Construction Law Insights

Fluor Enters. v. Mitsubishi Hitachi power Sys. Ams., 2018 U.S. Dist LEXIS 176250, 2018 WL 4956513 (E.D. Va. Oct. 12, 2018)

Mitsubishi Hitachi Power Systems Americas, Inc. (“Mitsubishi”) and Virginia Electric and Power Company (“VEPCO”) entered into a Turbine Supply Agreement (“TSA”) for Mitsubishi to sell turbine generators to VEPCO for use in a power generating facility in Brunswick County (the “Brunswick Project”). VEPCO contracted with Fluor Enterprises, Inc. (“Fluor”) for Fluor to construct the Brunswick Project (the “Fluor Contract”). Under the Fluor Contract, Fluor was responsible to engineer, procure, and construct the Brunswick Project. Around the same time VEPCO entered into the Fluor Contract, it assigned the TSA to Fluor through a Partial Assignment, Agreement (the “Assignment Agreement”), but VEPCO retained the obligation to pay Mitsubishi per the terms of the

TSA. Fluor alleged that Mitsubishi breached the TSA by failing to pay Fluor the liquidated damages to which it is entitled as a result of Mitsubishi’s late delivery of components to the Brunswick Project. On September 13, 2017, Fluor filed a Complaint against Mitsubishi, alleging breach of contract. On October 16, 2017, Mitsubishi answered the Complaint and asserted a counterclaim against Fluor for defamation. On November 3, 2017, Fluor moved to dismiss Mitsubishi’s defamation claim, which the court denied on June 15, 2018. On June 1, 2018, Fluor answered Mitsubishi’s counterclaim, but did not object to its jury demand. On August 23, 2018, Fluor filed a Motion to Strike, arguing that the Court should strike Mitsubishi’s demand for a jury trial because of the Assignment Agreement and TSA, which both contained a provision wherein the parties waived a right to a jury trial.

The Court denied Fluor’s Motion to Strike. FRCP 12(f) requires a moving party to make a motion to strike matters specified in FRCP 12(f) before responding to the pleadings at issue if it is one to which a response is allowed. Fluor filed its Motion to Strike after answering Mitsubishi’s counterclaim.

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