BRG HARRISON LOFTS URBAN RENEWAL LLC v. GENERAL ELECTRIC COMPANY et al

Filing 82

OPINION AND ORDER granting 52 Motion to Consolidate Cases; 16-CV-06577-SRC-CLW and 17-CV-01584-JMV-JBC are hereby consolidated into 16-CV-06577-SRC-CLW, with all subsequent filings to be filed only in 16-CV-06577-SRC-CLW and 17-CV-01584-JMV-JBC to be closed, and the Clerk is directed to edit the dockets to reflect the same, etc. Signed by Magistrate Judge Cathy L. Waldor on 07/14/2017. (ek)

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BRG HARRISON LOFTS URBAN
RENEWAL, LLC
Plaintiff,
vs.
Action No. 2:16-CV-06577-SRC-CLW
GENERAL ELECTRIC COMPANY,
ENVIRONMENTAL WASTE
MANAGEMENT ASSOCIATES, LLC,
and ACCREDITED ENVIRONMENTAL
TECHNOLOGIES, INC.,
Defendants.
OPINION & ORDER
EVANSTON INSURANCE COMPANY
Plaintiff,
vs.
ACCREDITED ENVIRONMENTAL
TECHNOLOGIES, INC.,
ENVIRONMENTAL WASTE
MANAGEMENT ASSOCIATES, LLC,
and BRG HARRISON LOFTS URBAN
RENEWAL, LLC
Defendants.

Action No. 2:17-CV-01584-JMV-JBC

THIS MATTER comes before the Court on Accredited Environmental Technologies,
Inc.’s (henceforth “Accredited Environmental”) Motion to Consolidate (ECF No. 52) the above
actions. Accredited Environmental is a defendant in the above actions filed in the District of New
Jersey: BRG Harrison Lofts Urban Renewal, LLC v. General Electric Company, et al., Docket
Number 2:16-cv-06577-SRC-CLW (henceforth the “BRG Action”) and, Evanston Insurance
Company v. AET, et al., Docket Number 2:17-cv-01584-JMV-JBC (henceforth the “Evanston

Action”). Environmental Waste Management Associates, Inc. (henceforth “Environmental Waste
Management”), also a Defendant in both actions, joins Accredited Environmental’s motion for
consolidation. Codefendant, General Electric Company (henceforth “General Electric”) of the
BRG Action and Plaintiff, Evanston Insurance Company (henceforth “Evanston”) of the Evanston
Action oppose the motion. The Court declined to hear oral argument pursuant to Rule 78 of the
Federal Rules of Civil Procedure, and for the reasons set forth below, the Court grants the Motion
to Consolidate.
I.

Background
A. BRG Action
The BRG Action relates to two parcels of land that Defendant, General Electric sold to

Plaintiff, BRG Harrison Lofts Urban Renewal, LLC (henceforth “BRG”) on June 9, 2015. (BRG
Action Complaint, ECF No. 1 at 4 ¶9.) In February 2012, before buying the land, BRG retained
Environmental Waste Management to “conduct environmental due diligence” on the property. (Id.
at 7 ¶39.) Environmental Waste Management, defendant in both actions, hired Accredited
Environmental, also a defendant in both actions, to survey the three buildings on BRG’s potential
land. This included conducting surveys to test for the presence of mercury on the land. (Id.) Over
three years later, in October 2015 and January 2016, BRG reportedly found mercury on its recently
acquired property. (Id. at 11 ¶¶51-57.) BRG filed the present action on October 6, 2016, against
General Electric, Environmental Waste Management, and Accredited Environmental alleging the
presence of mercury on the property it purchased from General Electric that both Environmental
Waste Management and Accredited Environmental failed to detect. (Id.)
On December 16, 2016, Environmental Waste Management filed an answer to the BRG
Action, asserting cross-claims for indemnity and contribution against Accredited Environmental

