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Greg Opinski Construction, Inc., A California Corporation v. Braswell Construction

November 17, 2011

GREG OPINSKI CONSTRUCTION, INC., A CALIFORNIA CORPORATION, PLAINTIFFS,
v.
BRASWELL CONSTRUCTION, INC. A CALIFORNIA CORPORATION;
THE EXPLORER INSURANCE COMPANY, AN UNKNOWN ENTITY; AND DOES 1 THROUGH 40, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge

MEMORANDUM DECISION AND ORDER RE PLAINTIFF'S MOTION TO REDUCE ARBITRATION AWARD TO JUDGMENT (DOC. 59)

I.INTRODUCTION

This is a contract dispute concerning construction of a duplex in Yosemite National Park (the "Park"). Defendant Braswell Construction, Inc., ("Braswell") operated as general contractor on the project under a September 27, 2007 prime contract with the Park in the amount of $782,271.00. Doc. 61, Ex. A at 1. On October 1, 2007, Braswell entered into a subcontract with Plaintiff Greg Opinski Construction, Inc., ("Opinski") in the amount of $567,946.00 to perform most of the work on the duplex. Compl. ¶ 15 & Ex. A (see Doc. 65). As is required under the Miller Act, 40 U.S.C. §§ 3133-3134*fn1 , for any federal construction project costing more than $100,000.00, Braswell arranged for Defendant The Explorer Insurance Company ("Explorer") to issue a surety bond in the amount of $782,271.00. Compl., ¶ 21 & Ex. B (see Doc. 65).

Before the Court for decision is Opinski's motion to reduce to judgment against Braswell and Explorer an Arbitration Award issued against Braswell in the amount of $295,799.78. Docs. 59 & 60. Braswell failed to respond to the motion. Explorer opposes certain aspects of Opinski's demand. Doc. 62. Opinski replied. Doc. 63. The motion was originally set for hearing on November 14, 2011, but the hearing was vacated and the matter submitted for decision on the papers. See Doc. 64.

II. BACKGROUND

A number of disputes arose between Braswell and Opinski during the construction of the duplex, ending in Braswell's termination of Opinski in early 2009. Opinski filed the instant lawsuit on April 9, 2009, alleging Braswell breached the subcontract by failing to pay sums due Plaintiff under the contract and by improperly terminating the contract. See Compl. at ¶¶ 13-18.

Opinski seeks the value of extra labor and materials provided in a quantum meruit claim. Id. at ¶¶ 27-32. Opinski also named Explorer as a Defendant in a separate cause of action seeking recovery on the Miller Act Payment Bond. Id. at ¶¶ 19-26. Braswell and Explorer filed separate Answers. Docs. 9 & 10. Since entering an appearance by filing an Answer, Explorer has been on notice of all proceedings in this case.

On August 18, 2009, Braswell filed a motion to stay the claims in this case pursuant to the Federal Arbitration Act, 9 U.S.C. § 3, on the ground that the subcontract between Braswell and Opinski contained a mandatory arbitration provision. Docs. 18 & 19. Opinski opposed the motion for a stay, arguing that Braswell had waived the right to enforce the arbitration provision.

Doc. 23. Although Braswell and Explorer were originally represented by separate counsel, at the time the motion to stay was filed both were represented by William Thompson, Esq. See Doc. 12. Explorer took no separate position in on the request for a stay. On November 10, 2009, Magistrate Judge Gary S. Austin stayed the case and ordered the parties to arbitration. Doc. 29.

The case proceeded to arbitration, with only Opinski and Braswell participating. (The Arbitraton Award does not indicate any separate participation by Explorer in the Arbitration. See Doc. 61, Ex. A.) In a detailed decision, the Arbitrator determined:

(1) Braswell improperly terminated Opinski (Doc. 61, Ex. A at 3-5);

(2) The undisputed contract balance is $109.726.74 (id. at 5);

(3) Braswell is entitled to $5,529.00 for proven offsets (id.);

(4) Opinski is entitled to $15,000.00 for additional supervision and costs incurred (id. at 5-6);

(5) Payment to Opinski for a single change order in the amount of $1,097.00 is allowed (id. at 6-7);

(6) The subcontract is expressly governed by California Law (id. at 6 (citing paragraph 35 of the subcontract));

(7) Because the contract is governed by California law, prompt payment penalties in the amount of $47,121.00, Calculated under California law, are owed to Opinski (id. at 7-8);

(8) Pursuant to the sub-contract's express term that the arbitrator may award attorney's costs and fees to the prevailing party, Opinski is owed $108,194.00 in attorney's fees and costs incurred during the course of the arbitration (id. at 8);

(9) Opinski is awarded interest on the portion of the total award that does not include prompt payment penalties ($228,488.00) at the rate of 10% from the date of the Arbitration award (6/22/11) (id. at 9);

(10) Finally, Opinski is entitled to continuing prompt payment penalties on $47,040.00 of unpaid progress payments at the rate of 2% per month from May 27, 2001 until paid (id. at 8-9).

On July 6, 2001, Opinski sent a demand letter to Explorer, seeking $295,799.78, calculated as follows:

Arbitration Award:

Contract balance $109,727.00 Braswell's Proven Offsets ($5,529.00) Opinski's additional supervision and costs $15,000.00 Change order costs awarded to Opinski $1097.00 Prompt payment penalties (under California Law) $47,121.00 ...


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