Atlantic Constructors, Inc. v. KBE Building Corporation et al

Filing 27

MEMORANDUM OPINION, ORDER Granting 13 Joint MOTION to Consolidate Cases filed by KBE Building Corporation, Federal Insurance Company.The two cases will be consolidated for all future proceedings, including trial. 3:19CV80 will be designated as the lead case for all further proceedings. Signed by Magistrate Judge Joel C. Hoppe on 9/1/2020. (hnw)

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
Charlottesville Division
MANGANARO MIDATLANTIC, LLC,
Plaintiff,
v.

Case No. 3:19cv00080

KBE BUILDING CORPORATION, et al.,
Defendants
ATLANTIC CONSTRUCTORS, INC.,
Plaintiff,
v.

Case No. 3:20cv00018

KBE BUILDING CORPORATION, et al.,
Defendants

MEMORANDUM OPINION & ORDER
Before the Court are Defendants KBE Building Corporation’s (“KBE”) and Federal
Insurance Company’s (“Federal”) (collectively the “Defendants”) Joint Motions to Consolidate
the above-captioned cases.1 Joint Mot. to Consolidate Cases, Manganaro MidAtl., LLC v. KBE
Bldg. Corp., No. 3:19cv80 (“Manganaro MidAtl.”), ECF No. 21; Joint Mot. to Consolidate
Cases, Atl. Constructors, Inc. v. KBE Bldg. Corp., No. 3:20cv18 (“Atl. Constructors”), ECF No.
13. For the reasons stated below, the Court hereby GRANTS the Joint Motions to Consolidate,
Manganaro MidAtl., ECF No. 21; Atl. Constructors, ECF No. 13, and consolidates these two
cases for all further proceedings, including trial.
I. Factual and Procedural Background

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The Defendants initially moved to consolidate four separate cases, however, two of those cases have
resolved and those motions are moot. See Order, Sullivan Mech. Contractors, Inc. v. KBE Bldg. Corp.,
No. 3:20cv13 (W.D. Va. July 29, 2020), ECF No. 39; Stipulation of Dismissal, Moore’s Elec. & Mech.
Constr., Inc. v. KBE Bldg. Corp., No. 3:20cv19 (W.D. Va. Aug. 11, 2020), ECF No. 23.

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In November 2017, the Commonwealth of Virginia and the Rector and Visitors of the
University of Virginia (collectively “Owner”) entered into a construction agreement with KBE
for the construction of upper-class student housing (the “Project”). See Compl. ¶ 4, Manganaro
MidAtl., ECF No. 1. Federal issued a payment bond on behalf of KBE in connection with the
Project. Id. ¶ 5. In February 2018, KBE and Atlantic Constructors, Inc. (“Atlantic”) entered into
a subcontract agreement for Atlantic to provide fire protection work at the Project. Am. Compl. ¶
5, Atl. Constructors, ECF No. 22.2 Atlantic completed its work on the Project in November 2019.
Id. ¶ 7. Atlantic alleges that KBE breached the subcontract agreement, the Defendants breached
the payment bond, and it is owed approximately $168,175 for its completed work. Id. ¶¶ 8, 12–
19.
In May 2018, KBE and Manganaro MidAtlantic Corporation (“Manganaro”) entered into
a subcontract agreement for Manganaro to install drywall, carpentry, and ceiling tiles at the
Project. Compl. ¶ 7, Manganaro MidAtl. Manganaro completed its work on the Project between
October 2018 and August 2019. Id. ¶¶ 9, 17. Manganaro alleges that KBE made numerous
changes to the scope of its work, and it was delayed and hindered in completing its work by KBE
and other subcontractors on the Project resulting in increased costs to Manganaro. Id. ¶¶ 10–12.
Manganaro further alleges that KBE breached the subcontract agreement, the Defendants
breached the payment bond, and it is owed approximately $1,526,833 for its completed work. Id.
¶¶ 16, 19–30.
The Defendants filed Joint Answers and Counterclaims in both cases. Joint Answer &
Countercl., Manganaro MidAtl., ECF No. 10; Joint Answer & Countercl., Atl. Constructors,

