant St. Paul Fire and Marine Insurance Company challenges the district court's dismissal of its petition to stay existing arbitration proceedings between St. Paul Fire and respondent Deluxe Corporation and compel arbitration before the American Arbitration Association (AAA), pursuant to AAA rules, and with venue in Minnesota.  We affirm.

In April 1997, Deluxe obtained a crime loss indemnity policy from St. Paul Fire insuring Deluxe's business operations worldwide.  The policy contained the following arbitration clause:

In the event of any dispute between [St. Paul Fire] and [Deluxe] as to any matters pertaining to a loss claimed under the Insuring Clauses, [St. Paul Fire] shall, at the request of [Deluxe], agree to the submission of any such dispute involving any loss which exceeds the applicable deductible to binding arbitration in accordance with the rules of the American Arbitration Association.

Deluxe submitted a claim in 1997 regarding checks stolen from its check printing facility in Mexico City, Mexico.  St. Paul Fire denied coverage.

In December 2002, Deluxe commenced arbitration by filing a demand for arbitration with the AAA at its Minneapolis, Minnesota office.  The demand for arbitration requested hearing locale in Mexico City, Mexico and referenced the "Commercial Arbitration Rules of the American Arbitration Association."

In January 2003, the International Centre for Dispute Resolution of the American Arbitration Association (ICDR) notified both parties that it had received Deluxe's demand for arbitration, explained ICDR would be administering the arbitration matter, and acknowledged Deluxe's request for hearing locale in Mexico City.  In March, ICDR oversaw a telephone conference during which the parties did not agree on a hearing location.  After reviewing written comments submitted by both parties, the ICDR determined the matter would be heard in Mexico City.  Correspondence from ICDR provided the decision on hearing location was made "pursuant to [ICDR's] authority under the International Arbitration Rules."

St. Paul Fire then sought an order in Ramsey County District Court compelling arbitration under 9 U.S.C. § 4 (2000).  St. Paul Fire argued Deluxe had failed to arbitrate in the manner agreed to and requested an order from the district court staying arbitration before ICDR and compelling arbitration before the AAA, pursuant to AAA rules, and with venue in Minnesota.  The district court found Deluxe had not failed to arbitrate in the manner agreed upon and dismissed St. Paul Fire's petition.

On appeal, St. Paul Fire contends it contractually agreed to arbitrate under "the AAA Commercial Rules" and Deluxe breached this agreement by accepting arbitration administered by ICDR and pursuant to "the ICDR International Rules."  St. Paul Fire argues the district court erred in finding Deluxe had not failed to arbitrate as agreed.

1.         St. Paul Fire made its motion to compel arbitration pursuant to 9 U.S.C. § 4, which provides, "A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition . . . [a] court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement."

On appeal from a denial of a motion to compel arbitration, our inquiry is limited to whether an express written agreement to arbitrate the subject matter of the present dispute exists between the parties and, if so, whether the agreement to arbitrate has been breached.  Contracting Northwest, Inc. v. City of Fredericksburg, Iowa, 713 F.2d 382, 384-385 (8th Cir. 1983).  Findings of fact will not be set aside unless clearly erroneous.  Case Int'l Co. v. T.L. James and Co., Inc. 907 F.2d 65, 66-67 (8th Cir. 1990).

Here, the arbitration clause provides that the parties agree to arbitrate "in accordance with the rules of the American Arbitration Association."  The  clause does not otherwise specify who should administer the arbitration proceeding or where the arbitration should be heard.  Deluxe filed a demand for arbitration with the AAA's Minneapolis office and requested hearing locale in Mexico City.  The demand for arbitration was thereafter received by ICDR, a division of the AAA.  This did not occur at the request or demand of Deluxe.

Arbitration is presently being administered by ICDR.  The record, however, does show that parties may specify an agreement to arbitration "by the American Arbitration Association under its Commercial Arbitration Rules" or an agreement to arbitration "in accordance with the International Arbitration Rules of the American Arbitration Association."  ICDR applied the international rules to the determination of hearing location.

This record supports the district court's conclusion that Deluxe has not failed or refused to arbitrate under AAA rules as provided for in the arbitration clause.  The district court did not err in dismissing St. Paul Fire's petition.

2.         St. Paul Fire argues pages 72 through 79 of Deluxe's appendix were not admitted in evidence before the district court and therefore should be stricken from the record on appeal.  We decline to address the merits of St. Paul Fire's assertion because we have not relied on the contested material in reaching our decision.  See Berge v. Comm'r of Pub. Safety, 588 N.W.2d 177, 180 (Minn. App. 1999) (finding it unnecessary to address merits of motion to strike when appellate court did not rely on objected-to portions).

Affirmed; motion denied.