4th Circuit affirms arbitration award in favor of church

A Prince George’s County church is entitled to more than $130,000 in damages from a Shenandoah Valley-based metalworking company, the 4th U.S. Circuit Court of Appeals has held.

The decision affirmed an arbitrator’s award in favor of the First Baptist Church of Glenarden, which hired New Market MetalCraft Inc. in 2004 to build catwalks for its 200,000-square-foot building in Upper Marlboro.

The church terminated the $876,500 contract in April 2006, claiming the catwalks did not conform to its specifications.

The parties went through a failed mediation before the church filed its demand for arbitration in May 2009. After holding hearings that fall and winter, the arbitrator awarded the church $130,518.

U.S. District Judge Alexander Williams affirmed the award in July 2010, despite New Market’s objection that the church’s claims were barred by the three-year statute of limitations.

“Even if the Court were to find that the Arbitrator misapplied or misinterpreted the law on the statute of limitations, the Court must confirm the award unless [New Market MetalCraft] can show that the Arbitrator knowingly disregarded the law as he understood it, which NMMC has not convinced the Court of,” Williams wrote.

New Market appealed, but the 4th Circuit affirmed Wednesday in an unsigned, one-paragraph opinion.

“We … find no error in the district court’s ruling. Accordingly, we affirm for the reasons stated by the district court,” the 4th Circuit said.

The church filed an involuntary Chapter 7 petition last month against New Market MetalCraft in U.S. Bankruptcy Court in Harrisonburg, Va., saying it feared a transfer of assets.

New Market’s attorney, Michael Melkersen, last week asked the court to dismiss the petition for lack of subject matter jurisdiction.

Melkersen is the son of Ole and W. Gail Melkersen. The involuntary petition lists the elder Melkersens as co-owners of New Market’s outstanding stock, but the motion to dismiss said W. Gail Melkersen is the sole owner of the company’s outstanding shares.

The Melkersens say the petition was filed in bad faith and that the church, as a single creditor, cannot seek involuntary liquidation because the company has more than 12 creditors.

The motion to dismiss lists a debt to the Commonwealth of Virginia for $10 and a debt of about $16 to another creditor. All told, four of the listed creditors are owed less than $50 each.

New Market’s motion, filed Aug. 2, also claimed its debt to First Baptist Church was a matter of bona fide dispute that was awaiting a decision by the 4th Circuit.

The 4th Circuit’s Aug. 10 opinion is available as RecordFax #11-0810-60