The United States for the use and benefit of Preferred Materials, Inc. v. Q.B.S., Inc. et al

Filing 20

ORDERED that this 1 Complaint is stayed in its entirety, pending arbitration of all claims herein pursuant to the terms of the Arbitration Agreement. It is further ordered that the parties shall participate in arbitration of all claims herein, in accordance with the terms of the Arbitration Agreement, with any arbitration hearing to be completed on or before 8/15/15. Signed by Magistrate Judge G. R. Smith on 12/4/14. (wwp)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION

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THE UNITED STATES OF AMERICA,
ffufb/o PREFERRED MATERIALS, INC.,

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Plaintiff,
VS.

Case No, CV414-207

Q,B.S. INC., FEDERAL INSURANCE Co.,
and ARCO, INC.,
Defendants.

CONSENT ORDER ON MOTION TO STAY CROSS-CLAIMS
AND TO COMPEL ARBITRATION
Pending before the Court is the Motion to Stay Cross-Claims and Compel Arbitration
filed by defendants QBS, Inc., and Federal Insurance Company (Doe. # 17). All parties,
including the plaintiff, have now entered into an Arbitration Agreement, a fully executed copy of
which is attached hereto as Exhibit A, by which the parties have agreed to submit all issues
pending in this action to binding arbitration, with Patrick T. O'Connor, Esq., serving as the
arbitrator.
In consideration of the parties' Arbitration Agreement, and by consent of all parties to
this action, as shown by the signatures of their counsel of record below, it is hereby ordered that
this action is stayed in its entirety, pending arbitration of all claims herein pursuant to the terms
of the Arbitration Agreement. It is further ordered that the parties shall participate in arbitration
of all claims herein, in accordance with the terms of the Arbitration Agreement, with any

arbitration heating to be completed on or before August 15, 2015. It is further ordered that this
Court will retain jurisdiction of this matter for the purpose of enforcement of the arbitration
award(s) rendered in accordance with the Arbitration Agreement.
SO ORDERED, this

day of

, 2014.

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Hon. G. R. Sn 'th, Magistrate Judge
Consented to by:
s/ Dana F. Braun
Dana F. Braun
Attorney for Q.B.S., Inc., and Federal Ins. Co.
State Bar of Georgia #078512

s/ David H. Johnson
David H. Johnson
Attorney for ARCO, Inc.
State Bar of Georgia # 393250

Post Office Box 9150
Savannah, Georgia 31412
Phone: [phone]
Fax: [phone]
dbraun(ëlbrhlaw.corn

319 TaUnall Street
Savannah, Georgia 31401
Phone: [phone]
Fax: [phone]
[e-mail]

s/ David M. Toolan
David M. Toolan
Attorney for Plaintiff
State Bar of Georgia # 714620
Oldeastle Law Group
900 Ashwood Parkway, Suite 600
Atlanta, Georgia 30338
Phone: [phone]
David.Too1an(o1dcastle1aw.coni
Prepared by:
s/ David H. Johnson
David H. Johnson

q;4tapdaia\00\683302 firbilTRV01 consent order.docx

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A1B1TATION AGREEMENT
This Arbitration Agreement ("Agreement") is made and entered Into this 3 ? ' day of
November, 2014 (the "ffhetive Date"), by and between Preferred Materials, Inc. f/k/a
Oldeastle Southern Group, Inc. dtb/a. APAC-Southeast, Inc. ("PIvU"), ARCO, Inc.
("ARCO", QBS, .fiic. ("QS"), and Federal Insurance Company ("Federal") thereinafter
sometimes collectively referred to as "the Parties").
Recitals
The United States Army Corp of Engineers, as the public authority, entered Into a
A.
contract with QBS, as the principal contractor, for improvements at Fort Stewart, Georgia known
as the 10th Engineering Battalion Company Operations Facility.
13.
QBS and ARCO then entered into a certain subcontract agreement dated July 20,
2011 the "ARGO Subcontract") for ARCO to furnish labor, matriais, equipment, and other
servicesfor the 10th EngIneering Battalion Company Operations Facility project in Fort Stewart,
•--'.'------.--

