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Lagrone Constr., LLC v. Landmark, LLC

United States District Court, N.D. Mississippi, Oxford Division

August 22, 2014

LAGRONE CONSTRUCTION, LLC, PLAINTIFF
v.
LANDMARK, LLC, et al., DEFENDANTS

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[Copyrighted Material Omitted]

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For Lagrone Construction, LLC, Plaintiff, Cross Defendant: Sidney Ray Hill, III, LEAD ATTORNEY, CLAYTON O'DONNELL, PLLC, Oxford, MS.

For Landmark, LLC, Landmark Drywall & Painting, LLC, Defendants, ThirdParty Plaintiffs, Counter Defendants, Cross Claimants: David E. Rozier, Jr., Jenessa Carter Hicks, LEAD ATTORNEYS, ROZIER LAW FIRM PLLC - Oxford, Oxford, MS.

For Apex Construction Services, LLC, ThirdParty Defendant, Cross Claimant, Counter Claimant: Slates C. Veazey, BRADLEY ARANT BOULT CUMMINGS LLP, Jackson, MS.

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OPINION AND ORDER

Debra M. Brown, UNITED STATES DISTRICT JUDGE.

This action arises from disputes associated with a construction project in Oxford, Mississippi. The general contractor on the project, Apex Construction Services, LLC (" Apex" ), has filed a motion to stay the proceedings and compel arbitration or, in the alternative, to dismiss the case for improper venue, based on an arbitration clause in the subcontract it entered with

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Landmark, LLC, and Landmark Drywall & Painting, LLC (collectively, " Landmark" ). Apex requests that this Court enforce the arbitration clause against not only Landmark but also Landmark's subcontractor, Lagrone Construction, LLC (" Lagrone" ), though Lagrone is not a party to the subcontract. For the reasons below, the Court finds that the claims between Apex and Landmark are subject to arbitration; the claims asserted by and against Lagrone are not bound by the arbitration clause; the proceedings should not be stayed as to the claims by and against Lagrone but, as to the claims between Apex and Landmark, should be stayed pending the outcome of arbitration; and dismissal based on improper venue is inappropriate.

I. Facts and Procedural History

Apex was the general contractor on the construction project in Oxford, Mississippi, known as Grove Hill (" Project" ). Pursuant to a subcontract agreement dated April 30, 2013, Apex hired Landmark as a framing subcontractor on the Project. The subcontract included a dispute resolution clause, which provided in relevant part:

15.1 The first step in the resolution of any dispute between Subcontractor and Contractor shall be a meeting to discuss and attempt to resolve the dispute. If both parties agree, the dispute can be settled by agreement. If not, the next step is consideration of mediation. If both parties agree, the dispute will be submitted to mediation under paragraph 15.2.3. If the dispute is not resolved by agreement or by mediation, then the dispute shall be resolved as follows:.
15.1.1 Disputes solely between Contractor and Subcontractor shall be resolved by arbitration.
15.1.2 Disputes between the Contractor, Subcontractor, or other Subcontractors, sub-subcontractors and suppliers shall be resolved by arbitration.
* * *.
15.2 With respect to any dispute arising out of or related to this Subcontract, the following provisions shall apply:
15.2.1 Choice of Law. The laws of the State of Tennessee shall govern this Subcontract.
15.2.2 Choice of Forum. The parties specifically submit to the jurisdiction of the Chancery Court for Davidson County, Tennessee, for bringing any litigation arising under this agreement. Apex Construction Services, LLC and Landmark Framing waive any objections to personal jurisdiction. Landmark Framing agrees not to bring any suit against Apex Construction Services, LLC in a court other than the Chancery Court of Davidson County, Tennessee.

Subcontract Agreement [10-1] at 12.

After contracting with Apex, Landmark hired Lagrone to perform framing work on the Project. Landmark and Lagrone did not enter a written contract for the framing work. In May 2013, a dispute arose between Landmark and Lagrone concerning payment for services rendered on the Project. As a result, Lagrone filed a complaint in the Circuit Court of Lafayette County, Mississippi, against Landmark for breach of an oral contract, unjust enrichment, or alternatively for a suit on an open account. See State Court Compl. [8-1]. Lagrone alleges that it had an oral contract with Landmark to perform framing work on the Project; that it satisfied its obligations under the oral contract; and that Landmark failed to pay the agreed upon amount for the work performed. Id. at 3. Lagrone seeks $35,108.94 in actual damages, unspecified consequential and punitive damages, prejudgment interest,

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post judgment interest, attorney's fees, and costs. Id.

On September 4, 2013, Landmark removed the case to this Court based on federal diversity of citizenship. See Notice of Removal [1]. The next day, Landmark filed a third party complaint against Apex seeking indemnification in the event it is found liable to Lagrone and seeking payment for any unpaid invoices owed by Apex. See Third Party Complaint [4] at 2-3. On October 29, 2013, Apex filed an answer to the third party complaint and counterclaims against Landmark for breach of contract, breach of express warranty, breach of implied warranties, negligence, and attorney's fees. Apex Answer [10] at 11-15. Apex also filed cross-claims against Lagrone for breach of implied warranties, negligence, and attorney's fees. Id. at 13-15. On November 18, 2013, Landmark filed an answer to the counterclaims and asserted a cross-claim against Lagrone for indemnification if it is found liable to Apex because, Landmark argues, any liability would stem from Lagrone's work on the Project. Landmark Answer [13] at 9-10.

On November 20, 2013, Apex filed the instant motion to stay and compel arbitration or, in the alternative, motion to dismiss. Mot. [14]. Landmark and Lagrone have responded in opposition to Apex's motion. The motion has ...


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