Petition for Writ of Certiorari — United States ex rel. Keller Pier Drilling Co. v. John H. Eisele Co.

Supreme Court brief1966

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Sepreme Court of the United States

October Term, 1965 ~ | %

UNITED STATES OF AMERICA for* the Use and

| Benefit of KELLER PIER DRILLING COMPANY, -

an Ohio. Corporation,

Petitioner,

vs. **

JOHN H. EISELE COMPANY, INC.

| an Ohio Corporation,

_ THE BUCKEYE UNION CASUALTY Co.,

| AMERICAN REINSURANCE Se

Rerpendenss_ \ ;

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT @F APPEALS

‘apes — FOR-FHE SIXTH -CIRCUIT—————

THOMAS F. LAZARON, ESQUIRE.

of THOMAS & LAZARON,

ere. 2456 Futbourne Drive, Bes rari,

“ .. . Cincinnati, Ohio 45231 :

HERBERT BASS, .

402 Atlas Bank Building

524 Walnut Street

‘Cin¢innati, Ohio 45202

S/* Zp. Attorneys for Petitioners .

ETS PE SAT ES TLE ALT TT TN ae TSE

COURT INDEX PRESS, INC. rd Printers — 809 Walnut Street, Cincinnati, Ohio 45202

I N DE x

Opinions Below ener a Treaty Dee ery cathe eo

* Jurisdiction Wes ‘ a ae ‘ errs oy ai larg Ora ia ce of Aa te

Questions Presented : cree, aed aioe meee Ce eee

Constitutional Provisions, Statutes Involved . Oe Tea. te

Statement of the ES re a, Seen pe jeeie ae

Basis for Jurisdiction of the U. S. District Court . ake 2

- Argument Amplifying the Reasons Relied on ie’ <a

i Allowance of the Writ ae... re 9.

: Appendix A—U:S. District Court Judgment .... wees 12°°

Appendix B—U. S.\Court of a for Sixth |

Ye MME’ Wide 5 Me Wd gk wen 8 od PR KS a

Appendix C—Amendmeat. Fifth, U. S. Constitution 14 |

; Appendix D—Amendment ‘Thirteenth, U. S.

COMSBEIOM: . 0. eee st POrTe Ty eee rr ee . s

". Joint Appendix: rere erty Following Appendices A toD

| CITATIONS

Cases:

Atkinson vs. ‘Sinclair Refining Company 82 S, Ct. |

SF ee Mea RO. Sad pes aesd ad és penkdi wine 10

C. J. Langenfelder & Sons, Inc. v. United States, .

i fo EE EEE EE EE TE Ce Peer ree 10

H. B. Zachary Co.-v. United States, 344 F. Ond 352... 9-10

__Norman-C- Bernhardt v. Polygraphic:Cofhpany of ‘. ~ .

America, 350 U.S. 198, 76 C. Ct. 73 ........... 9

Southeastern Oil Co. v. United States, 115 F. Supp. 198 10

Union of Electric, Radio & Machinists AFL-CIO, ©

v. Collins Radio Company, 317 F.2nd 214°.....° 10°

U.S. v. Alcon Development Company, 271 F.2nd pot 10.

United States v. Blair, 321.U.S. 820 ..... OR ter 10.

_ United States v. Grace & Sons, Inc., CCH, U. se

Supreme Court Bulletin, SA eo

United States v: Holpuch Co., 328 US. 701, 1001... - 9

‘Title 9; Section 2,°3, 4, U.S. Code .

. Title 28, Section: 1345. U.S. Code . ey eres Oe

ne Title. 28, Section, 1352 U. S. Code > eet Beene e ees .

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Title 40, “Section 270.b (b). U.S. Code Antiotated ..

Title 28, Section 1254 (1)-U. S. Code ............ .

Amendment: Thirteenth | oes See xk Nee See ere .

Authorities ae ace

CCH U. s. Supteme Court Bulletin B-1897 ° cP

iar the.”

- Supreme Court of the United States

alee _-October Teem, 1965 a

~ ‘oa? - ; .

UNITED STATES OF AMERICA for the Wse and

" Benefit of KELLER PIER DRILLING COMPANY,

2 an Ohio. Corporation, 3 3

Petitioner,

beet Part | Vi: 2 ai

, .° 4% JOHN H. EISELE COMPANY; ING.,

de '.- an Ohio Corporation,

- THE. BUCKEYE UNION CASUALTY CO.,

'.: AMERICAN RE-INSURANCE CO., |

Rte “i _Respondenté.

PETITION FOR WRIT OF caxriweant TO -

THE UNITED STATES COURT OF APPEALS 5)

r FOR THE SIXTH CIRCUIT)

To the “Hanorable, the Chief Justice ond ‘the Associate

"Justices of the United States Supreme Court:

The ‘petition of the above Petitioner is for a Writ of

Certiorari to issue to review in part the judgment ¢f the ~

‘ , Court of Appeals for the Sixth, Circuit of the United

' States, numbered 16,521, entered April 22, 1966 vacating

' the judgment of the United States District Court for the

- Southern District of Ohio, Dayton, Western Division en-

..-tered January 11, 1965 and requiring arbitration, and —

" _ shows to this court:

9 ®

ee, eee

OPINIONS BELOW

te ‘The judgmenit by order of the District: Court of. die: .

United States -for:the Southern District of Ohio in case

numbered 3023 filed Janua 11, 1965 and the judgment

of the Court of Appeals of the_United States for the Sixth

Circuit numbered 16, 521 vacating the U. S. District Court's:

_. decision and remanding for stay for arbitration, filed

«January. I'l, 1965 have not been reported.

_ A copy of the Jndement of the United States District

Court judgment .is appended to this Petition as Appendix

A; a copy of the judgment of the Circuit Court of Appeals

for the United States Sixth Circuit is “appended. hereto

as Apt B. i 3

JURISDICTION

Jurisdiction of. this court to review ‘the » judgr ient of the, -

United States Circuit Court of Appeals for the Sixth Cir-

cuit made and entered April 22, 1966 is invoked under

Section 1254 (1) of Title 28, Unitéd States Code. On that -

date the Court of Appeals vacated the judgment of the

_ District Court dismissing the suit of Use Plaintiff but —

‘ confirmed the decision of -the District. Court requiring

arbitration and remanding. and staying the case for such..

‘The questions here presented are raised in the pleadings

of the parties in the District Court and the Court, of Ap-

peals, except as to the application of the Fifth and Thir-

_ teenth Amendment which are here Yaised as a subsidiary ©

question which must be settled as an incident. of deter-

mining the issues raised in the lower courts.

QUESTIONS: PRESENTED ,

: 1. Where the. Respondent “(General Contractor) in |

,-serted unilaterally all of the terms, conditions and. provi-

eS |

Sot

“sions “of the- government Contract DA-15- 029-ENG-6241.

into the subcontract, making it-a part thereof and Peti-

" tiener subject thezeto and it to have precedence over any

conflicting provisions of the balance of ‘the subcontract,

~ and the government contract required Administrative rem- ;

edies ‘for relief to prevail over a conflicting provision for: :.

arbitration and Respondent breached ‘its. requirements to.

seek administrative relief for Petitioner or itself, and

breached its obligation to use arbitration and arbitrarily

settled its and Petitioner’s claims, must Petitioner exhaust

its administrative remedies . before -suit therefore aan

Title 40, Section 270 (b), Miller Act? ~ - |

2. . Was Respondent estopped by its conduct of -its. own

acts and deemed to ‘have waived its: rights to governmental

administrative remedies, and for arbitration as to its fitst

| subcontract with Petitioner? e

- 8... Was Respondent by its acts and. unlawful discharge

of Petitioner, and. -waiver of administrative relief and right

of arbitration so,as to permit the second contract not re-

quiring administrative relief or arbitration, and the spé-

cial demand and urgings of Respondent to Petitioner to

continue to perform after discharge on an implied in fact

contract for quantum meruit basis, estopped to deny such

two subsequent contracts were separate and néw contracts —

for additional work, and recovery of — therefor - “per-

missible under thé ‘Miller Act’?

4. Where the Respondent required Petitioner to use

its equipment, its officer'and employees to perform. labor

in a different capacity than originally agreed to after”

firing of Petitioner, and under threat to collect another |

subcontractor’s unreasonable costs under bond of Petition- -

er, was there a deprivation of the liberty of contract and

of property of the Petitioner, and of the officer and the

employees of it without due process and a taking of such

;

private property to a public use without just compensation .

anda violation of the Fifth Amendment of the United

States, and the same acts to bé deemed acts of slavery and

involving involuntary labor and violating the Thirteenth

Amendment to the United States Constitution, Section -I-_

‘thereof? .

5. Was the acitlie policy of Congress enacting Title 40,

* Section 270 (a) (d) (The Miller Act) to further implement

the guaranteed protections of the Fifth and Thirteenth

Amendments to the U. S. Constitution?

6. Was Title 9, Sections 2, 3, 4, applicable to a case

not involving interstate commerce nor a maritime con-

tract but a suit involving federal contract procurement law

where Respondent never invoked such law as to require

arbitration thereunder and Petitioner never waived its

rights to jury trial, and discovery procedure to obtain

_ evidence in possession of the Respondent and the U. S.

- government? ”

7. Where the subcontractor is ignorant of the require-

ments of work and is laboring under misrepresentatioris as’

to conditions of work known to the other party and the

conditions of work vastly exceed those as represented, can ~

such subcontrdttor waive in advance his rights to a judicial

determination thereof by contract, as well as the right of

the United States government to determine its own rights,

and submit its rights and: those of the sovereign to arbi-

tration? | :

8. Was the right to administrative relief or arbitration

of the rights of Petitioner under its first and whole sub:

contract, its second contract and third: contract for quantum

“meruit adequate and a complete remedy for relief? *

eet se ae oe

we?

CONSTITUTIONAL PROVISIONS, °

STATUTES INVOLVED

~ The constitutional and statutory provisions and pertinent

text are set forth in Joint Appendix and are: Article III,

2 Section 2, U. S. Constitution; Title’40, Section 270 b (b)

U. S. Code; Title 28; Section 1345 U. S ode; Title 9,

Section 2, 3, 4, U. S. Code; Title 28, Section 1352 U. S.

Code; and the following Constitutional provisions relevant.

as subsidiary issues are: Fifth’ Amendment, set forth in Ap-

E pendix C; Thirteenth Amendment, Sections 1 and 2 set

forth in Appendix D hereto.

STATEMENT OF THE CASE

. "This petition seeks review in part of the judgment of the | |

U. S. Court of Appeals for the Sixth Circuit filed April

22, 1966 remanding the case and ordering a stay for arbi-

tration. The case involves the drilling or pier holes ‘and

supervision of pouring of Respondent’ s concrete by Peti-

tioner supplying labor therefor, in construction of the Air

Force Institute Building of the United States government

at Wright Patterson Air Force Base, Dayton, Ohio under

a subcontract calling for arbitration and which by express.

terms made such subcontract subservient to the conflicting

terms of the general governmental standard procurement

contract DA-15-029-ENG-6241, and Petitioner subject to all

the terms, conditions and provisions of such governmental

contract which Respondent unilaterally inserted into such -

subcontract; however Respondent never delivered a copy

of such government contract to Petitioner thereby Peti-

tioner was unaware of certain obligations placed on it-as

well as many of its rights and privileges thereunder; Peti-

_tioner also suffered certain misrepresentations as to condi-

tions of work and was induced to enter into the contract on

- certain promises of Respondent. After commencing work‘

the enormity of the substrata changed conditions were © —

discovered by Petitioner who notified Respondent. Re:

spondent refysed.to listen to the claims of Petitioner and

Respondent urged Petitioner to work, labor and supervise

as well as its officer.to labor and supervise, and its em-

ployees to labor under unreasonable conditions because of .

vast amounts of underground as well as surface water, in-

creased costs to Petitioner never agreed to, errors caused.

_ by Respondent requiring correction by Petitioner at extra

‘costs of use of equipment, and labor and supervision. “Fhat

Respondent claiming Petitioner breached its contract de-

manded a bond of Petitioner which it supplied; Respond-

ent orally agreed with another contractor on March 8,

1963 to hire such contractor to replace Petitioner, then |

notified Petitioner by letter dated March 7, and delivered

March 11, 1963 of the cancellation of the work of Petitioner

and “fired out” Petitioner. Subsequently, it ordered Pe-

titioner to correct a hole caused by Respondent by a sepa-

rate latter authorization, having no reference to arbitration

or administrative relief, on a time and material basis; it

also at the same time demanded Petitioner -return to the

job and assist the other subcontractor complete the work

halted also by extreme adverse weather. Petitioner had to

incur additional labor costs, maintenance of insurance and

performed under changed conditions than originally con-

tracted to perform. It worked ‘from March 11, 1963

through April 3, 1963 and commenced correction of the

hole on March 27th, 1963 and completed such April 3,

1963. The Respondent threatened to charge the costs of

the new subcontractor to Petitioner over objections of

petitioner, who performed 90% of the work where as

Respondent billed Petitioner for the 10%. of the work.

performed by the substituting contractor at the approxi-

mate sum of $12,000.00 and nitued: to pay Petitioner for

the work performed by petitioner before unlawful dis-

chargé, as well as for the corrective work and the demand :

and -request for the additional performance after the un-

lawful discharge where no‘arbitratiori or administrative re-

_ lief was involved. The Petitioner never’ waived any of |

its rights and continued to object to the Respondent refus-

‘ing to heed its demands for performance by Respondent

under the contract, as well as the “firing out” and the

settling arbitrarily the demands of Respondent against

. Petitioner. Petitioner sought Réspondent to exert itself

for Petitioner as to its rights under the contract but Re-

spondent refused to institute or permit Petitioner to in-

stitute a claim for just compensation under the federal

administrative remedy for relief. The Petitioner being

obligated- to follow the terms of the government as to

changed conditions, giving notice of changed conditions of

work as well as comply with the disputes clause would have .

breached its contract if it had attempted to institute arbi- -

tration proceedings in the first instance, and when it at-

tempted to institute administrative remedies, the Respond-

ent.refused and the contracting officer refused to meet with

representatives of Petitioner because there was no privity

of contract between the U. S. government | and Petitioner.

When Respondent finally réfused to permit Petitioner to °

use administrative remedies and never demanded arbitra-

tion, Petitioner sued for its statutory relief under. the

* Miller Act, the last day before a year expired. from last day

of performance, setting up ‘its various rights under the

‘whole’ subcontract. Thereafter Respondent. filed a motion

to stay pending arbitration but never filed a petition. for

such under Title 9, Sections 1, 2, 3, and 4, thereof; but

Respondent acknowledged the various claims of Petitioner

but contended such arose out of the ‘subcontract. The

joint Appendix of the parties, pages 33a through - pages |

35a set forth the said motion, the order of the court to

Petitioner to show cause why the complaint should not - —

be dismissed entered June 9, 1964, and pages 35a through

page 60a set forth the basis for Petitioner's claim for

.jurisdiction. The joint appendix does not contain the

memorandum of Respondent opposing Petitioner. The

District Court by its order filed January 11, 1964 dis-

missed the complaint’and required the parties to resort

to arbitration. See Joint Appendix 6la. The Petitioner

filed its notice of Appeal to the Circuit Court of Appeals

for the Sixth Circuit, February 5, 1965. See Joint Ap-

pendix page 62a. An oral argument to the Circuit Court -.

of Appeals was made. by Petitioner and Respondent on

April 16, 1966 and the Court mdde ad entered its order

vacating the judgment-of the District Court and remand-

ing the case to the lower court and to stay proceedings —

pending arbitration. The Petitioner seeks to review in

part the judgment of the Court of Appeals for the Sixth

Circuit. of the United States requiring arbitration of the

three contracts of Petitioner and its rights thereunder.

