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IN RE S&R CO.

September 4, 1997

In the Matter of the Application to Compel Arbitration Between S&R COMPANY OF KINGSTON, a New York General Partnership and HARTFORD FIRE INSURANCE COMPANY, Petitioners, -and- LATONA TRUCKING, INC., Respondent.


The opinion of the court was delivered by: MCAVOY

 McAvoy, District Judge.

 Petitioners, S&R Company of Kingston ("S&R") and Hartford Fire Insurance Company ("Hartford"), brought this petition, pursuant to Section 4 of the Federal Arbitration Act, 9 U.S.C. § 4, seeking to compel arbitration of a dispute presently pending before this Court in an action entitled Latona Trucking, Inc. v. Hartford Fire Ins. Co., et al., (96-CV-306) ("Latona v. Hartford " or "pending action"). The Petitioners commenced the instant action following an Order by Magistrate Judge David R. Homer, in Latona v. Hartford, denying Petitioners' request to extend the deadline for pre-trial motions, thus precluding Petitioners from making a motion in that action, pursuant to 9 U.S.C. § 3, to stay Latona v. Hartford pending the enforcement of arbitration. *fn1"

 Latona opposes the instant petition asserting that (1) it has not agreed to arbitrate its claims against Hartford; (2) its claim against S&R does not fall within the scope of the arbitration agreement; and (3) Petitioners waived their right to arbitrate claims in Latona v. Hartford.

 For the reasons that follow, Petitioners' request to compel arbitration is denied in its entirety.

 I. BACKGROUND

 In July, 1995, Latona executed a contract with S&R to provide "Phase 1 Site Work including site work for a Toys "R" Us Retail Store" at the Hudson Valley Plaza in Kingston, New York (the "project"). S&R was the owner and developer of the project, and Toys "R" Us ("Toys") was a part owner of the project. Hartford was the surety on a payment bond obtained by S&R to secure payment of the contract price to Latona.

 Article 18.1 of the contract contained an arbitration clause providing:

 
In the event any dispute arises between the Parties relative to this contract which cannot be resolved by the Parties within thirty (30) days from the date first noticed, the Parties agree to refer the dispute to an arbitrator in accordance with the rules of the American Arbitration Association.

 Additionally, the payment bond included a clause incorporating the contract into the bond, which read as follows:

 
WHEREAS, PRINCIPAL (S&R) has entered into a contract with OBLIGEE (Latona) dated July 12, 1995 designated Phase 1 Site Work . . . which is made a part hereof as fully as if copied verbatim herein.

 Disputes arose between the parties regarding work completion and payments. On February 20, 1996, Latona commenced the pending action to collect $ 650,000 from Hartford under the payment bond as a result of S&R's failure to make payments due under the contract. Latona further sought to recover attorney's fees from S&R and Toys, pursuant to New York General Obligations Law § 5-322.3, for failure to file the payment bond with the County Clerk. In answering the complaint, Hartford and Toys did not directly include "arbitration and award" as an affirmative defense. They did, however, plead a defense of unspecified "documentary evidence."

 On June 28, 1997, a stipulation and consent order was filed allowing S&R to intervene as a defendant. Latona thereafter served an amended complaint. In answering the amended complaint, neither Hartford, Toys nor S&R pleaded "arbitration and award" as an affirmative defense. However, each asserted the defense of unspecified "documentary evidence." S&R also counterclaimed against Latona alleging breach of contract.

 The pending action continued with all parties actively participating in the discovery process. On June 5, 1997, Magistrate Judge Homer held a telephone conference regarding defendants' request to substitute counsel. During the course of that conference, defendants' new attorneys moved for an order to extend the May 15, 1997 deadline for filing pre-trial motions. Specifically, defendants intended, inter alia, to apply for a stay of the proceedings pending enforcement of the arbitration clause contained in the contract. By an Order dated June 6, 1997, Magistrate Judge Homer granted defendants' request for substitution of counsel, but denied its request for leave to file pre-trial motions. Defendants have appealed that Order to this Court. The pending action presently is scheduled for trial on October 20, 1997.

 On June 18, 1997, defendants commenced this separate action, pursuant to 9 U.S.C. § 4, to compel arbitration of the pending action.

 The Court now turns to the issues presented.

 II. DISCUSSION

 A) The Federal Arbitration Act

 The Petitioners filed this action, pursuant to 9 U.S.C. § 4, to compel arbitration of disputes between the parties in accordance with the terms of an arbitration clause contained in the contract executed between Latona and S&R. Latona opposes the petition asserting that (1) it has not agreed to arbitrate its claims against Hartford; (2) its claim against S&R does not fall within the scope of the ...


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