Judge issues stay pending arbitration in dispute over damaged New Orleans hotel

By Karen Kidd | Nov 20, 2018

NEW ORLEANS — A federal judge has agreed to stay - but not dismiss - a third-party demand for indemnify by a Louisiana-based architectural firm against a New York engineering form in a lawsuit over water damage in a hotel in New Orleans' historic central business district.

U.S. District Court Judge Eldon F. Fallon, on the bench in Louisiana's Eastern District, cited a portion of the Federal Arbitration Act and agreed to stay a third-party demand by John T. Campo & Associates against Cosentini Associates in New York City. The stay is in place pending arbitration between the two companies.

"However, the Court will deny the motion to the extent Cosentini alternatively requests dismissal of the third-party claim," Judge Fallon said in his 12-page order and reasons issued Nov. 8.

John T. Campo, which maintains offices in New Orleans and Covington, named

Cosentini as a third-party defendant in its motion.

The case itself was filed in late 2016 by plaintiff Cotton Exchange Investment Properties, owner of AC Hotel in the historic Cotton Exchange building on Carondelet Street, against John T. Campo, Xcel Air Conditioning and Commercial Renovation Services. The lawsuit alleges that shoddy workmanship by Xcel Air Conditioning caused water and moisture damage so bad that the 220-room hotel had to close for repairs.

Based on those allegations, Cotton Exchange Investment sued all three defendants alleging breach of contract and negligence claims and breach of warranty of good workmanship claims against John T. Campo and Commercial Renovation Services.

This past June, John T. Campo filed a third-party demand against Cosentini, alleging that Cosentini should indemnify John T. Campo because Cosentini provided the architectural plans for the hotel's renovation. John T. Campo's third-party demand is based on a proposal between the two a few years earlier.

In October, Cosentini filed its motion to compel arbitration and dismiss John T. Campo's third party demand, or else stay proceedings in the case pending arbitration.

Judge Fallon said the proposal between Campo and Cosentini would indicate arbitration is appropriate.

"The arbitration clause in the proposal is sufficiently broad to include Campo's claims against Cosentini and no outside considerations prevent the claims from being referred to arbitration," Judge Fallon's order said.

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