Stone & Webster, Inc. v. Georgia Power Company
2013 U.S. Dist. LEXIS 140457
| D.D.C. | 2013Background
- This contract action concerns EPC Agreement governing design/construction of two nuclear units in Waynesboro, GA; Stone & Webster and Westinghouse are Plaintiffs, Georgia Power et al. are Defendants.
- Plaintiffs allege breach of contract and violation of Georgia Prompt Payment Act related to excavation/backfill work and soil conditions that differed from representations, with Defendants paying some costs but withholding about $58 million.
- Article 27 mandates dispute resolution: Section 27.3 requires written notice, 27.4 provides mediation with a 60-day backstop before proceeding to arbitration or litigation depending on the Claim Threshold.
- Section 34.3 designates the D.D.C. as a non-exclusive venue while preserving first-to-file venue challenges.
- Plaintiffs commenced mediation by May 25, 2012; in June 13, 2012 the parties agreed to a non-AAA mediator (Eric Green) and altered mediation procedures, yet left other terms intact.
- Plaintiffs filed suit July 25, 2012, and Defendants moved to dismiss arguing the mediation condition precedent was not satisfied before suit; the Court ultimately dismissed without prejudice for timeliness and policy reasons.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the suit was timely under Section 27.4 mediation timing | Plaintiffs say mediation commenced May 25, 2012 under AAA rules | Mediation commenced July 30, 2012 under new terms after June 13, 2012 | Untimely under either definition of commence due to June 13 modification |
| Appropriate remedy for failure to mediate | Courts stay to allow mediation; not dismissal | Dismissal without prejudice appropriate | Dismissal without prejudice appropriate to protect rights and efficiency |
| Effect of June 13, 2012 modification on commencement date | AAA rules remain applicable for commencement | Parties mutual modification removed AAA control; commenced later | Modification renders commencement date June 13, 2012; May 25 start not controlling |
Key Cases Cited
- Cunningham & Assocs., PLC v. ARAG, LLC, 842 F.Supp.2d 25 (D.D.C. 2012) (remedial stay rather than dismissal for failure to fulfill contract condition precedent)
- Feld Entertainment, Inc. v. ASPCA, 523 F.Supp.2d 1 (D.D.C. 2007) (court's inherent power to control docket; stay or dismissal balancing factors)
- Advanced Body Care Solutions, LLC v. Thione Int'l, Inc., 524 F.3d 1235 (11th Cir. 2008) (courts have authority to stay to permit mediation; stays often appropriate)
- Perry v. Beggs, 581 F.Supp. 815 (D.D.C. 1983) (premature suit cured by later events not controlling where prejudice exists)