Underpinning & Foundation Skanska, Inc. v. Berkley Regional Insurance

262 F.R.D. 196, 2009 U.S. Dist. LEXIS 99414, 2009 WL 3363700
CourtDistrict Court, E.D. New York
DecidedOctober 20, 2009
DocketNo. 07CV2758 (ADS)(ARL)
StatusPublished
Cited by3 cases

This text of 262 F.R.D. 196 (Underpinning & Foundation Skanska, Inc. v. Berkley Regional Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Underpinning & Foundation Skanska, Inc. v. Berkley Regional Insurance, 262 F.R.D. 196, 2009 U.S. Dist. LEXIS 99414, 2009 WL 3363700 (E.D.N.Y. 2009).

Opinion

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

I. BACKGROUND

This case arises out of a dispute concerning a construction project at the Belgrave Water Pollution Control Plant, a plant owned by Third-Party Defendant Belgrave Water Pollution Control District (“Belgrave”). As part of an effort to improve the Water Pollution Control Plant’s facilities, in 2002 Bel-grave retained an engineering firm, Cameron Engineering and Associates, LLP (“Camer[198]*198on”) to design a concrete pile foundation for a new clarifier tank to be built at the plant. In September 2005, Belgrave contracted with W.H.M. Plumbing & Heating Contractors, Inc. (“WHM”) to serve as prime contractor responsible for, among other things, construction of this pile foundation. In connection with WHM’s retention as prime contractor on the project, in September 2005, WHM, as principal, and Defendant Berkley Regional Insurance Co. (“Berkley”), as surety, executed and delivered to Belgrave a Labor and Material Payment Bond in the amount of $5,880,000 (the “Payment Bond”). Also, in October 2005, WHM retained Underpinning & Foundation Skanska, Inc. (“Underpinning”) as subcontractor to install the individual piles for the foundation. The parties agree that, while WHM and Underpinning constructed some or all of the pile foundation (a structure with a pile foundation generally rests on numerous concrete pillars driven deep into the ground), the work on the pile foundation was ultimately abandoned in favor of a mat foundation (a structure with a mat foundation instead generally rests on a large concrete slab that sits relatively shallowly in the soil).

On July 9, 2007, Underpinning filed suit in this Court against Berkeley under the terms of the Payment Bond. Underpinning alleges in its complaint that it performed its contract and incurred additional expenses, but WHM underpaid Underpinning by the sum of $206,340.00. As Berkeley is surety under the terms of the Payment Bond, Underpinning alleges that Berkeley is liable for WHM’s underpayment. The Court exercised jurisdiction over this case pursuant to diversity jurisdiction provided by 28 U.S.C. § 1332, as Underpinning is a New York citizen, Berkeley is a Delaware citizen, and the amount in controversy exceeded the sum of $75,000.

On January 16, 2009, Berkeley moved for leave to implead Belgrave as a third-party defendant pursuant to Fed.R.Civ.P. 14(a). The Court granted Berkeley’s motion on June 2, 2009, and Berkeley filed a third-party complaint against Belgrave on June 9, 2009, seeking indemnification from Belgrave for any amounts Underpinning should recover from Berkeley in this matter. The Court continued to exercise jurisdiction over the case pursuant to its powers of supplemental jurisdiction provided by 28 U.S.C. § 1367 (“Section 1367”). Underpinning and Bel-grave are both New York entities, but Berkeley’s claims against Belgrave forms part of the same case or controversy that is alleged in Underpinning’s claim against Berkeley. In addition, Berkeley’s claims do not fall into any of the exceptions to supplemental jurisdiction enumerated in Section 1367(b).

According to Berkeley’s third-party complaint, Underpinning built a pile foundation for the project after being retained by WHM. However, Belgrave rejected the foundation as off-specification and withheld partial payment from WHM, who in turn withheld partial payment from Underpinning. Berkeley claims the pile foundation was off-specification only because of faulty design and direction from Cameron, Belgrave’s on-site representative and inspector. Berkeley therefore claims Belgrave is indirectly liable to Underpinning, as its performance on the contract would have been complete if not for the malfeasance of Cameron, Belgrave’s agent. Berkeley alleges, among other things, that Cameron was present on-site as Underpinning drove the piles, and that Cameron prematurely instructed Underpinning to stop driving the each pile, leaving the piles too shallow. Berkeley also alleges that Cameron improperly inspected and accepted piles that Belgrave later rejected. In addition, Berkeley alleges that Belgrave and Cameron conspired to withhold from Berkeley and WHM admissions by Cameron of its mistakes related to the pile foundation. Based on this and other threats, Belgrave and Cameron allegedly coerced WHM into entering into an agreement to remove the pile foundation and build the mat foundation at WHM’s sole expense.

Currently before the Court are (1) WHM’s motion to intervene as a defendant and assert counter-claims against Underpinning, pursuant to Fed.R.Civ.P. 24(b), and (2) WHM’s motion to join Cameron as a necessary party, pursuant to Fed.R.Civ.P. 19, or, in the alternative, to join Cameron as a per[199]*199missive party pursuant to Fed.R.Civ.P. 20. Both motions are unopposed.

II. DISCUSSION

A. WHM’s Rule 24(b) Motion

WHM is moving to intervene in this matter pursuant to Fed.R.Civ.P. 24(b) to answer Underpinning’s complaint and assert counterclaims against Underpinning. The Court therefore must consider the requirements for permissive intervention under Fed.R.Civ.P. 24.

Fed.R.Civ.P. 24 provides in pertinent part: (b) Permissive Intervention.
(1) In General. On timely motion, the court may permit anyone to intervene who:
(B) has a claim or defense that shares with the main action a common question of law or fact.
(3) Delay or Prejudice. In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties’ rights.
(e) Notice and Pleading Required. A motion to intervene must be served on the parties as provided in Rule 5. The motion must state the grounds for intervention and be accompanied by a pleading that sets out the claim or defense for which intervention is sought.

In applying Fed.R.Civ.P. 24(b), the Second Circuit has held that, for permissive intervention to be granted, “an applicant must (1) timely file an application, (2) show an interest in the action, (3) demonstrate that the interest may be impaired by the disposition of the action, and (4) show that the interest is not protected adequately by the parties to the action.” R Best Produce, Inc. v. Shulman Rabin Marketing Corp., 467 F.3d 238, 240 (2d Cir.2006) (quoting In re Bank of N.Y.

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Cite This Page — Counsel Stack

Bluebook (online)
262 F.R.D. 196, 2009 U.S. Dist. LEXIS 99414, 2009 WL 3363700, Counsel Stack Legal Research, https://law.counselstack.com/opinion/underpinning-foundation-skanska-inc-v-berkley-regional-insurance-nyed-2009.