Construction Law Insights

Hensel Phelps Constr. Co. v. Perdomo Indus., LLC, 2019 U.S. Dist. LEXIS 82636, 2019 WL 2111530 (E.D. Va. March 14, 2019)

Hensel Phelps Constr. Co. v. Perdomo Indus., LLC, 2019 U.S. Dist. LEXIS 81623, 2019 WL 2112955 (E.D. Va. May 14, 2019)

On May 12, 2016, Hensel Phelps Construction Co. (“Hensel Phelps”) and Perdomo Industrial, LLC (“Perdomo”) entered into a subcontract for the Freedom Plaza Project (the “Subcontract”). As of December 19, 2016, Perdomo was in default under the Subcontract. If a party defaults, the Subcontract requires that such claims or disputes be arbitrated pursuant to the AAA’s Rules for Construction Industry (“AAA Rules”) and that the arbitrator’s decision is final, conclusive, and binding on the parties and enforceable in a court of competent jurisdiction. On February 27, 2017, Hensel Phelps filed a Demand for Arbitration against Perdomo and its surety, Allied World Insurance Company (“Allied”). On May 21-25 and June 4-7 of 2018, an evidentiary hearing was conducted before an arbitration panel, which Perdomo failed to appear at the hearings. On August 21, 2018, the arbitration panel issued an award in Hensel Phelps favor in the amount of

$2,958,309.71 plus 10% interest against Perdomo and Allied jointly and severally and $7,917,666.30 plus 10% interest against Perdomo individually. The arbitration panel also dismissed with prejudice Perdomo’s counterclaim. On October 30, 2018, Hensel Phelps brought the instant action to confirm the arbitration panel’s arbitration award against Perdomo. On November 6, 2018, Mr. Perdomo was successfully served and Perdomo’s answer was due November 27, 2018. Because Perdomo failed to timely file an answer, Hensel Phelps requested default judgment against Perdomo.

The Magistrate Judge found that Perdomo was in default and recommended that Hensel Phelps was entitled to confirmation of the arbitration award in the amount of $7,917,666.30 plus 10% interest against Perdomo because the Subcontract provided for arbitration, the law provides for the court’s confirmation of an arbitration award, and Perdomo did not move to vacate, modify, or correct the arbitration award within 3 months of its issuance pursuant to 9 U.S.C. § 12. The District Court adopted the Report & Recommendation of the Magistrate Judge, granted Hensel Phelps default judgment against Perdomo, and confirmed and entered the Final Arbitration Award in favor of Hensel Phelps against Perdomo in the amount of $7,917,666.30 plus 10% per annum interest.

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