On August 11, 2020, I entered an Order granting Atlantic’s motion to file an Amended Complaint.
Order, Atl. Constructors, ECF No. 21.
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ECF No. 25. KBE alleges the same affirmative defenses and the same counterclaim for breach of
the subcontract in both cases.3 Joint Answer & Countercl. 5–11, Manganaro MidAtl.; Joint
Answer & Countercl. 4–8, Atl. Constructors. In part, KBE alleges that other subcontractors,
including the Plaintiffs in these two cases, were responsible for the delays and additional costs in
the Project. See Joint Answer & Countercl. 5–6, Manganaro MidAtl.; Joint Answer & Countercl.
4, Atl. Constructors.; Defs.’ Mem. in Supp. of Joint Mot. to Consolidate4, Manganaro MidAtl.,
ECF No. 22; Defs.’ Mem. in Supp. of Joint Mot. to Consolidate 4, Atl. Constructors, ECF No.
14. The Defendants filed their Joint Motions to Consolidate and Memoranda in Support in May
2020. Manganaro and Atlantic filed their Responses in Opposition, Manganaro MidAtl., ECF
No. 25; Atl. Constructors, ECF No. 17, and the Defendants filed a Joint Reply, Manganaro
MidAtl., ECF No. 26; Atl. Constructors, ECF No. 18. On August 18, this Court held a hearing on
the motions. The matters are now ripe for decision.
II. Legal Framework
Rule 42 of the Federal Rules of Civil Procedure provides, “[i]f actions before the court
involve a common question of law or fact, the court may . . . consolidate the actions.” Fed. R.
Civ. P. 42(a)(2). “District courts have broad discretion under [Rule 42] to consolidate causes
pending in the same district.” A/S J. Ludwig Mowinckles Rederi v. Tidewater Constr. Corp., 559
F.2d 928, 933 (4th Cir. 1977) (citing Fed. R. Civ. P. 42(a)). The Court must weigh the risk of
prejudice and possible confusion from consolidation against the burden on the parties, witnesses,
and judicial resources to conduct multiple suits involving common questions of law or fact, the
length of time to conclude multiple lawsuits as opposed to a single lawsuit, and the “relative

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The Defendants allege that the Plaintiffs breached the subcontract in many of the same ways, but include
additional breaches on the part of Manganaro.

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expense” to all of the parties presented by a single consolidated trial or multiple trials. Campbell
v. Bos. Sci. Corp., 882 F.3d 70, 74 (4th Cir. 2018). Generally, “judicial economy favors
consolidation because it saves time and expenses and avoids the risk of inconsistent judgments.”
Diment v. Sup. Ct. of Va., No. 3:07cv33, 2007 WL 4302867, at *1 n.1 (W.D. Va. Dec. 6, 2007)
(citing Switzenbaum v. Orbital Scis. Corp., 187 F.R.D. 246, 248 (E.D. Va. 1999)).
III. Analysis
These cases involve substantial common questions of law and fact, including the same
prime construction contract, the same Project, the same defendants, the same causes of action,
and the same defenses and counterclaims. See Harris v. L & L Wings, Inc., 132 F.3d 978, 981 n.2
(4th Cir. 1997) (noting that plaintiffs’ cases “brought against the same defendant, relying on the
same witnesses, alleging the same misconduct, and answered with the same defenses clearly
meet th[e] standard” for consolidation under Rule 42(a)); Rishell v. Comput. Scis. Corp., Nos.
1:13cv931, 1:14cv213, 2014 WL 11515835, at *1 (E.D. Va. Apr. 4, 2014) (consolidating cases
that involved the same defendant and likely involved deposing the same witnesses and exploring
the same defenses). The Plaintiffs allege that the Defendants breached the subcontract
agreements4 and failed to pay for work satisfactorily completed. The Defendants counter with the
same affirmative defenses to those claims and substantially similar counterclaims, including that
the Plaintiffs in these two cases are at least partially responsible for each other’s damages.
Questions of law will center on contract interpretation of the prime contract and the two
subcontracts at issue which, although different, are similar enough to warrant consolidation.