BASIS FOR’ JURISDICTION OF THE

U. S. DISTRICT COURT

The Petitioner filed its complaint before the expiration.

of one year from date of last day of work performed by it,

on April 3, 1964 with the U. S. District Court for the

Southern District of Ohio, Western Division, Dayton,

Ohio under the provisions of Title 40, Section 270 (a) and ©

(b).

: \

\> 9

‘ARGUMENT AMPLIFYING THE REASONS RELIED

ON FOR ALLOWANCE OF THE WRIT

OF CERTIORARI

' The petitioner contends that the decision of this case is

contrary to the decision of the Supreme Court of the United ©

States in holding that Arbitration must apply to the three

separate claims of Petitioner where no interstate commerce

- and. no maritime contracts were involved and where no

petition was filed therefor pursuant to the requirements

of the Arbitration Act, Title 9, Sections 1, 2, 3, and 4 of

the U. S. Code even though Petitioner has not waived

its right to trial by jury and must resort to federal dis-

covery procedure to secure evidence known to be in the

possession of the U. S. gevermaqent contracting officer

as well as the’ Respondent. The Supreme Court in its

decision contained in the case of Norman C. Bernhardt v.

Polygraphic Co. of America, 350 U. S. 198; 76'S. Ct. 73 ——

held such arbitration act applied only to matters involving

the movement of interstate commerce and maritime con-

tracts. Therein it also,stated that, in addition to other

matters, the right to have a. federal’ court give its con-

struction as-to matters of law as an aid to a jury are im- ©

portant. This case involves a narrow: construction of Fed-

eral law-peculiar only to U. S. government procurement

contracts not usual and not clearly understood by the usual

arbitrator not versed in government contract law. |

_ This decision of the Circuit Court of Appeals conflicts

* with the decision of the Supreme Court in the case of ©

U.S. v. Holpuch Co., 328 U.S. 701, 1001; which held that

where appeal procedure are clearly inadequate one could

avoid exhausting administrative remedies.

The Court of Appeals decision conflicts with the. Su-

preme Court decision in the case of U. S. v. Grace & Sons,

Inc. (June 6, 1966) reported in CCH. U. S. Supreme Court

Bulletin, B-1897 confirming H. B. Zachary Co. v. U. &.,:

10°

» $44 F, 2nd. 352; U. S. v. Blair, 321 U. S. 820; Southeastern

Oil Co. v. U. S., 115 F. Supp. 198; C. J. Langenfelder. &

Sons, Inc. v. U. S., 341 F2nd. 600, that where one had no

full and adequate remedy, one need not exhaust his ad-

ministrative remedies; and that in Blair v. U. S. supra a

subcontractor not having privity of contract could not re-

“cover for. additional expenses against the. United States

government. _ |

This decision of the Court of Appeals conflicts with that . -

> of the 4th Circuit’in U.S. et al. v. Alcon Development <

Corporation, 271 F.2nd. 904-which held proper the filing *

of a motion to stay for arbitration, also an answer, and a. -

petition for arbitration under Title 9, Sections 1, 2, 3,

-and 4 U. S. Code:

"The decision of the Circuit Court of Appeals conflicts,

with that of the. Supreme Court as to each of, the separate

claims of Petitioner in. Atkinson v. Sinclair Refining Co.,

82 S. Ct. 1318, 370 U. S. 238 which held that where there

is no agreement for arbitration one need not submit to

arbitration.

_ This decision of the Circuit Court of Appeals is con- -

trary to that of the Circuit Court of Appeals. for .Ten-

nessee in Union of Electric, Radio '& Machinists Workers

AF.L-C.1.0. v.. Collins Radio Company which held the

above also that it is the duty of the Court to determine

_ whether the reluctant party breached its duty to arbi-

trate.

- There is a substantial constitutional question whether

- ‘the Miller Act was enacted to further the purposes of Sec-

tion 2 of the Thirteenth Amendment, as well as the Fifth

Amendment to the U. S. Constitution so that a party may | - |

_ waive any tort committed against it and sue under an.

implied in fact contract for quantum meruit recovery fol-

lowing the requirement of work and labor by an employ-

ing contractor to its subcontractor, its officer and employees

after an. uniawful discharge; also the right of the laborers

to recover the. reasonable value of increased costs follow-

ing discovery Of true ‘conditions of work where costs were

vastly increased and the terms of the whole contract were

. contradictory with each other. This issue has never been

‘presented before under the Miller Act and if the decision

of the lower court were not - reversed, it would permit: the~

- United States government to become unintentionally a

party t to a-violation of the Fifth and Thirteenth Amend-

~ments to the U. S. Constitution. The settling of the issues

pleaded by Petitioner and in settling those must be con-

sidered the subsidiary constitutional issues included here, .

particularly the right of parties to waive their rights to be

free of slavery and involuntary servitude and to be de-’

_prived of rights of private property and liberty of con-

‘ tract, whether directly or indirectly, and contrary to the.

intention of the constitutional safeguards and policy of

the““Miller Act”, particularly where the party has no knowl--

edge of the facts.and did not intend to thusly waive its such _

rights, or the future rights of the sovereign as to the forum.

That as to.the decision below interpreting a requirement

for arbitration where there was no contract: for such and

the right to administrative relief was ‘as ilusory as the

right to arbitration as to the Petitioner, leaves an important

question in law uncertain and the determination by this

court of these.important matters of federal.law will pro--

. mote‘uniformity as to the rights of subcontractors and those

supplying services and labor to the United States, govern-

ment when such government must perform certain func-

tions as a sovereign for the benefit of the whole nation and

the protection of its citizens and tagsecure such. needed

services and labor as well as magerials at the lowest cost to

the. government. -

- WHEREFORE, IT 1s RESPECTFULLY SUBMIT-

TED that this petition for Writ of Certiorari. to review

rae i the’ award: rendered by the Arbitrator(s) may be en-

the judgment of: the United: States Court of Appeais for

the Sixth Circuit should be granted.

“THOMAS F. LAZARON, ESQUIRE

of THOMAS & LAZARON, |

" Attorneys for Petitioners °

2456-Fulbourne Drive,

Cincinnati, Ohio 45231. —

APPENDIX A:

IN THE UNITED STATES ‘DISTRICT COURT

‘Southern District of Ohio, Western Division

Dayton, Ohio —

. ** Givil Action No. 3023

(CAPTION OMITTED)

(Filed January 1], 1965.) |

On June 9, 1964 the Court issued an order for the use

plaintiff to show cause why this action should not be dis-

missed. Subsequently the use plaintiff filed a memoran-

dum which was respondéd to by defendants., The Court

has carefully considered this matter and concludes that

this action should be dismissed.

The Court i is compelled-to reach this conclusion because

of the broad arbitration clause which is contained in the

_ origitial contract, That clause provides:

. “Any controversy or claim arising out of or relating

-: to this contract, or the breach thereof, shall be settled

by arbitration in ‘accordance with the Rules of the —

’ American ‘Arbitration Association, and judgment upon

“4

ORDER OF. UNITED STATES DISTRICT couRT :

. . : bn

eg ee ne ee ee eer een To

tered. in any Court having jurisdiction thereof.”

{Emphasis added). : :

Accordingly, the use plaintiff's complaint is hereby DIS-

MISSED and the parties shall proceed: with arbitration. S |

_ Chief Judge U.S. District Court ™

APPENDIX B ,.

UNITED STATES COURT OF APPEALS ©

For The Sixth Circuit

(CAPTION OMITTED)

(Filed April 22, 1966)

ORDER |

Before WEICK, Chief Judge, O'SULLIVAN and CELE-

BREZZE, Circuit Judges. ee die .

We agree with the District Court that the parties are re-

_ quired to. arbitrate their controversy in accordance with

the arbitration clause in the contract. The motion filed by

defendants in the District Couirt was to stay the action pend-

ing arbitration, and not to dismiss it.

The judgment of dismissal entered by the*District Court .

is accordingly vacated and the cause is remanded with in-

structions to stay the action pending the arbitration pro-

° ceedings. = ‘ : |

_ Entered by order of the Court. "

i i /s/ Carl W. Reuss, Clerk

APPENDIX Cc

United States Code iad ms CONSTITUTIONAL:

AMENDMENTS: 1-5, page 297

AMENDMENT _V. CAPITAL” CRIMES; DOUBLE

JEOPARDY; SELF INCRIMINATION; DUE PROCESS:

_ JUST COMPENSATION FOR PROPERTY.

No person shall be held to answer for a capital, or other- .

wise infamous crime, unless on presentment or indictment

of a Grand Jury, except in cases. arising ip the land or naval .

forces; or in the militia, when in actual service in time of .

war or public danger; nor shall any person be subject for

the same offense to be twice put in jeopardy of life or limb;

nor shall be compelled in any criminal case to be a witness

. against himself; nor be deprived of life, liberty, or property.

without due process of law, nor shall private property be ©

taken for public use, without just compensation.

| APPENDIX D

> : e

United States Code por - CONSTITUTIONAL

AMENDMENT 6-14, page 269 | ; |

. AMENDMENT XII. SLAVERY ABOLISHED.

Section 1. ‘Neither slavery nor ‘involuntary servitude, |

except as,a punishment for crime whereof the’party shall .

have been duly convicted shall exist within the United

_ States, er any place subject their jurisdiction. |

Section 2. Congress shall have the ‘power to enforce this

‘Article by <eENe. legislation.

TABLE OF CONTENTS OF APPENDIX’

Case No. 3023.

: Page

Statement of Docket Entries ..... Govesesedes eeee ? dal

Complaint eons seg eecieees Weyer ere errr et a :

Exhibit WR Kexvetenes ee Sas a ee Pe don ents ae

ny hy, EER OO ACE) SE a he

Motion to Stay Action Pending Arbitration ........ 33a.

Order of Court.to Show Why Action. Should Not. |

_ Be Dismissed Feu veg iesen steveanssscsveyixs: Tt

Memorandum’ of Use-Plaintiff ‘Srecilie Motion =

to Stay Action Pending Arbitration .......... - 35a

Order of Court Dismissing Complaint... .:.. nhety f ae

Notice arch : conpQiR reer RT TTT eT ee eaten.

MRSS

STAT EMENT OF DOCKET ENTRIES |

4/3/64

4/6/64

4/27/64

4/29/64

6/9/64

6/24/64

7/2/64

1/11/65

2/5/65

2/12/65.

Complaint filed.

Summons issued with copies of complaint to

US. Marshal: for service.

. Defendants’ motion filed.

Summons returned executed and filed. Mar-

shal’s fee $9.72.

Order — @laintiff to file‘memo ) within 15 days.

. Plaintiff's memo opposing motion of defendant.

Defendants’ memo in opposition to use-plaintiff’s

memo.

Order — Plaintiff's Complaint dismissed; to pro-

ceed with arbitration filed.

Notice of appeal filed.

Bond of appeal filed.

Entry — Plaintiff's action dismissed to which

use Plaintiff excépts filed.

—_~

» 2a-

Civil Action No. 3023

UNITED STATES DISTRICT COURT |

for the —

Southern District of Ohio

Western Division, Dayton, O.

UNITED STATES OF AMERICA.

for the use and benefit of KELLER PIER DRILLING

CO., an Ohio Corporation, | |

: Plaintiff,

vs. :

JOHN H. EISELE COMPANY, INC.,

an Ohio Corporation;.

THE BUCKEYE UNION CASUALTY CO.;

AMERICAN REINSURANCE Co., |

Defendant.

a COMPLAINT

(Filed April 3, 1964.)

FIRST CLAIM

1. Jurisdiction of this cause is conferred. by Section

270 (a) and (b) of Title 40 of the United States Code.

FIRSTCOUNT ——_ )

2. On or about the 30th day of November 1962 the

Defendant,. John H. Eisele Company, Inc., entered into

written contract with the United States of America where-

: Complaint

by the om Defendant John H. Fisele mpany, Inc.,

_ agreed to furnish all the labor and materials/and to perform.

all work required for the construction of the AIR FORCE

INSTITUTE OF TECHNOLOGY building at Wright-

Patterson Air Force Base, State of Ohio, for the. considera-

tion of $2,665,218.00. A copy of the said contract, except

as to drawings and specifications i is attached hereto as Ex-

' hibit A.

_ 8.: Pursuant hs the Act of Congress approved August.

/ 24, 1935, the Defendant, John H. Eisele Company, an Ohio .

_ corporation having its principal office at Columbus, Ohio,

as Principal and the Defendants, the American Reinsurance

Co. having an office at'99 John Street, New York, New

York, and, The Buckeye Union Casualty Co., an. Ohio cor-

poration having an office at:1111 East Broad Street, Colum-

bus, Ohio, as sureties on or about the 30th day of November,

1962 duly executed a standard government form of pay- °

- ment bond to the United State of America, wherein and

. whereby the Defendant John H. Eisele Company, Inc.

and Defendants, American Reinsurance Co., and The

Buckeye Union Casualty Co., as sureties, bound themselves

jointly and severally in the sum of $1,066,087.20, con-

ditioned that if the principal shall promptly make payment

to all persons supplying labor and materials in the prosecu-

tion of the work provided in said contract, and any and all

duly authorized modifications of said contract that may here-

after be made, notice of which modifications to the surety

is hereby waived, then this obligation to be void; other-

_ wise to remain in full force and virtue.

4. The said bond was duly accepted by the United

States of America; and upon such acceptance, the contract

for the construction 2nd completion of the building afore- .

mentioned was awarded to Defendant John H. Eisele Com-

pany, Ine.

: Complaint

5. In order to obtain the performance of the work re-

quired under the said contract, the Defendant John H.

Eisele Company, Inc. entered into a sub-contract with Keller

Pier Drilling Co., an Ohio corporation for the doing of

certain drilling of holes, for piers using drilling equipment —

and the pourihg of concrete to form the said piers which

.work by the said use, Plaintiff was necessary to the per-

_ formance of Defendant, John H. Eisele Company, Inc.

contract with the United States and which use Plaintiff

agreed to perform in consideration of the payment to use

Plaintiff of $5,780.00 plus ‘$2.00 per cu. yard of concrete

poured; by. defendant John H. Eisele Company, Inc. A

copy of said sub-contract is attached hereto as exhibit B.

6. Thereafter this use Plaintiff, performed the said labor

and work and furnished equipment to drill said pier holes

and supervised the pouring‘of.said concrete to form the

. piers necessary as required under the contract between the

United States and Defendant John H. Eisele Company,

_ Inc, which labor, and work and use of equipment and

“supervision of concrete so poured was performed by use

) “Plaintiff, commencing on the 12th day of February, 1963,

during the months of February, March and April, and

- was terminated on April 4, 1963 ss Defendant John H.

Eisele Company, Inc.

