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PARSONS ENERGY & CHEMICALS GROUP v. WILLIAMS UNION BOILER

January 28, 2004.

PARSONS ENERGY & CHEMICALS GROUP Plaintiff,
v.
WILLIAMS UNION BOILER, Defendant



The opinion of the court was delivered by: CLIFFORD GREEN, Senior District Judge

MEMORANDUM

Presently before the Court are Defendant Williams Union Boiler's ("Williams") Motion to Dismiss Plaintiffs Amended Complaint to Vacate Arbitration Award Docket (#14) and Plaintiffs Reply thereto.*fn1 Defendant Williams moves to dismiss the Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(1), 12(b)(2), 12(b)(3), 12(b)(6), and 15(a). For the following reasons, Defendant's motion will be denied.

I. Factual and Procedural Background

  On April 30, 1998, Plaintiff Parsons Energy and Chemicals, Inc. ("Parsons") entered into a subcontract with Williams, in the amount of $44,724,195 for performance of certain services involved in the construction of a gasification power system in Delaware City, Delaware for Motiva Enterprises, LLC ("Motiva"). Amended Complaint, ¶ 34, 37. Due to delays in construction, Williams completed the project on April 21, 2000, after the pre-determined Milestone Date of January 17, 2000. Amended Complaint, ¶ 62. Parsons alleges that Williams failure to complete the project by the target date resulted in the assessment and payment of $4.5 Page 2 million in liquidated damages to Motiva. Amended Complaint, ¶ 101-02. Pursuant to the prime contract with Motiva, Parsons was required to make a liquidated damages payment of up to $4.5 million, based upon the number of days elapsed between the milestone date and the completion of the project. Amended Complaint, ¶ 65-66.

  Williams submitted an invoice for full payment of the Schedule Incentive Fee included in the subcontract between Parsons and Williams. Amended Complaint, ¶ 63. The subcontract provided that Williams was eligible for a maximum $2.5 million Schedule Incentive Fee upon completion of the project. Subcontract. Section IV. The subcontract also contained a provision apportioning payment of any liquidated damages owed by Parsons, requiring that Williams' share of liquidated damages be funded through forfeiture of the Schedule Incentive Fee. Subcontract. Section IV. As a result of tardy completion of the project, and later discovery of overbilling, Parsons refused to oblige Williams' request for payment of a Schedule Incentive Fee and other invoices. Amended Complaint, ¶ 64, 72-74.

  The subcontract between Parsons and Williams contained a relevant provision intended to resolve disputes between the parties. Section 25 of the converted subcontract, in pertinent part, reads:
All disputes between Contractor and Subcontractor arising under the Subcontract which cannot be resolved amicably by the Parties shall be referred to the upper management of Subcontractor and Contractor for resolution. If resolution cannot be reached by upper management, then the parties agree to mediation. If resolution is not achieved through mediation, the parties agree to submit the dispute to final and binding arbitration in accordance with the rules of the American Arbitration Association with proceedings conducted in the State of Delaware, USA or as otherwise agreed to by the Parties.
Subcontract. Section 25.

  In December of 2000, Williams filed a Demand for Arbitration seeking payment of Page 3 invoices totaling $5,749,530. Amended Complaint, ¶ 11. A panel of three arbitrators was convened by the American Arbitration Association. Amended Complaint, ¶ 14. As agreed upon by both Parsons and Williams, the Arbitration Panel conducted twenty-five hearing days, and two days for closing arguments, in Philadelphia, Pennsylvania during 2002. Amended Complaint, ¶ 16, 19.

  On February 20, 2003, the Arbitration Panel issued Williams an award of $2,859,066 for unpaid invoices, $1,500,000 for the Schedule Incentive Fee, $522,074 in accrued interest, and attorneys' fees, expert fees and expenses to be determined in a supplemental award. Arbitration Award, at 1. Additionally, the Arbitration Panel awarded Parsons a counterclaim award of $1,607,848 for various overbilling. Arbitration Award, at 1. The net sum of $3,273,292 was awarded to Williams. Arbitration Award, at 2. On August 1, 2003, the Arbitration Panel issued a supplemental award to Williams of $598,407 for attorneys' fees, and $271,783 for expert witness fees and expenses. Supplemental Award, at 1.

  On May 19, 2003, Parsons filed a Complaint to Vacate the Arbitration Award. On June 10, 2003, Defendant Williams filed a Motion to Dismiss Parsons' Complaint to Vacate Arbitration Award. Shortly after the Arbitration Panel submitted its supplemental award for attorneys' fees and expert witness fees and expenses on August 1, 2003, Parsons filed an Amended Complaint to Vacate Arbitration Award and Supplemental Award. Pursuant to this filing, Williams filed an amended Motion to Dismiss Parsons' Amended Complaint to Vacate Arbitration Award and Supplemental Award on September 3, 2003.

  Presently before this court is Defendant Williams' Motion to Dismiss Parsons' Amended Complaint to Vacate Arbitration Award and Supplemental Award. Williams asks this Court to dismiss Parsons' Amended Complaint for: (1) failure to obtain leave of court to submit an Page 4 amended pleading pursuant to Fed.R.Civ.P. 15(a); (2) failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ. P. 12(b)(6); (3) lack of subject matter jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(1); (4) improper venue, pursuant to Fed.R.Civ.P. 12(b)(3); and (5) lack of personal jurisdiction, pursuant to Fed.R.Civ. P. 12(b)(2). Motion to Dismiss, at 1.

 II. Standard of Review

  In order for this Court to grant a defendant's motion to dismiss, it must first take all of the allegations of the complaint as true, viewing the allegations liberally and giving the Plaintiff the benefit of all inferences which fairly may be drawn from it. Wisniewski v. Johns-Manville Corp., 759 F.2d 271, 273 (3rd Cir. 1985) (citing Bogosian v. Gulf Oil Corp., 561 F.2d 434, 444 (3rd Cir. 1977), cert. denied, 434 U.S. 1086 (1978)); Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3rd 1990). As a result, dismissal of a claim is proper only where "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hison v. King and Spalding, 467 U.S. 69, 73 (1984); Wisniewski, 759 F.2d at 273.

 III. Discussion

  A. Failure to Obtain Leave of Court to Submit ...


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