W&W Steel, LLC v. BSC Steel, Inc. et al

Filing 85

MEMORANDUM AND ORDER granting 48 Motion to Intervene and granting 64 Motion to Intervene. Signed by District Judge Julie A. Robinson on 5/1/2013. (ms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
________________________________________
W&W STEEL, LLC,

)
)
Plaintiff/Counterclaim Defendant, )
)
v.
)
)
BSC STEEL, INC.,
)
)
Defendant/Counterclaim Plaintiff/ )
Third-Party Plaintiff,
)
)
and
)
)
JAY D. PATEL,
)
)
Defendant,
)
)
v.
)
)
MARCUS SALAZAR, d/b/a MATERIALS
)
MANAGEMENT, INC. d/b/a MMI;
)
MORTGAGE MANAGEMENT, INC. d/b/a
)
MARTIALS MANAGEMENT, INC. a/k/a
)
MMI; and LIBERTY MUTUAL INSURANCE
)
COMPANY,
)
)
Third-Party Defendants.
)
______

Case No. 11-2613-RDR

MEMORANDUM AND ORDER

This matter is presently before the court upon the following
motions: (1) APAC-Kansas, Inc.=s motion to intervene as plaintiff
under Rule 24 (Doc. # 48); and (2) American Riggers Supply, Inc.=s
motion to intervene as a plaintiff under Rule 24 (Doc. # 64).

Having

carefully reviewed the arguments of the parties, the court is now
prepared to rule.

I.
This action arises out of the construction of the Irwin Army
Community Hospital located on Fort Riley, Kansas.

W & W Steel was

awarded

Joint

a

subcontract

effective July 12, 2010.

from

Balfour-Walton,

a

Venture,

W & W Steel agreed to perform the steel

erection of the general contract work on the project.

W & W Steel

then subcontracted some of its work to Materials Management, Inc.
(MMI).

MMI sub-sub-contracted the steel erection to BSC Steel.

Thereafter, BSC Steel entered into a series of lease agreements with
APAC where BSC Steel requested and APAC agreed to furnish BSC Steel
with certain equipment and labor in the construction of the project
and BSC Steel agreed to make payment according to APAC=s terms and
conditions.

American Riggers sold material to BSC Steel for use by

BSC Steel in the performance of its subcontract with MMI.

APAC and

American Riggers seek to intervene to assert claims against BSC
Steel, W & W Steel and Liberty Mutual Insurance Company, who issued
a

payment

bond

in

connection

with

the

subcontract

between

Balfour-Walton and W & W Steel.
W & W Steel filed its complaint in this case on November 8, 2011
against BSC Steel and Jay Patel.

BSC Steel filed its answer and

counterclaim against third-party defendants Marcus Salazar, MMI and
Liberty Mutual on January 12, 2012.
13, 2012.

Patel filed an answer on January

Salazar and MMI each filed a motion to dismiss on March
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30, 2012.
2012.

MMI also filed its answer and counterclaim on March 30,

On April 6, 2012, BSC Steel sought to amend its counterclaims

and third-party complaint.
May 10, 2012.

APAC filed its motion to intervene on

On May 18, 2012, Magistrate Judge Sebelius granted

in part and denied in part BSC Steel=s motion to amend.

BSC Steel

eventually filed an amended answer with amended counterclaims and
amended third-party complaint on June 12, 2012.
filed its motion to intervene on June 15, 2012.

American Riggers
MMI and W & W Steel

and Liberty Mutual filed motions to dismiss on June 26, 2012.
II.
In its motion, APAC seeks to intervene as a matter of right under
Fed.R.Civ.P. 24(a) and, in the alternative, permissively under
Fed.R.Civ.P. 24(b).

It contends that BSC Steel, W & W Steel and

Liberty Mutual are legally obligated to pay it for the equipment and
work provided for the project, and have failed to do so.

American

Riggers seeks to intervene permissively under Rule 24(b).

It

contends that BSC Steel, W & W Steel and Liberty Mutual are obligated
to pay for the materials it supplied for the project. A review of
the arguments made by the parties indicates that APAC and American
Riggers should be allowed to permissively intervene under Rule 24(b)
as plaintiffs in this case.

The court finds it unnecessary to

consider if APAC is entitled to intervene based upon right under Rule
24(a).
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Under Rule 24(b), the court may permit a party to intervene when
the applicant=s claim shares with the main action a common question
of law or fact.

Fed.R.Civ.P. 24(b). Permissive intervention is

within the sound discretion of the court.

Arney v. Finney, 967 F.2d

418, 421 (10th Cir. 1992). In deciding the motion, the court considers
(1) whether the application is timely; (2) whether the movant=s claim
and the underlying action share a common question of law or fact;
and (3) whether the intervention will unduly delay or prejudice
adjudication of rights of the original parties.

See Fed.R.Civ.P.

24(b); Kane Cnty., Utah v. United States, 597 F.3d 1129, 1135 (10th
Cir. 2010).
III.
W & W Steel and Liberty Mutual have argued that permissive
intervention should not be allowed because the claims of APAC and
American Riggers do not share common questions of fact or law with
the claims being litigated in this case.