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and General Electric. (BRG Action Environmental Waste Management Answer, ECF No. 17.) On
December 16, 2016, Accredited Environmental also filed an answer in the BRG Action, asserting
cross-claims against General Electric and Environmental Waste Management for indemnity and
contribution. (BRG Action Accredited Environmental Answer, ECF No. 21.) On April 28, 2017,
General Electric filed an answer to the BRG Action, asserting cross-claims against Accredited
Environmental and Environmental Waste Management, as well as counterclaims against BRG.
(BRG Action General Electric Answer, ECF No. 53.)
B. Evanston Action
Accredited Environmental first notified Evanston, their insurance carrier, of the suit BRG
filed against it in the BRG Action on October 26, 2016. (Evanston Action Complaint, ECF No. 1
at 5 ¶29.) Pursuant to their insurance agreement, Evanston engaged counsel to defend Accredited
Environmental in the BRG Action. (Id. at 5 ¶32.) Evanston subsequently discovered that
Accredited Environmental failed to provide them with the proper notice of the BRG Action as
outlined in their policy agreements. (Id.) As a result, on March 8, 2017, Evanston filed a
declaratory judgment action against Accredited Environmental, Environmental Waste
Management, and BRG. Plaintiff Evanston asserts that it is not responsible for providing insurance
coverage to Accredited Environmental for the claims alleged against it in the BRG Action. (Id. at
1.)
On April 21, 2017, Environmental Waste Management filed an answer to the Evanston
Action, asserting counterclaims maintaining that Evanston is “obligated to defend and indemnify
[Environmental Waste Management]” in the BRG Action. (Evanston Action Environmental Waste
Management Answer, ECF No. 8 at 13 ¶5.) Environmental Waste Management also asserts crossclaims for indemnification, contribution, and breach of contract against Accredited Environmental.

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(Id. at 16.) On May 12, 2017, Accredited Environmental filed an answer in the Evanston Action,
asserting cross-claims against Environmental Waste Management for contribution and
indemnification. (Evanston Action Accredited Environmental Answer, ECF No. 10.)
II.

Parties’ Arguments
On April 27, 2017, Accredited Environmental filed the instant Motion to Consolidate the

subrogation and declaratory actions. (BRG Action Notice of Motion, ECF No. 52.) Accredited
Environmental contends that the factual questions and Accredited Environmental’s liability in the
BRG Action “will have a direct effect on the coverage determination at issue in the [Evanston]
action.” (BRG Action Memo. Of Law in Supp., ECF No. 52-3 at 5.) Similarly, the “coverage
questions and issues in the [Evanston] action will have significant bearing and import on the BRG
action.” (Id.)
Environmental Waste Management, defendant in both actions, supports the motion for
consolidation because of the common issues and facts in both matters. (BRG Action Accredited
Environmental Brief in Supp., ECF No. 67.) Environmental Waste Management notes in its
briefing that discovery in both actions will raise similar questions. For example the nature of
Accredited Environmental’s work, whether it was negligent in its due diligence processes, and
whether it breached a contract with Environmental Waste Management is in dispute in both
matters. The “party witnesses for Accredited Environmental will [also] be substantially the same
persons in both actions.” (Id. at 7.) Environmental Waste Management explains how Accredited
Environmental’s employee testimony will be critical in deciding whether the company was in fact
negligent in conducting the mercury vapor survey in 2012. (Id.) Whether Accredited
Environmental is found to be negligent will determine the extent of Evanston’s insurance coverage
under the Accredited Environmental Policy. (Id.)

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Also relevant in both actions is the timing of when Accredited Environmental “believed
that any claim(s) were being made against it such that its insurance carrier should be notified…”
(Id.) Environmental Waste Management asserts that many facts having to do with notice in the
BRG Action will be essential to the issues in the Evanston Action.
In opposition, Evanston and General Electric deny that the subrogation action and
declaratory action involve common questions of law or fact, contend that consolidation would
impose undue burden and expense, and summarize the various claims to distinguish the cases.
(BRG Action General Electric Brief in Opp., ECF No. 65 at 5-24; BRG Action Evanston Brief in
Opp., ECF No. 66 at 4-13.) For example, General Electric, defendant in the BRG Action, argues
that the factual and legal issues presented by the Evanston Action regarding Accredited
Environmental’s insurance policy are not at issue in the BRG Action. (Opp. ECF No. 65 at 11.)
Conversely Evanston claims that whether Accredited Environmental or Environmental Waste
Management “were negligent in the performance of their professional services is not relevant” to
its dispute. (BRG Action Evanston Brief in Opp., ECF No. 66 at 6.)
III.

