D.R. Peck Excavating, Inc. v. International Fidelity Insurance Company

Filing 51

Magistrate Judge Donald L. Cabell: ORDER entered. MEMORANDUM AND ORDER denying 44 Motion to Dismiss. (Russo, Noreen)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
UNITED STATES OF AMERICA f/b/o D.R.
PECK EXCAVATING, INC.,
Plaintiff,
v.
INTERNATIONAL FIDELITY
INSURANCE COMPANY,

Civil Action No. 13-cv-13239-DLC

Defendant,
and

MEMORANDUM AND ORDER

WILLIAMS BUILDING CO., INC.,
Defendant and Plaintiff-in-Counterclaim,
v.
D.R. PECK EXCAVATING, INC. AND
UNITED CASUALTY SURETY AND
INSURANCE COMPANY,
Defendants-in-Counterclaim.

CABELL, Magistrate Judge:
This matter comes before the Court upon a motion to dismiss filed by plaintiff and counterdefendant, D.R. Peck Excavating, Inc. (“D.R. Peck”), seeking dismissal of its payment and
performance bond surety, United Casualty Surety and Insurance Company (“United Casualty”).
The Court has reviewed and considered the papers submitted by the parties, as well as the
arguments advanced at the hearing on July 2, 2015. For the reasons discussed below, the motion
to dismiss is DENIED.
I. DISCUSSION AND ANALYSIS
As mentioned above, the plaintiff D.R. Peck moves to dismiss the complaint as it relates to its
surety United Casualty. D.R. Peck contends that, because it prevailed at a binding arbitration

proceeding between itself and defendant/plaintiff-in-counterclaim Williams Building Company
(“Williams”), and because United Casualty would only be potentially liable in the event D.R. Peck
had lost, it follows that United Casualty is no longer potentially liable to Williams and,
accordingly, Williams’ counterclaims alleging otherwise should therefore be dismissed. Williams
argues in opposition that the motion to dismiss is premature because D.R. Peck and Williams
agreed in their contract to be governed by the Federal Arbitration Act (“FAA”), which in this case
provides that a party has three months from the date the final award is delivered to vacate, modify
or correct the award. See 9 U.S.C. § 12. According to Williams, that three month waiting period
runs from April 28, 2015, the date the arbitrator issued the final award, and thus does not expire
until July 28, 2015. Williams argues that, although it presently does not anticipate it will challenge
the award, it desires for a number of reasons to exercise its right to have the full waiting period run
before agreeing to cede any rights or claims it might have with respect to any party.
At the hearing on July 2, 2015, D.R. Peck argued that: (1) the arbitration was governed by state
rather than federal law; (2) that the waiting period under state law is 30 days rather than three
months; (3) that the waiting period began not on April 28, 2015 but rather on March 3, 2015, when
the arbitrator issued a partial final award; and that (4) the waiting period thus ended as early as
May 3, 2015 (if it was 30 days) and no later than June 3, 2015 (if it was three months). Absent an
explicit agreement by the parties to an arbitration, there is no hard and fast rule for determining
whether a waiting period should begin following the issuance of a first partial final award or the
true final award. See e.g., Hart Surgical, Inc., v. Ultracision, Inc., 244 F.3d 231 (1st Cir. 2001).
Against this backdrop, the Court finds it would unfairly and unnecessarily penalize Williams to
arbitrarily adopt the plaintiff’s position. In that regard, D.R. Peck did not cite to anything tending
to suggest that Williams’ allusion to specific language in the parties’ contract providing that the

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arbitration was to be governed by the FAA was mistaken or unjustified. And, while the Court is
mindful that D.R. Peck’s principal goal in moving to dismiss is to alleviate financial constraints
imposed by the loss of access to a substantial sum of its money, the passage of time, and
particularly the closeness in time to July 28th, has somewhat diluted the practical impact of that
argument. Finally, it would appear from the Court’s vantage point that D.R. Peck has at all times
since the arbitration decision been in a position to moot this issue and recover its tied-up capital
by simply dismissing the lawsuit against International Fidelity Insurance Company. The Court
presumes that D.R. Peck has had good reasons for not doing so, just as it presumes Williams has
for opposing any attempt to weaken its ability to meaningfully challenge the arbitration award
before the expiration of the waiting period.
II.

ORDER

Accordingly, for the reasons set forth above, it is hereby ORDERED that D.R. Peck’s motion
to dismiss [dkt #44] is DENIED.
SO ORDERED.
/s/ Donald L. Cabell
DONALD L. CABELL, U.S.M.J.
DATED: July 7, 2015

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