American Home Assur. Co. v. Vecco Concrete Const. Co., Inc. of Virginia
| Decision Date | 04 September 1980 |
| Docket Number | No. 80-1161,80-1161 |
| Citation | 629 F.2d 961 |
| Parties | AMERICAN HOME ASSURANCE CO., Appellee, v. VECCO CONCRETE CONSTRUCTION CO., INC. OF VIRGINIA, Vecco Construction Industries, Inc., Vecco Concrete Construction Co., Inc. of the District of Columbia, Vecco Concrete Construction Co., Inc. of Maryland, Curry Concrete Construction, Inc., Springfield Erectors, Inc., Raymond A. Curry, Jr., Madelyn Curry, Richard A. Sevila, Sharon Sevila, John Campbell, III, Regina Campbell, Appellees, v. MERCURY CONSTRUCTION CORPORATION, Appellant, and Baldwin and Gregg-William C. Overman Associates, Prince William Board of County Supervisors, Occoquan-Woodbridge/Dumfries-Triangle Sanitary District, Stuart R. Baldwin, P. Porcher Cragg, George E. Langley, Thomas J. McDonald, William C. Overman, Baldwin and Gregg-Langley, McDonald & Overman, William C. Overman Associates, Occoquan-Woodbridge Sanitary District, Third-Party Defendants. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Joseph B. Mays, Jr., Birmingham, Ala. (A. H. Gaede, Jr., Bradley, Arant, Rose and White, Birmingham, Ala., Michael McGettigan, Murphy, McGettigan, McNally & West, Alexandria, Va., on brief), for appellant.
John J. Sabourin, Jr., Alexandria, Va. (Richard W. Hausler, Falls Church, Va., Hazel, Beckhorn & Hanes, Fairfax, Va., on brief), for appellee Vecco Concrete Const. Co., Inc. of Virginia.
Edward Gallagher, Washington, D. C. (Edward Graham Gallagher, Washington, D. C., on brief), for appellee American Home Assur. Co.
Before BUTZNER and RUSSELL, Circuit Judges, and KIDD *, District Judge.
This is an appeal from the district court's denial of appellant and third-party defendant, Mercury Construction Corporation's motion to dismiss proceedings against it or, alternatively, to stay all proceedings in the present action pending arbitration. For reasons set forth below, we reverse the decision of the district court and remand for further proceedings.
Mercury Construction Corporation ("Mercury") entered into a contract with the Board of Supervisors of Prince William County, Virginia, agreeing to act as general contractor for the construction of a wastewater treatment plant. Subsequently Mercury subcontracted the structural concrete work to Vecco Concrete Construction Company, Inc. of Virginia ("Vecco"). American Home Assurance Company ("American Home"), acting as surety for Vecco, executed performance and payment bonds covering Vecco's subcontract. A number of guarantors, including Vecco and affiliated corporations, and six individuals who had financial interests in Vecco, executed a general agreement of indemnity guaranteeing Vecco's performance to American Home.
On March 22, 1979, Mercury declared Vecco in default and demanded that American Home meet its obligations as surety for Vecco under its performance and payment bonds. Subsequently American Home paid Mercury the difference between the cost to complete Vecco's subcontract work and the balance left to be paid under the subcontract. American Home also made payments under its payment bond to suppliers of Vecco whom Vecco had failed to pay.
American Home filed the present action in October of 1979 against Vecco and the other guarantors, seeking indemnification for sums paid under the performance and payment bonds and to obtain a declaratory judgment as to future losses. Vecco then filed a third-party complaint against Mercury, Baldwin and Gregg-William C. Overman Associates ("Consulting Engineers") and the Sanitary District, seeking indemnification for any sums which might be awarded American Home as well as damages for various alleged breaches of duty by the third-party defendants.
The Consulting Engineers filed a cross-claim against Mercury for indemnification and contribution. Mercury then filed a counterclaim against Vecco alleging breach of contract. To complete the picture, American Home filed claims against Mercury, the Sanitary District and the Consulting Engineers for any sum due Vecco on its third-party complaint against them.
Mercury then moved to dismiss the third-party complaint and crossclaim or, alternatively, to stay all proceedings against it pending arbitration. The district court denied the motion holding, inter alia, that Mercury had waived its right to arbitrate and was in default due to delay with proceeding with arbitration. Mercury noted its appeal from the denial of its motion and, after proper application, we stayed all proceedings in the court below pending this expedited appeal.
Mercury's subcontract with Vecco provides in pertinent part:
"If any question of fact shall arise under this contract . . . then either party hereto may demand an arbitration by reference to a Board of Arbitration . . ."
Mercury argues that the above contractual language and the applicability of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., compel the granting of its motion to stay. Vecco argues that its contract with Mercury is not subject to the Act since the contract is not one "evidencing a transaction involving commerce." 1
Before the Federal Arbitration Act becomes applicable to the instant case, two findings must be made: (1) there was an agreement in writing providing for...
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