CERTIFIED/LVI ENVIRONMENTAL SERVICES v. PI CONSTR. CORP., (W.D.Tex. 2003)

NANCY STEIN NOWAK, United States Magistrate Judge.

To: Honorable Fred Biery United States District Judge

This lawsuit arises from the related asbestos clean-up, demolition and abatement work performed by plaintiff, Certified/LVI Environmental Services, Inc., at the Kelly Air Force Base, in Bexar County, San Antonio, Texas. According to plaintiff's original complaint, P1 Construction Corporation, which subcontracted with plaintiff to perform the work, unlawfully terminated its agreement with plaintiff by alleging plaintiff failed to perform as expected. Plaintiff seeks compensation for the work it performed under the agreement. PI Construction Corporation, through its successor, Meridian Contracting, Inc. ("Meridian"), and John K. Davis Jr., Meridian's chief officer, has filed a counterclaim arguing that Certified breached its agreement with PI Construction Corporation by failing to perform the work in an acceptable fashion. Defendants Acstar Insurance Company ("Acstar") and Ranger Insurance Company provided bonds for the work and became sureties pursuant to the Miller Act, 40 U.S.C. § 270a et. seq.

On June 10, 2002, defendant Acstar moved to consolidate the instant suit ("the Certified lawsuit") with the related suit subsequently filed in this division for trial purposes. Docket Entry 26. The related suit, also pending before this District Court, is styled: The United States of America for the use and benefit of Delta Structural Technology, Inc. ("Delta") v. Ranger Insurance Company and Acstar Insurance Company, And Delta Structural Technology Inc. v. PI Construction Corporation, Meridian Contracting, Inc., John K. Davis, Jr., Tony Byrne, Mike Douglas and the United States of America, jointly and severally, Civil Action No. SA-02-CA-0442 FB ("the Delta lawsuit"). Acstar's motion to consolidate, brought pursuant to FED. R. Civ. P. 42(a), is opposed by co-defendants John K. Davis, Jr. and Meridian. Docket Entry 27. Delta, the plaintiff in the related action, has filed an advisory stating that it concurs with Acstar's request for consolidation. Docket Entry 34. After having reviewed the arguments made by the parties on the issue of consolidation, and the applicable law, it is my opinion that the motion should be denied.

Other than involving subcontracts under the identical prime contract entered into by PI Construction Corporation with the United States government, specifically, the United States Department of the Air Force, to perform construction work at the Kelly Air Force Base, the suits do not involve the same parties nor do they involve sufficient common questions of law or fact to merit consolidation under FED. R. CIV. P. 42(a), Consolidation is not justified merely because the Miller Act is involved in both suits. Furthermore, Acstar, the party which moved for consolidation, is no longer a named-defendant in the Delta lawsuit. The District Court, on December 6, 2002, entered an Order granting plaintiffs voluntary motion to dismiss its claims against Acstar with prejudice.See Delta Lawsuit, at Docket Entry 36. It would, thus, appear that any interests Acstar (or Delta which concurred in the request) may have had in consolidating these two suits have now become MOOT. For these reasons, and as set forth more fully below, it is my recommendation that Acstar' motion to consolidate be DENIED in its entirety.

I have jurisdiction to enter this Memorandum and Recommendation under 28 U.S.C. § 636 (b) and the District Court's Order referring all pretrial matters in this proceeding to me for disposition by order or to aid in their disposition by recommendation where my authority as a Magistrate Judge is statutorily constrained. Docket Entry 6.

Rule 42(a) provides:

(a) Consolidation. When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

Under this Rule, a district court may consolidate separate actions when the actions involve common questions of law and fact. See Enterprise Bank v. Saettele, 21 F.3d 233, 235 (8th Cir. 1994); and CHARLES ALAN WRIGHT ARTHUR R. MILLER, 9 FED. PRAC. PROC. Civ.2d §§ 2381-2386 (1995 Supp. 2001). The goal of consolidating cases is to prevent separate suits from producing conflicting results. See International Paving Systems, Inc. v. Van-Tulco, Inc., 806 F. Supp. 17, 22 (E.D.N.Y. 1992). The party moving for consolidation bears the burden of showing the cases should be consolidated. See In re Repetitive Stress Injury Litig., 11 F.3d 368, 373 (2d Cir. 1993); and Servants of Paraclete, Inc. v. Great American Ins. Co., 866 F. Supp. 1560, 1572 (D.N.M. 1994). A well-drafted motion for consolidation should argue the following: (1) the cases proposed for consolidation are pending either before the same court for all purposes or before two different courts within the same judicial district; (2) the cases involve a common party; (3) the cases involve common issues of law; (4) the cases involve common issues of fact; (5) there is no risk of prejudice or possible confusion if the cases are consolidated, or if there is any risk, it is outweighed by the risk of inconsistent adjudications of factual and legal issues if the cases are tried separately; (6) consolidation will not result in an unfair advantage; (7) consolidation will conserve judicial resources; (8) consolidation will reduce the time for resolving the cases when compared to separate trials; and (9) consolidation will reduce the expense of trying the cases separately. See Frazier v. Garrison ISD, 980 F.2d 1514, 1532 (5th Cir. 1993); Hendrix v. Raybestos-Manhattan, Inc., 776 F.2d 1492, 1495-1497 (11th Cir. 1985); and In re Repetitive Stress Injury Litig., 11 F.3d at 373. The district court's decision concerning a motion to consolidate is reviewed on appeal under an abuse of discretion standard. Frazier, 980 F.2d at 1531 (citing Davis v. Yellow Cab Company of St. Petersburg, 220 F.2d 790, 791 (5th Cir. 1955)).

