Power Generation Solutions Limited ("Branch") v. Black & Veatch Special Projects Corp.

Filing 36

MEMORANDUM AND ORDER granting 32 Defendant's Motion to Stay Litigation. All discovery and scheduling deadlines are stayed for 60 days. Defendant is directed to notify the court of a decision by USAID within 14 days of the decision. If no decision has been rendered by USAID by 4/7/2015, defendant shall submit a status report no later than 4/10/2015. See Memorandum and Order for further details. Signed by Magistrate Judge Karen M. Humphreys on 2/6/15. (sj)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

POWER GENERATION SOLUTIONS
LIMITED (“BRANCH”),
Plaintiff,
v.
BLACK & VEATCH SPECIAL
PROJECTS CORP.,
Defendant.

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Case No. 14-2056-CM

MEMORANDUM AND ORDER
This matter is before the court on defendant’s motion to stay litigation (Doc. 32).
For the reasons set forth below, the motion shall be GRANTED.
Background1
This dispute arose out of infrastructure developments in the country of
Afghanistan. Highly summarized, the defendant Black & Veatch Special Projects Corp.
entered into a contract with the United States Agency for International Development
(“USAID”) for specific development projects. As a result of that contract, defendant
awarded a subcontract to plaintiff Power Generation Solutions Limited in April 2011.
The subcontract included the installation and removal of generators and associated
equipment at two locations in Afghanistan. In August 2011 defendant and USAID
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The facts in this section are taken from the parties’ pleadings and briefs and should not be
construed as judicial findings or factual determinations.

suspended the work at Kandahar East and later placed the project on indefinite status.
After that project was suspended, defendant and USAID continued to make demands of
plaintiff in order to integrate the equipment originally intended for Kandahar East into
other locations. Plaintiff claims that it provided labor, equipment, materials and services
beyond what was required in its subcontract with defendant.
After completing its work under the subcontract, plaintiff submitted a Request for
Equitable Adjustment (REA) to defendant in March 2013 demanding the adjusted
compensation of $1.9 million above the fixed contract price for its additional services.
The parties agree that defendant forwarded the REA to USAID for consideration in
November 2014 after it conducted its own audit of plaintiff’s request, but they disagree
about whether the submission satisfies the contractual definition of a “claim.” In its
Complaint, plaintiff makes claims against defendant for breach of contract, breach of
implied warranty, and unjust enrichment in the revised amount of $1.8 million.

Defendant’s Motion to Stay Litigation (Doc. 32)
Defendant seeks a stay of this case to allow USAID to issue a decision on the
requested adjustments. Defendant argues that the language of the parties’ subcontract
requires a stay and, even if a stay is not contractually required, the court has the inherent
power to grant a stay. Plaintiff disputes defendant’s interpretation of the contract and
contends that because defendant did not formally certify its request the USAID cannot
make a decision on that demand. Plaintiff’s primary argument, unsupported by fact or

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law, is that it is highly unlikely that USAID will pay its full demand and therefore a stay
will only cause unnecessary delay.
Although defendant requests a stay under the terms of the subcontract, the court
does not agree that the subcontract specifically necessitates a stay under the
circumstances presented here. A stay of any dispute resolution under the subcontract is
required only upon the “initiation of claim and dispute resolution under the Prime
Agreement” between defendant and USAID.2 Without deciding whether this “claim”
satisfies the subcontract definition, defendant’s “pass-through” of plaintiff’s request does
not appear to be a dispute between the parties of the prime agreement which would
require a contractual stay.
The resolution of defendant’s motion need not be based on the contract language.
Regardless of how the claim was transmitted to USAID and whether or not it was
properly “certified,” it is undisputed that plaintiff’s full REA is now pending before
USAID—the agency ultimately responsible for payment.3

Although plaintiff is

pessimistic about its prospects for full reimbursement, allowing the REA process to
conclude would be beneficial to both parties. A decision from USAID may narrow the
issues and allow both parties to make better educated decisions about moving the case
forward. The parties have already agreed to seek additional time to complete discovery

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Doc. 33, Ex. 1, at 8, Sect. 00552.44.1.
Doc. 33, Ex. 1, at 7. Sect. 00552.28.1 specifies, “All claims for additional time or money are
contingent upon Purchaser [BVSPC] receiving from Owner [USAID] the same additional time
and money. If Owner [USAID] denies Purchaser [BVSPC]’s claim, Subcontractor [PGS] shall
not be entitled to its claim.”
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pending a ruling on the motion to stay. No prejudice would result by staying further
action pending the USAID decision.
Whether to stay litigation is an incident of the court’s inherent power to control its
docket and rests in its sound discretion.4 The court may exercise that power in the
interest of economy of time and effort for itself and for counsel and parties appearing
before it.5 Applying these standards, a stay of all proceedings in this matter is legally
appropriate, economical, and will not unduly prejudice either party. Accordingly, this
case is stayed for sixty (60) days following the entry of this order.

IT IS THEREFORE ORDERED that defendant’s motion to stay litigation (Doc.
32) is GRANTED. All discovery and scheduling deadlines are stayed for 60 days.
Defendant’s counsel is directed to assist the USAID in order to facilitate a timely
decision on the pending claim. Defendant is hereby directed to notify this court of a
decision by USAID within fourteen days of the decision. If no decision has been
rendered by USAID by April 7, 2015, defendant shall submit a status report no later than
April 10, 2015 to the undersigned U.S. Magistrate Judge by e-mail to
[e-mail], at which time the court may, on its own
motion, continue the stay accordingly.

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Universal Premium Acceptance Corp. v. Oxford Bank & Trust, No. 02–2448–KHV, 2002 WL
31898217, at *1 (D. Kan. Dec. 10, 2002) (citing Pet Milk Co. v. Ritter, 323 F.2d 586, 588 (10th
Cir.1963)).
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Id. (citing Landis v. N. Am. Co., 299 U.S. 248, 255 (1936)).
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IT IS SO ORDERED.
Dated at Wichita, Kansas this 6th day of February, 2015.

s/ Karen M. Humphreys
KAREN M. HUMPHREYS
United States Magistrate Judge

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