Applicable Law
A District Court has the “inherent power to ‘control the disposition of cases on its docket

with economy of time and effort for itself, for counsel and for litigants.’” United States v.
Kramer, 770 F. Supp. 954, 957 (D.N.J. 1991) (quoting Landis v. North Am. Co., 299 U.S. 248,
254, (1936)). Rule 42(a) of the Federal Rules of Civil Procedure outlines this power indicating that
“[i]f 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 order to avoid unnecessary cost or delay.” It is well established that this power to

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consolidate cases under Rule 42 is broad sweeping. A.S. ex. Rel. Miller v. SmithKline Beecham
Corp., 769 F.3d 204, 212 (3d Cir. 2014) (citations and quotations omitted).
The existence of common issues is a prerequisite for consolidation, but the mere presence
of such issues alone does not compel consolidation. Liberty Lincoln Mercury, Inc. v. Ford
Marketing Corp., 149 F.R.D. 65, 80 (D.N.J. 1993). At the same time, Rule 42 does not “demand
[] that actions be identical before they may be consolidated.” In re Cendant Corp. Litig., 182
F.R.D. 476, 478 (D.N.J. 1998). Rather courts will look to whether consolidation will “streamline
and economize pretrial proceedings so as to avoid duplication of effort, and [] prevent conflicting
outcomes in cases involving similar legal and factual issues” In re TMI Litig., 193 F.3d 613, 724
(3d Cir. 1999) (citations and quotations omitted); In re Central European Distribution Corp. Sec.
Litig., 2012 WL 5465799, * 9 (D.N.J. Nov. 8, 2012) (in considering whether to consolidate, a court
should weigh “the interests of judicial economy against the potential for new delays, expense,
confusion, or prejudice”).
IV.

Discussion
As emphasized by General Electric and Evanston, the cases, claims, counterclaims, and

cross-claims present an array of issues that range from breach of contract to negligence to duties
to defend and indemnify. However, it is plain that the actions involve common questions of law
and fact such that consolidation is warranted. In their opposition motion, General Electric argues
as a reason against consolidating that “[Environmental Waste Management’s cross-claims against
Accredited Environmental in the insurance coverage action are entirely duplicative of the crossclaims Environmental Waste Management asserted against Accredited Environmental in the BRG
action.” (BRG Action General Electric Brief in Opp., ECF No. 65 at 12.) Quite to the contrary,

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these duplicative cross-claims are a testament to how inextricably intertwined the BRG and
Evanston actions are and the inherent need for consolidation.
The factual and legal issues are similar in both actions so as to warrant consolidation. It is
relevant in both cases when Accredited Environmental first learned of any possible claim.
Evanston even concedes to the relevance of the timing in their opposition motion, stating that the
factual and legal issues that are relevant in the Evanston Action include: “1) whether AET or
[Environmental Waste Management] were aware of the claims against them prior to January 1,
2016; [and] 2) when BRG’s claims were first reported to Evanston.” (BRG Action Evanston Brief
in Opp., ECF No. 66 at 6.)
Whether “BRG’s claims fall within the Professional Services and Pollution exclusions”
clauses of the Evanston Policies is also a contested issue. (Id. at 6.) Evanston argues that BRG’s
claims against Accredited Environmental in the BRG Action should be excluded because of a
“[p]ollution exclusion provision contained in the CGL Coverage Parts of the Evanston Policies.”
(Id. at 6.) (internal citations omitted). Even though the thrust of the Evanston Action is insurance
coverage, it is certainly relevant to know what type of claims succeed in the BRG Action before
deciding whether those claims fall under any insurance coverage exclusionary provisions in the
Evanston Action. (Id. at 6.) What claims are successful in the BRG Action and the exact nature of
the parties conduct in the BRG Action is inextricably intertwined with the insurance coverage
questions in the Evanston Action.
In light of the duplicative questions of law and fact in both matters judicial economy will
best be served by consideration of all claims in one docket. Having considered the pleadings as
well as the competing submissions, the Court finds the request to consolidate these matters to be
meritorious and in its discretion grants Accredited Environmental’s motion for consolidation.

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ACCORDINGLY, IT IS on this 14th day of July, 2017,
ORDERED that the motion (ECF No. 52) to consolidate filed by Accredited
Environmental Technologies, Inc. is granted; and
ORDERED that 16-CV-06577-SRC-CLW and 17-CV-01584-JMV-JBC are hereby
consolidated into 16-CV-06577-SRC-CLW, with all subsequent filings to be filed only in 16CV-06577-SRC-CLW and 17-CV-01584-JMV-JBC to be closed, and the Clerk is directed to edit
the dockets to reflect the same; and
ORDERED that the Clerk shall terminate ECF No. 52.

s/Cathy L. Waldor
CATHY L. WALDOR
United States Magistrate Judge

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