City of Redfield v. Liberty Mutual Insurance Company

Filing 18

ORDER denying 15 Motion to Consolidate Cases. Signed by U.S. District Judge Karen E. Schreier on 4/22/2014. (KC)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
CITY OF REDFIELD, a South
Dakota Municipality,
Plaintiff,
vs.
LIBERTY MUTUAL INSURANCE
COMPANY,
Defendant.

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CIV. 14-4001-KES

ORDER DENYING MOTION
TO CONSOLIDATE
AND STAY LITIGATION
PENDING APPEAL

Plaintiff, City of Redfield, commenced a lawsuit in January of 2014 against
defendant, Liberty Mutual Insurance Company. The complaint asserts claims for
breach of contract and bad faith arising out of a performance bond issued by Liberty
Mutual. City of Redfield seeks compensatory and punitive damages and an award of
attorneys’ fees. The bond was issued for a construction contract between Quam
Construction Co., Inc., and City of Redfield.
On September 3, 2013, Quam had filed a petition against City of Redfield to
compel arbitration pursuant to 9 U.S.C. § 4 (the Federal Arbitration Act). 1:13-CV01017-CBK, Docket 1. The only relief requested in the petition was declaratory relief
ordering City of Redfield to participate in arbitration. After considering the
arguments of both parties, the court denied Quam’s motion to compel arbitration. Id.
at Docket 22. This matter is on appeal to the Eighth Circuit Court of Appeals.

In the case pending before this court, Liberty Mutual moves to consolidate this
action with the Federal Arbitration Act matter 1:13-CV-01017-CBK and to stay the
matter pending a decision from the Eighth Circuit Court of Appeals. Pursuant to Fed.
R. Civ. P. 42(a), actions may be consolidated before the court if they involve common
questions of law or fact.
There are no common questions of law or fact between the two proceedings.
The action pending before this court involves a determination of whether Liberty
Mutual is obligated to pay City of Redfield under the performance bond after Quam
failed to complete the project. The only issue in the Quam action is whether an
enforceable arbitration provision exists between the parties. Both actions seek
different remedies. And the questions of fact to resolve the legal issues do not
overlap. As a result, the motion to consolidate is denied. Because the motion to
consolidate is denied, Liberty’s Mutual’s motion to stay is denied as moot because it is
premised on granting the motion to consolidate. Therefore, it is
ORDERED that Liberty Mutual’s motion to consolidate and stay (Docket 15)
is denied.
Dated April 22, 2014.
BY THE COURT:

/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

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