My review of the pleadings in both lawsuits reveals that although both cases involve a claim under the Miller Act, they contain very different facts, different causes of action, different subcontractors and different defendants. See Docket Entries 1, 24 and 25, in the Certified Lawsuit, and Docket Entries 3, 11-14, and 18 in the Delta Lawsuit. The plaintiff in the Certified Lawsuit contracted to conduct a clean-up, demolition and abatement work for PI Construction Corporation. PI Construction Corporation subsequently terminated the contract due to plaintiff's alleged unacceptable work performance, and the work was subsequently performed by other entities. The plaintiff in the Delta lawsuit, on the other hand, contracted with PI Construction Corporation to construct, repair, and modify certain buildings. In contrast to the Certified lawsuit, the plaintiffs in the Delta lawsuit allegedly completed the contract in a satisfactory fashion but were not paid for the work performed under the terms of the contract. While both the Certified Lawsuit and the Delta Lawsuit deal with the performance of construction work at the Kelly Air Force Base, each plaintiff conducted different types of work, with one plaintiff's work performance being called into question by PI Construction Corporation. Docket Entry 27, at 2.

Also the Delta lawsuit involves parties not present in the Certified action (i.e., the United States of America, Tony Barnes and Mike Douglas). The Delta Lawsuit contains causes of action for intentional and negligent tort, false certification, a Prompt Pay Act claim brought pursuant to chapter 28 of the Texas Property Code, and a claim on a sworn account, none of which are alleged in the Certified Lawsuit. In addition, there is no procedural benefit here from some type of consolidated or joint discovery. For instance, the deadline for the parties to complete discovery in the Certified Lawsuit has already passed and several motions for summary judgment have been filed in the case. Docket Entries 45, 46 and 58. While the discovery period in the Delta Lawsuit has been extended, the United States of America has recently moved for dismissal in the case. See Delta Lawsuit, at Docket Entry 38.

Based on these differences and for the reasons articulated by co-defendants Davis and Meridian in their opposition to Acstar's request for consolidation, it is my opinion that factual considerations pertinent to the performance under the subcontracts by two different entities would not be manageable at trial. The remaining defendants would indeed be unfairly prejudiced as a result of the facts and/or actions of various other co-defendants in the Delta Lawsuit which are not relevant to claims or defenses of the co-defendants in the Certified Lawsuit. Furthermore, any risks of prejudice faced by Acstar by having to defend itself in both suits have been totally eliminated by the fact that as of December 6, 2002, Acstar was dismissed with prejudice from the Delta Lawsuit.

Based on the foregoing, it is my recommendation that Acstar' motion to consolidate pursuant to FED. R. CIV. P. 42(a) be DENIED in its entirety. Docket Entry 26.

The United States District Clerk shall serve a copy of this Memorandum and Recommendation on each and every party either (1) by certified mail, return receipt requested, or (2) by facsimile if authorization to do so is on file with the Clerk. According to Title 28 U.S.C. § 636 (b)(1) and Fed.R.Civ.P. 72(b), any party who desires to object to this report must serve and file written objections to the Memorandum and Recommendation within 10 days after being served with a copy unless this time period is modified by the District Court. A party filing objections must specifically identify those findings, conclusions or recommendations to which objections are being made and the basis for such objections; the District Court need not consider frivolous, conclusive or general objections. Such party shall file the objections with the Clerk of the Court, and serve the objections on all other parties and the Magistrate Judge. A party's failure to file written objections to the proposed findings, conclusions and recommendations contained in this report shall bar the party from a de novo determination by the District Court. Additionally, any failure to file written objections to the proposed findings, conclusions and recommendations contained in this Memorandum and Recommendation within 10 days after being served with a copy shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions accepted by the District Court.