GALLO v. PHH MORTGAGE CORPORATION
Filing
214
OPINION. Signed by Judge Noel L. Hillman on 12/22/2015. (dmr)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
PATRICK GALLO, individually
and on behalf of all others
similarly situated, et al.,
Civil No. 12-1117 (NLH/KMW)
OPINION
Plaintiff,
v.
PHH MORTGAGE CORPORATION,
Defendant.
APPEARANCES:
PETER A. MUHIC
SAMANTHA E. JONES
TYLER STEPHEN GRADEN
EDWARD W. CIOLKO
SHANNON O. LACK
DONNA SIEGEL MOFFA
JAMES A. MARO, JR
KESSLER TOPAZ MELTZER & CHECK, LLP
280 KING OF PRUSSIA RD
RADNOR, PA 19087
On behalf of plaintiffs
PETER J. LEYH
BRAVERMAN KASKEY P.C.
ONE LIBERTY PLACE, 56TH FLOOR
1650 MARKET STREET
PHILADELPHIA, PA 19103-7334
WEINER BRODSKY KIDER PC
MITCHEL H. KIDER
DAVID M. SOUDERS
BRUCE A. ALEXANDER
1300 19TH STREET, N.W., FIFTH FLOOR
1
WASHINGTON, D.C. 20036
On behalf of defendant
DEEPA J. ZAVATSKY
MARK S. MELODIA
REED SMITH LLP
136 MAIN STREET
SUITE 250
PRINCETON, NJ 08540
On behalf of interested party American Security Insurance
Company
HILLMAN, District Judge
This matter has come before the Court on the motion of
plaintiff to consolidate for all purposes this putative class
action with Finch v. PHH, Civil Action No. 14-1694 (NLH/AMD),
which is currently consolidated with this action for discovery
purposes.
These two matters both involve defendant PHH’s
“forced-placed” or “lender-placed” hazard insurance policies,
which are imposed as a part of home mortgage agreements, and
both matters involve the same alleged scheme by PHH.
At the February 11, 2015 hearing in the Finch matter, the
Court, having reviewed the two matters closely, expressed to the
parties its independent observation that it appeared that the
matters should be consolidated.
The Court ordered plaintiff to
file a formal motion to consolidate because defendant did not
consent to the consolidation.
In his motion plaintiff argues:
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By consolidating these actions, the Court will be able to
evaluate and consider, in a single proceeding, class
certification issues common in the actions, including the
arguments for a nationwide RICO class and the appropriate
contours of the various state law subclasses in the cases.
Absent consolidated proceedings, these issues would be
presented separately in each action despite the fact that
they implicate virtually identical factual and legal
issues. Consolidated proceedings would achieve a measure of
economy and efficiency at the merits phase as well by
eliminating the burden of separately engaging in the
analyses of identical contracts and virtually identical
breach of contract claims (including breach of the implied
covenant of good faith and fair dealing). Moreover,
consolidation would allow the Court to issue just one
decision and opinion at each phase of the proceedings (i.e.
class certification, summary judgment and/or trial),
thereby addressing the common procedural, factual and legal
issues presented in both actions. In short, it cannot be
disputed that the common questions of law and fact raised
in these two actions involving substantially similar
allegations arising out of the exact same force-placed
insurance practices of a single Defendant weigh heavily in
favor of consolidation.
(Docket No. 193-1 at 12-13).
In contrast, defendant argues, inter alia, that (1) no
common questions of fact exist because the two cases concern
different state laws; and (2) defendant has been prejudiced by
the delayed resolution of its oppositions to plaintiff’s class
certification motions because of plaintiff’s counsel’s decision
to file two separate law suits, which have been able
inappropriately to morph into claims now amendable to
consolidation. (Docket No. 196 at 18, (“The plaintiffs’
attorneys are using Finch to amend Gallo.”).
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Federal Civil Procedure Rule governing consolidation of
cases provides:
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.
Fed. R. Civ. P. 42(a).
Rule 42 supplements the Court’s “inherent power to control
the disposition of cases on its docket with economy of time and
effort for itself, for counsel and for litigants.”
Liberty
Lincoln Mercury, Inc. v. Ford Mktg. Corp., 149 F.R.D. 65, 80
(D.N.J. 1993) (citations and quotations omitted).
The mere
existence of common issues does not automatically require
consolidation, but rather the Court must balance such factors as
the interest or efficiency and judicial economy gained through
consolidation, against the delay or expense that might result
from simultaneous disposition of separate actions.
Id.
“In the
absence of an articulated basis to assert confusion or
prejudice, consolidation is generally appropriate.”
In re
Lucent Technologies Inc. Sec. Litig., 221 F. Supp. 2d 472, 480
(D.N.J. 2001).
Noting that the two actions have already been consolidated
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for discovery purposes, where “all discovery in one action shall
be deemed produced and available for use in the other” (Docket
No. 30), the Court finds that defendant’s objections to the
consolidation of the two cases do not prevail over plaintiff’s
articulation of, and the Court’s own analysis of, the need to
consolidate these cases.
Because the two cases concern the same
defendant and the same alleged force-placed insurance scheme,
and a decision on a fact or legal issue in one case would
directly affect the other, consolidation of the two actions will
serve to prevent confusion and prejudice, and foster economy and
efficiency.
The Court points out, to assuage defendant’s concerns, that
“consolidation is permitted as a matter of convenience and
economy in administration, but does not merge the suits into a
single cause, or change the rights of the parties.”
Johnson v.
Manhattan Ry. Co., 289 U.S. 479, 496-97 (1933); Newfound Mgmt.
Corp. v. Lewis, 131 F.3d 108, 116 (3d Cir. 1997) (stating that
Johnson remains the “authoritative” statement on the law of
consolidation, citing 9 Wright & Miller, Federal Practice and
Procedure: Civil 2d § 2382, at 430 (1995)).
Moreover, “if the
discovery process reveals a substantial reason why the actions
should not be consolidated for the purpose of trial, this
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decision can be revisited.”
In re Lucent Technologies Inc. Sec.
Litig., 221 F. Supp. 2d 472, 482 (D.N.J. 2001) (consolidating
two separately filed class actions); see also Fed. R. Civ. P.
42(b) (“For convenience, to avoid prejudice, or to expedite and
economize, the court may order a separate trial of one or more
separate issues, claims, crossclaims, counterclaims, or thirdparty claims.”).
Consequently, the Court will grant plaintiff’s motion to
consolidate this action with Finch v. PHH, Civil Action No. 141694 (NLH/AMD) pursuant to Federal Civil Procedure Rule 42(a).
An appropriate Order will be entered.
December 22, 2015
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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