Money Point Diamond Corp. v. Bomar Resources, Inc., Civ. A. No. 86-937-N.

• Decision Date: 27 February 1987
• Docket Number: Civ. A. No. 86-937-N.
• Citation: 654 F. Supp. 634
• Court: U.S. District Court — Eastern District of Virginia
• Parties: MONEY POINT DIAMOND CORP. t/a Jacobson Metal Company, Plaintiff, v. BOMAR RESOURCES, INC., Defendant.

654 F. Supp. 634

MONEY POINT DIAMOND CORP. t/a Jacobson Metal Company, Plaintiff, v. BOMAR RESOURCES, INC., Defendant.

Civ. A. No. 86-937-N.

United States District Court, E.D. Virginia, Norfolk Division.

February 27, 1987.

Mark T. Coberly, Vandeventer, Black, Meredith & Martin, Norfolk, Va., for plaintiff.

Thomas B. Kelly, Seawell, Dalton, Hughes & Timms, Norfolk, Va., for defendant.

ORDER

CLARKE, District Judge.

This matter comes before the Court on a Motion to Compel Arbitration filed by the defendant Bomar Resources, Inc. (Bomar). Bomar entered into a contract with the plaintiff Jacobson Metal Company (Jacobson) for the purchase of approximately 10,000 long tons of steel scrap.

The plaintiff alleges in Count I of its Complaint that Bomar breached the contract with the plaintiff by failing to load on board the M/V KONSTANDINOS V, a vessel under charter by Bomar, the amount of steel scrap that was required under the contract. Plaintiff alleges that Bomar had already partially loaded the M/V KONSTANDINOS V and that the ship did not have enough remaining cargo capacity to take the full 10,000 long tons of steel from the plaintiff.

In Count II, Jacobson alleges that Bomar has breached its contract by failing to pay the balance due on the contract. Jacobson alleges that there is an outstanding balance due of $46,000.

In Count III of the Complaint, Jacobson alleges that it is the third-party beneficiary of a contract entered into between the defendant Bomar and Taiwan Trading Ltd. (Taiwan). The plaintiff alleges that Taiwan entered into a contract with Bomar for space aboard the M/V KONSTANDINOS V for carriage of goods that Taiwan had purchased from plaintiff. Jacobson alleges that Bomar also breached its contract with Taiwan by not having enough remaining cargo capacity aboard the M/V KONSTANDINOS V. The plaintiff alleges that such breach caused direct harm to the plaintiff because Taiwan could not accept delivery of the goods, and the goods could not be resold because of their unique character.

The defendant has filed a Motion to Stay Proceedings and Compel Arbitration. The contract entered into between Jacobson and Bomar contains the following arbitration clause:

Any controversy or claim arising out of or relating to this agreement or any alleged breach there of shall be determined by arbitration in New York City in accordance with the rules then obtaining of the American Arbitration Association. The decision of the arbitrators shall be final and binding upon the parties and may be entered as a judgement sic in any court having competent jurisdiction and made a rule of court.

The Court finds that Jacobson's contract claims against Bomar in Counts I and II of the Complaint clearly fall within the ambit of the arbitration clause of their agreement and are thus arbitrable. It has been held by this Court that "the district courts must grant a motion to stay proceedings and compel arbitration when the issue at trial is one which is referable to arbitration and the agreement providing for arbitration is in writing." In re Jubilant Voyager Corp., 1983 A.M.C. 426 (E.D.Va.1983).

As to Count III, the Court finds that although there may be some overlap in the factual determinations with Counts I and II, the claim in Count III does not fall within the ambit of the arbitration clause found in the parties' agreement. Arbitration arises out of a...