Neises Military Housing Inc v. Megen Construction Co Inc et al

Filing 28

MEMORANDUM ORDER granting 9 Motion to Stay; granting 9 Motion to Compel Arbitration. This action is hereby STAYED and the parties to the contract are to proceed with arbitration. Signed by Magistrate Judge Kathleen Kay on 6/22/2011. (crt,Dauterive, C)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAKE CHARLES DIVISION

NEISES MILITARY HOUSING, INC.

:

DOCKET NO. 2:11-CV-00556

VERSUS

:

JUDGE JAMES T. TRIMBLE

MEGEN CONSTRUCTION CO. INC.,

:

MAGISTRATE JUDGE KAY

MEMORANDUM ORDER

Before the court is the motion of plaintiff Neises Military Housing, Inc. (“Neises”), for an
order staying the above-entitled action and an order compelling arbitration. Doc. 9. After due
consideration, this court hereby GRANTS plaintiff’s motion to stay and refers the parties to
proceed with arbitration..
On April 8, 2011, plaintiff Neises Military Housing, Inc. filed suit in the United States
District Court Western District of Louisiana against Megen Construction Company, Inc., Ohio
Farmers Insurance Company (“OFIC”), Walton Construction Company, LLC (“Walton”), and
Traveler’s Casualty and Surety Co. (“Traveler’s) alleging breach of contract claims. Plaintiff
maintains that federal question jurisdiction exists pursuant to the Miller Act, 40 U.S.C. §§ 31313134. Doc. 1, p. 1-2.
Plaintiff allege in its complaint, that defendant Walton was a generally contractor who
entered into a construction contract with the United States through the U.S. Corp of Engineers,
for the construction of a housing barracks at Fort Polk. Doc. 1, p. 3. After, acquiring the
construction contract, defendant Walton allegedly entered into a subcontract agreement with
defendant Megan. Doc. 1, p. 3. Subsequently, on or around July 1, 2009, Megen entered into a

subcontract with plaintiff Neises. Doc. 1, pg. 3; see also Doc. 1, att. 2. The written agreement
entered into between defendant Megen and the plaintiff Neises contains a clause, “13.8”, entitled
“Binding Dispute Resolution.” See Doc. 1, att. 2, p. 7.
On April 21, 2011, plaintiff Neises, after filing their complaint in this court, filed a
motion to stay proceedings, and compel arbitration in accordance with clause 13.8 of the
agreement between themselves and defendant Megen. Doc. 9. On April 28, 2011, defendant
Megen filed a memorandum in support of plaintiff’s motion to stay and compel arbitration,
agreeing that the written contract giving rise to the dispute compels arbitration, and that
arbitration is in fact mandatory under the circumstances. Defendant Megan also requests that
this court stay proceedings and order arbitration. See Doc. 11, p. 1. None of the remaining
defendants has objected to this request.
DISCUSSION
Under the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 2,3,4 et seq., any party bound to
an arbitration agreement that falls within the scope of the FAA may bring a motion in federal
district court to compel arbitration and stay the proceeding pending resolution of the dispute.
The FAA eliminates district court discretion and requires the court to compel arbitration of issues
covered by the arbitration agreement. See Dean Witter v. Reynolds, Inc. v. Byrd., 470 U.S. 213,
218 (1985).
CONCLUSION
Because the parties’ written agreement stipulates that disputes arising out of or related
to their agreement shall be submitted to binding dispute resolution, because no party objects to a
stay in proceedings or arbitration, and considering the fact that both parties to the contract in
question requested that this court compel arbitration and stay proceedings,

IT IS ORDERED that Plaintiff’s motion to stay proceedings pending arbitration be and it
is hereby GRANTED. IT IS FURTHER ORDERED that this action is hereby STAYED and the
parties to the contract are to proceed with arbitration.
THUS DONE this 22nd day of June, 2011.