United States et al v. Travelers Casualty and Surety Company of America et al

Filing 31

ORDER dismissing without prejudice 3 Motion for TRO; dismissing without prejudice 3 Motion for Preliminary Injunction; dismissing without prejudice 5 Motion for Confirmation of Arbitration Award Signed by Honorable David C. Bramlette, III on 9/18/2012 (ECW)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
UNITED STATES FOR THE USE AND
BENEFIT OF MID STATE
CONSTRUCTION COMPANY, INC.
AND MID STATE CONSTRUCTION
COMPANY, INC.
VS.

PLAINTIFFS

CIVIL ACTION NO. 5:11-cv-169(DCB)(JMR)

TRAVELERS CASUALTY AND
SURETY COMPANY OF AMERICA; US
COATING SPECIALTIES & SUPPLIES,
LLC; AND EARL WASHINGTON

DEFENDANTS

ORDER
This cause is before the Court on the plaintiff Mid State
Construction Company, Inc. (“Mid State”)’s Motions for Confirmation
of Arbitration Award and for a Temporary Restraining Order and/or
Preliminary Injunction (docket entries 3 and 5).

Having carefully

considered the motions and the record in this case, and being fully
advised in the premises, the Court finds as follows:
The Complaint in this action was filed on November 30, 2011.
The plaintiff, Mid State Construction Company, Inc. (“Mid State”)
brings its claims under the Miller Act (40 U.S.C. § 3133 et seq.)
in the name of the United States for the use and benefit of Mid
State. See 40 U.S.C. § 3133(b)(3)(A). According to the Complaint,
US Coating Specialties & Supplies, LLC (“US Coating”) was awarded
a prime contract by the United States for the “ERDC Project” in
Vicksburg, Mississippi.

US Coating and Travelers Casualty and

Surety Company of America (“Travelers”) provided a Payment Bond for

the Project.

Subsequently, Mid State entered into a Subcontract

with US Coating, as well as several other contracts between Mid
State, US Coating and/or Earl Washington (“Washington”), including
an Original Credit Agreement, an Amended Credit Agreement, and an
Escrow Agreement.

The Complaint further alleges that US Coating

and Washington breached and defaulted as to their obligations owed
to Mid State.

The Complaint also alleges that the Subcontract,

Original Credit Agreement, Amended Credit Agreement, and Escrow
Agreement all provided for binding arbitration.

Complaint, ¶¶ 8-

20.
Mid

State

demanded

arbitration

against

US

Coating

and

Washington, and arbitration proceeded under the administration of
the American Arbitration Association.
proceedings,
enforcing

Mid

the

State

escrow

During the arbitration

sought

preliminary

agreements

between

injunctive
the

parties.

relief
The

Arbitrator entered two preliminary orders or awards addressing
preliminary

injunctive

relief

as

to

the

escrow

agreements.

Following a final hearing, the Arbitrator issued his Arbitration
Award on November 22, 2011, in favor of Mid State.

Complaint, ¶¶

23-37.
Mid State alleges that neither US Coating nor Washington has
complied with the Arbitration Award.

Complaint, ¶ 41.

Mid State

seeks orders and/or judgments enforcing the arbitration agreements
and awards, Complaint, ¶ 36; awarding judgment for the sums awarded

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Mid State in the Arbitration Award; and awarding the injunctive
relief provided for in the Arbitration Award.

Complaint, ¶¶ 36,

42-43, 55-67.
Mid State also alleges that it has submitted a claim to
Travelers for the value of its work, which Travelers has not paid.
Mid State asserts that it is entitled to judgment against Travelers
and US Coating, jointly and severally, on their Payment Bond,
pursuant to the Miller Act, for the monetary sums granted by the
Arbitrator to Mid State.
On

December

8,

Complaint, ¶¶ 44-54.

2011,

Mid

State

filed

its

Motion

for

Confirmation of Arbitration Award and for a Temporary Restraining
Order and/or Preliminary Injunction.

On December 20, 2011, US

Coating filed a voluntary petition for relief under Chapter 11 of
the United States Bankruptcy Code, in the Bankruptcy Court for the
Southern District of Mississippi.

The proceeding was subsequently

closed and a new Chapter 11 voluntary petition was filed on January
13, 2012.
Proceeding

On January 31, 2012, Mid State filed an Adversary
against

US

Coating

in

the

Bankruptcy

seeking the same relief it seeks in this Court.

proceedings,

An Answer to the

Adversary Complaint was filed by US Coating in the Bankruptcy
proceedings on February 8, 2012.
District courts have original jurisdiction over bankruptcy
cases and all civil proceedings “arising under title 11, or rising
in or related to cases under title 11.”

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28 U.S.C. § 1334.

However, district courts may refer actions within their bankruptcy
jurisdiction to the bankruptcy judges of their respective districts
pursuant

to

28

U.S.C.

§

157(a).

The

Southern

District

of

Mississippi has a standing order in place that provides for
automatic reference of such matters to the Bankruptcy Court.

See

Nunc Pro Tunc Referral of Bankruptcy Matters to Bankruptcy Judges,
July 23, 1984.

Thus, this matter has been referred to the

Bankruptcy Court for the Southern District of Mississippi.
The Court further finds it more appropriate for the Bankruptcy
Court to decide the motions for confirmation and injunctive relief
in the first instance, since the Bankruptcy Judge is familiar with
the issues which are already pending before him in the adversary
proceeding.

See

3326726,

*5

at

Doctors Associates, Inc. v. Desai, 2010 WL
(D.

N.J.

Aug.

23,

2010)(action

to

confirm

arbitration award was type of claim frequently identified as
resolvable in bankruptcy court).
On July 18, 2012, U.S. Bankruptcy Judge Edward Ellington
issued an Order Confirming Arbitration Award and Directing Entry of
Judgment, Enforcing Escrow Requirements as to Future Payments, and
Reserving Ruling on Other Issues, in Bankruptcy Petition # 1200121-EE. Thus, Judge Ellington has ruled on the motion to confirm
arbitration award, and has reserved ruling on certain aspects of
the motion for temporary restraining order and/or preliminary
injunction.

This Court therefore finds that the motions pending

4

before it should be dismissed without prejudice.
Accordingly,
IT IS HEREBY ORDERED that Mid State Construction’s Motion for
Confirmation of Arbitration Award (docket entry 5) and Motion for
Temporary Restraining Order and/or Preliminary Injunction (docket
entry 3) are DISMISSED WITHOUT PREJUDICE, inasmuch as said motions
have been referred to U.S. Bankruptcy Judge Edward Ellington.
SO ORDERED, this the 18th day of September, 2012.

/s/ David Bramlette
UNITED STATES DISTRICT JUDGE

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