Carbonlite Industries LLC v. Bezner Analgen Und Maschinebau Gmph et al

Filing 40

MINUTES (IN CHAMBERS) by Judge Christina A. Snyder: The Court is not convinced that consolidation of the actions in this situation would promote judicial economy in a fair and just manner, since the underlying factual basis of each parties' claims are different. Accordingly, the Court denies Plaintiff CSI Electrical Contractors's Motion to Consolidate Cases 33 without prejudice. Court Reporter: Not Present. (gk)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-10876 CAS (AJWx)
CV 12-01757 CAS (AJWx)

Title

CSI ELECTRICAL CONTRACTORS INC. V. ZIMMER AMERICA
CORPORATION, ET AL.
CARBONLITE INDUSTRIES, LLC V. BEZNER ANALGEN UND
MASCHINEBAU GMPH ET AL.

Present: The Honorable

Date

May 22, 2013

CHRISTINA A. SNYDER

Catherine Jeang
Deputy Clerk

Not Present
Court Reporter / Recorder

N/A
Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants

Not Present

Not Present

Proceedings:

I.

(In Chambers:) PLAINTIFF CSI ELECTRICAL
CONTRACTORS’S MOTION TO CONSOLIDATE CASES
(filed May 3, 2013) [No. 2:12-CV-10876, Dkt. No. 30; No. 2:12CV-01757, Dkt. No. 33]

INTRODUCTION & BACKGROUND

The Court finds this motion appropriate for decision without oral argument. Fed.
R. Civ. P. 78; Local Rule 7-15. Accordingly, the hearing date of June 3, 2013, is vacated,
and the matter is hereby taken under submission.
On January 4, 2012, CSI Electrical Contracts, Inc. (“CSI”) filed suit against
Carbonlite Industries, LLC (“Carbonlite”), Bezner Analgen Und Maschinebau GmbH
(“Bezner”), and Zimmer America Corporation (“Zimmer”), and Columbia Business
Center LLC (“Columbia”) in the Los Angeles Superior Court. In the operative first
amended state court complaint, CSI asserts a single cause of action for unjust enrichment
against Carbonlite only, related to extra work that CSI allegedly performed but for which
it did not receive compensation.
On March 1, 2012, Carbonlite filed suit against Bezner, Bezner America LLC,
Zimmer, and B and B America LLC (“B and B”) in this Court. No. CV 12-1757 CAS,
Dkt. No. 1 (“Carbonlite Federal Action”). On May 22, 2012, Carbonlite filed its first
amended complaint (“Carbonlite FAC”) naming only defendant Bezner and asserting
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 1 of 6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-10876 CAS (AJWx)
CV 12-01757 CAS (AJWx)

Date

May 22, 2013

Title

CSI ELECTRICAL CONTRACTORS INC. V. ZIMMER AMERICA
CORPORATION, ET AL.
CARBONLITE INDUSTRIES, LLC V. BEZNER ANALGEN UND
MASCHINEBAU GMPH ET AL.

claims for (1) breach of contract and (2) disgorgement of compensation pursuant to
California Business & Professions Code § 7031(b). On June 12, 2012, Bezner filed a
counterclaim against Carbonlite, asserting claims for (1) breach of contract, (2) quantum
meruit, and (3) unjust enrichment. On March 21, 2013, the Court issued an amended
scheduling order, setting a discovery cut-off date of October 1, 2013, a deadline of
December 2, 2013 to file motions, and a pre-trial conference date of January 13, 2014.
On December 20, 2012, CSI filed suit against Zimmer and Bezner in this Court.
No. CV 12-10876 CAS, Dkt. No. 1 (“CSI Federal Action”). On February 11, 2013,
plaintiff filed its First Amended Complaint (“CSI FAC”). CSI asserts the following
claims for relief: (1) breach of contract, (2) breach of implied covenant of good faith and
fair dealing, and (3) restitution for unjust enrichment. On March 25, 2013, the Court
granted Zimmer’s motion to dismiss without prejudice. On April 25, 2013, the parties’
stipulated to dismiss Zimmer from this action with prejudice pursuant to Federal Rule of
Civil Procedure 41(a)(1)(ii). Bezner filed an answer to CSI’s FAC on March 8, 2013. A
scheduling conference has not yet taken place.
All of the above actions center around the construction and operation of a
polyethylene terephthalate (“PET”) recycling facility owned by Carbonlite in Riverside,
California. In the Carbonlite Federal Action, Carbonlite alleges that it entered into a
contract with Zimmer as the prime contractor for designing, supplying, and installing a
fully operational “sorting module” for collecting and conveying plastic bottles within
Carbonlite’s facility. Carbonlite FAC ¶ 7. Thereafter, Bezner allegedly assumed all of
Zimmer’s contractual duties by entering into a subcontract with Zimmer. Id. ¶ 8.
Carbonlite contends that Bezner and Zimmer breached their respective contracts by
failing to properly design, manufacture, and install a “turn key” sorting module. Id. ¶ 10.
On March 30, 2012, Zimmer assigned to Carbonlite all of its contractual rights against
Bezner, and Carbonlite brings suit, in part, on the basis of this assignment. Id. ¶ 11.
Bezner, in its counterclaim in the Carbonlite Federal Action, alleges that Carbonlite
issued a purchase order to Zimmer by which Zimmer agreed to supply a sorting module
for Carbonlite’s recycling facility. Counterclaim ¶ 5. Pursuant to this purchase order,
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 2 of 6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-10876 CAS (AJWx)
CV 12-01757 CAS (AJWx)

