Free Motion to Stay - District Court of Federal Claims - federal

Case 1:02-cv-01228-TCW

Document 66

Filed 10/16/2006

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS THE MOUNTBATTEN SURETY COMPANY, Plaintiff, v. UNITED STATES, Defendant. ) ) ) ) ) ) ) ) ) )

No. 02-1228C (Judge Wheeler)

DEFENDANT'S UNOPPOSED MOTION TO STAY PROCEEDINGS PENDING DECISION Pursuant to Rule 7 of the Rules of the United States Court of Federal Claims, defendant, the United States, requests that any further action in this case be stayed pending resolution of the largely identical issues in Travelers Indemnity Co. v. United States, Court of Federal Claims docket number 05-1252C, currently pending before the United States Court of Appeals for the Federal Circuit, docket number 06-5143. A decision in Travelers will significantly affect resolution of the issues presented in this case, Mountbatten Surety Co. v. United States, docket number 02-1228, and Gulf Insurance Co. v. United States, former docket number 02-626 (collectively the "consolidated cases"). For this reason, the United States requests the Court stay any further action in the consolidated cases, pending resolution of the same issues on appeal. Counsel for the plaintiffs, Mountbatten and Gulf Insurance, have authorized counsel for the United States to represent to the Court that plaintiffs are not opposed to this stay. In the consolidated cases, the question before the Court is, in essence, whether the Court has jurisdiction to consider a claim by a surety which pays

Case 1:02-cv-01228-TCW

Document 66

Filed 10/16/2006

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solely pursuant to its payment bond. More specifically, whether, because the surety incurred costs solely pursuant to its payment bond, the surety's complaint fails to state a claim upon which relief can be granted. In the alternative, the United States asserted that it is entitled to summary judgment in its favor, because the United States made final payment to the bonded contractor, which extinguishes the obligation of the United States to pay the surety, who "steps into the shoes of the contractor." The United States filed a motion to dismiss and, in the alternative, for summary judgment, based upon these two theories. Plaintiffs in the consolidated cases each filed cross motions for summary judgment. Disposition of those motions is currently before the Court. The motions in the Gulf Insurance case were argued before Senior Judge Smith on September 9, 2004. Subsequent to those arguments, Gulf Insurance was consolidated with Mountbatten. The parties waived oral argument in the Mountbatten case, because of identity of issues with those presented in the Gulf Insurance case. During the last six months, this Court has issued several opinions relating to the issue presented by the consolidated cases. Travelers, however, is the first case that is ripe for consideration by the appellate court. On September 19, 2006, the United States filed its notice of appeal in the Travelers case. The United States believes that, based upon very similar facts and presenting all but identical issues, a decision in Travelers may be dispositive of the issues in the consolidated cases.
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Case 1:02-cv-01228-TCW

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For the foregoing reasons, the United States respectfully requests that the Court grant the requested stay, pending final resolution of the issue in Travelers on appeal. Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director s/ Deborah A. Bynum DEBORAH A. BYNUM Assistant Director s/ Ronald G. Morgan RONALD G. MORGAN Trial Attorney Commercial Litigation Branch Civil Division Department of Justice 1100 L Street, N.W. Attn: Classification Unit 8th Floor Washington, DC 20530 Tel. (202) 307-0367 Fax (202) 514-7969 Attorneys for Defendant. October 16, 2006

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Case 1:02-cv-01228-TCW

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Filed 10/16/2006

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CERTIFICATE OF FILING I hereby certify that on this 16th day of October 2006, a copy of the foregoing "DEFENDANT'S UNOPPOSED MOTION TO STAY PROCEEDINGS PENDING DECISION " was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/ RONALD G. MORGAN Eric R. Stanco, Esquire Eric R. Stanco & Associates 126 C Street, N.W. Washington, D.C. 20001 Robert G. Barbour, Esquire Watt, Tieder, Hoffar & Fitzgerald, L.L.P. 7929 Westpark Drive, Suite 400 McLean, Virginia 22102