7. The defendant John, H. Eisele Company, Inc. failed

and neglected to pay to the use Plaintiff the said sum of:

$5,780.00 plus $2.00 per cubic yard of. poured concrete

according to its sub-contract.

8. Oneryear has not elapsed from the date of final pay-

ment of the contract and although due demand has been

made upon the defendant, John H. Eisele Company, Inc.

‘no part of said sum of $5,780.00 plus $2.00 per cu: yay

of poured concrete, with interest has been paid to the use. .

Plainuff.

chu.

Complaint

9. All of said-work and labor and use of drilling equip-

ment and supervision of pouring concrete was performed

within the said Southern District of Ohio.

_ Wherefore, the United States of America for the use and-

benefit of Keller Pier Drilling Co. demands judgment.

against the defendants in the sum of $5,780.00 plus $2.00

per cu. yard of concrete poured, with interest from the 4th

day of April 1963 and the.costs of this action.

SECOND COUNT

1. Use Plaintiff repeats and cndtiaiie each and all of

the allegations contained in paragraphs 1, 2, 3, 4, 5, of the .

First Count of Claim numbered First with like effect as if

herein fully repeated.

_ 2.. That under the terms of said aleconitaies Defend-

_ant Eisele Company, Inc. was required to set off each situs

of each hole to be drilled by use Plaintiff, and said De-

fendant, John H. Eisele Company, Inc. by its special in-

stance and written request made known to use Plaintiff

its promise to pay use Plaintiff a reasonable sum of money

on a time and ‘material basis for correction of a pier hole

location, said sum to be in aciition to the said sub-contract

price. :

3. That use Plaintiff ciliadied the correction of said

pier hole on March 27, 1963 and completed said correction

on April 2, 1963 at the reasonable value for said work and

- labor and use of equipment in the sum of $385.21.

__ 4, ‘The defendant, John H. Eisele Company, Inc. failed

and neglected to pay use Plaintiff the said sum of $385.21

according to its written request. :

‘ 5.. One year has not elapsed from date of final payment

of the contract and although: due demand has been made

on defendant, John H. Eisele Company, Inc. no part of

Complaint

_ said $385.21 with interest has been paid t to use Plaintiff. |

6. All of said work and labor for correction said-pier._.

hole location and drilling with equipment was performed. .

_ within said-Southern District of Ohio.

Wherefore, the United States of America for the use and

benefit of Keller Pier Drilling Company demands judgment

~-against defendants in the sum of $385.21 with interest from

the 4th day of April, 1963 and costs of the action.

. rs ” .

“SECOND CLAIM

1. Jurisdiction of this cause is conferred by Section 270 -

(a) and (b) of Title 40 of the United -States Code.

‘THIRD COUNT

“9. Use Plaintiff repeats and realleges each and all

of the allegations containe | in paragraphs numbered 2,

3, 4, of- the First Count of Claim numbered First of this“

complaint with like effect as if herein fully repeated.

3. In order to obtain the performance of the work re-

quired under the said contract the Defendant, John H.

Eisele Company, Inc. entered into a sub-contract with Keller

‘Pier Drilling Co. an Ohio corporation for the drilling of

‘certain pier holes using drilling equipment and supervising

the pouring of concrete to form the said piers which work .

by the-use Plaintiff was necessary to the performance of.

Defendant, John H. Eisele Company, Inc. and which use_

. Plaintiff offered to perform in consideration of the pay-

ment of $5,780.00 plus $2.00 per cu. yard of concrete

poured. That use Plaintiff agreed to perform said work

- provided Defendant, John H. Eisele Company, Inc. re-

moved overhead electrical wires.

4. Use. Plaintiff was not furnished ‘a copy of the prime -

contract nor specifications governing same which were in-

Ct ee Eee

dmv EGAied ~~

in alts Saal on des

-—

“Ta

Complaint . ;

corporated into the sub:contract awarded use Plaintiff, a

| copy of which is attached hereto as Exhibit B, and use

Plaintiff did not know the method of. pouring concrete

required a vibration method thereby increasing to use

~ Plaintiff the costs of such labor and work.

5. That no time was specified as to commencement date

or completion date in use Plaintiff’; sub-contract, but he

offered to commence work on February 12, 1962 with the

approval of Defendant, John H. Eisele Company, Inc:

6.. That Defendant, John H. Eisele Company, Inc.

induced use Plaintiff to purchase workmen’s compensation

insurance, public liability insurance and property damage

insurance and to incur certain other expenses.in attempt-

ing to fulfill the requirements of said sub-contract aggre-

gating in cost of $7,752.15 to use Plaintiff.

7, That although the contract of use Plaintiff and De-

fendant John H. Risele Company, Inc. mae the pro-

visions of the prime contract of said defendant and the

United States government and use Plaintiff would have,

been excused from performing said work because of the

extremes of adverse weather, said Defendant urged use

- Plaintiff to exert more time and effort than was required

under said sub-contract all : of which use Plaintiff com- ©

* plied with.

8. Use Plaintiff further urges upon information and be-

lief that because of the adverse weather prohibiting con-

struction, in order to expedite the construction of said pier

holes said Deferidant failed and neglected to give use Plain-

tiff three days prior notice of defendant’s determination

that use Plaintiff was derelict in its obligation and said’

Defendant negotiated with another sub-contractor on or

about March 3, -1963 to supplant use Plaintiff three days

before said Defendant notified use Plaintiff of its said de-

cision contrary to defendant’s a caidas

. 9. Use plaintiff says that said Defendant failed and

neglected and refused to remove overhead electric wires

for use plaintiff as agreed thereby causing great delay

to use plaintiff in moving its equipment from situs to

situs with drilling boom lowered.

10. Use Plaintiff further says that he was induced to

enter into negotiations for such work on ihe representation

that the substrata would be merely damp, free of large

boulders, whereas and in fact, water drained into each hole:

so drilled, necessitating excessive use of pumping equipment

beyond normal requirements and’ causing additional un-

forseen costs, due to “remucking”. of drilled, water filled .

holes at great expense to use ait

- 11. That approximately four days after detent 7 n

H. Eisele Company, Inc. negotiated a written agreement

with. such other sub-contractor, said defendant informed

use Plaintiff of its decision to bring additional men and

equipment in and charge the same to the expense of use

Plaintiff, all at an unreasonable price of $40 per cu.: yard

of concrete poured. ;

12. That despite ‘said defendant’s notification to use

Plaintiff of its determination to cancel. the balance of use ;

Plaintiff's contract, said defendant urged use Plaintiff to.

continue to exert its capabilities to complete such work

and to incur other and greater expense.

13. Use Plaintiff further alleges that defendant, John

H. Eisele. Company, Inc. was required to stake out drilling

. .' situs which in certain instances were inaccurately staked

and center not accurately indicated, all to the great delay

| and expense to use Plaintiff. 7

_ 14. That despite the repudiation of the obligation of’

defendant under its sub-contract with use Plaintiff on March

7, 1963 and due to the“urgings both before and after said

date, use Plaintiff had’ fully ‘performed all obligations

/On its part to be anleenieaies and at the time ‘of said re-

Complaint }

pudiation was ready, willing and able and duly offered to

continue the due performance thereof.

15.° That defendant, John -H. Eisele Company, Inc.

failed, neglected. and refused to pay to use Plaintiff the

_ said sum of $5,780.00 plus $2.00 per cu. yard. of concrete

poured, and said defendant failed, neglected and refused

to pay any other or further amounts said defendant agreed

to pay for additional work or to reimburse use Plaintiff

he sum of $7,752.15 which use Plaintiff reasonably, in-

cured, at said Defendant’s . special urging and requests,

hough use Plaintiff made’ demand on said defendant

for reimbursement and compensation. .

16. That use Plaintiff's agreement has not reached its

termination date and one year has not elapsed from the

date of final payment of the agreement and urgings of De-

.fendant John H. Eisele Company, Iric. and although due

demand has been made on defendant John H. Eisele Com-

pany, Inc., no part of the reasonable value of use Plain-

tiff’s. work, labor, equipment, or costs have been paid.

17. That the value of $7,752.15 was reasonable which

use Plaintiff expended’ on account of defendant John H.

Eisele Company, Inc. and which was expended and labor

performed in the Southern District of Ohio.

Wherefore, the United States of America for the use

and benefit of Keller Pier Drilling Co. demands judgment

against the defendants in the sum of $7,752.15 with interest

from the 4th day of April, 1963 and costs of this action.

| /s/ Thomas F. Lazaron

Thomas & Lazaron by. Thomas F. Lazaron

a member of the firm |

Attorneys for Keller Pier Drilling Co.

. Office and Post Office address

' 105 Rookwood Bldg. 1077 Celestial St.

Cincinnati 2, Ohio ~

10a

STATE OF OHIO: | ) SS:

_ COUNTY OF HAMILTON ) —

‘Wilbur Keller, being duly sworn deposes and says that

he resides at 4774 Jessup Street, Cincinnati, Ohio, that he _

is the president of Keller Pier Drilling Co.,an Ohio corpora-. .

tion th¢e use Plaintiff herein; and that he has read the

. foregoing complaint and knows the contents ‘thereof, that

the same are true of his own knowledge except as to the

matters therein stated to: be alleged on information and

‘belief and as to those. matters he believes them to be true.

we Keller, President

Sworn to and ictal before me this ond day of April,

« 1964.

Ernest V. Thomas, Jr., Notary Public

‘Hamilton ines id Ohio

lla

EXHIBIT A :

‘CONSTRUCTION CONTRACT |”

Contract No. DA-15-029-ENG-6241

Date of Contract 30 November 1962

Namie and Address of Contractor

JOHN H. EISELE COMPANY, INC.

18 E. 41st Street :

_ + New York 17; New York

Corporation, incorporated in the State of Ohio

Department or Agency ee |

U. S. Army Engineer District, Louisville

Corps of Engineers, U. S.A. —

P. O. Box 59, Louisville 1, Kentucky

Contract for (Work tobe performed) :

Construction of Air Force Institute of Technology,

Place FO ae ee ae

Wright-Patterson Air Force Base, Ohio:

Contract Price (Express in words and figures) |

. Two Million Six Hundred Sixty-Five Thousand Two

Hundred Eighteen. and No/100 Dollars. ($2,665,2 18.00)

Estimated = - oa

Administrative Data (Optional) ~~ > | Pade

To be paid by Special Disbursing Agent (Military Funds), ©

- U.S. Army Engineer District, Louisville, Corps of -En-

gineers, USA, 830 West Broadway, Louisville 3, Ken-

tucky from the following funds:

__57X3300 377-6513 P.321-32 $ 15-029 (BAN 3-288)-

The United States of America (hereinafter.called the Gov-

ernment), represented by the Contracting Officer executing

' ‘this contract, and the individual, partnership, joint ven-.

ture, or corporation named above (hereinafter. called the

Contractor), mutually agree to perform this contract in

‘strict accordance with the General. Provisions (Standard

12a

. Exhibit A

Form 23-A), Labor Standards Provisions Applicable’ to Con-

tracts in Excess of $2,000 (Standard Form 19-A), and the

following nue specifications, schedules, tala and ”

se conditions:

| "Specifications: Serial No. ENG-15-029-63-11 as amend- -

ed by Amendment Nos. 1, 2 and 3 thereto. _

aperange: As listed in Paragraph SC-3 of the § vecifica-

- tions as amended. by Amendment No. 2 thereto. _

General Provisions: Std. Form 23-A (April 1961) as

modified by continuation sheets Nos. 5 through 16.

Unit Price Schedule: Attached hereto‘and made a part .

hereof.

Work Shall Be Started

- : Within 10 calendar days after date of receipt by contractor

of Notice to Proceed.

Work Shall Be Completed «

“In accordance with the provisions of paragraph SC-1 of

thes ecifications. es

Alterations. The following. alterations were made in this

contract before, it was signed by the parties hereto:

Article 28 of ‘General Provisions deleted..

In witness whereof, thie parties hereto have executed this: .

" . contract as of the date enteréd-on the first page hereof.

THE UNITED STATES OF AMERICA

» Js/ James L. Lewis 28 Dec. 62

‘James L. Lewis, Col., CE

District Engineer.

Contracting Officer ,

| CONTRACTOR

» John H. Eisele Company, Ine.

James Conforti, Jr. —

President

7 ad

| St Ray

ees

——se ee” Ore

~@ | | 13a

eaten Exhibit A. |

GENERAL PROVISIONS

(Construction Contract)

. * . ="

4, CHANGED CONDITIONS

The Contractor shall promptly, and’ before such condi-

ions are disturbed, notify the Contracting Officer in

writing of: (a) subsurface or latent physical conditions at

the site differing materially from those’ indicated in this,

contract, or (b) unknown physical conditions at the site,

of an unusual nature, differing materially from those or-

dinarily éncountered and generally recognized as inhering

‘in. work of the character provided for in this: contract.

The Contracting Officer. shall. promptly investigate the

conditions, and if he finds that -such - conditions do so

materially differ and cause an increase or deérease in the

Contractor's cost of, or the time required for, performance

of this contract, an equitable adjustment shall be made and |

the contract modified in writing’ accordingly. Any-claim

of the Contractor for adjustinent, hereunder shall not be

allowed unless he has given notice as above required; or

‘unless the Contracting Officer grants a further period ‘of ©

time before the date of final payment under the contract.

_ If the parties fail to agree upon the adjustment to be made,

the dispute shall be determined as s provided i in Clause 6 ‘of

__ these General Provisions. ‘

5. TERMINATION FOR DEFAULT — DAMAGES

FOR DELAY — TIME EXTENSIONS

oe - @ —_

. | -

(d) The Contractor's right to proceed shall not -be so

terminated nor the Contractor charged with resulting dam-

age if:

oo |

l4a

Exhibit A |

(1) ‘The delay in the completion of the work arises

from unforeseeable causes beyond the control: and without

,the fault or negligence of the Contractor, including but not

restricted to, acts of God, acts of the public enemy, acts of ©

‘the Government in either its soverign or contractual ca-

pacity, acts of another contractor in the performance of a

contract with the Government, fires, floods, epidemics, quar-

antine~ restrictions, strikes, freight embargoes, unusually

severe weather, or delays.of subcontractors or suppliers aris-

ing from unforeseeable causes beyond the control and with-

out the fault or negligence of both the Contractor and

such subcontractors or suppliers; and

(2) The Contractor, within 10 days from the oe '

of any such delay (unless the Contracting Officer grants a

further period oftime before the date of final payment

_ under the. contract), notifies the Contracting Officer in

writing of the causes of delay.

The. Contracting Officer shall ascertain the facts and the

extent of the delay and extend the time for completing the

work when, in his judgment, the findings of fact justify

such an extension, and his findings of fact shall be final

and conclusive on the parties, subject only to appeal as pro-

vided in Clause 6 df these General Provisions.’

