Judge Medley won't rule in arbitration costs

Alejandro de los Rios May 28, 2010, 4:45am

Both sides in a contract dispute involving a New Orleans contractor were told May 12 that the Orleans Parish Civil District Court will not settle who is responsible to pay for arbitration.

New Orleans resident Deshon Berry sued Design Build Construction, its manager Tyler Malejko and Assurance Company of America, after Malejko allegedly failed to supply and build two modular homes on Berry's property.

Metairie attorney Peter Perez Jr. filed the suit on behalf of Berry on April 30, 2009. Philadelphia attorney Edward Mendy is representing Design Build Construction and Malejko. New Orleans attorney Cherrell Simms is representing Assurance.

Despite not being directly involved in the charges brought against Design Build Construction, Assurance took part in arbitration hearings regarding this suit. But since neither Assurance nor Berry could agree on who should be responsible for the upfront arbitration deposit, they filed a joint motion with Judge Lloyd Medley to lift the stay on the proceedings and enforce arbitration.

Medley denied the motion to appropriate the arbitration costs citing the case of Dealer Computer Services Inc. vs. Old Colony Motors Inc. (588 F.3d 889, 887 Louisiana Fifth Circuit 2009) and a Louisiana Supreme Court decision which states that "payment of arbitration fees is a procedural condition precedent that is for the arbitrators to decide and that the trial court should not review."

The original petition for damages claims that Design Build reputedly missed contractual deadlines, coerced Berry into buying a modular home she did not want and other violations of the Louisiana Unfair Trade Practices Act (LUPTA). Berry is seeking more than $300,000 in damages.

Orleans Parish Case 2009-04514

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