Federal acted as surety In connection with the Project and issued a payment bond
C.
in the amount of-$13,18&000.00.
Subsequently, ARCO entered Into a subcontract agreement with PM[ dated
D.
November 28 2011 (the-"PMI Subcontract") for certain work to be performed on the Project.
Following completion of the Project, certain disputes and/or controversies have
E.
arisen among the Parties concerning their respective rights and obligations. On September 19.
2014, PM! filed a Complaint against QBS, Federal, and ARCO in the United States District
Court 1or,te Southern District of Georgia, Savannah Division, case styled The Unll$tates,fo
the Use ondBeneffl of PreferedMo1erial.s, Inc., P/K/Al O!drx,rlle Southern Group, Inc., 1)/S/Al
AP4C Southease, Inc. v. Q..S. Inc., Federal /n.suranee Company, and A.RCO, inc., Case No.
CV414-207 (the "Lawsuit").
in response to the Complaint, ARCO filed an Answer and Cross-elaims against
F.
QBS and Federal on October 15, 2014.
In connection with the Lawsuit, the Parties have agreed to submit any and all
0.
claims by and between the Parties arising out of the ARCO Subcontract, the PMI Subcontract,
and the dealings amongst thorn for construction services on the Project, including but not limited
to, those olainns asserted in PMI's Complaint and ARCO's cross-claims (the "Claims"), to
binding ar1itrat ion, on. the terms and conditions as set forth below.

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NOW, THEREFORE, in consideration of the above recitals, which tire incorporated
herein, and for good and valuable consideration, the receipt and sufficiency or which are hereby
acknowledged, the Parties agree as follows:
Agreenent_to Arbitrate, The Parties hereby consent and agree to submit the
Claims to binding arbitration before a neutral arbitrate,.

Neutral Arjltrator, The arbitration shall be conducted by a single neutral
2.
arbitrator and the Parties hereby agree to utilize Patrick O 4ConQ!, as the arbitrator
("Arbitrator"), lithe Arbitrator is unable or unwilling to serve, the Parties shall cooperate with
each other in agreeing upon a replacement arbitrator. If the Parties cannot agree upon a
replacement nrb1trator, then either Party can submit a motion to the Court in the Lawsuit,
requesting that the Court seIet the replacement arbitrator.

3.

Loeafion. of Arb!LtrnCion He ari ng The arbitration hearing shall be held in

Savannah, Georgia.
4.
Gqyernlug Lw,. The arbitration hearing shall be governed by the AAA
Construction Industry Arbitration Rules (without using AAA to administer), and the Federal
AAA rules or the FAA, then this Agreement shall govern.
Discovery & Arbitratlom ffearIn,frgeadures, The following procedures shall
5,
be followed in connection with the arbitration proceeding:

a

The exchange of written discovery and depositions, upon request s shall be

governed by and be in accordance with the Federal Rules of Civil Procedure, with any motions
to compel production of documents Or attendance at depoition, or motions for protective orders,
to be decided by the Arbitrator.
The Parties shall provide the names, curriculum vitae, and summaries of
b.
the testimony anticipated from all expert witnesses, along with copies of any and all reports
generated by such witnesses not later than ninety (90) days prior to the arbitration hearing.
e.

Bxcopt for rebuttal exhibits, the

Parties shall list and exchange copies of

All exhibits and demonstrative evidence expected to be used at the hearing not later than thirty
(30) days prior to the arbitration hearing. Unless a document Is specifically objected to, the
Abitrator will assume such documents are submitted without objection and they will be
considered as evidence. The Parties will also exchange lists of all witnesses that they expect to
testify at the hearing, at the time that exhibits are exchanged. Any documents not listed on the

exhibit liatmay not be offered Into evidence at the final arbitration hearing, unless the offering
Party shows good cause as to why the exhibit was not listed.
The Parties will be allowed to submit to the Arbitrator a post-hearing brief
d.
of no more than fifteen (15) pages, The Arbitrator may request counsel address specific factual
issues and points of law.

C.

The Arbitrator shall Issue a Final Award in writing, determining liability

and damages on the Claims within fifteen (15) days of the close ot'the, hearings : which will not
occur until briefs are submitted. The Arbitrator's Final Award shall set forth the award and a

reasoned basis therefor, The Final Award shall be final and binding upon the Parties. The
Arbitrator shall have the power to award any type of relief that would be available in a court of
competent jurisdiction. Any award may be entered as a Judgment in the action presently pending
among the Parties In the United States District Court for the Southern District of Georgia:
Savannah Division,
Any disputes regarding the foregoing procedures requests for
f.
modifications thereto, and-the enforcement thereof will be in the sole discretion of the Arbitrator.
Arbitration JIgpiring SeheduIe The arbitration hearing shall be scheduled, for
6,
seven (7) consecutive calendar days, or such lesser time as the Parties mutually agree, on the
earliest dates that the Arbitrator, Parties and couns1 are all available.