Date

May 22, 2013

Title

CSI ELECTRICAL CONTRACTORS INC. V. ZIMMER AMERICA
CORPORATION, ET AL.
CARBONLITE INDUSTRIES, LLC V. BEZNER ANALGEN UND
MASCHINEBAU GMPH ET AL.

Zimmer sub-contracted its entire performance to Bezner, whereby Bezner agreed to
supply and assemble a pre-manufactured sorting module. Zimmer was to pay Bezner
504,895 Euros plus $3,016,098 for the module and installation. Id. ¶¶ 6–7. In October
2011, a dispute arose between Zimmer and Benzer regarding payments due under the
contract and a separate General Agency Agreement. Id. ¶ 8. Thereafter, Carbonlite
agreed to pay Bezner directly, rather than making payment through Zimmer. Id.
Carbonlite allegedly breached the contract and its agreements with Bezner by failing to
pay the entire contractual sum, as Bezner is still owed 78,226.76 Euros plus $446,664.29.
Id. ¶¶ 10–11. In addition, Bezner allegedly performed additional work on the project not
included within scope the original contract, for which Bezner contends it is owed at least
an additional 447,017 Euros. Id. ¶ 12.
In the CSI Federal Action, CSI alleges that it entered into a subcontract with
Bezner to furnish and install electrical wiring systems, components, and services pursuant
to the plans and specifications for the sorting module project. CSI FAC ¶ 14. During the
course of CSI’s performance on the project, it allegedly incurred extra work and related
costs related to the design, engineering, and programming of the recycling machinery. Id.
¶ 18. CSI submitted multiple change order requests to Bezner, demanding to be
reimbursed in the amount of $447,090 for the additional work it performed. Id. ¶ 19.
The amount was ultimately reduced to $434,778. Id. As CSI continued to complete its
work on the project, it submitted multiple invoices to Bezner. Id. ¶ 20. On November 1,
2011, CSI submitted its final invoice to Bezner in the amount of $447,090, while
simultaneously issuing a demand for payment to both Bezner and Zimmer. Id. ¶¶ 20–21.
Despite having fully performed all the conditions of its contract with Bezner, CSI alleges
that neither Zimmer nor Bezner have fully paid CSI for the work it performed. To date,
CSI claims Bezner owes it at least $545,766.1

1

CSI also alleges the existence of the agreement between Carbonlite and Zimmer,
whereby these parties agreed that Carbonlite would not pay Bezner’s invoice due to
problems with the recycling machinery that Bezner supplied. Carbonlite also agreed not
to hold Zimmer financially responsible for any obligation to pay unpaid subcontractors.
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 3 of 6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-10876 CAS (AJWx)
CV 12-01757 CAS (AJWx)

Date

May 22, 2013

Title

CSI ELECTRICAL CONTRACTORS INC. V. ZIMMER AMERICA
CORPORATION, ET AL.
CARBONLITE INDUSTRIES, LLC V. BEZNER ANALGEN UND
MASCHINEBAU GMPH ET AL.

On May 3, 2013, CSI filed a motion to consolidate the two federal actions
presently pending before this Court. No. 12-cv-10876, Dkt. No. 30; No. 12-cv-1757,
Dkt. No. 33. Carbonlite opposed the motion on May 13, 2013, and CSI filed a reply on
May 20, 2013. Bezner has not filed a response to CSI’s motion. After considering the
parties’ arguments, the Court finds and concludes as follows.
II.

LEGAL STANDARD

Where two or more “actions before the court involve a common question of law or
fact,” a court has the discretion to join the actions for a hearing or trial for any or all
matters at issue, or to consolidate the actions for all purposes. Fed. R. Civ. P. 42. See
Seguro de Servicio de Salud v. McAuto Sys. Group, 878 F.2d 5, 8 (1st Cir. 1989) (“The
threshold issue is whether the two proceedings involve a common party and common
issues of fact or law.”). Separate trials may subsequently be ordered on “one or more
separate issues, claims, crossclaims, counterclaims, or third-party claims.” Id. “The
district court, in exercising its broad discretion to order consolidation of actions
presenting a common issue of law or fact under Rule 42(a), weighs the saving of time and
effort consolidation would produce against any inconvenience, delay, or expense that it
would cause,” in addition to any prejudice that may result. Huene v. United States, 743
F.2d 703, 704 (9th Cir. 1984).
III.

