United States District Court, S.D. New York
March 12, 2004.
SIEMENS WESTINGHOUSE POWER CORPORATION, Plaintiff, -against- DICK CORPORATION, Defendant/Counterclaim Plaintiff, CONTINENTAL CASUALTY COMPANY and NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, Defendants; DICK CORPORATION, ON BEHALF OF THE CONSORTIUM OF DICK CORPORATION AND SIEMENS WESTINGHOUSE POWER CORPORATION, and INDIVIDUALLY, Third-Party Plaintiff, against AES LONDONDERRY, L.L.C., SYCAMORE RIDGE, L.L.C., STONE & WEBSTER, INC., LIMBACH COMPANY and SACHS ELECTRIC COMPANY, Third-Party Defendants
The opinion of the court was delivered by: VICTOR MARRERO, District Judge
DECISION AND ORDER
Plaintiff Siemens Westinghouse Power Corporation ("SWPC") moves under
Federal Rule of 54(b) for an order entering final judgment with respect
to a claim upon which it prevailed by summary judgment. The Court's
summary judgment order declared that SWPC would be entitled to
reimbursement from defendant Dick Corporation ("Dick") for certain
up-front payments it
made to a third party on behalf of a consortium comprised of SWPC
and Dick. Dick argues that the motion should be denied because its own
counterclaims, which may ultimately offset its liability to SPWC, are
intertwined with the issue of the up-front payments. Because the purpose
of the relevant provisions of the parties' Consortium Agreement is for
Dick to pay the disputed money up front, the Court
concludes that it is proper to immediately enter judgment on SWPC's
behalf. The motion is granted.
The Court has recited the basic facts of this dispute in several
decisions, most recently as follows:
[SWPC] and [Dick] formed a consortium for the
purpose of constructing a power plant. The plant
construction became severely delayed, and the
plant owners collected liquidated damages against
the consortium by drawing upon letters of credit
SWPC had posted on the consortium's behalf. The
parties are now suing each other, in part, to
determine how much each party is responsible for
those liquidated damages. In a summary judgment
Decision and Order dated October 14, 2003
("October Order"), the Court determined that,
under the parties' Consortium Agreement, Dick, not
SWPC, was liable for the liquidated damages to the
owners up front, and that the ultimate
apportionment of those damages would be determined
according to other provisions of the Consortium
Agreement. See Siemens Westinghouse Power
Corp. v. Dick Corp., 293 F. Supp.2d 336
Siemens Westinahouse Power Corp. v. Dick Corp., No. 03
Civ. 364, 2004 WL 385058, at *1 (S.D.N.Y. Mar. 2, 2004) (footnote in
A Court may enter an otherwise interlocutory order as a final judgment
under Rule 54(b) where (1) there are multiple claims or parties; (2) the
order at issue is a final decision within the meaning of
28 U.S.C. § 1291; and (3) there is "`no just reason for delay.'" See Ginett v.
Computer Task Group, Inc., 962 F.2d 1085, 1091 (2d Cir. 1992)
(quoting Fed.R.Civ.P. 54(b)). Dick first contends that the October
Order resolving SWPC's claim is not a final decision because it may be
offset by Dick's own counterclaims and is therefore intertwined with
those pending counterclaims. The Court disagrees.
The Supreme Court has held that the "mere presence" of "nonfrivolous
counterclaims" which may offset a party's liability "does not render a
Rule 54(b) certification inappropriate." Curtiss-Wright Corp. v.
General Elec. Co., 446 U.S. 1, 9 (1980). As with any other claims,
the significance of counterclaims "turns on their interrelationship with
the claims on which certification is sought." Id. The Second
Circuit has held that "[o]nly those claims `inherently inseparable' from
or `inextricably interrelated' to each other
are inappropriate for rule 54(b) certification."
Ginnett, 962 F.2d at 1096. SWPC's claim for the initial
liquidated damages payments is not intertwined with Dick's counterclaim
because the claims "can be decided independently of each other."
Sears. Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956).
That is, whether SWPC is entitled to reimbursement for the payment of
liquidated damages to a third party initially is a simple
matter of interpreting particular contract provisions which have nothing
to do with the separate contract provisions determining the
ultimate apportionment of liability as between Dick and SWPC.
Second, Dick argues that there are "just reason[s] for
delay," Fed.R.Civ.P. 54(b), namely (1) the hardship that Dick will
suffer in having to immediately pay a sum which may ultimately be offset
by the Court's later determinations, and (2) avoiding the possibility
that Dick's potential offset would render any appellate review of the
issue of initial payments moot. The Court again disagrees. Dick
specifically contracted with SWPC that Dick, and not SWPC, would pay
these damages up front. Were the Court to deny SWPC's motion, the Court
would deprive SWPC of the benefit of its bargain by effectively erasing
that contract provision. Even assuming Dick is ultimately entitled to a
large, or even full, offset of the liquidated damages, that fact would
not moot any
appellate review on the issue of initial damages payments
because the Consortium Agreement places importance on the
sequence of those payments, as opposed to the ultimate net
transfer of money between the joint venture partners. The Consortium
Agreement specifically contemplates a sequence in which Dick pays first,
and then gets reimbursed by SWPC for the appropriate amount; it does not
contemplate a sequence in which SWPC pays first, and then is deprived of
those funds through the end of litigation. To effectuate the parties'
intentions in this regard, the Court concludes that there is no just
reason for delay and that the Court's award to SWPC should be entered as
a final judgment under Rule 54(b).
For the reasons stated, it is hereby:
ORDERED that, in accordance with the Court's Decision and
Order dated October 14, 2003, defendant Dick Corporation, is; found
liable to plaintiff Siemens Westinghouse Power Corporation ("SWPC") for
breach of contract in the amount of $15,041,327.98 and the Clerk of Court
is directed to enter final judgment for SWPC in that amount in accordance
with Federal Rule of Civil Procedure 54(b).