'(e) If, after notice of termination of the Contractor’s

right to proceed, under the provisions of’ paragraph (a)

of this clause, it is determined that the delay is excusable

under the provisions of paragraph (d) of this clause, such

notice of termination shall be deemed t6 have been issued

pursuant to the clause of this contract entitled “Termination

for Convenience of the Government,” and the rights and

obligations of the parties hereto shall in such event be

governed by such clause. (This paragraph (e) applies

only if this contract contains such termination oe.)

ge a ee

| Exhibit A

6. DISPUTES , ‘

(a) Except as siaseoitia eoeidal in this contract, ‘any

dispute concerning a question of fact arising under this

contract which is not disposed of by agreement shall be de-

cided by the Contracting Officer, who shall reduce his de-

cision to writifig and mail or otherwise furnish a copy there-

of to the Contractor.” The decision of ‘the Contracting

Officer shall be final and conclusive unless, within 30 days

from the date of receipt of such copy, the Contractor mails

or otherwise furnishes to the Contracting Officer a written —

appeal addressed to the head of the agency involved. Thee

decision of the head’ of the agency or his duly authorized

representative for the determination of such appeals shall

be final and conclusive. This provision shall not bé plead-

ed in any suit involving a question of fact arising under

this contract as dimiting judicial review of any such de- —

cision to cases where fraud by such official or his representa-

tive or board is alleged: Provided, however, that any such

_ decision shall be final and conclusive unless the same is

fraudulent or capricious or arbitrary or so grossly errone-

ous as necessarily to imply bad faith or is not supported by

‘substantial evidence. In connection with any appeal pro-

ceeding under this clause, the Contractor shall be afforded

an opportunity to-be heard and to offer evidence in support

of his appeal. Pending final decision of a dispute here- .

‘under, the Contractor shall proceed diligently with the

performance o fthe contract and in accordance with the

Contracting Officer's decision.

* ‘* * _

99. TERMINATION FOR CONVENIENCE OF THE

GOVERNMENT. (JAN. 1961):

(a) The performance of work under this contract may

be terminated by the Government in accordance with this _

2. 16a

Exhibit A

clause in whole, or from time to time in part, whenever the

Contracting Officer shall determine that such termination

is in the best interest of the Government. Any such ter-

mination shall be effected by delivery to the Contractor-

of a Notice of Termination specifying the extent to which

performance of work under the contract is terminated, .

and the date upon which such termination becomes effec-

tive. ; Re

(b) After receipt of a Notice of Termination, and ex-

cept as otherwise directed by the Contracting Officer, the

Contractor shall: . ow)

* * | *

(iv ‘assign to the Government, in the manner, at the

times,-and to the extent directed by the Contracting Of-:

ficer, all of the right, title, and interest of the Contractor

under the orders and subcontracts so terminated, in which

case the Government shall have the right, in ‘its discretion,

to settle or pay any or all claims arising out of the termina-

tion of such orders and subcontracts;

(v) settle all outstanding liabilities and all claims arising

out of such termination of orders and subcontracts; with the

approval or ratification of the Contracting Officer to the

extent he may require, which approval or ratification

shall be final for all the purposes of this clause;

* * *

(ix) take such action as may be necessary, or as the Con- :

tracting Officer may direct, for the protection and preserva-

tion of the property related to this contract which is in the

possession of the Contractor and in which the Government

has or may acquire an interest.

* y * *

(e) In the event of the failure of the Contractor and

the Contracting Officer to agree as provided in paragraph ,

17a y

» Exhibit

(d) upon the whole amount to be er to the a

by reason of the termination of: stad pursuant to this clause,

the. Contracting Officer shall, subject to any Settlement

Review, Board approvals required by Section VIII of the

- Arméd Services Procurement Regulation in effect as of the

daté of execution of this contract, determine,-on the. basis

of information available to him, the amount, if any, due to

the Contractor by reason of the termination and shall pay ©

to the Contractor the amounts ‘determined as follows:

(i) with respect to all contract work performed prior

to the effective date of the Notice of Termination, the

total (without duplication of any items) of —

ak ee

(B) the cost’ of settling and paying claims arising out

of the termination of work under sub-contracts or orders

as provided in paragraph (b) (v) above, exclusive’ of the

amounts paid or payable on account of supplies or ma-

terials delivered or services furnished by. the subcontractor -

prior to the effective date of the Notice of Termination of -

work: under this contract, which amounts shall be in-

cluded in the cost on account of which payment is made.

under (A) above; and

* * *

25. GRATUITIES. (MAR. 1952).

* * *

vided in this clause shall not be exclusive and are in addi-

tion to any other _— and akc oes provided by law or

under this contract.

(ASPR 7-104.16)

18a

- Exhibit A

40. PRIORITIES, ALLOCATIONS, AND. ALLOT-

MENTS. (JAN. 1961) —

; *. * . * .

Subparagraph / (d)(1) and paragraph (e) of General Pro-

vision 5, entitled “Termination for Default — Damages. for

Delay — Time Extensions,” have been deleted and the fol-

lowing are substituted therefor: : °

“(1) - The delay in the completion of the’ work arises

from causes other than normal weather beyond the con-

trol and without the fault or negligence of the Contractor,

including but not restricted to, acts of God, acts of the pub-

lic enemy, acts of the Government in- either its sovéreign

_or contractual capacity, acts of another contractor in the

performance of a contract with thé Government, fires,

floods, epidemics, quarantine restrictions, strikes, freight —

embargoes, unusually severe weather, or delays of subcon-

tractors or manta ating from causes other than normal

‘weather beyond the control and. without the fault or negli-

~“» gence of both the Contractor and such subcontractors or

suppliers; and” (ECI 7-602.5)

“(e) If, after notice of yerminaticn of the Contractor's

right to proceed under the provisions of this clause, it is

determined for any reason that the Contractor was not in

default under the provisions of this clause, or that the delay

_ was excusable under the provisions of ‘this clause, the

| rights and obligations of the parties shall, if the contract |

contains a clause providing for termination for convenience

_ of the Government, be-the same as if the notice of termina-

tion had been issued pursuant to such clause.” (ASPR

- 8-709)

19a

Exhibit A .

21.. NONDISGRIMINATION IN EMPLOYMENT. -

(JUL 1962) | |

+ * eo. et \’

(g) The Contractor will.include the provisions: of the’.

foregoing paragraphs (a) through .(f) in every subcontract

or purchase order unless exempted. by rules, regulations, or

orders of the President’s Committee on Equal Employment

Opportunity issued pursuant to séction 303 of Executive —

Order No. 10925 of March 6, 1961, so that such provisions

will be binding upon each subcontractor or vendor.* The

Contractor will take such action with respect to any sub-

contract or purchase order as the: contracting agency may

. direct as a means of enforcing such provisions, including ©

sanctions for noncompliance: Provided, however, that in

the event the Contractor becomes involved in, or is threat-

ened with, litigation with a subcontractor or vendor as a

result of such direction by the contracting agency, the Con-

tractor may request the United States to enter into such liti-

gation to protect the interests of the United States.

*The President’s Committee on Equal Employment:

Opportunity interprets the first sentence of paragraph (g)

to mean that the Contractor will include the provisions of

‘ the foregoing paragraphs (a) through (f) in every first-tiér

subcontract or purchase order, so t provisions will .

be binding upon each such subcontractor or vendor, and

will require each first-tier subcontractor or vendor similar- ~

ly to.include the provisions of paragraphs (a) through (f)

in any subcontract or purchase order which he places, un-

less exempted by rules, regulations, or orders of the Presi-

dent’s Committee on Equal.Employment Opportunity is-

sued, pursuant to section 303 of Executive Order 10925 of .

March 6, 1961. (ASPR 12-802) =

¥* * 1€

20a

Exhibit A

2. WORK HOURS ACT OF 1962 — OVERTIME COM-

PENSATION.

(a) No Contractor or subcontractor contracting for any

~ part of the contract work shail require or permit any laborer

or mechanic to be employed on such work in excess of eight

hours in any calendar day or in excess of forty hours in any

-workweek unless such laborer or mechanic received com-

pensation at a rate not less than one and one-half times

his basic rate of pay for all hours worked in’ excess of

eight hours in any calendar day or in excess of forty hours

in such workweek whicheyer is ‘the greater number of. over-

time hours.

(b) In the event of any violation of the provisions of

paragraph (a) the Contractor and any subcontractor re-

sponsible for such violation shall be liable to any affected .

employee for his unpaid wages. In addition such Con- -

_ tractor or subcontractor shall be liable to the United States

. for liquidated damages. Such liquidated damages shail be -

computed with respect to each individual laborer or me-

‘chanic employed i in violation of the provisions of paragraph |

(a) in the sum of $10 for each calendar day‘ on which

such employee was required or permitted to work in excess

of eight hours or. in excess of forty hours in a work-week

without payment of the required overtime wages.

be withheld from moneys payable on account of work per-

formed by the Contractor or subcontractor the full amount

of wages required by this contract and such sums as may

administratively be determined to be necessary to satisfy any

liabilities of such Contractor or subcontractor for liquidated

damages as provided in paragraph (b).

- eae Tele *

2la

Exhibit A

LABOR STANDARDS -PROVISIONS

_ Applicable to Contracts in Excess of $2,000

* * *

- 7. SUBCONTRACTS — TERMINATION

The Contractor agrees to insert Clauses I through

7 hereof in all subcontracts and furthe? agrees that a breach

” of any of the requirements of these clauses may be grounds

for termination of this contract. The term “Contractor”

as used in such clauses in any subcontract shall be deemed

to refer to the subcontractor except in the phrase * ‘Govern-

ment Prime Contractor.”

EXHIBIT B

INSERTION PAGES 2- A, 2-B and 2-C by GENERAL

- CONTRACTOR ARE, PART OF THIS CONTRACT.

- .STANDARD’ FORM OF SUBCONTRACT

* * .

CONTRACT 251-3 - a

THIS AGREEMENT made this SIXTEENTH day of

JANUARY in the year NINETEEN. HUNDRED and

SIXTY-THREE by and between KELLER PIER DRILL-

ING CO., 4774 Jessup Street, CINCINNATI 39, OHIO

hereinafter called the Subcontractor and JOHN H. EISELE,

_ COMPANY, Inc. (OHIO) hereinafter called the Contractor.

WITNESSETH, That the Subcontractor and Contractor

for the consideration hereinafter named agree: as follows:

SECTION 1. The Subcontractor agrees to furnish all

_ material and perform all work as described in Sectjon 2 here-

of for Air Force Institute of Technology for The United -

States of America hereinafter called the Owner, at Wright-

Patterson Air Force Base, Ohio. in accordance ‘with the

General Conditions of the Contract between the Owner and.

tore 22a

<i Exhibit B

the Couitaies and in accordance with Supplementary Gen-

eral. Conditions, the: Drawings and the Specifications pre-

pared by Giffels & Rossetti, Inc. and U.S. Army Engineer

District, Louisville Corps of Engineers, Louisville, Ken-

- tucky ‘hereinafter called the Architect, all of which General

Conditions, Drawings and Specifications, signed*)by the

parties thereto or identified by the Architect, form‘a part_

_ of a Contract between the Contractor and the Owner dated,

- November 30th, 1962, ‘and hereby become’ a part of this

Contract.

SECTION 2. ‘The\ Subcontractor and the Contractor

_agree that the materials to be furnished and work to be done

by the Subcontractor + For furnishing all labor, tools, |

equipment and supervision required to complete all the

work called for under Section 4 of the specifications en- ~

titled — “MACHINE- DRI ‘LED PIERS” and/or as —

on the drawings.

Concrete will be furnished’ by General Contéaceor. but

Sub-contractor will pour same in place. —

Any load test on piers or concrete test to be responsibility -

of General Contractor. 7 ‘

Subcontractor subject to the ipsteval of ‘the Architects

and Owners. . : < :

General Contractor to set any steel or bolts that ‘i into

“piers, to do any forming ‘that need be done on piers above ©

“ground level and laying off of piers.. |

" ~ SECTION 3.. The Subcontractor agrees to complete the

several portions and the whole of the work: herein sublet’

by the time or times, following: - Work | to start within two

<— days’ notice. ”

- SECTION 4. The Contractor agrees to pay the Sub- *

_contractor for the performance of his work the sum of Five

“Thousand Seven-Hundred and Eighty Dollars ($5,780. 00) .

PLUS = Two Déllars sit 00) per cubic jas for pouring

. ef

= Py hp ae

28a ek

Exhibit B

of concrete, in current funds, subject to additions and de-

ductions for changes as may be agreed upon, and to make

payments on account thereof as follows: _

TERMS OF PAYMENT: 85% on the 20th of the month

for all work performed at the project during the previous

thonth provided always however, that the Contractor shall

- not be required to pay; Subcontractor for any work per-

_ formed unless and until the Owner has actually paid the

‘Contractor therefore; balance to be paid thirty: (30) days”

after final approval and acceptance by ‘the Architects and, ~

Owners.

If piers are over:or under the depth, specified, ADD or

DEDUCT. $2.00 per lin. ft. .and ‘For — concrete —

ADD $2.00 per cu. yd. 7

SECTION 5. The Contractor and Subcontractor agree’ .

to bé hound by the'terms of the Agreement, the Genéral _.

Conditions, Drawings and Specifications as far as applicable |

to this subcontract, and also by the following provisions: ‘

The Subcontractor agrees— . -

a) To be bound to the Contractor by the terms of the Agree- :

ment, General .Conditions of the Contract, the Supple-

mentary General Conditions, the Drawings and Specifica-

.. tions, and to assume toward him all the obligations and”

responsibilities that he, ik those oe assumes toward

the Owner.~ __ :

b) To submit to the Contractor seiktililiian for payment in

such reasonable time as to enable the Contractor to apply —

for payment under Article 24 of the General Conditions.

ce) To make all claims for extras, for extensions of time -

and for damage for delays or otherwise,. to the Contractor

» in the manner provided in the General Conditions of the

Contract and Supplementary. General Conditions for like .

claims by the Contractor upon.the Owner, except that the

time for making claims for extra cost is one week.

94a :

_ Exhibit B

The Contractor agrees— |

d) To be bound to the iihcineneior by all the obligations

that the Owner assumes to the Coritractor under the Agree-

ment, General Conditions of the Contract, the. Supple-.

mentary General Copditions, the Drawings and Specifica-

tions, and by all the provisions thereof affording remedies

and redress to the Contractor from the Owner. ee

e) To pay the Subcontractor, upon‘ the payment Of cer-

tificates, if issuéd under the schedule of values described in

Article 24 of the General Conditions, the amount allowed

to. the Contractor on account of the Subcontractor’s work

to the extent of the Subcontractor’s interest therein. a

f) To pay the Subcontractor, upon the payment of cer- .

. tificates, if issued otherwise than as in (e), so that at all times

his total payments shall be as large in proportion to the

. value of the\work done by him as the total amount certified ©

to the Contractor is to the value of the work done by him.

‘.. g) To pay the Subcontractor to such extent as may be

provided by the Contract Documents or the subcontract, if

either of these: provide for earlier or larger snc than

the above.

j) To pay. the Subcontractor a jude share of any fire in- ~

= surance money received by. him, the Contractor, under

Article 29 of the General Conditions..

k) To make no demand for liquidated damages or r penalty

—°. for delay in any,sum in excess’ of such amount as may be

specifically named in the subcontract. .

1) That no claim for services rendered. or materials furn-

ished by the Contractor to the Subcontractor shall be valid

unless written ‘notice thereof is giver: by the Contractor to °

the Subcontractor during the first ten days of the caléndar . ©

month: following that in which the claim originated.

