Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-00388/USCOURTS-casd-3_07-cv-00388-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Insurance Contract

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1 06cv0717 J (JMA)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

PHILADELPHIA INDEMNITY

INSURANCE COMPANY,

Plaintiff,

v.

DOUGLAS E. BARNHART, INC.,

Defendant. 

AND ALL RELATED ACTIONS.

 

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Civil No. 06cv0717 J (JMA)

ORDER GRANTING

DEFENDANT’S MOTION TO

CONSOLIDATE FOR PURPOSES

OF DISCOVERY ONLY.

Before the Court is Douglas E. Barnhart, Inc.’s (“Defendant”) Motion to Consolidate

Case No. 06cv0717 with Case No. 07cv0388 for purposes of discovery only. [Doc. No. 37.] 

The Court determined that the issues presented were appropriate for decision without oral

argument pursuant to Civil Local Rule 7.1.d.1. For the reasons stated below, the Court

GRANTS Defendant’s Motion to Consolidate for purposes of discovery only. 

Background

This dispute arises from an insurance agreement (“Policy”) that Plaintiff Philadelphia

Indemnity Insurance Company (“Plaintiff”) issued to Defendant. (See Pl.’s Compl. at 2, 4;

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 Def.’s Answer at 2.) Vista Unified School District (“Vista Unified”) was the named insured on

the Policy. (See Pl.’s Compl. at 2.) In 2003, Defendant entered into a contract with Vista

Unified to construct the Guajome Park Academy (“Project”), a four building charter school. 

(Id.; Def.’s Answer at 1; Def.’s Countercl. at 2; Pl.’s Answer to Def.’s Countercl. at 2.) As the

general contractor for the Project, Defendant was also covered by the policy. (See Pl.’s Compl.

at 2; Def.’s Answer at 2; Def.’s Countercl. at 2.) Defendant subcontracted with Artimex to

perform steel fabrication for the Project. (See Def.’s Countercl. at 2.) As a subcontractor,

Artimex was also covered by the policy. (See Pl.’s Compl. at 2; Def.’s Answer at 2; Def.’s

Countercl. at 2.) 

Vista Unified hired Testing Engineers, Inc. (“Testing Engineers”) to inspect and approve

the steel fabrication completed by Artimex. (See Pl.’s Compl. at 2; Def.’s Answer at 2.) Testing

Engineers inspected all shop and field work completed by Artimex. (See Pl.’s Compl. at 2;

Def.’s Answer at 8.) After substantial work was completed on the project, Vista Unified

discovered that one of Testing Engineers’ inspectors was unqualified, (See Pl.’s Compl. at 2),

and, as a result, fired Testing Engineers. (See Def.’s Countercl. at 2.) Upon firing Testing

Engineers, Vista Unified hired a third party inspection company to reinspect all of the previously

approved welds on the Project. (See Def.’s Countercl. at 2; Def.’s Answer at 2.)

Plaintiff claims that after the third party inspection company reinspected the welds, Vista

Unified demanded that the welds be replaced. (See Pl.’s Compl. at 2, Def.’s Answer at 2.) 

Defendant denies knowledge of whether the third party inspection company actually reinspected

the welds but admits that it was ordered by Vista Unified to deconstruct and reconstruct certain

work on the Project. (See Def.’s Answer at 2.) Defendant alleges that many of the welds that

Testing Engineers had inspected were inadequate and required additional welding work, which

delayed and interrupted the project, and required Defendant to spend additional time, materials,

and resources. (See Def.’s Countercl. at 3.) 

In March of 2005, Defendant submitted a claim to Keenan & Associates, the

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 administrator of Vista Unified’s school insurance program. (See Pl.’s Compl. at 2; Def.’s

 Answer at 2.) On July 26, 2005, Plaintiff received a claim by Defendant for reimbursement for

 the above-described damages under the policy. (See Def.’s Countercl. at 3; Pl.’s Answer to

Def.’s Countercl. at 2.) Plaintiff denied the claim. (See Pl.’s Answer to Def.’s Countercl. at 2.) 

