United States District Court, District of Columbia
S. CHUTKAN UNITED STATES DISTRICT JUDGE
Western Surety Company brought this suit for declaratory and
injunctive relief seeking to enjoin Defendant U.S.
Engineering Company from compelling arbitration proceedings
against Plaintiff and making a claim on a surety bond issued
by Plaintiff. Defendant has filed a motion to dismiss under
Rule 12(b)(6), arguing that the parties are contractually
bound to arbitrate their dispute over the bond. Plaintiff
responded by filing a motion for partial summary judgment
solely on the issue of whether it must arbitrate its dispute
with the Defendant. For the reasons stated herein,
Defendant's motion will be DENIED, and Plaintiffs motion
will be GRANTED
January 25, 2012, Turner Construction and Defendant entered
into a contract for Defendant to perform construction and
renovation work at the South African Embassy in Washington,
D.C. (ECF No. 16, Pl. Statement of Facts ("SOF")
¶ 1). Defendant then awarded a subcontract for sheet
metal work on the project to United Sheet Metal, Inc.
(Id. ¶ 2). The subcontract contains the
following provisions that are pertinent for the pending
• The introductory paragraph identifies U.S. Engineering
as the "Contractor" for purposes of the contract,
who enters into a "subcontract" with United Sheet
• Paragraph 26, which is entitled "Arbitration,
Any controversy or claim of Contractor against Subcontractor
or Subcontractor against Contractor shall be resolved by
arbitration pursuant to the Construction Industry Arbitration
Rules of the American Arbitration Association in effect on
the date on which the demand for arbitration is made
• Paragraph 31, the Merger Clause, integrates the prior
communications and representations "between Contractor
and Subcontractor, " and notes that the subcontract is
the "final and complete agreement between Contractor and
(Pl. Ex. 1).
entering into the subcontract with Defendant, United Sheet
Metal negotiated with Plaintiff to issue a surety bond for
$585, 000. (Pl. Ex. 2). Under the terms of the surety bond:
• United Sheet Metal is named as the "Contractor,
" Plaintiff is the "Surety, " and Defendant is
the "Owner." (Pl. Ex. 2 at p. 1).
• "The Contractor and Surety [Plaintiff], jointly
and severally, bind themselves, their heirs, executors,
administrators, successors and assigns to the Owner
[Defendant] for the performance of the Construction Contract,
which is incorporated herein by reference."
(Id. § 1).
• "Any proceeding, legal or equitable, under this
Bond may be instituted in any court of competent jurisdiction
in the location in which the work or part of the work is
located . .
(Pl. Ex. 2, §§15, 1, 11.)
early 2013, a dispute over the performance of the subcontract
arose between Defendant and United Sheet Metal, which led to
Defendant terminating the subcontract. (Pl. SOF ¶¶
11-12). Defendant hired a replacement subcontractor to finish
the sheet metal work, and United Sheet Metal sought to compel
arbitration, seeking $331, 242 in damages. (Id.
¶¶ 13-14). Defendant filed a counterclaim for $417,
379 in damages. (Id. ¶ 14). The arbitration
proceedings between Defendant and United Sheet Metal have not
concluded. (Id. ¶ 15).
9, 2014, Plaintiff received a letter from Defendant stating
that it had terminated United Sheet Metal's performance
of the subcontract, and that Defendant intended to make a
claim under the surety bond. (Id. ¶ 16). On
March 4, 2015, Defendant filed a request to join Plaintiff as
a party in Defendant's arbitration proceedings with
United Sheet Metal. (Id. ¶ 18). Plaintiff