United States, Ex Rel. Aurora Painting, Inc., a Washington Corporation v. Fireman's Fund Insurance Company, a Foreign Corporation

Overview

Nunvik Construction (“Nunvik”) agreed with the United States Public Health Service (“Health Service”) to construct a water tank at Deering, Alaska. Appellant Fireman’s Fund Insurance Company (“Fireman’s Fund”) issued performance and payment bonds as surety for Nunvik, pursuant to the Miller Act, 40 U.S.C. §§ 270a to 270d (1986). Nunvik entered into a subcontract with appellee Aurora Painting (“Aurora”) to sandblast, paint, and insulate the tank. This subcontract contains an arbitration clause.

Because the water tank project was delayed, Aurora was unable to finish its work during the 1982 construction season and faced the prospect of returning the following year. When Aurora’s management notified Nunvik that it could not complete the work the following year, Nunvik convinced Aurora to return and the two parties negotiated an interim settlement agreement.

The interim settlement agreement provided for Aurora to submit certified weekly payroll records to Nunvik and for Nunvik to pay Aurora the payroll amounts. It also required that the parties arbitrate any disputes or claims between them after completing work on the subcontract. Fireman’s Fund was not a party to the…