U.S. for the use of Precision Walls, Inc. v. Caddell Construction Co., Inc.

In U.S. for the use of Precision Walls, Inc. v. Caddell Construction Co., Inc., 2008 WL 2900938 (W.D.Ky. July 23, 2008) a subcontractor on a Miller Act project in Kentucky sued the prime contractor and its surety alleging delay and acceleration claims.  The subcontract included an arbitration clause, a pass through clause binding the subcontractor to the administrative dispute resolution procedures in the prime contract, and a forum selection clause for arbitration in Alabama.  The prime contractor sought preliminary relief based on each of these clauses.  The prime contractor asked the court to stay the action and any arbitration pending resolution of its claims against the Government pending before the Armed Services Board of Contract Appeals alleging that the subcontractor’s claims were included in the ASBCA proceeding.  The subcontractor disputed that all of its claims could be attributed to acts of the Government.  The prime contractor also sought a stay of the Miller Act suit pending arbitration between it and the subcontractor.  Finally, the prime contractor sought to transfer the case to the U.S. District Court in Alabama.

The court granted a stay of the Miller Act suit pending the arbitration between the prime and the subcontractor but left it to the arbitrator to determine whether the arbitration should be stayed pending the outcome of the ASBCA proceeding.  The court denied the motion to transfer because venue was proper in Kentucky and the forum selection clause applied only to the arbitration not to litigation.