_'m) To give the Subcontractor an opportunity to be present

_ and to submit evidence in any arbitration mavenving hés

; rights. * 7 << Pr gee

25a

Exhibit “Re

n) To name as arbitrator under arbitration proceéding as —

provided in the General Conditions the person nominated ~

by the Subeontractor, if the sole cause of dispute is the

work, materials, rights or responsibilities of “the Subcon-.

tractor; or if, of the Subcontractor and any’ other subcon-

tractor jointly, to name as such arbitrator the person upon

whom ‘they agree. s

The Contractor and the Subcontractor agree that—

o) In the matter of arbitration, their rights and obligations

and all procedure shall be analogous to those set forth

in this Contract.

Nothing in this article shall create any obligation on the

part of the Owner to pay or to see to the payment of any

_ sums to any Subcontractor.

GENERAL CONTRACTORS ADDITIONAL

. INSERTIONS

K ‘The Standard Form of «the General Conditions of

the Contract of the American Institute of Architects, 1958

Edition, is made-a part of the Specifications and of the Con-

tract, and shall govern the execution of the work and all.

questions arising thereunder, except where stated to the

contrary on pages 2A and 2B herein.

_ 2. The Contractor shall have the right at any time to

require the Subcontractor to furnish a bond covering: the

faithful performance of the Agreement and the payment

of all obligations thereunder, in such form and amount as

the Contractor may prescribe and with such sureties as it

may approve.. If such bond: is required by instructions

given previous to the submission of bids, the premium ~

shall be paid by the Subcontractor; if sibsequent thereto,,

it shall be paid by the Contractor. ~

Any controversy or claim arising out of or relating

to this contract, or the breach thereof, shall be settled by:

: 26a

Exhibit B

arbitration in accordance with the Rules of the American

Arbitration Association, and judgment upon the award

rendered by the Arbitrator(s) may be entered in any Court

having jurisdiction thereof.

4. The Subcontractor shall gather together all rubbish

caused by his work, broom clean the floors, and remove

his rubbish from the premises. On completion of his

Work, the Subcontractor shall remove from and about the

building, all tools, scaffolding, equipment and pexpins or

waste materials pertaining to his Work.

- Since time is of the essence of this contract, all work

shall proceed with all possible speed, so as not to delay

the progress of construction an any way whatsoever. |

6. The Subcontractor must have sufficient men, ma-

terials and equipment on the job at all times'in order to

properly carry on the work (in the judgment of the Con-

tractor.) Should the Subcontractor at any time delay the —

progress of the work (in the judgment of the Contractor),

then the Contractor has a right to hire men and equipment |

and buy all necessary materials in order. to carry ‘on the work,

properly, and charge all costs invalved in doing so to the

Subcontractér, it being only necessary for the Contractor

to notify the Subcontractor by means of the “three days’

notice” by registered mail ‘to the Subcontractor’s address,

in order to exercise the above-mentioned right.

7. If, in the opinion of the Contractor, it is necessary

for the Subcontractor to work overtime or to work more

than one shift in order to complete the job within the stipu-

lated completion date, this overtime work shall be per- |

formed by the Subcontractor without expense to the Con-

tractor. |

8: All labor used i in connection with this work must =

satisfactory to the Contractor and of such character as will

not cause any conflicts with any other trades on the work.

27a

: Exhibit B |

Should any labor be employed on the job that is unsatis-

factory to the Contractor (in the Contractor’s opinion), such

labor must be dischargéd upon notification to the Subcon-

tractor to do so by the Contractor. ; ;

9. The Subcontractor’ must be responsible for any

. damage to his work from any and all causes until. its

acceptance by the Contractor and Architects.

10. The Subcontractor agrees to, and shall, es

upon demand of the Contractor and/or Owner, and at the © ;

‘ expense of the Subcontractor, repair and/or replace, in a

manner satisfactory to the Architect, any and_.all work

furnished by the Subcontractor which may have become

defective, due to faulty materials and/or workmanship,

and/or due to unsatisfactory functioning of plant and/or

equipment, furnished hereunder, for which he is at fault,

i re year, from the date of completion of the

- Work. The Subcontractor, further agrees to and shall pay

' for all damage to the building resulting }from defects in

his ‘work and al] expenses, necessary to Yemove, replace

and/or repair, in a satisfactory® ‘manner,fany other work

which may be damaged and/or disturbed in‘ making repairs

to the Work included in this guarantee. : .

11. It is understood that the General Contractor is not’ ’

to be held responsible for any delays in the progress of

the work or for any >dditional cost caused thereby regardless -

of whether these delays are caused by the Owner, Archi-

tect, General Contractor or Subcontractor and/or any other

delays or for other reasons. |

12. The Contractor shall be. at liberty from time to.

time,:whether the work’ or any part thereof shall or shall .

not have been completed, to make changes, and/or omis-

sions in the work as he may deem necessary, upon written

order to the Subcontractor, When’ the amount of the

debit or credit has been agree upon the Contractor shall

28a

Exhibit B

issue a -written order to the’ Subcontractor stating the

amount to be added to or deducted from the Contract Price.

13.. Any extra orders authorized by the Contractor on

.a time and material basis will not be paid by the Contractor

unless Subcontractor obtains vouchers signed by the Con- .

tractor’s authorized job representative at the end of each

_ day: These vouchers to show the exact time spent, labor

rates, quantities and cost of materials used. These time

and material extra orders tq be billed to the Contractor at .

actual cost plus ten percent (10%) to cover other costs, ex-

penses and profit of the Subcontractor. |

14. It is understood that should there be an increase in

wages and/or materials during the life of this contract,

the additional cost of same is to be paid for by the Subcon-

tractor without additional cost to the Contractor. |

15. The Subcontractor shall not sub-let, assign or trans-

fer this agreement or any part of the work-included herein

or any moneys to become due hereunder, without the

written consent of the Contractor.

16. The Subcontractor is to have monthly’ requisition

in office of Contractor on the last day of each month for. all

work performed during’ that month; otherwisé it may not

‘ be possible for Contractor to consider Subcontractor’s

_ Tequisition for payment. The Subcontractor agrees to sub-

mit on demand by the Contractor, with, his first requisition

a complete detailed statement of the contract amount cor-

rectly sub-divided and equally balanced into the various.

‘items comprising this contract to be used only as a’ basis

of calculating the payments due. : :

17. The Subcontractor is to furnish the Contractor with

receipted bills or other evidence of payment for any and

- all labor, materials, and supplies used by this Subcontractor -

.in the performance of his work. ‘The Contractor reserves

the right to withhold any payments due the Subcontractor

29a

Exhibit B

‘ until such receipted, bills, or other satisfactory evidence of

payments are presented to the Contractor.

18. If at any time there shall be evidence of any lien

or any other claim of any kind or description for which the

Contractor or the said premises may become liable, and

which is chargeable to the Subcontractor or his subcon- —

tractors, and/or when damages shall be caused by this Sub-

contractor to another subcontractor’s- work, then the Con-

tractor shall have the right to: retain out of any payment

then due or thereafter to become due an amount sufficient,

in the opinion of the Contractor, to completely indemnify

the Contractor against any such lien or claim. If there

shall prove to be any such lien or claim after all payments

are made, the Subcontractor shall refund to the Contractor

all ‘moneys that the latter may be compelled to pay in dis- —

_ charging or disposing thereof and of any other claim made

in consequence of the Subcontractor’s default, and this

Agreement shall not be affected by the final payment.

19. The Subcontractor, for thé contract price herein

provided for, hereby accepts and assumes exclusive liability

ff for, and shall hold the Contractor harmless —_— the

payment of:

(a) All contributions, taxes or premiums slich may be

payable. under the Unemployment Insurance Law of any

State or under the Federal Social Security Act, measured

upon the payroll of employees, by whomsoever employed,

engaged in the performance of the work included in this

contract.

(b) All sales taxes levied or ine against the Owner,

the Contractor or the Subcontractor arising out of the

furnishing or installing by the Subcontractor hereunder of

oh any kind of personal property.

20. The Subcontractor is to furnish to the Contractor

Certificates showing that he is covered on this contract with

the following Insurance, ~

30a

‘(a) Workmen’ s =e in | accordance with the.

laws of the State of Oba

(b) Public Liability®asurance in the limits of $250,000,

for each person and $500,000, for each accident,

(d) Contractors’ Protective ‘Public Liability Insurance,

- with an individual limit of $250,000, and a total limit for

any one accident $500,000, for the account of the Subcon- .

tractor when the Subcontractor sublets to another any

portion of the work undertaken under this Agreement.

. (e) Contingent Property’ Damage Insurance in an

amount not less than $50, 000. : | |

. Certificates of Insurance must be at the Contractor’s office

before Subcontractor commences work. :

_ 21. The Subcontractor hereby agrees to indemnify and

save harmless the owner and the general contractor from

and against any and all loss and/or experise which they, or. —

either of them, may suffer or pay as a result of claims, settle-

ments, suits, judgments or damages due to, because of, or

_arising out of any and all injuries to, or death of, any and

all persons including the subcontractors employees and for

any and all damage to property, caused by or resulting from

or arising out of or in connection with: the.contract and/or.

the prosecution of the work thereunder whether due to |

the acts or omissions of the owner, or the acts or omissions

-of the general contractor, or the acts or omissions of any

other contractor, or the acts or omissions of any other per- .

son, firm, partnership, association or corporation, or other-

: wise.

22. The Subcontractor shall defend all suits or deine

“for infringement by him of any patent rights that-may be

brought against the Contractor and/or the Owner arising

out of the Work contemplated by this Agreement, and shall

save the Contractor and/or Owner harmless from loss on

saat

; ?

5 P

‘ 3

a \

8la .

; Exhibit B ee

account thereof, except that the Subcontractor shall not be

responsible for such loss when particular process or product

of a particular manufacturer or nianufacturers is specified

in the Contract Documents.

23. Should Subcontractor elect to store materials and/or

equipment on, the sidewalk or street at his: own risk it

shall be his duty to properly stack same in a neat and orderly

‘ manner and to install and fhaintain such protection lights

_as are required. |

24. Paragraphs (g), (h) and () of Section 5 are super-

ceded as follows: Payments shall beset forth ii Section 4,

' Claims or changes by contractor shall be valid at anytime

before final payment is made to the subcontractor.

25. There are incorporated by reference in this sub-

- contract, with like force and effect:as.if the same were stip-

ulated herein at length, all of the terms and conditions ‘of

the contract between ‘the general contractor and The United

States of America, dated November 30, 1962 and bearing

Contract No. DA-15-029-ENG-6241. Wherever there shall

be any discrépancy or differerice in terms or provisions be-

tween the said general contract and the standard form of |.

general conditions of the contract of the American Insti-

tute of Architects 1958 edition (together with these gen-

eral contractors additional insertions as modified), then,

_and, in such event, the provisions of the general contract

between the general contractor and the said United ‘States

of America, shall govern. aA

26. The subcontractor agrees: to 0 perform this contract

in strict accordance with the General Provisions (Standard

Form 23-A, April 1961, pages 1 thru 16 inclusive); Labor

Standards Provisions (Standard form 19-A), and the fol- .

lowing designated specifications, schedules, Grawings, and o

- conditions:

SPECIFICATIONS: Serial No. ENG-L5. 029-63-11 as:

amended by Amendment Nos. 1, 2 and 3 thereto.

32a

«Exhibit B

‘DRAWINGS: As listed in Paragraph SC-3 of the Speci-

fications as amended by Amendment No. 2 thereto. :

_ 27.. PRIORITY RATING DO-C2.

Certified for national defense usé under _— Regula-

tion 1. ‘

Subcontractor is required to follow the provisions of

DMS Reg. 1, and of all other applicable. regulations and

orders of BDSA in obtaining controlléd materials and, other

products and materials’ needed to fill this order.

28. This project is exempt from Ohio State Sales ‘Tax.

Exemption Certificate is attachedto this contract.

29. All shop drawings and samples, certificates of com-

_ pliance with the Specifications, and payroll reports. should

be sent to contractors Ohio Office located at 111 East Main

Street, New London, Ohio.

30, Certificates of Compliance with Federal Specifica-

tions as indicated in the specifications will be required by

_ each supplier of material for the job and reference should

be made to the Section and the Paragraph of the specifica-

tions to which such compliance: is: intended. This certifi-

cation should be signed by an official of the manufacturer. — .

SECTION 6. .

‘Agreement between

Bey paper .. Subcontractor. ‘

Luew esis .. Contractor

ene re ee Owner _

“Litedenteecans Architect” =

Contract, Price $.. is... a5 000 9

IN WITNESS WHEREOF the parties hereto have ex-

ecuted this Agreement, the day and year first above written.

JOHN H. EISELE COMPANYInc.

_ By: John P. NELSON, Vice President °

KELLER PIER DRILLING CO. ~

‘By: WILBUR S. KELLER, Pres.

— itle)

33a

IN THE UNITED STATES DISTRICT COURT

- Southern District of Ohio, Western Division

Dayton, Ohio —

*Givil Action No. 3023

(CAPTION OMITTED)

MOTION —

(Filed April 27, 1964.)

- Now come the defendants and respectfully move this

Court that the “above styled action and all proceedings .

- herein be stayed until an arbitration shall be had in accord-,

ance with the terms of the contract entered into between

the use —— and defendant, John H. Encle Company,

Inc.

For the grounds a: this’ motion, defendants respectfully

direct.the Court’s attention to Paragraph No. 5. in the use

‘ plaintiff's complaint wherein the use plaintiff alleges a

contract between said plaintiff and the defendant John

H. Eisele Company, Inc.,. and attaches a copy of said con- |

tract to its complaint marked “Exhibit B”. The Court is

then referred to.the said “Exhibit B” and specificalf} Para-

graph No. 3 of the said “Exhibit B” which reads as @bllows: —

“Any controversy jor claim arising out of or relating

to this contract, or the breach thereof, shall be settled

by arbitration in accordance with the Rules of the

American Arbitration Association, and judgment upon

- the award rendered by the Arbitrator(s) may be en-

tered in any Court having jurisdiction thereof.”

The use plaintiff's complaint alleges certain transactions

occurring between the use plaintiff and defendant John H. .

‘Eisele Company, Inc., which give rise to ‘the claim as_set

+ he.

34a

| ‘ Motion io Stay Action

forth’ in the use plaintiff's complaint filed the third day.

of April, 1964, under the above style. All of said trans-

actions: set forth in use plaintiff's complaint arose out of

or relate to the aforesaid contact.

The use plaintiff has not at any time asked or demanded |

of the defendant John H. Eisele Company, Inc., that it .*

proceed to arbitrate any alleged claim, @ispute, or right

it may have, if any, by reason of the matters and alleged

facts set forth in the complaint herein, nor has the. de-_

fendant John ‘H. Eisele Company, Inc;, failed, neglected,

or refused to proceed to arbitrate any of such alleged claims.

The defendants, therefore, claim that under, and pur-

suant to the provisions of the said contract set forth in the |

- complaint of the use plaintiff as“Exhibit: B”, and the statutes

of the Uniited States ‘in such cases made and provided there-

for, this Court is without jurisdiction to proceed upon, or

determine the alleged, cause of action set forth in the com-

plaint herein, and that the alleged action set forth i in ‘the

_ complaint is prematurely brought. . #.

WHEREFORE, defendants heréin pray that an order

may be entered by- this Honorable Court staying the action -

_ and all proceedings herein until an arbitration shall be

had: in accordance with the terms of the contract entered

into between the use plaintiff and defendant John H.

Eisele ‘Company, Inc.

