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United States v. Hartford Accident and Indemnity Co.

United States District Court, M.D. Pennsylvania

December 1, 2017

UNITED STATES OF AMERICA f/u/b/o AMERICAN COMBUSTION INDUSTRIES, INC., Plaintiff,
v.
HARTFORD ACCIDENT AND INDEMNITY CO., Defendant.

          MEMORANDUM

          A. Richard Caputo United States District Judge

         Presently before me is a Motion to Stay (Doc. 39) filed by Defendant Hartford Accident and Indemnity Company (“Hartford”). For the reasons that follow, Hartford's request for a stay will be denied.

         I. Background

         Plaintiff American Combustion Industries, Inc. (“ACI”) commenced this action against Hartford on April 8, 2013 for payment on a subcontract pursuant to the Miller Act, see 40 U.S.C. § 3131 et seq., or, in the alternative, for quantum meruit. (See Doc. 1, generally). Specifically, in 2008, the United States Army Corps of Engineers (the “Corps”) awarded John C. Grimberg Co., Inc. (“Grimberg”) a contract for work related to the construction of a new central heating plant in Susquehanna, Pennsylvania. (See id. at ¶¶ 7-8). As the prime contractor on the project, Grimberg applied for and obtained a Payment Bond from Hartford in the sum of $19, 959, 706.00. (See id. at ¶¶ 9-10).

         Grimberg ultimately solicited and selected a bid from ACI to subcontract work relating to the installation of new boilers and related equipment. (See id. at ¶ 11). Grimberg and ACI entered into a subcontract for that work in the amount of $5, 600, 000.00 in April 2009. (See id. at ¶ 12).[1] During the course of ACI's work on the project, it alleges that a number of change orders were authorized, increasing the total price of the subcontract to $7, 539, 468.00. (See id. at ¶¶ 18-20).

         ACI avers that, despite demand, payments totaling $261, 775.50 remain due and owing from Grimberg regarding certain change orders on the project. (See id. at ¶¶ 26-29). These change orders included $156, 738.23 for worked related to the Steam Bypass and $105, 017.50 in other proposed change orders. (See Doc. 40, 10-11; Doc. 44, 9). As a result of Grimberg's nonpayment for this work, ACI commenced this action against Hartford pursuant to the obligations and responsibilities created by the Payment Bond. (See Doc. 1, ¶¶ 36-38).

         On May 30, 2013, Hartford filed its Answer and Affirmative Defenses to ACI's Complaint. (See Doc. 8, generally). Thereafter, ACI and Hartford jointly requested and obtained a stay of the matter for a 120 day period. (See Doc. 23, generally). In requesting the stay, the parties indicated that Grimberg and ACI were “work[ing] together to pursue recovery from the Corps on the ACI [proposed change orders] that are pending with the Corps.” (See Doc. 22, ¶ 5). At the joint request of the parties, the stay was extended multiple times. (See Docs. 25, 27, 29, 31, generally). Most recently, a 180 day stay was granted on August 23, 2016. (See Doc. 31, generally).

         In a joint status report filed by the parties on March 30, 2017, the parties indicated that the claim submitted relating to a number of change orders completed by ACI had been denied by the Corps. (See Doc. 33, ¶ 6). The parties also stated that Grimberg filed a notice of appeal to the Armed Services Board of Contract Appeals (“ABSCA”) on January 31, 2017. (See id. at ¶ 7). In view of that appeal, Hartford believes that the stay should be continued, but ACI takes the position that the action sub judice can proceed without a final resolution of the ASBCA matter. (See id. at ¶¶ 8-9).

         As such, Hartford filed the instant motion to stay the action. (See Doc. 39, generally). Hartford contends that a continuation of the stay in this case is necessary to allow for completion of the disputes process. (See Doc. 40, 13-17). As set forth by Hartford, the only claim submitted in the disputes process to the Corps relates to the Steam Bypass change orders. (See id. at 10-11). Thus, the remaining $105, 755.70 in change orders claimed by ACI were not presented to the Corps. (See id. at 11, 23). According to Hartford, the disputes process for the Steam Bypass change orders is mandatory under the subcontract, and because this process has not yet been completed, proceeding with this action is premature. (See id. at 15). As a result, Hartford argues that all relevant factors weigh in favor of staying ACI's Miller Act claim while ACI exhausts this disputes process. (See id. at 17-24).

         ACI opposes any further stay of the instant litigation. (See Doc. 44, generally). ACI first claims that Hartford is unable to satisfy its burden justifying the grant of a stay. (See id. at 9-10). Second, ACI disputes that the subcontract includes the terms and conditions relating to the disputes process. (See id. at 11). Additionally, ACI argues that even if the subcontract includes the disputes process provisions cited by Hartford, a stay should still be denied. (See id. at 12-15).

         Hartford in reply asserts that the disputes procedure is part of ACI's subcontract with Grimbell. (See Doc. 45, 2-6). Hartford further responds that the Steam Bypass claim is governed by the disputes process. (See id. at 7-9). Finally, Hartford maintains that ACI delayed the disputes process and a stay is therefore appropriate under the circumstances. (See id. at 11-14). Hartford's motion for a stay is fully briefed and ripe for disposition.

         II. Discussion

         “The District Court has broad discretion to stay proceedings as an incident to its power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 706 (1997); see United States v. Breyer, 41 F.3d 884, 893 (3d Cir. 1994). In exercising that discretion, a district court is instructed to “weigh competing interests and maintain an even balance.” Landis v. North American Co., 299 U.S. 248, 254 (1936). To that end, when determining whether to grant a stay, a district court should consider “(1) the length of the requested stay; (2) the hardship or inequity that the movant would face in going forward with the litigation; (3) the injury that a stay would inflict upon the non-movant; and (4) whether a stay would simplify issues and promote judicial economy.” Rajput v. Synchrony, 221 F.Supp.3d 607, 609-10 (M.D. Pa. 2016) (citing Barnard v. Lackawanna Cnty., No. 15-2220, 2016 WL 362424, at *2 (M.D. Pa. Jan. 29, 2016)); see also Structural Grp., Inc. v. Liberty Mut. Ins. Co., No. 07-1793, 2008 WL 6416843, at *5 (M.D. Pa. Oct. 16, 2008) (citing Landis, 299 U.S. at 256). The party requesting the stay “‘bears the burden of showing that the circumstances justify an exercise of that discretion.'” Supinski v. United Parcel Serv., Inc., No. 06-793, 2012 WL 1622385, at *1 (M.D. Pa. May 9, 2012) (quoting Nken v. Holder, 556 U.S. 418, 433-34, 129 S.Ct. 1749, 173 L.Ed.2d 550 (2009)).

         The request for a stay will be denied. For one, the stay sought by Hartford is for an indefinite duration, and stays in such circumstances are disfavored. See, e.g., Kegerise v. Susquehanna Twp. Sch. Dist., No. 14-747, 2017 WL 5070244, at *3 (M.D. Pa. Nov. 3, 2017); Clouser v. Golden Gate Nat'l Senior Care, LLC, No. 15-33, 2016 WL 4254268, at *7 (W.D. Pa. Aug. 10, 2016); accord Cheyney State Coll. Faculty v. Hufstedler, 703 F.2d 732, 738 (3d ...


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