United States District Court, D. New Jersey
WILLIAM H. WALLS SENIOR UNITED STATES DISTRICT COURT JUDGE
matter arises out of a dispute between Plaintiff Nitterhouse
Concrete Products, and Defendant Dobco,  over a
subcontract agreement for the fabrication of pre-cast
structural supports by Plaintiff for a parking garage project
on which Defendant was the general contractor. Defendant
moves to dismiss this matter under Fed.R.Civ.P. 12(b)(6), or
in the alternative, to stay the matter and compel mediation
and arbitration pursuant to the Federal Arbitration Act.
Defendant's motion is granted in part.
AND PROCEDURAL BACKGROUND
Nitterhouse Concrete Products, Inc.
("Nitterhouse"), is a business entity with its
principal place of business in Chambersburg, Pennsylvania.
Compl. ¶ 1, ECF No. 1. Defendant Dobco is a business
entity with its principal place of business in Wayne, New
Jersey. Id. ¶ 2. On December 26, 2012, the
parties entered into a contact in connection with the
construction of a parking garage on the campus of William
Patterson University in Wayne, New Jersey. Id.
¶ 5. Defendant Dobco was the general contractor for the
parking garage construction project, and hired Plaintiff
Nitterhouse to fabricate "pre-cast structural
members" for the construction of the garage.
Id. ¶ 6. Dobco contracted to pay Nitterhouse
$5, 736, 000.00 upon completion of their work on the parking
garage, this amount was later reduced to $5, 724, 053.89.
Id. ¶ 7. Although Nitterhouse performed its
obligations in completing the project, payment in the amount
of $286, 203.00 was still outstanding as of December 31,
2014. Id. ¶ 11.
The Subcontract Provisions
subcontract contained provisions for alternative dispute
resolution procedures. Section 6.1.2 of the subcontract
contains a mediation provision, which provides:
The parties shall endeavor to resolve their claims by
mediation which, unless the parties mutually agree otherwise,
shall be administered by the American Arbitration Association
in accordance with its Construction Industry Mediation
Procedures currently in effect. A request for mediation shall
be made in writing, delivered to the other party to this
Subcontract and filed with the American Arbitration
Association unless the parties mutually agree in writing to
substitute mediation administrator.
Form of Agreement Between Contractor and Subcontractor
("Subcontract") § 6.1.2, ECF No. 1-1.
addition to the mediation provision, the subcontract also
contains a provision for binding dispute resolution. This
provision, Section 6.2, provides:
For any claim subject to, but not resolved by mediation
pursuant to Section 6.1, at the sole option of [Dobco], it
shall be resolved either by arbitration under the
Construction Industry Arbitration Rules of the American
Arbitration Association and judgment may be entered on the
basis of the award; or, if [Dobco] does not opt for
arbitration, then such dispute shall be decided in the
Superior Court of the State of New Jersey, and the venue of
any such action shall be placed in Passaic County, New
Id. § 6.2.1
The Siddons Litigation
individual named Donald Siddons was injured on the site of
the parking garage construction project, and brought claims
against both Nitterhouse and Dobco in the Superior Court of
New Jersey. Def.'s Br. at 4, ECF No. 7-1. Dobco asserted
cross-claims against Nitterhouse seeking indemnification
under the contract.
response, Nitterhouse claimed that Dobco was not entitled to
indemnification because it was in breach of the contract due
to the outstanding $286, 203.00 at issue in this lawsuit.
PL's Opp. at 11, ECF No. 10. Nitterhouse also sought to
bring an affirmative counterclaim against Dobco seeking
damages for breach of contract. The trial court allowed
Nitterhouse to raise the breach of contract issue as a
defense to indemnification, but refused to allow an
affirmative damages claim for fear of confusing the issues
before the jury. Id. Dobco has engaged in
significant discovery in connection with the Siddons
litigation, including participation in multiple depositions.
Id. at 9. The outstanding $286, 203.00 balance was
raised at some of these depositions. Id.
Nitterhouse brought suit in the District of New Jersey on
November 9, 2016 alleging breach of contract, breach of
implied covenant of good faith and fair dealing, unjust
enrichment and conversion. Compl. ¶¶ 14-33.
January 17, 2017, Defendant moved to dismiss or, in the
alternative, to stay the action in the District and compel
mediation and arbitration. Defendant argued that the suit
should be dismissed pursuant to the forum selection clause,
which provides that any litigation be venued in the Superior
Court of New Jersey. In the alternative, Defendant argues
that the action be stayed, and that the ...