Manganaro argues that it made substantial changes to KBE’s standard sub-contractor agreement before
the parties signed. See Pl.’s Resp. in Opp’n to Joint Mot. to Consolidate Cases 4, Manganaro MidAtl.
These changes, however, do not appear to be dispositive of Manganaro’s claims or so different as to
require different interpretations of the law and facts.
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Additionally, there will be a significant commonality among the facts presented. Although the
Plaintiffs performed different types of work and are claiming different amounts in damages, they
worked on the same Project during roughly the same period. Both Plaintiffs allege that KBE and
Federal breached their obligations by failing to pay for completed work, and KBE counterclaims
that both Plaintiffs breached the subcontracts in many of the same ways, including failing to
clean up and interfering with other subcontractors’ work on the Project. There will be common
issues related to some change orders, back charges (including those implicating each Plaintiff),
and set offs. The differences between these two cases do not predominate. At its core,
Manganaro’s case is not substantially more complex than Atlantic’s, despite the substantial
differences in the number of change orders at issue and the amount of damages, because the suits
involve the same defendants, claims, defenses, counterclaims, and alleged breaches of the
subcontracts. Cf. V.A.L. Floors v. 1419 Tower, L.P., No. 08-cv-5680, 2009 WL 1977840, at *3
(E.D. Pa. July 8, 2009) (denying motion to consolidate where one action was “more multifaceted and complex” than the other, involved many additional causes of action, counterclaims,
and defenses, and risked confusing the jury if tried together).
As to the other factors, concern for inconsistent judgments generally favors
consolidation, and concern of jury confusion favors maintaining separate cases. See Campbell,
882 F.3d at 74; Diment, 2007 WL 4302867, at *1 n.1. In this case, these factors play a minimal
role and essentially cancel each other. Both cases are before the Honorable Glen E. Conrad,
Senior United States District Judge, and the parties indicated at the hearing that in both cases
they have requested bench trials. Thus, there is little, if any, risk of inconsistent judgments or
jury confusion.

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The Court next considers the burden on the parties, witnesses, and judicial resources.
Because of the substantial common questions of law and fact, not only will the Defendants’
witnesses and evidence be substantially similar in both cases, parts of the Plaintiffs’ cases will
likely substantially overlap. Consolidation of these two actions will reduce the burden on the
Defendants. As to discovery, the Defendants’ responses to the Plaintiffs’ requests for production
of documents likely will overlap substantially. Moreover, the individuals who testify on behalf of
the Defendants at depositions will likely be the same. Thus, consolidation of discovery will be
more efficient. Counsel for Atlantic asserted that the Manganaro case will involve more
discovery and Atlantic may incur greater expenses reviewing discovery related to Manganaro. I
find this argument unpersuasive. Atlantic should be able to identify the discovery responses
relevant to its claims and defenses and those of KBE that overlap with Manganaro and focus its
efforts on them.
As to efficiencies gained through a consolidated trial, during the motions hearing, counsel
for the Defendants represented that their cases against the Plaintiffs would take three trial days in
a consolidated action or three trial days in each separate action and would involve similar
evidence about project delays caused by the Plaintiffs and other subcontractors. According to
Plaintiffs’ counsel, Atlantic’s case will take one day, and Manganaro’s case will take five or six
days to try. Consolidating the trials will add one day to the existing trial date in Manganaro’s
case and eliminate a four-day trial in Atlantic’s case, thereby conserving judicial resources.
Moreover, the increased burden on Manganaro would be minimal, and the burden on the
Defendants of participating in two trials would be eliminated. Although the trial time for Atlantic
would be increased significantly, on the whole, consolidating the cases will reduce the relative
burden on the parties and conserve judicial resources.

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Finally, the procedural posture of both cases favors consolidation. In Manganaro
MidAtlantic, the parties have exchanged initial written discovery requests and responses. It
appears that the parties in Atlantic Constructors are working on similar discovery requests and
responses. No depositions or dispositive motions have been filed in either case. As such,
consolidation likely will not result in a prejudicial delay to either Plaintiff in the discovery
process or trial date.
On the whole, the factors favor consolidation of these two cases. Accordingly, the
Defendants’ Joint Motions to Consolidate, Manganaro MidAtl., LLC, No. 3:18cv90, ECF No.
21; Atl. Constructors, Inc., No. 3:20cv18, ECF No. 13, are GRANTED, and the two cases will be
consolidated for all future proceedings, including trial.
It is so ORDERED.
ENTER: September 1, 2020

Joel C. Hoppe
United States Magistrate Judge

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