United States District Court, E.D. Louisiana
FIDELITY AND DEPOSIT CO. OF MARYLAND
ORDER AND REASONS
E. FALLON UNITED STATES DISTRICT JUDGE
the Court is Defendant's motion to stay proceedings
pending completion of contractual dispute resolution
proceedings. R. Doc. 11. Plaintiff opposes the motion. R.
Doc. 19. Having considered the parties' arguments,
submissions, and applicable law, the Court now issues this
Order and Reasons.
case arises from a contract dispute between Plaintiff
Fidelity and Deposit Company of Maryland
(“Fidelity”) and Defendant Audubon Commission
(“Audubon”), concerning a Takeover Agreement for
a construction project effective November 12, 2014. R. Doc. 1
at 5. Plaintiff invokes jurisdiction of this case under 28
U.S.C. § 1332. R. Doc. 1 at 1.
entered into a contract with Courseault Commercial, Inc.
(“Courseault”), who is not a party in the instant
case, in which Courseault agreed to provide materials and
labor for a project at One Canal Street in New Orleans,
Louisiana. R. Doc. 1 at 2. The contract is an industry
standard AIA Construction Contract containing AIA Conditions
of the Contract for Construction. R. Doc. 11-1 at 1.
Fidelity executed a bond for Courseault as a surety in
connection with this contract. R. Doc. 1 at 2. The contract
contains a liquidated damages clause that would allow for
damages if the project was not completed by January 28, 2014.
R. Doc. 1 at 2. After Audubon declared Courseault to be in
default of the contract, on November 12, 2014, Fidelity
agreed to take over the contract between Courseault and
Audubon. (“Takeover Agreement”). R. Doc. 1 at 2.
Takeover Agreement states that liquidated damages for which
Fidelity would be liable would be reduced by 33-percent if
the project was completed by January 10, 2014 or by
20-percent if the project was completed between January 11,
2015 and January 21, 2015. R. Doc. 1 at 2. The project was
completed on April 17, 2015. R. Doc. 1 at 3.
argues that Fidelity and/or Courseault validly requested time
extensions due to incidents that were either caused by
Audubon or were excusable due to the redesign of the
exhaustion vents, grating system and event cover, railing
modifications, shutdowns for Mardi Gras and French Quarter
Fest, and modifications to the pumps. R. Doc. 1 at 3.
Plaintiff asserts that if these requests had been granted,
Courseault would have had at least 98 more days to complete
the project, which would entitle Fidelity to a 33-percent
reduction in liquidated damages pursuant to the Takeover
Agreement. R. Doc. 1 at 3-4. Plaintiff further alleges that
although all work under the contract has been completed and
final payment has been sent, Audubon has improperly withheld
at least $208, 108.00 from Fidelity. R. Doc. 1 at 4-5.
Accordingly, Fidelity filed the instant litigation on
February 3, 2017, seeking funds it believes have been
improperly withheld. See R. Doc. 1.
Audubon answered the suit on June 23, 2017, alleging that
Fidelity failed to follow contractual dispute resolution
procedures that were agreed to by both parties and were part
of the contract. See R. Doc. 8. Audubon now asks the
Court to stay this case pending the outcome of the dispute
resolution proceedings provided in the contract. R. Doc. 11.
courts have the inherent power “to control the
disposition of the cases on its docket with economy of time
and effort for itself, for counsel, and for litigants.”
Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). It
is well established that the power to stay proceedings has
been recognized as such inherent power. Id. The
decision of whether a stay should be granted is based on the
“judicial economy and convenience for the Court, for
counsel, and for the parties.” United States v.
FEDCON Joint Venture, No. 16-13022, 2017 WL 897852, at
*1 (E.D. La. 2017). The decision is made based on an exercise
of judgment, which involves balancing competing interests.
Id. (quoting In re Beebe, 56 F.3d 1384 (5th
Cir. 1995)). The Court has recently noted that the use of a
contract dispute resolution proceeding will serve judicial
economy, as it has the potential to resolve all or part of
the suit, therefore making further proceedings limited or
unnecessary. Id., at *2.