Opinion
CIVIL ACTION NO. 06-491 c/w 06-7084, SECTION "T"(3).
February 19, 2008
ORDER AND REASONS
Currently before the Court is Belfor's Motion to Consolidate Civil Action No. 07-6378 entitled Guaranteed Fence and Gate, LLC v. Belfor USA Group, Inc. with this action. Rec. Doc. 191. Guaranteed Fence and Gate, LLC, has filed an Opposition. Rec. Doc. 212. The matter came for hearing without oral argument on November 28, 2007 and was submitted on the briefs. The Court, having considered the arguments of the parties, the Court record, the law and applicable jurisprudence is fully advised in the premises and ready to rule.
I. BACKGROUND
Defendant, Belfor USA Group, Inc., (hereinafter, "Belfor") is a construction company that provided construction and remediation services after Hurricane Katrina. Guaranteed Fence and Gate, LLC (hereinafter, "Guaranteed Fence"), is one of the subcontractors which provided its services on Hurricane Katrina Belfor projects.
Two civil actions were filed by the workers which performed the aforementioned services. The first, the Xavier matter, arises out of the alleged failure to pay workers overtime benefits under the Fair Labor Standards Act. Shortly after the Xavier matter was filed, the Obando action ensued alleging the denial of overtime benefits under the Fair Labor Standards Act and in addition, various state law claims. These two actions have been consolidated.
In the consolidated action, Belfor filed a third-party demand against, among others, Guaranteed Fence. Rec. Doc. 90. That demand is two-fold. First, Belfor alleges that it and Guaranteed Fence entered into a Master Service Agreement under which Guaranteed Fence agreed, inter alia, to pay all appropriate wages to employees and to comply with federal and state laws regarding employees. Rec. Doc. 90 at p. 3. Belfor asserts that its investigation has revealed a number of the opt-in plaintiffs and potential opt-in plaintiffs or class members as well as the named plaintiffs in the Xavier and Obando actions worked for Guaranteed Fence on Belfor projects. Rec. Doc. 90 at pp. 4-5. To the extent it is determined Belfor is liable to the plaintiffs who were not paid overtime wages by Guaranteed Fence, Belfor asserts that the Master Service Agreement makes Guaranteed Fence indebted to Belfor for those amounts. Accordingly, the third-party demand seeks a declaratory judgment declaring that Guaranteed Fence must indemnify Belfor from any and all claims made by the plaintiffs in the consolidated actions due to Guranteed Fence's "failure to pay wages to its employees." Rec. Doc. 90 at p. 6.
The second ground requests a judgment declaring the amounts owed by Belfor to Guaranteed Fence or vice versa. Belfor provides that it has continued to withhold payment due to Guaranteed Fence for work performed because it failed to comply with the terms of the Master Service Agreement. Belfor alleges that Guaranteed Fence's work was deficient and therefore, they are entitled to an offset against any amounts owed to Guaranteed Fence. Rec. Doc. 90 at p. 7. Further, Belfor asserts that the indemnification amounts Guaranteed Fence will be responsible to pay Belfor for the expenses and/or liabilities it incurs in the defense of, or on the merits, of these consolidated actions will also have to offset any amounts Guaranteed Fence claims it is owed. Rec. Doc. 90 at p. 7.
After the third-party demand was filed, Guaranteed Fence filed a Petition in the Louisiana 24th Judicial District Court, Parish of Jefferson, against Belfor, and others, seeking damages and alleging its work on Belfor projects was final or substantially completed, however, it has not been paid in full. See Exhibit "A" attached to Rec. Doc. 4 at p. 5. That matter was removed to this Court and given Civil Action No. 07-6378.
Belfor now seeks to consolidate this action and Civil Action No. 07-6378 arguing that its third-party demand against Guaranteed Fence in the former action and the claims raised by Guaranteed Fence against in the latter action, involve identical parties as well as present identical questions of law and fact, namely the rights and obligations of each party under the Master Service Agreement. Rec. Doc. 191. Guaranteed Fence opposes consolidation arguing: (1) there are not common issues of law or fact in the two actions; (2) consolidation would cause unnecessary confusion; (3) consolidation would result in unnecessary delay to the adjudication of Guaranteed Fence's actions as well as causing it financial hardship; and (4) consolidation would be prejudicial because Guaranteed Fence would no longer be able to have the ability to expedite its claims, focus the Court's attention to its legal needs, and satisfy its interests in a economically logical legal proceeding. Rec. Doc. 212 at p. 7.
II. LAW AND ANALYSIS
Federal Rules of Civil Procedure Rule 42 provides, in pertinent part:
Rule 42. Consolidation; Separate Trials
(a) Consolidation. If actions before the court involve a common question of law or fact, the court may:
(1) join for hearing or trial any or all matters at issue in the actions;
(2) consolidate the actions; or
(3) issue any other orders to avoid unnecessary cost or delay
"A trial court has broad discretion in determining whether to consolidate a case pending before it." Alley v. Chrysler Credit Corp. 767 F.2d 138, 140 (5th Cir. 1985) citing, N.A.A.C.P. of Louisiana v. Michot, 480 F.2d 547, 548 (5th Cir. 1973). Accordingly, where there are actions before the Court which do involve a common question of law or fact, the trial court may, in its discretion, decide to consolidate the actions, but it is not mandated to do so. Id. Consolidation is permitted as a matter of convenience and economy in judicial administration. While it is required that a common question of law or fact be present as a prerequisite to consolidation, the mere presence of a common question does not require consolidation. Continental Bank Trust Co. v. Ols. E. D. Platzer 304 F.Supp. 228, 229 (S.D.Tex. 1969). Further, when it is not believed that there would be a sufficient saving of judicial time and effort to warrant a joint trial when balanced against the inconvenience, delay and confusion that might result from requiring each party to attend trial of some issues in which it is not involved, consolidation is not appropriate. Continental Bank Trust Co., 304 F.Supp. at 229-230.
Assuming, without deciding, that Belfor's third-party demand in the Xavier/Obando consolidated action and the independent action filed by Guaranteed Fence have common issues of law and fact, this Court exercises its discretion and denies consolidation because consolidating these actions, while perhaps saving judicial time and effort, would result in inconvenience and delay to Guaranteed Fence in having its independent case proceed as part of the Xavier/Obando case. The Xavier/Obando action is a large action with over two-hundred documents filed to date. Consolidating the breach of contract claims of Guaranteed Fence into this action would greatly inconvenience and delay its claims from going forward. Presently, the parties in the Xavier/Obando actions have presented various Motions which the Court has take under advisement. The case is not set for trial and the collective action hearing will not proceed until after the Court rules on the outstanding Motions. In sum, the case is at a stand still while the outstanding motions are decided. By consolidating the Guaranteed Fence breach of contact case with this case, Guaranteed Fence would be in caught up in this delay and not be able to move forward with its claims expeditiously.
While the Court understands that a decision in favor of Belfor on the third-party demand would have an impact on Guaranteed's case against it, Belfor can raise the same allegations as those in the third-party compliant in defense of Guaranteed Fence's independent action and in the event the third-party demand is granted, bring those issues to the Court. Alternatively, if the third-party demand is denied, Guaranteed Fence can raise those issues also. The is no prejudice as all of these cases are before the undersigned and this Court is well aware of the intricacies of the issues presented and questions involved.
Accordingly, and for the reasons stated herein,
IT IS ORDERED that the Belfor's Motion to Consolidate, Rec. Doc. 191, is DENIED.