Umicore Building Projects USA v. Trinity Roofing Service

Full title: UMICORE BUILDING PROJECTS USA, INC. Plaintiff/Counter-defendant, vs…

Court: United States District Court, N.D. Illinois

Date published: Apr 29, 2004

03 C 8101 (N.D. Ill. Apr. 29, 2004)

Opinion

03 C 8101

April 29, 2004

MEMORANDUM OPINION

CHARLES KOCORAS, District Judge

This matter comes before the court on Third-Party Defendant James McHugh Construction Company's ("McHugh") motion to dismiss, or in the alternative, to stay the complaint of Defendant/Third-Party Plaintiff Trinity Roofing Service, Inc. ("Trinity") and to compel arbitration. For the reasons set forth below, the motion to stay is granted.

BACKGROUND

McHugh is the general contractor on a construction project in Chicago (the "Project"). On March 8, 2001, McHugh contracted Trinity to provide roofing services for the Project (the "Subcontract"), including the furnishing of a zinc. metal roofing system and accompanying shop drawings. On August 19, 2002, Trinity sent Plaintiff Umicore Building Products USA, Inc. (Umicore) a purchase order for Umicore to deliver shop drawings and to fabricate roofing materials for Trinity's use on the Project (the "Purchase Order"). On November 12, 2003, Umicore, a Delaware corporation based in North Carolina, filed a complaint in this court against Trinity, an Illinois corporation, pursuant to 28 U.S.C. § 1332. Umicore's complaint alleges five counts of breach of contract under Illinois law, claiming that it fully performed under the terms of the Purchase Order and that Trinity has not paid for its services.

On February 9, 2004, Trinity filed a third-party complaint against McHugh, seeking to indemnify McHugh for any resulting judgment in favor of Umicore. Trinity's third-party complaint against McHugh also alleges breach of contract. On March 17, 2004, McHugh notified Trinity of its election to arbitrate their dispute pursuant to a binding arbitration clause contained in the Subcontract. On the same day, McHugh also filed the present motion to stay Trinity's third party complaint and compel arbitration.¹

1 McHugh's motion seeks to dismiss the complaint, or in the alternative to stay the proceedings and compel arbitration. However, when a binding arbitration clause is successfully invoked, the effect is to stay the case, as opposed to dismissal of the suit. 9 U.S.C. § 3;Pryner v. Tractor Supply Co., 109 F.3d 354, 361 (7th Cir. 1997). We will therefore treat McHugh's motion solely as a motion to stay and compel arbitration.

DISCUSSION

The Subcontract's arbitration clause provides: "Any dispute between [Trinity] and [McHugh] shall, at [McHugh's] sole option, be decided (1) by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association or (2) by litigation in any appropriate court located in Chicago, Illinois." McHugh ex. A, Art. 23. The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., indicates a strong federal policy in favor of the enforcement of private arbitration agreements. Shearson/American Express, Inc. v. McMahon, 482 U.S. 220, 225-26 (1987). According to the FAA, a written agreement to arbitrate "in a contract evidencing a transaction involving commerce . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2; Moses H. Cone Mem'l Hosp. v. Mercury Construction, 460 U.S. 1, 24 (1983). Where a contract includes an arbitration clause, the clause creates a presumption that the dispute should be arbitrated, unless the party opposing arbitration can show that the clause is incapable of an interpretation that could cover the dispute at hand. AT T Technologies, Inc. v. Communications Workers of Am., 475 U.S. 643, 650 (1986).

Based on the clear language of the clause, we find the Subcontract's arbitration provision binding as to Trinity. Trinity does not object to the enforceability of the Subcontract's arbitration clause and requests that we stay its third-party complaint against McHugh. Trinity also requests leave to file a motion to compel arbitration against Umicore pursuant to the terms of the Purchase Order. However, the only present issue for this opinion is the McHugh-Trinity arbitration provision, so any discussion of Umicore's purported obligation to arbitrate is inappropriate at this time.

CONCLUSION

Based on the foregoing analysis, McHugh's motion to stay the proceedings and compel arbitration is granted, but only as to Trinity's third-party complaint. Trinity is granted leave to file a motion to compel arbitration against Umicore.