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Dome Technology, LLC v. Golden Sands General Contractors, Inc.

United States District Court, W.D. Virginia, Charlottesville Division

June 28, 2017

DOME TECHNOLOGY, LLC, Plaintiff,
v.
GOLDEN SANDS GENERAL CONTRACTORS, INC., et al., Defendants.

          MEMORANDUM OPINION

          Hon. Glen E. Conrad Chief United States District Judge.

         Dome Technology, LLC ("Dome Technology") filed this diversity action against Golden Sands General Contractors, Inc. ("Golden Sands") and American Business Continuity Domes, Inc. ("ABC Domes"), asserting claims for breach of contract. The case is presently before the court on the defendants' motion to compel arbitration. For the following reasons, the court will grant the defendants' motion.

         Background

         Dome Technology is an Idaho limited liability company that specializes in constructing "large-scale industrial bulk storage reinforced concrete domes." Am. Compl. ¶ 1, Docket No. 25. Golden Sands is a Florida corporation that offers general contracting services. Id. ¶ 2. ABC Domes is a Florida corporation that specializes in leasing concrete domes, primarily business continuity domes, which are built to house a company's systems infrastructure. See Id. ¶¶ 3, 11.

         In or around December of 2012, Dome Technology, Golden Sands, and ABC Domes entered into a Strategic Alliance Agreement, pursuant to which the parties "would collaborate, work together, and provide specialized services in bidding on, procuring, and completing construction contracts for the construction of business continuity and disaster relief dome projects, all while remaining distinct and separate entities." Id. ¶¶ 10, 12. To that end, the parties agreed to "work together in good faith through open communication, coordination, and cooperation to develop mutually beneficial Cooperative Project agreements."[1] Strategic Alliance Agreement § 5, Docket No. 25-1.[2] The parties entered into the Strategic Alliance Agreement "for the purpose of establishing the general terms 1) governing their participation in this Agreement, 2) governing their participation in Cooperative Projects, and 3) governing their relationship as Joint Business Development partners." Id. § 3(H). The parties agreed that the Strategic Alliance Agreement would apply to all Cooperative Projects. See id § 3(F) ("All architectural dome projects nationally and internationally will be designated as Cooperative Projects and will fall under the scope of this Agreement.").

         The Strategic Alliance Agreement sets forth the general obligations of the parties in connection with the Cooperative Projects. See generally id. §§ 5.1-5.3 (outlining the parties' contractual responsibilities). The parties agreed that Golden Sands would serve as the preferred general contractor for the Cooperative Projects, see id § 3(1); that ABC Domes would facilitate a mutually acceptable project construction agreement between Golden Sands as general contractor and Dome Technology as subcontractor, see Id. § 5.2; and that Golden Sands and Dome Technology would enter into separate subcontract agreements on a project-by-project basis, see id §§ 5.2, 7.1. The parties further agreed that ABC Domes would "guarantee[] Golden Sands' payment obligations to Dome Technology under any subcontract subject ... to Golden Sands' contractual rights of set off, charge back and other nonpayment defenses provided for in the subcontract." Id. § 7.1.

         The Strategic Alliance Agreement also contains the following "Dispute resolution" provision, which includes the arbitration clause on which the defendants' motion is based:

Any unresolved disputes between the Parties shall be first resolved by nonbinding mediation. Any dispute, claim, or controversy arising solely between the Parties out of or relating to any interpretation, construction, performance or breach of this Agreement (including both actions in contract and in tort) arising out of or relating to the enforcement of this Agreement, (including the formation, performance, modification or extension of this agreement) or any form of relief (including damages, rescission, specific performance, injunction, and punitive damages) that is not resolved by nonbinding mediation shall be settled exclusively by arbitration. The arbitration shall be held in a location mutually agreeable to the parties, or if not mutually agreed, then in Orlando [, ] Florida. It shall be conducted under the auspices of and by the rules of the American Arbitration Association. Discovery will be allowed at the discretion of the arbitrator. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator will be final, conclusive and binding on the Parties to the arbitration. The Parties consent that any notice, motion, application or any paper concerning the arbitration may be served by certified mail, return receipt requested, or by personal service provided it allows reasonable time for appearance. The arbitration proceedings must be begun within one year after the claim arises. Failure to begin arbitration proceedings within that period will constitute an absolute bar to the institution of any proceedings on that claim and a waiver of that claim. Judgment whether in damages or injunction or otherwise may be entered on the arbitrator's decision in any court having competent jurisdiction, the same as if the arbitration decision had originally been rendered by that court.
The foregoing provision for arbitration of disputes between the Parties shall not apply in cases where a customer or other third Party brings a claim or files a complaint against one or both of the Parties in a court having competent jurisdiction over the Parties named in the action or proceeding, or in cases involving personal injury (including workers compensation claims) or death ....