They suggest that the

claims of APAC and American Riggers are entirely collateral to the
claims here.

They further argue that permitting intervention would

prejudice the parties and impede judicial economy.

APAC and

American Riggers have advised the court that BSC Steel has no
objection to their intervention in this action.
There has been no argument that the motions of APAC and American
Riggers were not timely.

They were raised prior to the setting of
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a scheduling conference or case management deadlines.

See Sears

Roebuck & Co. V. IP of A Salina Central Mall, LLC, 2009 WL 1664614
at * 2 (D.Kan. June 15, 2009).

Thus, the court finds that the motions

were timely.
W & W Steel and Liberty Mutual do contend that the claims raised
by these parties do not share a common question of law or fact with
the underlying action.

They further contend that intervention will

unduly delay or prejudice adjudication of the rights of the original
parties.
Both APAC and American Riggers rely upon U.S. for the Use and
Benefit of Empire Carpet Corp. v. Appalachian Flooring Co., 36 F.R.D.
452 (D.Mass. 1964) for support.

In Empire Carpet, the plaintiff

subcontractor brought an action against another subcontractor and
the surety on the payment bond for the project.

Meco, Inc., another

subcontractor on the project, sought to intervene.
assert another claim on the payment bond.

Meco sought to

The court allowed

permissive intervention to Meco stating: ABoth of these claims [the
claims of Empire Carpet and Meco] are against the same bond.
has been held sufficient to permit intervention.@

That

Empire Carpet, 36

F.R.D. at 453 (citing U.S. for the use of Albert Pipe Supply Co. v.
Harris-Harmon Well Co., 7 F.R.Serv. 24b.2, Case 6 (D.C.N.Y. 1943)).
W & W Steel seeks distinguish Empire Carpet because here the
claims asserted by W & W Steel against BSC Steel do not involve a
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claim against Liberty Mutual on the payment bond.

W & W Steel further

asserts that, assuming arguendo that BSC Steel has a viable
third-party claim against Liberty Mutual, the facts and law relating
to that claim arise solely from the performance of the MMI-BSC Steel
contract, a separate contract from the contract purportedly entered
into between BSC Steel and American Riggers or APAC.
The court is not persuaded by the arguments of W & W Steel.

W

& W Steel has made no effort to explain why it makes a difference
that the claim in Empire Carpet involved a payment bond claim between
the original plaintiff and defendant while the payment bond claim
in this case arises in a third-party complaint.

For the purposes

of determining if the claims of APAC and American Riggers have a
common question of law or fact with the Amain action,@ the court
believes that we can and should consider those claims raised in
third-party complaints.

The term Amain action@ is broad enough to

include third-party claims.
Since the court has determined that APAC and American Riggers
satisfy Rule 24(b)(2)=s timeliness and commonality requirements, the
court must next exercise its discretion to determine whether Athe
intervention will unduly delay or prejudice the adjudication of the
rights of the original parties.@ Fed.R.Civ.P. 24(b)(3); Degge v. City
of Boulder, Colo., 336 F.2d 220, 222 (10th Cir. 1964).

AA finding by

the court that the presence of the intervener will not prejudice the
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original parties serves to encourage the court to exercise its
discretion to allow intervention.@

7C Wright, Miller, & Kane,

Federal Practice and Procedure: Civil 3rd ' 1913 at p. 480 (2007).
The court finds that intervention by these parties neither causes
delay to the main action nor prejudices the adjudication of the rights
of the original parties. The intervention will not unduly delay the
main action for the same reason that the motions are timely:

the

case is at its early stages since there has been no scheduling
conferences set.

W & W Steel and Liberty Mutual have only suggested

that intervention will unduly prejudice them and impede judicial
economy because the new parties will insert new claims which unduly
delay the adjudication of the rights of the current parties.

The

court is not persuaded that these additional claims will result in
any undue delay or prejudice.
A party seeking permissive intervention under Fed.R.Civ.P.
24(b) must establish a basis for federal subject matter jurisdiction
independent of the court=s jurisdiction over the underlying action.
Fed.R.Civ.P. 82 (AThese rules shall not be construed to extend or
limit the jurisdiction of the United States district courts....@);
EEOC v. Nev. Resort Assoc., 792 F.2d 882, 885 (9th Cir. 1986).

W &

W Steel and Liberty Mutual have not suggested that subject matter
jurisdiction would be lacking if APAC and American Riggers are
allowed to intervene in this case.
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The court finds that diversity

jurisdiction exists for the claims asserted by APAC and American
Riggers.

Accordingly, the court shall allow APAC and American

Riggers to intervene under Rule 24(b).
IT IS THEREFORE ORDERED that APAC-Kansas= motion to intervene
as a plaintiff under Rule 24 (Doc. # 48) be hereby granted.
IT IS FURTHER ORDERED that American Riggers Supply, Inc.=s motion
to intervene as a plaintiff under Rule 24 (Doc. # 64) be hereby
granted.
IT IS SO ORDERED.
Dated this

1st

day of May, 2013, at Topeka, Kansas.

s/ Julie A. Robinson
Julie A. Robinson
United States District Judge

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