Chempower, Inc. v. Robert McAlpine, Ltd.
Decision Date | 26 April 1994 |
Docket Number | Civ. A. No. 2:94-0149. |
Citation | 849 F. Supp. 459 |
Court | U.S. District Court — Southern District of West Virginia |
Parties | CHEMPOWER, INC., Petitioner, v. ROBERT McALPINE, LTD., et al., Respondents. |
John M. Slack, III and Anthony J. Majestro, Jackson & Kelly, Charleston, WV, for petitioner.
George G. Guthrie, King, Allen & Arnold, Charleston, WV, Joel Lewin, Hinckley, Allen & Snyder, Boston, MA, for respondents.
Pending is the Respondents' motion to modify this Court's Order entered March 18, 1994.1 That Order stayed all related proceedings in the Massachusetts state court in favor of arbitration of the dispute between the parties.
Apparently, the litigation in Massachusetts state court not only involves claims by the Respondents against the Petitioner, but claims by the Respondents against two other parties as well. Those other parties are a part of the arbitration proceedings before this Court. Although it is undisputed that the direct proceedings between the Petitioner and the Respondent are stayed by the March 18, 1994 Order, the question now presented is whether the March 18, 1994 Order also binds parties to the Massachusetts action who were not involved in the arbitration proceedings.
In their motion to modify, the Respondents ask the Court to stay only that portion of the Massachusetts action involving the Respondent and the Petitioner. Petitioner, however, notes the Massachusetts state court action includes claims against the Petitioner's surety and the Massachusetts Highway Department (MHD). Petitioner asserts the outcome sought by Respondents against either the surety or MHD is necessarily predicated on the outcome of the arbitration proceedings. Thus, Petitioner argues, the entire Massachusetts action should be stayed pending the outcome of the arbitration proceedings.
Our Court of Appeals has held, "where questions of fact common to all actions pending ... are likely to be settled during the ... arbitration, ... all litigation should be stayed pending the outcome of the arbitration proceedings." American Home Assurance Co. v. Vecco Concrete Construction Co., Inc., 629 F.2d 961, 964 (4th Cir. 1980). This was so because, "although it is true that the arbitrator's findings will not be binding as to those not parties to the arbitration, considerations of judicial economy and avoidance of confusion and possible inconsistent results nonetheless militate in favor of staying the entire action." 629 F.2d at 964. Moreover, even where a non-arbitrable count in a complaint is joined with arbitrable claims, the non-arbitrable claims may be stayed pending the outcome of the arbitration. Money Point Diamond Corp. v. Bomar Resources, Inc., 654 F.Supp. 634, 636-37 (E.D.Va.1987). See also Institute of Mission Helpers of Baltimore City v. Reliance Insurance Co., 812 F.Supp. 72, 76 (D.Md.1992) ) ; Hikers Industries, Inc. v. William Stuart Industries (Far East) Ltd., 640 F.Supp. 175, 178 (S.D.N.Y.1986) .
Respondents assert the foregoing cases are distinguishable from the instant case because the parties not subject to arbitration there were nevertheless party to the proceedings before the district court. Here the parties not subject to arbitration are involved only in the Massachusetts state court action, and were not before this Court.
Respondents attempt to distinguish the foregoing cases is misplaced. The principal reason for staying such proceedings remains the same whether the parties not subject to arbitration are in either federal or state court. Where common questions of fact relating to all actions pending may be decided in arbitration including only some of the parties, "considerations of judicial economy and avoidance of confusion and possible inconsistent results nonetheless militate in favor of staying the entire action." American Home Assurance Co., supra, 629 F.2d at 964. This fact remains even where the action to be stayed is not pending in the district court, but in state court.
Based upon the foregoing, this Court concludes the Massachusetts state court action should be stayed in its entirety pending the outcome of the arbitration proceedings between the Petitioner and the Respondents. Respondents' motion to modify is DENIED. Petitioner's motion to clarify is GRANTED.
Also pending is the Respondents' motion for stay of the March 18, 1994 Order pending appeal. An Order compelling arbitration is appealable if it is "a final decision with respect to an arbitration." Title 9 U.S.C. § 16(a)(3). As stated by the Court of Appeals in Humphrey v. Prudential Securities Inc., 4 F.3d 313, 317 (4th Cir.1993):
Because the sole issue before this Court was the arbitrability of the dispute between the parties, the issuance of the Order compelling arbitration is now final and appealable. Humphrey, supra. The Court now addresses whether to stay the Order compelling arbitration while the appeal is pending.
Petitioner contends a stay should not be granted because Respondent has not made an adequate showing in support of its request. Issuance of a stay pending appeal of an Order compelling arbitration is a matter to be considered within its sound discretion. Fed.R.Civ.P. 62(c).2 The exercise of...
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American Nat. Property and Cas. Co. v. Weese
...L.Ed.2d 483 (1976); Richmond, Fredericksburg & Potomac R. Co. v. Forst, 4 F.3d 244 (4th Cir.1993); Chempower, Inc. v. Robert McAlpine, Ltd., 849 F.Supp. 459 (S.D.W.Va.1994) (Haden, C.J.); Tweel v. Frankel, 444 F.Supp. 1071 (S.D.W.Va.1978) (Haden, 4 Plaintiff asserts in its complaint it is e......