(DULY SIGNED WITH CERTIEICATE OF SERVICE.)

35a. % 4 Se a

_ (CAPTION OMITTED)

| ORDER OF UNITED STATES DISTRICT cou RT°

3 _ (Entered June, 9, 1964.)

Now comes the Court and notes that: defendants eeaee 2.

filed'a motion to stay all proceedings until an arbitration

is.held in accordance with the terms of the contract entered

into between the use plaintiff-and defendant John H. |

"Eisele Company, Inc. It appears to the Court that the |

filing of this law suit was premature and accordingly the - .

.. use plaintiff shall file a memorandum within 15: days show-

ing cause why this action should. not be dismissed,

-CARLA.WEINMAN ss

Chief Judge U. S. District Court ei

| (CAPTION OMITTED) as

MEMORANDUM. OF USE PLAINTIFF OPPOSING

THE MOTION OF DEFENDANTS FOR A STAY OF —

_ PROCEEDINGS AND F OR ARBI TION, FILED

APRIL 27,1964; AND PURSUAN O ORDER OF

‘ COURT ENTERED JUNE 9, 1964

w COMPLAINT

{Filed June 24, 1964.)

The complaint filed April 3, 1964 contains two aera

against the Defendant herein: 1

FIRST “CLAIM containing two unts, alleged juris-

diction of the-cause conferred upon the court by Title 40, -

_ Sections 270a and 270b of the United States Code. . 4

| 1. The second paragraph thereof alleged construction

" eontract DA-15-029-ENG-6241 between: JOHN H. EISELE

COMPANY, INC. DEFENDANT and THE UNITED .

STATES OF AMERICA, U. S. ARMY ENGINEER ©

- | 36a |

CORPS; LOUISVILLE DISTRICT, for construction of

an Air Force Institute of Technology building at Wright

Patterson Air Force Base,at the contract price of $2,665,-

218.00, and represented by Exhibit A attached.

- 2. .Third paragraph thereof alleged Defendants AMER-

ICAN REINSURANCE COMPANY and THE BUCK-

EYE UNION CASUALTY CO., as sureties and DEFEND. —_

ANT JOHN H. EISELE COMPANY, INC. as’principal,

executed ‘a standard form of payment bond to the United

States ‘government ‘wherein such suréties. would remain

’ liable for the amount of said bond if the named principal

' failed to make promptly payments to all persons supplying

labor or materials. :

3. Fourth paragraph thereof alleged acceptance of tach

bond by the United States government.

4. Fifth paragraph thereof alleged execution .of sub-

contract 251- 3 by DEFENDANT JOHN H. EISELE COM-

PANY, INC. and USE-PLAINTIFF KELLER PIER

DRILLING CO., attached thereto as Exhibit B and dated

January 16, 1963.-

5. Section 1 of such sub-contract viata Use-Plaintift

to “supply material and perform all work as described in

Section 2 thereof for the United States of America (therein-

after called the Owner), at Wright Patterson Air Force

Base, Ohio, in accordance with the general conditions of — —

the contract betweensuch Owner and JOHN H. EISELE |

GOMPANY, INC. therein named Contractor, and in ac-

cordance with Supplementary General Conditions, the .

Drawings and Specifications prepared by Grifels & Ros-

setti, Inc., and U. S. Army Engineer District, Louisville .

Corps of Engineers, Louisville, Kentucky thereinafter

called Architects, all of which General Conditions, Draw- ©

ings and Specifications, signed by the parties thereto or

identified by the Architect, form a part of the contract be-

tractor States:

| . ae ae

. * Memorandum of Use Plaintiff Opposing. Motion for Stay /

tween the Contractor and the Owner dated November 30th,

1962 and hereby become a part of this contract”. Aemphasis

added)

6. Section 2 of such subcontract stated 0 Tree

subject to approval of the Architects and Owners”.

7. Exhibit B reflects -the unilateral action of the De-

fendant Contractor ifsérting without spegial notice to Use-

Plaintiff of pages 2-A, 2-B preprinted pages, and the spe-

cially typed page 2-C and making such, ‘subcontragt si |

to said such pages. 3 /

8: Exhibit A (Contract # DA-15.029- ENG- 6241) ‘waile

a part of such subcontract Lapedes Section 2: Specifica- |

tions; and Drawings; Section 4: CHanged Conditions; Sec-

tion. 3: Changes; Section 5: Termination for ¢ default-dam- ,

_ ages for delay, Time Extension; S¢ction 6: Disputes; Section

9: Materials and Acceptance; S¢ction 10: Inspection and |

‘ Acceptance; Section 21: Nondiscfimination i in Employment,

certain exclusive procedure for government of the parties...

thereto. as ‘to terms, conditions) and performance | and obli-

gations. — |

9, : Section 1 of Page 2-A ‘inserted by Defendant Con-

“The Standard Form of the .General Conditions of

the Contract of the American Institute of Architects

. is made a part of the Specifications and of the ~

‘ contract and shall govern the execution of the work

. and all questions ie thereunder, except where |

stated to the contrary . pages 2A and 2Bherein.”. ~

10. Sestion 3 of said insertion. states:

“Any controversy or claim arising out of or ‘relating to

this contract or the breach thereof, shall be settled ‘by

arbitration in accordance with the Rules of the Ameri-

. can Arbitration Association, .and judgment upon the

38a

Sinica: “ol Won: Weis Ginn Wiiitaas tay tant

. “award rendered by the. Arbitratar(s); may be entered .

in any court having Jurisdiction thereof.”

- " However, specially typed continuation of page 2- B (en-

_ titled -2-C) inserted solely. by Defendant ‘Gampenctor into

~ such sub-contract states: dc e

“25. There are incorporated by reference in this

subcontract, with like force and effect as if the same

were stipulated herein at length, all of the terms .and--

conditions of the contract between the general con-

tractor and the. United States of: America, ‘dated No-

vember 30th, 1962 and bearing contract No. DA-15-

029-ENG-6241. Wherever there.shall be any discrep-

ancy or difference in the terms and provisions thereof :

between the said general contract and the standard

form of general conditions of the contract of the Amer-

ican Institute of Architects 1958 edition (together with

these general contractors additional insertions as modi-

fied), then and, in such event, the provisions of the .

- general contract between the ‘general contractor and

the said United States of America, shall govern.”

“26.; The subcontractor agrees to. perform this con-

tract in strict accordance with the General Provisions

(Standard Form 23-A, April 1961, pages 1 through 16.

inclusive) Labor Standards Provisions (Standard form

19-A), and | the following designated specifications, |

Additionally Section 5 of the said sub-contract states:

schedules, drawings, and conditions . . .”-

-“The contractor and subcontractor agree to, be bound

by the terms of the Agreement, the General Condi-

tions, Drawings, and Specifications as far as applicable

to this subconttact, and also Me the following provi-

sions:

The Subtomenictos: agrees—

a) - To be bound to the Contractor by the terms of the

Agreement, General Conditions, the Drawings and

Specifications, and to assume toward him all thé obli- ~

39a | |

| Memorandem of Use Plaintiff Opposing Motion for Stay

gations and responsibilities that he, by thoge documents

., assumes toward the Owner.

c) * * *

The Contractor agrees— ° 7 Me

d) To be bound to the Subcantractor by all the obli-

gations that the Owner assumes to the Contractor

under the Agreement, General Conditions of the Con-

tract, the Supplementary General Conditions, the

Drawings and Specifications, and by all the Provisions

thereof affording remedies and redress to the Contract-

. or from the Owner.

*. * *

ly. That no claim for services rendered or materials

‘furnished by the Contractor to the Subcontractor shall

be valid unless written notice thereof is given by the

Contractor to the Subcontractor during the first 10

,days of the calendar month following that in which

the claim originated.”

‘Also Section 6 of the said i insértions by the Contractor, *

namely 2-A states:

~ The Sheuicel must have sufficient men, ma-

terials, and, equipment on the job at all times in: ~

_ order to properly carry out the work (in the judgment

_ ___Of the contractor). Should the Subcontractor at any

time delay the progress of the work-{in-the-judgment-————

of the Contractor) then the Contractor has the right

tq hire men and equipment and to buy all necessary

materials in order to carry on the work properly, and

to charge all costs involved in doing so to the Sub-

contractor; it being only necessary for the Contractor

to notify th te Subcontractor by means’ of the “three

days’ notice” by registered mail to the Subcontractor’s

address, in order to exercise the above mentioned

right.” (Emphasis added.)

i. Paragraph 7 alleged Defendant Contractor in de-

fault of payment according to its contracts and under such

> 4

- @

- &, @

ate | 40a

Memorandum of Use intiff Opposing Motion for Stay

bond contract accepted by‘thé’Plaintiff herein for the bene-

fit of ‘ Use-Plaintiff and other subcontractors — similarly

situated, such subcontractors obtained a right to sue on

such bond furnished by Defendant’s sureties herein pur-—

suant to Title 40, Sections 270a; and 270b, United States

Code.

oe: 3 Paragraph 8 alleged one year had not elapsed, show:

ing compliance with said Section 270b.

"13. Paragraph 9 alleged work and labar had been per-

_ formed and equipment furnished in thé Southern District ~

of Ohio in conformity with said Section 270b (b).

14. Paragraphs 2, 3, 4, 5, as well as 1, of the Second

Count. alleged a separate claim for, payments under a

_ separate written instrument for correction of a pier hole

location and not under subcontract 251-3.

15. . The Second Claim of the Use-Plaintiff alleges juris-

diction of the case under said Sections 270a; and 270b.

16. Paragraph 5 states no time as specified for’ com-

" . mencement nor completion of the work and that Use-Plain-

.. tiff offered to commence work on February 12, 1963 with

~ approval of Defendant. Contractor.

Paragraph 7 alleges the defense of adverse. idee adie

said contract DA-15-029-ENG-6241 to the claim of De-.,

fendant Contractor that Use-Plaintiff had failed to perform

its contract but. that Use-Plaintiff continued to perform |

beyond those obligations ae of _ ity: requests

of Defendant.

Paragraphs 8 and 1] sain that deine ‘iti weather

___had_a claim against -Use-Plaintiff-in that “Use-Plaintiff was

stated as not keeping sufficient men and equipment on the

job; and. terminated the balance of Use-Plaintiff’s work by

a letter of notice dated March 7, 1963 and which letter. was .

. not delivered to Use-Plaintiff until March 11, 1963; ‘that

. . delaying Use-Plaintiff, Defendant Contractor insisted a

Ala -. ;

‘k | Mamorandom of Uso Plaitit Oppesing Motion for Stay’

Deferidant had prior thereto engaged another subcontractor.

to replace Use-Plaintiff on or about March 3, 1963 and had .

entered into an agreement dated. March 8, 1963. —

~ Paragraphs 9 and 10 of said Second Claim alleged claims

Use-Plaintiff had against Defendant Contractor and which

claims would be defenses in favor of Use-Plaintiff under

‘Clause 4 of Contract DA-15-029-ENG-6241 against any

- alleged delay, and which claims as well as those allegedly

of Defendant Contractor were ‘subject to arbitration,. but

for the inclusion of DA-15-029-ENG-6241, its terms, condi- °

tions and remedies into the subcontract; as well as those

special provisions of subcontract which confirmed that the

contgact DA-15- o29ENG 624] would govern.

i "WAIVER.

The affidavits annexed hereto reflect the actions of the

Use-Plaintiff and ‘Defendant Contractor as. follows:

. 1. The Defendant Contractor breached its own contract ~

(251-3 subcontract), by requiring Use-Plaintiff to perform

beyond those requirements imposed by such contract and

__by the contract DA-15-029-ENG-6241, and by the Defend- |

ant acknowledging that such Defendant had a claim or con-

troversy against the Use-Plaintiff but by said Defendant

refusing and failing to call for arbitration at any’ time.

_ 2. The Defendant Contractor breached its-own agree-

ment to arbitrate, if there was such a requirement on the —

parties to arbitrate, in that Defendant submitted its ‘claim

to. Use-Plaintiff_ to provide for a performance bond, -and

without requiring arbitration of such claim, resisted by

Use-Plaintiff. : aol

3. “The Defendant breached its own agreement not say

as to give proper notice to Use-Plaintiff, but also. Defendant

Contractor's obligation to arbitrate any claim of lack of

ee Re aN te Lk

Momarandom of Use Plaintif Opposing Matin for Stay

_ sufficient men and equipment, when such Defendant en-

tered. into a-contract with another. subcontractor, on or

‘about March 3, 1963; four days before date of the letter

, of Defendant, and 8 days before Usé-Plaintiff received such .

letter of notification, That Defendant should have firstly,

if it had a justifiable claim against Use-Plaintiff, have noti~

fied’ Use-Plaintiff. first and then hired other = persons and

equipment following three days notice,

- 4... That Defendant breached its own agreement with :

| - Use-Plaintiff that- when ‘contacted by Counsel for. Use- 7

Plaintiff, the President of Defendant Contractor, one James --—

Conforti, Jr. met with such counsel at Dayton, Ohio on |

March 21; 1964 and discussed ways to settle the. dispute

between Use-Plaintiff and such Defendant, and when ap- .

proached-with the method of using U. S. governmental

“administrative procedures set forth in said contract #DA-

15-029-ENG-6241, and when asked permission to institute

such procedure as Use-Plaintiff had: no privity of contract

_ with the’ United States whereas: Defendant did, and said.

pe rae: “President of Defendant’ advised that he would firstly have °

. . ,

* ° »

BPR re mr apapc nitions chesemencce ire a senees Sane

a letter on behalf of Use-Plaintiff to the effect that Defend-

ant would not be deemed by Use-Plaintiff to have prejudiced

Defendant's rights by | pursuing such administrative action -

.. before the,.Contracting Officer at Louisville, Kentucky . .

‘_ New York City; between ms Washington, D. Cc. and New York ~

- That certain meetings were held between counsel for Use-

Plaintiff and“ Defendant, namely said president and a: Vice

. President, John Nelson at New York City; State of New

- York, all to the effect to induce Use-Plaintiff in the belief =

Defendant would institute such action for administrative

relief; that counsel for Use-Plaintiff had. telephoned con-’

‘ versations with Defendant. through its said officers on vari-

‘ous occasions between the points of Cincinnati; Ohio and

dee Ce oe ; o ?

43a

; Memorandum of Use Plainiif Opposing Motion for Stay

City and between’ Dayton, Ohio and New York City. That

as. time approached for termination of the right of Use~ -

Plaintiff to file suit on the bond of Defendant for payment,.

that Defendant represented to Counsel for Use-Plaintiff

that Defendant would supply the bond number and the .

_ names of the sureties, until 's several days. before the suit “°

"herein was instituted. That on March 25, 1964, Use-Plain-

tiff. submitted to Defendant: its written statement that -join-

ing in such action for administrative relief of behalf of

Defendant, would not be held asa waiver of right of De-

fendant to bring claims against Use-Plaintiff if Defendant

might have such or any claim. That Use-Plaintiff had

communicated. to Defendant that' as time for filing suit on

the payment bond of Defendant was terminating, that Use-

Plaintiff would attempt to institute the suit to protect itself,

and: during such. interim Use-Plaintiff and Defendant might

seek an adjudication of the right of Use-Plaintiff before the

Contracting Officer at Louisville, under proper contract

administrative procedures, until several days before termi-

nation’ of Usé-Plaintiff’s right to enforce payments rights .

