NETPLANNER SYSTEMS INC v. GSC CONSTRUCTION INC et al
ORDER denying 36 Motion to Compel Ordered by US DISTRICT JUDGE CLAY D LAND on 08/17/2017 (glg)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
NETPLANNER SYSTEMS, INC.,
GSC CONSTRUCTION, INC. and
LIBERTY MUTUAL INSURANCE
CASE NO. 4:16-CV-150 (CDL)
O R D E R
Plaintiff filed this action
approximately sixteen months
ago, alleging that it completed work at Fort Benning under a
subcontract with Defendant GSC Construction, Inc. and that it
has yet to be paid.
Defendant Liberty Mutual Insurance Company
pursuant to its obligations under the Miller Act, 40 U.S.C. §
dispositive motions, prepared a joint pretrial order, and argued
motions in limine.
In anticipation of trying this case during
the Court’s September trial term, the Court held a pretrial
On the eve of that conference, Defendants filed a
motion to compel arbitration.
At the pretrial conference, the
arbitration by engaging in conduct inconsistent with insisting
on their right to arbitrate the dispute and by waiting until the
last minute before trial to raise the issue.
15, ECF No. 37.
See Pretrial Order
The Court has examined Defendants’ late filed
motion and Plaintiff’s response.
As explained in the remainder
of this Order, the Court confirms its earlier ruling denying
Defendants’ motion to compel arbitration (ECF No. 36).
Arbitration Act (FAA), [9 U.S.C. § 1 et seq.], reflects ‘both a
liberal federal policy favoring arbitration and the fundamental
principle that arbitration is a matter of contract.’”
Waffle House, Inc., No. 16-15574, 2017 WL 3381100, at *3 (11th
Cir. Aug. 7, 2017) (quoting AT&T Mobility LLC v. Concepcion, 563
U.S. 333, 339 (2011)).
Still, “[a]rbitration should not be
compelled when the party who seeks to compel arbitration has
waived that right.”
In re Checking Account Overdraft Litig.,
754 F.3d 1290, 1294 (11th Cir. 2014) (quoting Morewitz v. W. of
Eng. Ship Owners Mut. Prot. & Indem. Ass’n (Lux.), 62 F.3d 1356,
1365 (11th Cir. 1995)).
A party waives its right to compel
participation results in prejudice to the opposing party.’”
(quoting Morewitz, 62 F.3d at 1366).
The Court confirms today that Defendants waived the right
participating in the litigation up to this point and by delaying
its request to compel arbitration until the very last minute.
By waiting until the last minute to file its motion, Defendants’
dilatory conduct has prejudiced Plaintiff by causing it to incur
every expense necessary to try this case but for those incurred
during the trial itself.
Defendants filed a joint answer that failed to raise any
objection or argument against Plaintiff’s claims based on an
agreement to arbitrate.
See Answer, ECF No. 7.
discovery order, see Scheduling & Discovery Order 4, ECF No. 12,
and thereafter participated in discovery.
Plaintiff should be compelled to arbitrate its claims.
discovery period eventually closed, Plaintiff filed a motion for
summary judgment, to which Defendants responded with no mention
that the claims were subject to an arbitration agreement.
the contrary, Defendants affirmatively invoked the machinery of
the federal court and filed a motion under Federal Rule of Civil
Procedure 12(b)(3) seeking dismissal or transfer of part of this
case based on improper venue.
See Defs.’ Mot. to Dismiss Claims
1, ECF No. 19.
The Court granted that motion.
additional litigation in another court.
Being parties to the subcontract containing the arbitration
agreement, Defendants are presumed to know that they had the
right to arbitrate this dispute all along.
See In re Checking
party to an agreement to arbitrate is presumed to know that it
has the right to arbitrate).1
Notwithstanding that knowledge,
Defendants waited until the very eve of the pretrial conference,
arbitrate this dispute), to file their cursory two-page motion
to compel arbitration.
The Court finds that the totality of
raise the slightest argument in favor of arbitration until the
very last minute—is inconsistent with the intent to arbitrate
and, instead, is consistent with the desire to litigate this
case in two federal courts.
While Liberty Mutual is technically not a party to the arbitration
agreement, the Court uses “Defendants” for simplicity.
By belatedly attempting to invoke their right to arbitrate,
Defendants have prejudiced Plaintiff.
the litigation machinery qualifies as the kind of prejudice that
is the essence of waiver.”
Id. at 1295 (quoting E.C. Ernst,
Inc. v. Manhattan Constr. Co., 559 F.2d 268, 269 (5th Cir. 1977)
“A prime objective of an agreement to arbitrate
Id. (quoting Preston v. Ferrer, 552 U.S. 346, 357
reviewing evidence, filing briefs seeking summary judgment and
opposing Defendants’ motion to dismiss or transfer, and moving
Additionally, Defendants have forced Plaintiff to litigate half
of its claims in another court in another jurisdiction away from
its home, which will likely result in duplicative expenses and
even more delays in getting paid.
“By slowing the process and
magnifying its costs, [Defendants’] delay undermined the purpose
favoring arbitration agreements.’”
Id. (quoting Moses H. Cone
Mem’l Hosp. v. Mercury Cosntr. Copr., 460 U.S. 1, 24 (1983));
see also Robinson v. Alston, 596 F. App’x 871, 873 (11th Cir.
arbitration agreement caused opposing party to endure costs in
duplicative proceedings in another court).
their right to compel arbitration.
The FAA was enacted “to relieve congestion in the courts
and to provide parties with an alternative dispute resolution
Morewitz, 62 F.3d at 1364.
Defendants’ eve-of-trial motion is
not only inconsistent with an agreement to arbitrate but also
plainly flouts the purposes of the FAA, all to the prejudice of
Accordingly, the Court confirms its earlier ruling
denying Defendants motion to compel arbitration (ECF No. 36).
IT IS SO ORDERED, this 17th day of August, 2017.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA
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