Def.’s Countercl. at 3.) 

On April 4, 2006, Plaintiff filed a Complaint in this Court seeking a judicial declaration

that Defendant has no lawful claim against Plaintiff for insurance coverage due to the delay

caused by the defective welds. (See Pl.’s Compl. at 2, 4.) Defendant filed a Counterclaim and

an Answer. [Doc. Nos. 4, 5.] In Defendant’s Counterclaim, it alleges: (1) breach of insurance

contract for denying Defendant’s insurance benefits under the policy and (2) breach of implied

covenant of good faith and fair dealings because Plaintiff failed to timely investigate

Defendant’s insurance claim. (See Def.’s Countercl. at 3-4.) On July 26, 2007, Plaintiff filed an

Answer to Defendant’s Counterclaim. [Doc. No. 7.]

On July 18, 2007, Defendant filed this Motion to Consolidate the initial claim and

Defendant’s counterclaim for purposes of discovery. [Doc. No. 37.] On August 6, 2007,

Defendant submitted a Notice of No Opposition Filed to the Court (“Notice”), stating that, as of

the date of the Notice, the Plaintiff had filed no opposition to the consolidation of the cases.

[Doc. No. 41.]

Legal Standard

Federal Rule of Civil Procedure 42(a) provides in pertinent part that “[w]hen actions

involving a common question of law or fact are pending before the court...it may order all

actions consolidated; and it may make such orders concerning proceedings as may tend to avoid

unnecessary costs or delay.” Fed. R. Civ. P. 42(a) (emphasis added). When related cases fall

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 within the parameters of Rule 42, it is within the district court’s sound discretion to consolidate

them. See Investors Research Co. v. U.S. Dist. Ct., 877 F.2d 777, 777 (9th Cir. 1989). Rule 42

does not demand that actions be identical before they may be consolidated. Rather, in deciding

 whether to consolidate actions under Rule 42(a), a court must balance the savings of time and

effort consolidation will produce against any inconvenience, delay, confusion, or prejudice that

may result.” Takeda v. Turbodyne Technologies, Inc., 67 F. Supp. 2d 1129, 1132 (C.D. Cal.

1999). 

Discussion

After reviewing the complaints in the two related cases, the Court FINDS that they

involve common questions of fact and law. As the Defendant points out, both cases concern the

same damages that the Defendant alleges it incurred as a result of the deconstruction and

reconstruction of portions of the Project. (Mot. at 4.) More specifically, the results of both cases

will depend on the Court’s finding with regards to the following common questions of fact and

law: (1) the work the Defendant performed to undo and redo work on the Project; (2)

Defendant’s extended general conditions; (3) work performed by Defendant’s lower tiers to

undo and redo work on the Project; and (4) the lower tiers’ extended general conditions. (Mot.

at 5.) Any discovery pertaining to these four areas can be carried out with the purpose of

obtaining information for both cases with few, if any, substantive changes.

Additionally, consolidating the two cases does not result in prejudice to the non-moving

party. As of the date of Defendant’s Motion, none of the parties had taken any depositions. 

(Mot. at 6.) Thus, consolidating the cases for purposes of discovery will not effect any previous

depositions. Further, opposing party does not oppose consolidation or assert that consolidation

will produce

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inconvenience, delay, confusion or prejudice. For these reasons, the Court finds that

consolidation of the above-referenced cases is appropriate. 

Conclusion

 Accordingly, the Court GRANTS Defendant’s Motion to Consolidate Case nos.

06cv0717 (JMA) and 07cv0388 (NLS) pursuant to Rule 42(a). The parties are directed to

contact the magistrate judge to set dates for trial and pre-discovery matters in the newly

consolidated case. 

IT IS SO ORDERED.

DATED: September 27, 2007

HON. NAPOLEON A. JONES, JR.

United States District Judge

cc: Magistrate Judge Adler

 All Counsel of Record

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