_ om said bond through court action, at which time Defend-

“ant failed, neglected and refused, to supply such bond,

number, name of sureties or terms thereof to Use-Plaintiff.

That because of such unfair dealings of a large corporate

Defendant having many experiences with governmental

procedures and construction. contracts whereas Defendant |

suffered its first experience under a United States govern-

ment contract, and - attempted to perform fully all the

terms and. requirements written therein as well. as those

additionally imposed by Defendant, and looking to De-

* fendant’ to obtain corrective relief for Use-Plaintiff under

‘the. remedial sections of Contract DA-15-029-ENG-6241 as —

. only Defendant had privity of contract with the United

* States of pany Use-Plaintiff w was induced by the actions

3 44a |

-” Mamorandese of Use Plaintif Opposing Motion for Stay. - ;

of Defendant tepudiating the requirements placed on De- ~

-" fendant.and to attempt'the only method remaining to Use-

Plaintiff: to file suit im court on. the payment bond of ~

. Defendant and forego administrative relief under ‘the

Principal contract as well as any possible relief under -_

subcontract, of which no femedy ‘existed. = sa

4. That Defendant waived any right it ever : had, te ae

unilaterally i inserting into such subcontract the requirement

that the Contract DA-15-029-ENG-624 ould govern the

rights of the parties, arid the additional provisions into such:

_ subcontract, confirming such specially typed requirement..

« . 5. That under the “Standard form of General Condi-.

tions of the Contract of the American Institute.of Archi-

tects’ requirements; requiring timely notice of arbitrations,

as Section 40 thereof states:

“Notice of the demand for arbitration: of a 1 dispute.“ |

shall be filed in writing with the other party to the

contract, and a copy filed with the Architect. The.

demand for arbitration shall be made within’ a: reason-

able time after the dispute has arisen; in no- case, how-

. ever shall the demand be made later than the-timeof

_. final payment, except as otherwise re, stipulated —

in the contract. ve

_ THE LAW

Title 40, Section 270b (b) .

_ “Every suit shall be ee in the name » of the

United States for the use of the person suing, in the

‘United States District Court for any district in which |

the contract was to be performed and executed and

. not elsewhere, irrespective of the amount in contro-

~ versy, but no suit shall be commenced after the ex-

. piration of one year after the day on which the last of.

the labor was eae or.material was supplied Mm

° >

45a

" Mamerandom of Use Plaintit Opposing) Mation for Stay

him. The United States shall not be liable for the pay-

... ment of any costs or — of any such suit.”

——

ARTICLE Ill, SECTION 2. Constitution as the: United

_ States of America states:.

“Section 2. The indicial power shall ne ‘to all

- Cases it Law and Equity, arising under this Constitu-

tion, the laws of the United. States, and Treaties, made

or which shall be made under their Authority; . . .

to Controversies in which the United es shall bé °

a party; ... te , ;

* Title 28, Section 1345, United ies Code, states:

“Except as otherwise provided by Act of Congress, the.

district courts shall have original jurisdiction: of all:

civil suits, actions or proceedings commenced by the

United States, or by any agency or officer thereof-ex-

pressly authorized to sue by Act of Congress.” rae

_(see United States Fidelity & Guaranty Co. v. United |.

States, 204 U.S: 349; 27 S. Ct. 381, 51 L. Ed. 516,'to. -

_ «the effect that suit-on a surety’s bond on behalf of per-

sons supplying labor or materials, and brought.in the

. -name of the United States, that such Plaintiff is a real

~ and not 7 a nominal party)

TITLE 9; “ARBITRATION, detain 2, United States we,

| Code states: |

“A written provision (in any maritime transaction or

‘ a contract evidencing a transaction involving com-

merce) to settle by arbitration a controversy thereafter

arising, out of such contract, or -transaction or the

an agreement in’ writing to submit to the arbitration

in existing controversy arising out of such contract;

transaction or refusal shall be valid, irrevocable and

enforceable, save upon such grounds as exist at law

or in im enpeey for the revocation. of any contract.”

46a .

UO Memerinden of Ue: Plaintiff Opposing Motion for ‘Stay

Section 3 of said.'Title ee

“If any suit or proceeding be brought in any of the

courts of the United States upon any issue referable to

arbitration under an agreement in writing for such

arbitration, the court in which such suit is pending,

_-upon being satisfied. that the issue involved in such

suit or. proceeding is referable to arbitration under

such agreement, shall on application of one of the’

parties, stay. the trial of the action until.such arbitra-

tion has been had.in accordance with the terms of the

agreement, provided the applicant for the stay is not in —

default in proceeding with such arbitration.” (Em- —

phasis added).

TITLE 28, Section 1 352 United States Code states:

' “The District Courts shall have original jurisdiction

concurrent with State Courts, of any action on a bond

executed under any law of the United States.”

APPENDIX, RULES AND REGULATIONS IMPLE-

MENTING TITLE 41, PUBLIC CONTRACTS, states:

“Section 52. 6 DISRU'TES

All questions and disputes with respect to contract

performance, payment and ‘procedure should be re-

ferred to the contracting officer concerned, through an

inspector if available at the premises, in the absence

of-a special instruction or notice received in particular

cases. Determinations of the contracting officer are

. ordinarily reviewable, in the manner prescribed by

the Secretary of the, Treasury or such representative.

as he may, designate from time to time. No special . ,

forms are required to submit questions, disputes and

‘claims, or appeals from the determination thereof.

Howevef, claims for amounts due deceased contractors

must be filed on Standard form 1055 (Revised), ‘Claim

against the United States for amounts due in the case

of a Decedent.. ‘s

; 47a

Memorandum of Use Plaintiff Opposing Motion for Stay |

TITLE 9 ARBITRATION, SECTION 4. FAILURE

TO ARBITRATE UNDER AGREEMENT: PETITION

TO UNITED STATES COURT .HAVING JURIS- .

DICTION FOR ORDER TO COMPEL ARBITRA-

TION: NOTICE AND SERVICE THEREOF: HEAR-

. ING-AND DETERMINATION, states: ia 6

“a party aggrieved by the alleged failure, neglect or

ment for arbitration may petition any United States

District Court which, save for such agreement would

have jurisdiction under Title 28, in a civil action or

in admiralty, of the subject matter of a. suit arising

‘out of the controversy between the parties, for an

_ order directing that such arbitration proceed in the

thanner provided for in such agreement. Five days

notice in writing of such application shall be served

upon the party in default. Service thereof shall’ be

made in the manner provided by the Federal Rules

of Civil Procedure. The Court shall hear the parties,

and upon being satisfied that the making of the agree-

ment for arbitration or the failure to comply therewith

- is not in issue, the court shall make an order directing

the parties to proceed to arbitration in the manner in

accordance with the terms of the agreement. The

hearing and proceedings, under such. agreement, shall

_ be within the district in which the petition for an

order directing arbitration is filed. If the making of

_ the arbitration agreement, or the failure, neglect, or

refusal to perform the same be in issue, the court shall

proceed summarily to the trial thereof. If no jury

trial be demanded by the party alleged to be in de-

fault, or if the matter in dispute is within the admiralty

jurisdiction, the court shall hear and determine such

issue. Where such an issue is raised, the party alleged

to be in default, may, except in cases of admiralty, on

or before the return day of the notice of the applica-

tion, demand a jury trial of such issue or issues, and

_ upon such demand, the court shall make an order re-

‘8a )

Memorandum of Use Plaintiff Opposing Motion for Stay

ferring the issues to a jury in the manner provided

by the. Federal Rules of Civil Procedure, or may

ially call a jury for that purpose. If the jury find

t no agreement for arbitration was made or that

there is’ no default in the proceeding thereunder, the

proceeding shall be dismissed. If the jury find that

an agreement for arbitration was made in writing and —

there is a default in proceeding thereunder, the court

shall make an order summarily directing the parties

to proceed with arbitration | in accordance with the

_terms thereof.”

RULES OF THE UNITED STATES DISTRICT

COURT, SOUTHERN DISTRICT OF OHIO, RULE

7, MOTION AND MOTION DAYS:

“1. There shall be Sled with each motion a brief state-

ment of the grounds of the same, with citations of

authorities relied upon, and failure to do so shall be

good ground for striking the motion from the files for

want of ccmearn re a

LOCAL NO. 1505, INTERNATIONAL BROTHER.

HOOD OF ELECTRICAL WORKERS AFL-CIO, IN-—

TERVENOR VS. LOCAL LODGE OF DISTRICT 38 of

THE INTERNATIONAL ASSOCIATION OF MA-

CHINISTS, AFL-C1O, ET AL., Raytheori, United States

Court of Appeals | First Circuit, May 3, 1962, 304 F2d 365,

held:

“We believe that the exclusive jurisdiction to resolve’ |

the conflict between the parties is within the Labor

Board whose certifications have permitted these over-

lapping claims. It is true that no unfair labor practice

has been committed. . . . Even had there been, this |

might not pre-empt the District Court's jurisdiction

29 U.S.C.A. #185.

. . A union by contract with an employer cannot

define the scope of that certification. That is the

49a

Memorandum of. Use Plaintiff Opposing Motion for Stay

court’s function . | . Not only has: the Board made -

necessary clarifications in the past . . . but jurts-

dictional es ic between unions are precisely it’s

province. . . . It is appropriate that its jurisdiction

be exclusive.”

LOCAL NO. 725, INFERNATIONAL UNION OF

OPERATING ENGINEERS VS. STANDARD OIL .

COMPANY OF INDIANA, District Court North Dakota,

1960; 186 F. Supp. 895 which held: /

“1, Arbitration is a matter of contract and_a party

cannot be required to submit to arbitration any dispute

which he has not agreed so to do. ‘For arbitration is

a matter of contract and a party is not required to

- submit to arbitration any dispute which . he has not

' agreed ‘so to submit.”

.“9. The courts have the exclusive jurisdiction to

determine whether the reluctant party has breached —

its promise to arbitrate — this is not a question to be

. up to the arbitrator . ...”

“6. The arbitration agreement being a matter of con-

tract should be interpreted in accordance with the in-

tentions of the parties as therein expressed and in the

light of the facts and circumstances surrounding the

negotiations for and execution of the agreement.” __

“A specific collective bargaining agreement may ex-

clude contracting out from the grievance procedure

or a written collateral agreement may make clear that

the excluding out was not a matter of arbitration. In

such a case a grievance may not when contracting out

' be arbitrationable.” .

| RADIATION SPECIALTY COMPANY VS. CANNON _

MILLS, Circuit. Court of Appeals, 4th Circuit, 1938; 97

F2d 318 which held on the facts where the Defendant made

an election not to seek arbitration initially:

‘Here’ when the Plaintiff chose to ignore the arbitra-

~ 50a ne

Memorandum of Use Plaintif Opposing Motion for Stay

tion clause in the sales contract, the Defendant did not

immediately, as was its duty as if it intended to rely

on the arbitration clause, assert its intention to en-

force the arbitration; on the contrary the Defendant

‘appéared and filed an answer to the complaint .

More than three months afterwards the Defendant ap-

‘peared and filed a motion for an order for continuance

that a witness was absent . . . and it was not until

six months afterwards and on the day expressly agreed

upon that the trial was to be had that the Defendant .

without giving notice filed its motion to stay the trial

pending arbitration which it then sought to enforce. _

By its course the Defendant waived its right to arbi-

tration under the clause in the contract and was in

» default in proceeding with arbitration and in the case

of ZIMMERMAN VS, COHEN, 236 NY. 15, 139 NE

764, will be found a discussion of similar facts. There

the court said, page 765: Plaintiffs’ by bringing the

action ignored this provision of the contract; they made

no reference to it in their complaint. Defendants

under provisions of the arbitration law could have

applied to the court to enforce arbitration and stay

. all proceedings in the action and instead of doing so

the Defendant answered; the Defendant ‘went even

further and made a counterclaim setting up a demand

for judgment against the Plaintiffs in a large sum

, Whatever right the Defendant might have had

under the arbitration clause and the arbitration law

to enforce arbitration he deliberately waived; he chose

and elected to proceed by action in court for the deter-

mination of the respective claims. While the Arbitra-

tion Law provides for the: enforcement of arbitration

agreements there is nothing in the law which pre-

vents the parties agreeing between themselve$ to resort

to any other method of settlement; the law does bar

the parties from coming into the court of the state if

they mutually choose to do so.”

| bla :

Memorandum of Use PistalitipOppesing Motion for Stay

_AMERICAN GUARANTY COMPANY VS. CALD-

WELL, Circuit Court of Appeals, 9th Circuit, 1934 where: |

in a party agreed that a certain: arbitration method would

be followed; however when the:claim or dispute arose that __.

party did not follow the method of arbitration and the

method of arbitration set out in the contract was abandoned. |

That court held: .

“The Federal Court acquired jurisdiction of the pro-

ceedings when confirmation of the arbitrators’ award -

was transferred thereto from the state court had juris- ~

diction to set aside the first award . . . Courts

generally will not construe arbitration agreement as

ousting them of jurisdiction unless such construction is _.

' inevitable, TITLE 9 ARBITRATION ACT, USS.

C.A. Section 1 et sequor.” ae .

UNIAO DE TRANSPORTADORES PARA IMPOR-

TACAO E’ COMMERCIO LTDA COMPANHEA DE

NAVAEGACAEO CARREGADORES ACRRAGADO-

RES, District Court of New York, 1949; 84 F. Supp. 582

which held dnder an agreement to arbitrate: “ '

“Under the Federal Arbitration Act an arbitration

agreement may be repudiated, waived or abandoned

by one or both of the parties. But even in such case

where one party seeks to do so, the other has the right

to plead the agreement as a defense. and such a stay

does not oust the court of jurisdiction but provides

PA THE LABORATORIES VS. DU PONT FILM

CORPORATION, District Court of New York, 3 Federal

Rules Decisions 11, January 16, 1943 and where the De- —

fendant agreed simultaneously with Du Pont De Nemours

to purchase its. supplies from such company and which

_ agreement stated that in the event of a dispute the matter

. 52a

Memorandum of Use Plaintiff Opposing Motion for Stay

should be referred to the firm of Price & Waterhouse as to

costs, as a defense to the suit.and order for subpoena duces

tecum issued by a Master Commissioner at request of

-~Plaintiff; held:

- “Whether Section 12 is enforceable or unenforceable

arbitration clause ‘or whether it is a’ clause for the

reference of an incidental issue, it is nevertheless sub-

ject to waiver I have concluded that the Defendant

-,has waived whatever right it had thereunder. f

“It was on Defendants own motion that:a master be

appointed to take testimony as to costs and this would

mean that Price Waterhouse & Co. would have to’ —

perform the same function that. as to some of the - -

‘issues already being heard by the special master. It.

is apparent that the Defendant’s request has not been

timely made. RADIATOR SPECIALTY COMPANY |

_ VS. CANNON _MILLS, 4th Gir. 1938, 97 F2d 318,

/ 17 ALR 298... ."°

TRANSCONTINENTAL & WESTERN “AIRLINES

, VS. PARKER, C. C. of Missouri, 1944,:144 F2d 735 where-

in the employer and decedent agreed that death benefits

would be payable in the maximum Amount under the law

' of Missouri and such payments under such workmen’s com-

_ pensation to be payable to employee or his dependents as -.

