Opinion
00 CIV. 5469 (RCC)
November 18, 2003
OPINION AND ORDER
Plaintiff Ocean Ships, Inc. ("Ocean Ships") moves to consolidate two separate actions against defendants Thomas E. Stiles and the law firm of Stiles and Wright, P.C., 00 Civ. 5469 (RCC) ("the Stiles action") and defendant Stephen Wright, 02 Civ. 7251 (RCC) ("the Wright Action"). Because the Court finds that the benefits of efficiency resulting from consolidation outweigh any issues of prejudice or confusion, Plaintiff's motion is GRANTED.
I. Background
Ocean Ships originally brought suit against Thomas E. Stiles and the law firm of Stiles and Wright, P.C. (the "law firm") based on the law firm's legal representation of Ocean Ships in the underlying case of Horan v. Ocean Ships, Inc., No. 29556-92 (N.Y.Sup.Ct. Dec. 24, 1997). Plaintiff's Complaint included three claims: (1) legal malpractice based on failure to perfect an appeal; (2) breach of contract; and (3) negligence for delay in entering judgment in the Horan case.
On April 3, 2002, this Court granted Ocean Ships' motion for summary judgment on the legal malpractice claim and declined to reach the remaining claims. See Ocean Ships, Inc. v. Stiles, 00 Civ. 5469 (RCC) (S.D.N.Y April 3, 2002). On appeal, the Second Circuit remanded the decision for reconsideration solely on the issue of "the amount of damages (if any) caused by the malpractice." Ocean Ships, Inc. v. Stiles, 315 F.3d 111, 114 (2d Cir. 2002).
After the Stiles action was remanded to this Court, Ocean Ships brought suit against Steven Wright, a partner in the law firm. Plaintiff claims that Wright is liable for the damages claimed in the Stiles action because he was an active participant in the legal representation of Ocean Ships in the Horan case and is a shareholder of the law firm. Ocean Ships also alleges that Wright committed a fraudulent conveyance of the law firm's assets while the appeal for the Stiles action was sub judice, Wright has submitted a motion to dismiss the amended complaint, which is currently pending before this Court.
II. Discussion
Ocean Ships contends that the Stiles and Wright actions share similar issues of fact and law and should be consolidated to maximize efficiency. Stiles and the law firm, the defendants in the Stiles action, contend that consolidation would result in prejudice and confusion that would outweigh any gains in efficiency.
Rule 42(a) of the Federal Rules of Civil Procedure grants a trial judge broad discretion to determine whether to consolidate two actions to "avoid unnecessary costs or delay." Johnson v. Celotex, 899 F.2d 1281, 1284 (2d Cir. 1990). A judge must balance the gains in judicial efficiency with any threats of prejudice and confusion to determine the most efficient method of disposition that preserves access to a fair and impartial trial. Id. at 1284-85. The burden is on the moving party to prove that consolidation is warranted. See Solvent Chem. Co. v. E.I. Dupont De Nemours Co., 242 F. Supp.2d 196, 221 (W.D.N.Y. 2002). The movant must prove that the two actions are based on common questions of law or fact and that considerations of efficiency outweigh any prejudice or confusion that might result from consolidation. See Johnson, 899 F.2d at 1284-85 (quoting Hendrix v. Raybestos-Manhattan, Inc., 776 F.2d 1492, 1495 (11th Cir. 1985)); Quintel Corp., N. V. v. Citibank, N.A., 100 F.R.D. 695, 697 (S.D.N.Y. 1983).
Stiles and the law firm argue that consolidation would create prejudice and confusion, which would undermine the ability of the Court to conduct a fair and impartial trial. They assert that consolidation will prejudice Wright because he has yet to even interpose an answer to a claim for which Stiles and the law firm have already been found liable.
It is true that Stiles and the law firm have already been found liable for legal malpractice by summary judgment. The Stiles action was remanded to this Court by the Second Circuit only for reconsideration of "the amount of damages (if any) caused by the malpractice." Ocean Ships, Inc., 315 F.3d at 114. In the Wright action, on the other hand, Wright's liability for legal malpractice, negligence or fraudulent conveyance has yet to be determined. Stiles and the law firm argue that Wright would be prejudiced by his association with co-defendants who have already been found liable and that the different issues involved would confuse the jury.