Id. at § 14.4.

         The parties agreed that the Strategic Alliance Agreement would "remain intact for fifteen (15) years, " unless "all Parties agree" to terminate the agreement. IcL § 14.3; see also Id. ("Termination or withdrawal by a Party or Parties from this Agreement may only occur upon approval of all the Parties of the Alliance."). They further agreed that the Strategic Alliance Agreement may be modified only if "all Parties agree to such modifications." Id.

         As contemplated by the Strategic Alliance Agreement, Golden Sands and Dome Technology entered into a Master Subcontractor Agreement in August of 2013. See Am. Compl. ¶ 17. The Master Subcontractor Agreement provides that it "supersedes all prior agreements, written or oral, between Golden Sands and [Dome Technology] relating to the subject matter of this Agreement."[3] Master Subcontractor Agreement at 1, Docket No. 25-2. The Master Subcontractor Agreement contains general terms and provisions applicable to work performed under the individual project subcontracts, including provisions related to insurance coverage, scheduling, payment, and indemnification. The Master Subcontractor Agreement also contains the following provision titled "LEGAL NOTICES AND DISPUTES":

[I]n order to avoid conflicts of law, if a dispute arises out of either Party's performance under a Subcontract Agreement, then the validity, interpretation and performance of this Agreement shall be governed by the Laws of the State in which the corresponding Subcontract Agreement project is located. In the absence of a disputed Subcontract Agreement as provided above, the validity, interpretation, and performance of this Agreement, standing alone, shall be governed by the Laws of the State of Florida and in such case only any judicial proceeding shall be brought in the County of Miami-Dade, Florida within two (2) years of the date the cause of action accrued, but in no event after final payment to the Subcontractor. Subcontractor agrees to participate in and be bound by any proceedings which directly or indirectly relate [] to this Agreement (litigation, arbitration and/or mediation). No dispute or controversy shall interfere with the progress of the construction and Subcontractor shall proceed with the work without causing interruption, deficiency or delay. Notwithstanding anything in the foregoing to the contrary, the exclusive legal jurisdiction as well as the validity, interpretation, and performance under any Subcontract Agreement shall be in the appropriate courts of and governed by the Laws of the State where the project that is the subject of the Subcontract Agreement is located.

Id., §10.

         The parties successfully bid on a number of architectural dome construction projects throughout the United States, including projects at the North Anna Nuclear Generating Station in Louisa County, Virginia (the "North Anna Project") and the Surry Nuclear Power Plant in Surry County, Virginia (the "Surry Project"). On August 6, 2013, Golden Sands and Dome Technology entered into a subcontract agreement for the construction of a dome for the North Anna Project (the "North Anna Subcontract"). That same day, they entered into a subcontract agreement for the construction of a dome for the Surry Project (the "Surry Subcontract"). The subcontracts provide that the "Subcontractor [Dome Technology] is to perform the tasks set forth in, and pursuant to the terms of this subcontract, and in accordance with the terms of the Master Subcontract Agreement." North Anna Subcontract 2, Docket No. 25-3; Surry Subcontract 2, Docket No. 25-4. ABC Domes is not a party to the North Anna Subcontract or the Surry Subcontract, and neither subcontract contains its own dispute resolution provision.

         After entering into the subcontracts for the North Anna Project and the Surry Project, Dome Technology began providing services and materials for each project as required under the respective subcontracts. At some point during the construction phase, Golden Sands asked Dome Technology to assign certain portions of Dome Technology's scope of work over to Golden Sands. "Specifically, Golden Sands requested that Dome Technology assign Golden Sands[] the responsibility to construct the impact blast doors and man door concrete entry ways on each dome." Am. Compl. ¶ 44. Although "Dome Technology never signed a written change order, ... Golden Sands took the scope of work from ...


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