•L&Costs. The reasonable fees and expenses charged by the Arbitrator shall
7.
be paidas follow one-third to be paid by PM!, one-third to be paid by ARCO, and one-third to
attorneys' fees. Notwthstanding anything to the contrary herein, the Arbitrator may, at his
discretion, award fees and expenses to a Party to the extent permitted by applicable law. 'Fho
Arbitrator, In his discretion, shall determine a reasonable time for payment of all fees and costs.
ReleajLD1smissaL Upon receipt of payment In the amount set forth in the
S.
Final Ayard and such payment clearing the recipient's bank:
a.

the Panics shall file a joint stipulation of dismissal with prejudice of the

Lawsuit; and
the Parties shall executC and exchange full and final mutual releases of all
b.
Claims related to or arising out of the construction and design of the Project.
agouoraliqn. PrIor to the final arbitration hearing, the PartIes shall cooperate
9.
with each other in a good faith attempt to narrow the issues to be presented; and to reach such
factual stipulations and other agreements to facilitate a clear presentation of the issues on an
expedited basis.
10. $av of LitigatIon. Within five (5) days after the Parties' execution of this
Agreement, the Parties shall notify the Court of their agreement to stay the Lawsuit, and shall
submit a stipulated order staying the Lawsuit and reserving jurisdiction to enforce this
Agreement and any Final Award entered by the Arbitrator,
11. EntIre Arcement, This is the complete Agreement ottho Parties on the subject
of arbitration of Claims arising under or related to the PMI Subcontract, ARCO Subcontract, and

completion of the Project. This Agreement supersedes any prior or contemporaneous oral or
written agreement or understanding on the subject.
12.
Couutrparts Facsimlle/EinalJ TrausmIssou. This Agreement may be
executed in counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, This Agreement shall be binding upon the Parties
upon the facsimile transmission or email transmission of an executed copy thereof.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the
Effective Date first above written.

PREFERRED MATERIALS, INC. FIX/A OLDCASTLE SOUTHERN GROUP, INC.
1)/B/A APAC-SOUTHEAST, INC.
By:

ARCO, INC.

________ __________)

QI3S, INC.
By:

FEDERAL INSURANCE COMPANY
By:_

yA6I0preTerred mateih1s'arbItrs?on agrecmeni.doc[I 11241141

completion of the Project. This Agreement supersedes any prior or eontcmporoncous oral or
written agreement or understanding on the subject.
Counterparts Facslmlte/Eninit Transmission.. This Agreement may be
counterparts, each of which shall be deemed an original, but alt of which together
shall constitute one and the same instrument. This Agreement shall be binding upon the Parties
upon the facsimile transmission or email transmission of an executed Copy thereof.
12,

executed in

IN WITNESS WHEREOF, the Parties have executed this Agreement ctfcctivc as of the
Effective Date first above written.

PREFERRED MATERIALS, INC. 1'flQA OLDCASTLE SOUTHERN GROUP, INC.
1TWB/A APAC-SOUTHEAST, INC.

By:_________________________

-,
ARCO, INC.

By:
T%dt.t 4--.1

QBS, INC.

,

FEDERAL INSURANCE COMPANY

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completion of the Project,. This Agreement supersedes any prior or contemporaneous oral or
written agreement or understanding on the subject.
12.
connterparts FacskiileIEmai1 Transmlssioii, This Agreement may be
executed in counterparts each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement shall be binding upon the Parties
upon the (hosithik transmission or email transmission of an executed copy thereof.
IN WETNESS W1IER.BOF. the Parties have executed this Agreement ffctivo as of the
Bfthctive Date first above written.

PREFERRED MATERIALS, INC. F/K/A OLDCASTLE SOUTHERN GROUP, INC.
1)/fl/A APACSOIJTHEAST, INC.
By:

ARCO INC.
ByL__

QBS, INC.

Jim p r

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CE COMP.

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