PECK ORMSBY CONSTRUCTION COMPANY v. City of Rigby et al

Filing 170

MEMORANDUM AND ORDER RE: STAY PENDING ARBITRATION. Signed by Judge William B. Shubb. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (krb)

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UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF IDAHO

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----oo0oo----

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PECK ORMSBY CONSTRUCTION
COMPANY,

CIV. NO. 1:10-00545 WBS

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Plaintiff,

MEMORANDUM AND ORDER RE: STAY
PENDING ARBITRATION

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v.
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CITY OF RIGBY, PARKSON
CORPORATION, and WESTERN
SURETY COMPANY,

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Defendants.
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Plaintiff Peck Ormsby Construction Company (“Peck

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Ormsby”) brought this action against defendants City of Rigby

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(“Rigby”), Parkson Corporation (“Parkson”), and Western Surety

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Company arising from a wastewater facility construction project

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for which Peck Ormsby was the contractor and Parkson the

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subcontractor.

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Travelers Casualty and Surety Company, who had delivered a

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performance bond to Rigby guaranteeing Peck Ormsby’s performance.

Rigby filed a third-party complaint against

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(Docket No. 151.)

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In addition to the performance bond involving Rigby,

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Travelers, and Peck Ormsby, Parkson was required to deliver a

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Performance Guarantee to Rigby.

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an arbitration clause in the Performance Guarantee was not

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enforceable.

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Ninth Circuit, (Docket No. 158), the court ordered that Parkson

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and Rigby arbitrate the claims between them, (Docket No. 163).

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The court also ordered that the remaining parties brief the issue

(Docket No. 84.)

The court originally held that

After reversal and remand by the

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of whether the remaining claims should be stayed pending

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arbitration.

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I.

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(Id.)

The Court Will Not Stay the Non-Arbitable Claims
The court is in receipt of the remaining parties’

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briefs on the subject.

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conferences on August 28th, 2013 and September 16, 2013 in which

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all parties participated.

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(Docket Nos. 165 & 166.)

The court held

Where an arbitration agreement is enforced as to some

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parties in the litigation but claims between parties not subject

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to the agreement remain, “it may be advisable to stay litigation

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among the non-arbitrating parties pending the outcome of the

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arbitration.”

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Corp., 460 U.S. 1, 20 n.23 (1983); see also United States v.

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Neumann Caribbean Int’l, 750 F.2d 1422, 1427 (9th Cir. 1985)

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(staying all proceedings in case, including non-arbitrable third-

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party complaint, pending arbitration due to considerations of

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“economy and efficiency”).

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non-arbitrable claims, the court “considers economy and

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efficiency, the similarity of the law and fact to those that will

Moses H. Cone Mem’l Hosp. v. Mercury Constr.

When deciding whether to stay the

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be considered during arbitration, and the potential for

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inconsistent findings absent a stay.”

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2:09-CV-03086-GEB-EFB, 2010 WL 3341823, at *8 (E.D. Cal. Aug. 24,

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2010).

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Wolf v. Langemeier, No.

While the law and facts at issue in the federal court

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proceedings are similar to those at issue in the arbitration, the

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court declines to stay the claims between the remaining parties

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during the course of the arbitration.

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findings by the arbitrator would not be binding against Peck

Any potential inconsistent

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Ormsby, who will not have an opportunity to participate in the

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arbitration.

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Fredericksburg, 713 F.2d 382, 387 (8th Cir. 1983) (noting that

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“the arbitrator’s findings will not be binding as to those not

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parties to the arbitration”).

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discovery, filed dispositive motions, and are currently preparing

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for a trial on January 14, 2014.

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Cf. Contracting N.W., Inc. v. City of

The parties have completed all

As the parties noted at the September 16, 2013 hearing,

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Rigby has not yet even initiated arbitration proceedings.

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the arbitrable claims proceed to arbitration, the parties

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estimate that it would take up to five months to select

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arbitrators and proceed through preparations similar to trial.

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Any economy and efficiency to be gained through prompt

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arbitration has already been lost.

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does not have the power to order a stay of the arbitration, the

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arbitrator would not be precluded from holding the arbitration

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proceedings in abeyance while the federal proceedings advance.

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Thus economy and efficiency do not favor staying the non-

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arbitrable claims pending arbitration.
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Should

Furthermore, while the court

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The court accordingly declines to stay the action

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between Rigby, Peck Ormsby, and Travelers.

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II.

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The Court Would Not, Over Parkson’s Objection, Dismiss
Rigby’s Claim Against Parkson Without Prejudice

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At the September 16, 2013 hearing, it was suggested

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that Rigby might seek to dismiss its remaining claim against

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Parkson without prejudice.

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Parkson’s consent, the court would have discretion to deny any

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request by Rigby to dismiss its claim against Parkson without

As the parties seem to agree, without

See Hamilton v. Firestone Tire & Rubber Co., Inc.,

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prejudice.

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679 F.2d 143, 145 (9th Cir. 1982) (“The Ninth Circuit has long

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held that the decision to grant a voluntary dismissal under Rule

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41(a)(2) is addressed to the sound discretion of the District

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Court, and its order will not be reversed unless the District

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Court has abused its discretion.”); see also Searcy v. Thomas,

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1:10-CV-00294-EJL, 2013 WL 837936, at 2 (D. Idaho Mar. 6, 2013).

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Under the circumstances of this case, the court would

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not exercise its discretion to dismiss Rigby’s claim against

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Parkson without prejudice.

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significant amounts of time, as well as court and financial

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resources, litigating the arbitration issue.

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benfit to a dismissal without prejudice.

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dismiss without prejudice and Rigby to later bring the same claim

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against Parkson again, there would be only the drawbacks of

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further delay and the duplication of costs and efforts already

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expended.

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The parties have already spent

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The court sees no

Were the court to

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IT IS SO ORDERED.
DATED:

September 17, 2013

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