ANALYSIS

Moving party CSI seeks an order consolidating these related cases and adopting the
dates set forth in the Court’s amended scheduling order issued on March 21, 2013 in the
Carbonlite Federal Action. CSI contends that consolidation is appropriate chiefly
because both cases arise out of the same project, involve the same contracts, and similar
claims for breach of contract or unjust enrichment. As such, similar evidence will be
necessary to prove the parties’ claims in each case, including testimony and
documentation with respect to the nature of the project, performance of the project, and
obstacles that were encountered during performance of the respective contracts. This
includes witnesses who will have to travel internationally to attend depositions and trial.
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 4 of 6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-10876 CAS (AJWx)
CV 12-01757 CAS (AJWx)

Date

May 22, 2013

Title

CSI ELECTRICAL CONTRACTORS INC. V. ZIMMER AMERICA
CORPORATION, ET AL.
CARBONLITE INDUSTRIES, LLC V. BEZNER ANALGEN UND
MASCHINEBAU GMPH ET AL.

Consolidation will also not cause confusion, prejudice, or inconvenience, CSI contends,
as combining these cases will allow for more efficient scheduling of hearings,
depositions, and trial. In fact, given the similarities between the two cases, CSI argues
that not consolidating these actions could cause prejudice or confusion if inconsistent
results are rendered. Finally, CSI contends that no delay will result, as CSI is willing to
follow the scheduling order already in place in the earlier-filed Carbonlite Federal Action.
Carbonlite opposes CSI’s motion to consolidate, arguing that prejudice, confusion
of the issues, inconvenience, and a waste of judicial resources will result if these actions
are consolidated. First, Carbonlite contends that consolidation will have the “practical
effect of creating a multiplicity of actions,” because CSI has already filed a state court
complaint seeking recovery of the same funds that it claims it is owed by Bezner, or
alternatively Carbonlite. This will cause prejudice to Carbonlite by forcing it to
concurrently litigate state and federal actions. Second, Carbonlite contends that
confusion of the issues will result, as demonstrated by the fact that CSI muddles the
details of multiple contracts in its moving papers. Carbonlite’s only contract is with
Zimmer, who assigned its rights under a Zimmer-Bezner contract to Carbonlite. CSI’s
only contract, in contrast, is with Bezner. Carbonlite’s claim is related to Bezner’s
alleged failure to provide a “fully functioning turn-key” sorting module, which has
nothing to do with CSI’s claims for extra work it allegedly performed under its contract
with Bezner. Because of the complex web of relationships between the parties,
Carbonlite contends that confusion of the issues is likely to result. Third, Carbonlite
maintains that consolidation will cause inconvenience to the parties by forcing them to
expend additional time and resources while CSI litigates its claims against Bezner in the
CSI Federal Action—claims that are unrelated to Bezner and Carbonlite’s claims against
one another.
At the outset, the Court notes the basic alignment of the parties to the respective
actions. In the federal actions, CSI and Carbonlite, respectively, are suing Bezner for
breach of contract. However, the underlying contract in each action is different. CSI’s
claim is related to extra work it allegedly performed but did not receive payment for;
Carbonlite’s claim is for breach of the Zimmer-Bezner subcontract related to delivery of a
CV-90 (06/04)

CIVIL MINUTES - GENERAL

Page 5 of 6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 12-10876 CAS (AJWx)
CV 12-01757 CAS (AJWx)

Date

May 22, 2013

Title

CSI ELECTRICAL CONTRACTORS INC. V. ZIMMER AMERICA
CORPORATION, ET AL.
CARBONLITE INDUSTRIES, LLC V. BEZNER ANALGEN UND
MASCHINEBAU GMPH ET AL.

“turn-key” sorting module. Bezner is also asserting a counterclaim against Carbonlite
for breach of contract related to Carbonlite’s payment obligations. These obligations,
arise at least in part from an alleged contract between Carbonlite and Bezner. In the state
action—which is not directly at issue on this motion—CSI is asserting a single claim for
unjust enrichment against Carbonlite.
The Court concludes that these actions should not be consolidated at this time.
Undoubtedly, multiple common issues of fact related to the purchase and installation of
the sorting module at the Carbonlite recycling plant will be raised in the federal actions.
Many of the same witnesses may be required in each case, although the portions of their
testimony that are relevant will not be the same in each case. However, the fundamental
issue is different in each case. CSI’s claim against Bezner for additional work pertaining
to its contract with Bezner is different in kind from Carbonlite’s claim against Bezner for
breach of its performance obligations under the Zimmer-Bezner contract. While
reference to the relevant contracts in the related federal litigation may be needed in each
case, the primary focus will be on the contracts between the parties to each separate
federal action. Moreover, to the extent that coordination of some overlapping discovery
appears to be warranted, this can be accomplished by the parties without the formal
consolidation of the two cases before the Court.
V.

CONCLUSION

The Court is not convinced that consolidation of the actions in this situation would
promote judicial economy in a fair and just manner, since the underlying factual basis of
each parties’ claims are different. Accordingly, the Court denies the motion to
consolidate without prejudice.
IT IS SO ORDERED.
00
Initials of Preparer

CV-90 (06/04)

CIVIL MINUTES - GENERAL

:

00

CMJ

Page 6 of 6