' provided in ‘said law. The contract also provided for

arbitration of:disputes between the employer and. em-

ployee, otherwise than as specifically provided shall be

determined by a contracting officer of the government or |

. State authorized Tepresentative. On action by the widow .

of decedent and the Defendant did not file an answer but

filed its motion for a stay of the proceedings under Section

3 of Title 9,. Arbitration Action, asking for arbitrations.

_- That court held the following:

| 53a" |

Memorandum of Use Plaintiff Opposing Motion for Stay

“neither the employee nor the beneficiary had con-

_ tracted with the employer for submission of such dis-

_ pute to the arbitration. If the parties to the contract

of employment had intended to include such dispute

in the arbitration clause, the words “between such

employer and employee” should have been omitted .

from: the clause. There is.no basis for assuming that

therein the clause is not fully and accurately written -

__. LOCOMOTIVE COMPANY VS. GYRO PROCESS

COMPANY ET AL, United States Court of Appeals, 6th

Circuit, November 24, 1950; 185 F2d 316; wherein Gryo

Process ‘instituted suit in a Michigan court for breach of

contract and. Chemical Process jained in such, and Loco- |

motive filed its petition in the Federal District Court for a

stay of the. proceeding in accordance with Section 4 of

Title 9, Arbitration Act and contended that such section °

-did not permit the court to determine a waiver of the -_

agreement for arbitration and the non-compliance there-

with are in issue and that if the court finds that if neither

of such facts are in issue then the court must issue an

order for arbitration: Held: .

. .°We do not agree. We stated on the formér

appeal that the contract right of arbitration could be

waived .and we have adhered to that conclusion. -

GALION IRON WORKS VS. ADAMS, 7th Cir. 128

F2d 411,.413. . . . Section four of the Act merely

provides that the procedure for enforcing the right’

provided by the contract, if that right although if -

' originally existing has been ‘lost and does no longer

exist, there is nothing for Section fouf* to enforce. :

+ Filing of the original action by Gyro was notice to |

Locomotive that ,Gyro was refusing to arbitrate the

. FS . : *

‘ .

. i .

? ‘ \

fe .

-. | i eee

Memorandum of Use Plaintiff Opposing Motion ‘for Stay

dispute under the arbitration agreement .°. . Loco-

motive could lave and should have decided at that

- time whether it would insist on which of the two

methods of procedure it would elect to follow; either -_

_ insist on the contract, right of arbitration or prepare

- for trial by jury. The two methods are inconsistent _

enough to require an election between them. It made

no attempt:to enforcé its right under present section

four of the act until the present action was. filed. It

‘did not apply for a stay of proceeding under Section .

3 of the Act . . . We agree with the trial judge

that such conduct in the’ trial court amounted to a -

relinquis!iment of the right to arbitrate. .

of a promise for a contract must be ‘supported by con-

sideration to be enforceable; but a waiver taking or

the nature of an election, like an election, needs no

consideration and cannot be retracted; it takes on. the

Mature of an executed transaction.”

- AMERICAN SUGAR REFINING COMPANY VS.

THE ANACONDA, Circuit Court. of Appeals of Florida,

1943, 138 F2d 765; affirmed 64 S. Ct. 863; 88 L. Ed. 1117.

The charter. party agreement provided for arbitration and

_ Defendant excepted to the jurisdiction of the couft of the -

subject matter insisting the agreement to arbitrate’ ousted

the court of jurisdiction. Held: ~

‘The Act (Arbitration Act of the United States) was

passed not to oust the court of jurisdiction but to

.. provide for maintaining their jurisdiction while: at

¢ the same time recognizing arbitration agreements are

“0 affirmative defenses and providing for a forum for

their specific. enforcement. . . . The purpose and

effect of Section 8 ‘was to leave in no doubt by Section

4 conferring ‘such right for enforcement of the arbi-

tration agreement would-be available as well in suits —

- where property was not seized as in those suits where

_ property was seized. Courts will not construe arbitra-

55a

“Memorandom of Use Plaintil Opposing Motion for Stay

tion agreements ‘of ousting them of. jurisdiction unless

the construction is. inevitable. . . . The agreement

did not oust the jurisdiction to entertain the suit. It

did not give the appellee the right to have the suit

wrong.

MURRAY OIL PRODUCTS COMPANY VS. MITSUI

-& CO., Circyit Court of New York Appeals, N.Y., 1944;

-146.F2d 381. Suit on an oil purchase agreement comm

an arbitration .clause; held:

“That a provision in a contract containing an arbitra-

tion clause affects only the remedy and it is not gov-

erned’ by the law of the state wherein the contract

was made. If the provision in the New York contract

requiring any dispute arising out of the contract to be

settled by arbitration ‘was not a condition precedent,

it was not a bar to an action to litigate at comimon

law on the contract regardless of its legality.”

UNITED STATES FOR THE USE AND BENEFIT

OF H. W. MOSELEY VS. ELECTRONIC & MISSILE

‘ FACILITIES, INC., ET AL, Supreme Court of United

States, 1962 Term, held:

“In denying the action on the motion the: District

Court held that the Arbitration Act did not apply here

since any other holding would nullify the provisions

of the Miller Act. . . . We agree that .. . fraud -

‘In the procurement of an arbitration contract ‘like

fraud in the procurement of any contract makes it’

void and unenforceable and that this question of fraud

is a judicial one which must be determined by the

court. To allow this.question to be decided by arbi-

tion agreefnent. even though er in the grossest

of fraud.”

dismissed. The judgment dismissing the suit was.

trators would to that extent be to enforce the arbitra-

aie Pera 56a

Mamerandem of Use Palntit Opposing Maton fr Stay

“CONCLUSION Re -

1. ‘That if there was an agreement of the parties for

arbitration initially, then by agreement of the parties, par-

ticularly by the unilateral action of the Defendant Con-

tractor of insorporating the administrative procedures. 7

under such contract of the Government and Defendant

#DA-15-029-ENG-6241, as modifying and cancelling such

provision; that the séctior of the subcontract Use-Plaintiff

specifically nkew the Use-Plaintiff was agreeing to did pro-

vide for U.-S. governmental administrative remedies and

not for arbitration.

2. That Defendant had. three courses open to it, as ‘it

could have initially attempted to arbitrate its earlier claims

against Use-Plaintiff, whereas instead, it refused to heed

- the claims of Use-Plaintiff for removal of the wires, and

the extreme adverse weather; and. instead of arbitrating -

such claims as well as any imagined claims of its own

Defendant contractor elected to terminate the contract,

at the same time urging Use-Plaintiff to perform without °

the benefit of any contract, contrary to any requirement

for arbitration, as well as contrary to the rights of the

United States government, Section 21, (g) of.said ‘contract.

-tion, if such could be deemed a part of the contract, ‘by

false promise that Defendant would permit. the Use-Plain-

_ tiff. to join with Defendant to seek administrative relief

under the provision of contract DA-15029, ENG- 6241; as

well of the conduct of the Defendant, well versed in U. S. °

governmental procedures from prior multi contracts, to

? t to cause’ Use-Plaintiff to go beyond the statutory

time fpr instituting suit on the payment bond supplied

_in default of payment of. the separate written agreement for

3 Paso ac Cee a

§. ‘Fhat the Defendant waived its right under the very .

' General Conditions’ of the Contract of the American Insti-

tute of Architects requiring timely demand for arbitration

as above set out.

6. That Defendant was a party breaching its own agree-

ment for arbitration if suth might be deemed a part of the

- subtontract by not calling for timely arbitration but by

arbitrarily ‘and unilaterally’ taking its own way in the

matter, despite the other terms of the prime contract and

correction of a pier hole location; not subject to the terms.

of the subcontract, and doubtful of government ‘of the

_ terms and performance by even the Prime contract, De-

‘fendant could not comply with the terms of Section 3 of

the Title 9 ARBITRATION ACT, US.C.

7. Furthermore this contract obligation of the Defend-\

ant under the prime contract to Use-Plaintiff and likewise

under the special written agreement as well as that of the

subcontract required not arbitrators unversed in law but

the determination of the court_ itself’ in construing the

orders and regulations of the. Secretary of the Air Force,

of the comptroller- general; Board of Contract Appeals, En-

gineéring Corps, Court of Claims and Federal Courts of

Appeal all of which are highly sophisticated determinations

* of Federal Common Law and do not: include ‘ ‘commerce”

nor maritime jurisdictional problems, as,,or such contracts

Section 1 of Title 9, Arbitration.

8. Furthermore Use-Plaintiff is highly vetiudbied 4f

its sole action urider any of its contracts might be dismissed

as the Defendant induced Use-Plaintiff to delay any filing

on the bond pursuant to Section 270 b of Title 40 until —

‘>

‘relating to such two classes requiring — under ye

b . 58a ao

the day before the statutory time limit ran, and Use-Plaintiff

- would have no remedy against the Defendant's sureties.

Furthermore the actions of the parties themselves, the

Defendant first and on many occasions:and Use-Plaintiff

Ahereafter by filing suit and by acquiescing in seeking

‘administrative relief and by conferring with Defendant’s

principal officers, as well as supplying such requested letter

to Defendant, and relying on Defendant to institute admin-

istrative action directly with the* Contracting officer and

' the Board of Contract Appeals under the ,provisions of

Prime Contract DA-15-029-ENG-6241 and the ‘Statutes,

Rules and Regulations of the United States Government

in such cases made and provided. ,

9. That Defendant in attempting to invoke the equity

powers of the District must do equity itself and not enrich

itself by if not its own wrong, then by its unfair conduct

and dealings.

10. That Defendant did not : domnighy with the Statute

governing arbitration and failed, neglected and refused

to file timely its petition for arbitration, if it ever could

_ *be deemed to have had such ‘right under its said subcon-

“tract, and in the long delay caused Plaintiff to under

great expenses, whereas and in fact the motion of Defend-

ant for a.stay pending arbitration is not the procedure

required under Section 4 of Title 9 Arbitration Act; which

requires a petition of 4 party not in default, with service,

of notice timely made and pursuant to the Federal Rules of

Civil Procedure, none of which Defendant had done.

-l11. That the motion of the Defendant should also be |

“3 pee because of noncompliance with the very rules

of the Court wherein Defendant is asking assistance in not

attaching authorities to support its motion, despite the

sworn verifications of the complaint of Use-Plaintiff.

59a

Memorandum of Use Plaintiff Opposing Motion for Stay

WHEREFORE Use-Plaintiff through its counsel earn-

estly prays the court to overrule the motion of Defendants

herein, and to retain jurisdiction of the case and the

cause of Use-Plaintiff under the authorities-of the Statute, .

rule and authorities above submitted.

«Thomas F. Lazaron:of Thomas & Lazaron,

‘Attorneys for Plaintiff (Use) °

105 Rookwood Building, Cincinnati 2, Ohio

PROOF OF SERVICE

This is to certify that Thomas F. Lazaron, one of at-

torneys for Use-Plaintiff herein, have served a copy of the

foregoing Memorandum upon the law firm of Kuhns, Ken-

nedy & ‘Platenburg, Attorneys for Defendant at their office

at 1506 Hulman Building, Dayton 2, Ohio on June 24,

1964, by personal delivery by said Thomas F. Lazaron.

Thomas F. Lazaron of Thomas & Lazaron,

Attorneys for Use-Plaintiff =

105 Rookwood Building, ‘Cincinnati, Ohio

AFFIDAVIT OF THOMAS F. LAZARON SUPPLE-

MENTING MEMORANDUM OPPOSING MOTION

OF DEFENDANT FOR STAYING PROCEEDINGS

- AND FOR ARBITRATION

(Filed April 27, 1964.)

STATE OF OHIO ; :

— } SS:

COUNTY OF BUTLER ;

Thomas F. Lazaron being first duly sworn according to

law deposes and says that he has served as one of the at-

torneys for Use-Plaintiff from the inception of employment |

of counsel by. Keller Pier Drilling Company, and that he,

|. aan is fully aware of all phases of the litigation between the

«wre me

60a « .

Affidavit of Thomas F. Lazaron

said .various parties, and that to the best information and

belief of said affiant, Defendant Contractor never requested —

nor made demand on Use-Plaintiff for arbitration of the — |

disputes existing between the said parties; that of his own

personal knowledge affiant knows he met with James Con- |

forti, Jr., Esquire whois also President of Defendant con-

tractor, in the City of Dayton on March 21, 1964, wherein:

Defendant and counsel ‘for Use-Plaintiff discussed proper

methods -of settling the dispute ‘arising. under. the ‘provi-

sions of Contract DA-15-029-ENG-6241 and that at no —

‘ time did such officer make demand for arbitration; that as

the meeting broke up, and understanding said James.

Conforti, Jr. also was an attorney of the State of Ohio, on °

"being asked: if said “affiant didn’t believe that in order to

be able to file suit under the ‘Miller Act’ it would appear

to James Conforti, Jr., Esq., that one should first.seek arbi-

tration,” said affiant, also an Attorney at Law of the State

of Ohio replied that in his ‘ ‘opinion the procedure would .

appear-to be administrative action under the institution

and provisions of Contract OEE 241: - and

under the ‘Miller Act’.”

/s/ Thomas F. afamron

Sworn to before me and subscribed i in my presence this

24 _— of June, 1964. i

' .fs/ Helen Johnson

Notary Public in and for Butler County, Ohio

My Commission Expires July 14, 1967

(Seal) ’ 3

oe Yee tee fi

roe ae

6la

ORDER OF UNITED STATES DISTRICT COURT

(Filed January 11, 1965.)

: On June 9, 1964 the Court issued an order for the use

plaintiff to show cause why this action should not be dis-

missed. Subsequently the use plaintiff filed a memoran-

dum which was responded to by defendants. The Court

has -carefully considered this, matter arid éoncludes that

this action should be dismissed.

- The Court ts compelled to reach this conclusion because

of the broad arbitration clause which is contained in the.

original contract. - That ‘clause provides:

“Any controversy ia claim arising out of or relating

to this contract, or the breach thereof, shall be settled

by arbitration in accordance with the Rules of the

American Arbitration Association, and judgment upon

. the award rendered by the Arbitrator(s) may be en-

tered in any Court having jurisdiction thereof. 38

(Emphasis added).

Accordingly, the use plaintiff's comiplainey 1s hereby DIS-

MISSED and the parties shall proceed with arbitration.

Te ereegeeecezc eevee eoue es aeeeesese eves

> Chief Judge U. S. District Court:

62a

NOTICE OF APPEAL

(Filed February 5, 1965.)

Notice is hereby given that THE UNITED STATES’

OF AMERICA, Plaintiff For The Use And Benefit of

KELLER PIER DRILLING CO., an Ohio corporation

hereby appeals to the United States Court of Appeals for

the Sixth Circuit from the order of the United States Dis-

trict Court for the Southern District of Ohio, Western Divi-

. sion, Dayton, Ohio, filed January 11, 1965 at 3:45 P.M.,

dismissing the Use Plaintiff's Complaint and ordering the

-parties to proceed with arbitration.

. /s/ Thomas F. Lazaron, Esq.

of counsel,

Thomas & Lazaron

Attorneys at Law.

For Appellant

402 Atlas ‘Building

524 Walnut Street

Cincinnati, Ohio, 45202

C35 ? inate

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.