Stiles and the law firm also argue that consolidating the two actions in different stages of the trial process will prejudice the Stiles case by delaying its disposition. The only issue remaining in the Stiles action is the amount of damages to which Ocean Ships is entitled. Therefore, resolution of the Stiles action is likely to take less time if it is not consolidated with the Wright action, in which the question of defendant's liability is yet to be determined.
In response, Ocean Ships argues that consolidation would result in very little delay because most of the discovery for the Wright case has already taken place. It contends that the only discovery remaining in the Wright case is the defendant's deposition and document disclosure. This additional discovery would only minimally delay the Stiles action, which also requires additional discovery.
Having examined these arguments, the Court finds that consolidation of the two cases will produce gains in efficiency that will outweigh any potential prejudice. For the purpose of judicial efficiency, Rule 42(a) allows the consolidation of two cases with similar issues of law and fact. Johnson, 899 F.2d at 1284. The Stiles action and the Wright action arise from the same event — the failure to perfect a meritorious appeal in the Horan case. Thus, the actions share similar issues of fact.
While common issues of fact alone are sufficient to meet the standards of Rule 42(a), the existence of similar questions of law also weigh in favor of consolidation because both actions are based on claims of legal malpractice. Quintel Corporation, N.V., 100 F.R.D at 697. The defendants in the Stiles action have been found liable for legal malpractice and Ocean Ships alleges that Wright was either liable for legal malpractice because of his role in the Horan case or because he was a shareholder of the law firm. Only one common issue of fact or law is required for consolidation; the legal malpractice claim satisfies this requirement.See BD ex rel. Jean Doe v. DeBuono, 193 F.R.D. 117, 141 (S.D.N.Y. 2000).
Consolidating the two cases would also promote judicial efficiency by reducing discovery costs. Consolidation would relieve the parties in theWright action from having to perform the same voluminous discovery that has already been completed in the Stiles case. Much of the discovery required for the two cases is the same, such as the depositions of the vice president of Ocean Ships and expert witnesses. Thus, consolidation would save litigation costs rather than impose an additional burden on Wright.
Defendant claims that consolidation would prejudice Wright and confuse the jury because the defendants in the Stiles action were found liable for a claim only alleged against the defendant in the Wright action. The Court finds, however, that the risk of prejudice and confusion that might result from consolidating these two cases is minimal and, in any case, does not outweigh the benefits of consolidation. Moreover, the Court could easily minimize or eliminate any prejudice or confusion through the use of an appropriate jury instruction. See Johnson, 899 F.2d at 1285;Int'l Paving Sys., Inc. v. Van-Tulco, Inc., 806 F. Supp. 17, 22 (E.D.N.Y. 1992).
The Court finds that the total gains in efficiency that would result from consolidation also outweigh any brief delay in the Stiles action. In deciding a motion to consolidate, a court must balance the savings in time and effort with the possibility of inconvenience and delay that will result from consolidation. Stein, Hall Co. v. Scindia Steam Navigation Co., 264 F. Supp. 499, 501 (S.D.N.Y, 1967). Consolidation is generally appropriate as long as any prejudice, such as delay and inconvenience, does not outweigh efficiency concerns. See Primavera Familienstiftung v. Askin, 173 F.R.D. 115, 129 (S.D.N.Y. 1997). Thus, concerns of efficiency should only defer to issues of paramount concern for a fair and impartial trial. See Malcolm v. Nat'l Gypsum Co., 995 F.2d 346, 350 (2d Cir. 1993); Johnson, 899 F.2d at 1285.
The possible delay in the Stiles action would be brief because there is only a minimal difference in the remaining discovery between the Stiles and Wright actions. The Court finds that this brief delay would not rise to the level of a paramount concern and thus does not outweigh the gains in efficiency from consolidation. Since the delay is small compared to the time that would be saved by sharing discovery in the two cases, consolidation is appropriate.
III. Conclusion
For the foregoing reasons, Plaintiff's motion for consolidation is GRANTED. The Clerk of the Court is directed to consolidate Case No. 02 Civ. 7251 with 00 Civ. 7251.