Fed. Ins. Co. v. Superior Court of Ventura Cty.

A subcontractor and a prime contractor on a public works project have a dispute. Their agreement provides that disputes be resolved by way of arbitration. Here we hold that the subcontractor’s suit against the prime contractor’s surety must be stayed until completion of the arbitration.

Procedural and Factual Background

David Mackey, real party in interest, was a subcontractor on a public works project. He had a dispute with the prime contractor Hedley Builders, Inc. (Hedley) over money allegedly owed him for his work on the project. Mackey filed an action against Hedley and petitioners Federal Insurance Company and Vigilant Insurance Company (hereinafter referred to as the carriers). A provision in Hedley’s subcontract with Mackey required arbitration of any claim or dispute. Hedley petitioned respondent superior court to compel arbitration and for a stay of the action pending the resolution of arbitration. Respondent court ordered the arbitration of the Hedley-Mackey dispute and stayed the action as to Hedley.

Instead of arbitrating his dispute with Hedley, Mackey filed his first amended complaint and served the carriers with requests for discovery. Respondent…