Defendant Holmes countered with the instant motion, requesting dismissal in favor of, or alternatively, a stay to abide, arbitration pursuant to the foregoing provision. Hoping to avoid the same, plaintiff argues that defendant Holmes terminated the arbitration clause along with the subcontract, and/or waived its right to compel arbitration by electing to invoke the bond. Alternatively, plaintiff contends a dismissal or stay in favor of arbitration would forsake judicial economy.

The court disagrees, and finds the proper course is to stay the matter to abide arbitration pursuant to the terms of the subcontract. Indeed, the Federal Arbitration Act (FAA), particularly 9 U.S.C. § 3, commands this result upon being satisfied that the issue is referable to arbitration under the agreement. To be sure, the instant dispute falls squarely under the broad arbitration clause quoted above. Moreover, it is well-settled that such a clause survives the termination of a contract unless negated expressly or by clear implication. See Nolde Bros., Inc. v. Local No. 358, Bakery and Confectionery Workers Union, 430 U.S. 243, 255 (1977); see also Litton Fin. Printing Div. v. N.L.R.B., 501 U.S. 190, 208 n.3 (1991). Larry's Lumber has not established any such negation here.

Nor has it established Holmes waived its right to arbitration. Eighth Circuit Courts will find a waiver only where the party "(1) knew of an existing right to arbitration; (2) acted inconsistently with that right; and (3) prejudiced the innocent party by these inconsistent acts." Barker v. Golf U.S.A., Inc., 154 F.3d 788, 793 (8^th Cir. 1998)(citations and internal quotations omitted). It is axiomatic that a party which resists litigation in favor of arbitration ala Holmes has not "acted inconsistently with its right to arbitration." See id. It follows that no real prejudice will be shown under such circumstances. See Stifel, Nicolaus & Co., Inc. v. Freeman, 924 F.2d 157, 159 (8^th Cir. 1991) ("Prejudice" results from lost evidence, duplication of efforts, use of discovery methods unavailable in arbitration, or litigation of substantial issues going to the merits).

Finally, in the court's view "considerations of judicial economy and avoidance of confusion and possible inconsistent results . . . militate in favor of staying the entire action." The presence of plaintiff's Miller Act claim gives no pause here; the Eighth Circuit has held that "Section 3 of the Arbitration Act . . . is broad enough to permit the stay of litigation between nonarbitrating parties as long as that lawsuit is based on issues referable to arbitration under an arbitration agreement governed by the [FAA]." Contracting Northwest, Inc. v. City of Fredericksburg, Iowa, 713 F.2d 382, 387 (8^th Cir. 1983).

The court is emboldened by the decision of the District of Wyoming in United States ex rel Reservoir Capital Corp. v. Holmes & Narver Serv., Inc., No. 98-CV-148-J (D. Wyo. Oct. 20, 1998). While by no means binding upon this court, the court finds the able Wyoming Judge's interpretation of the identical arbitration clause persuasive.

Accordingly, defendant's motion to dismiss is hereby DENIED. Defendant's alternative motion to stay is GRANTED. IT IS HEREBY ORDERED that all claims and disputes of the parties arising out of the subcontract be referred to arbitration pursuant to paragraph 20 therein. IT IS FURTHER ORDERED that the above-entitled action is STAYED to abide this process. The parties are directed to jointly report the status of their arbitration not less than quarterly and, upon completion, to promptly submit any remaining issues to this court for resolution.

IT IS SO ORDERED.

Dated this _____ day of May, 2000.

RODNEY S. WEBB, CHIEF JUDGE
UNITED STATES DISTRICT COURT

1. Plaintiff also has before the court a motion to extend time to respond (doc. #6); this motion is hereby GRANTED.