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Judges rule on contractor dispute over new FBI headquarters

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The Indiana Court of Appeals reversed the denial of a general contractor’s motion to stay proceedings and compel arbitration regarding disputes with subcontractors, finding general contractor Welty Building Co. LTD did not waive its right to insist upon arbitration.

Welty was chosen as general contractor to construct the new FBI headquarters in Indianapolis. The building would be owned by Indy Fedreau Company LLC, and Ohio Farmers Insurance Co. provided a contract performance bond on Welty’s behalf. Welty hired 21 subcontractors to work on the project. Their agreements included an arbitration clause. But Indy Fedreau filed a lawsuit against Welty and OFIC in November 2011 alleging breach of contract, breach of bond, fraud and bad faith based on claims Welty ran up the costs of the project. Indy Fedreau also believed that Welty wasn’t timely paying the subcontractors, which resulted in mechanic’s liens. Several subcontractors also sued Welty.

Welty later filed a counterclaim in the Fedreau case, seeking to foreclose its own mechanic’s lien on the property. It joined the subcontractors with respect to the mechanic’s lien notices they had filed. This led to counterclaims being filed against Welty by the subcontractors. Welty and OFIC then sought to stay the subcontractors’ claims pending mediation and arbitration, which was denied. The trial court agreed with the subcontractors that Welty had waived its contractual right to insist upon arbitration.

“It is clear that Welty did not ‘elect’ to sue the subcontractors without first engaging in mediation or arbitration, nor did it voluntarily ‘institute’ a legal proceeding, to use the language of Article 37 of the subcontract. Welty’s hand was forced by Fedreau’s filing of the lawsuit against it, at which time Welty was compelled to countersue for foreclosure of its mechanic’s lien and to name the subcontractors as co-defendants on that claim,” Judge Michael Barnes wrote in Welty Building Co., LTD. and, Ohio Farmers Insurance Company v. Indy Fedreau Company, LLC, et al., 49A02-1206-PL-493.

The judges sent the case back to the trial court so that arbitration can be ordered between Welty and the subcontractors and that the litigation between those parties be stayed. The trial court did not assess whether the subcontractors’ claims against OFIC should be stayed pending arbitration, so the judges ordered the trial court to consider that issue.

 

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  1. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  2. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  3. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  4. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  5. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

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