United States District Court, W.D. Arkansas, Texarkana Division
ORDER
Susan
O. Hickey, United States District Judge.
Before
the Court is a Motion to Intervene filed by Robertson
Contractors, Inc. (“Robertson”). ECF No. 10.
Plaintiff has filed a response. ECF No. 12. Robertson has
filed a reply. ECF No. 18. The Court finds this matter ripe
for consideration.
BACKGROUND
Plaintiff
filed the instant case in the Circuit Court of Howard County,
Arkansas, on October 19, 2017. ECF No. 3. This matter was
subsequently removed to this Court on January 23, 2018, on
the basis of diversity jurisdiction. ECF No. 1. In its
complaint, Plaintiff alleges that on or about December 11,
2014, it entered into a subcontract with Robertson whereby
Plaintiff would supply Robertson with materials to be used in
the completion of a construction project for the Arkansas
Highway and Transportation Department (“AHTD”) by
Robertson. ECF No. 3, ¶ 5. Plaintiff claims that
Defendant acted as surety for Robertson and that on or about
January 23, 2015, Defendant and Robertson executed and
delivered a payment bond to the State of Arkansas. ECF No. 3,
¶ 6. Plaintiff states that this bond was for the use and
benefit of the Arkansas State Highway Commission
(“ASHC”) and certain third parties-including
Plaintiff-and that under the terms of the bond Defendant and
Robertson were bound to pay claims of parties furnishing
labor and materials for the construction project.
Id. Plaintiff asserts that it supplied Robertson
with $301, 903.81 worth of materials and that Robertson has
only paid Plaintiff $227, 061.25. ECF No. 3, ¶ 7.
Plaintiff claims that it has demanded payment from Defendant
and Robertson, but that those demands have been refused. ECF
No. 3, ¶ 10.
Plaintiff
further alleges that it entered into a second subcontract
with Robertson on or about March 3, 2016, wherein it agreed
to provide materials to be used by Robertson in completing
another construction project for the AHTD. ECF No. 3, ¶
15. Plaintiff claims that, in connection with this second
project, Defendant and Robertson-as surety and principal,
respectively- executed and delivered another payment bond to
the State of Arkansas. ECF No. 3, ¶ 16. Plaintiff states
that this bond was for the use and benefit of the ASHC and
certain third parties-including Plaintiff-and that under the
terms of the bond Defendant and Robertson were bound to pay
claims of parties furnishing labor and materials for the
construction project. Id. Plaintiff asserts that it
has provided supplies worth $33, 939.00 under this
subcontract and has only been paid $28, 821.12. ECF No. 3,
¶ 17. Plaintiff claims that it has demanded payment for
the remaining amounts from Defendant and Robertson, but that
those demands have not been met. ECF No. 3, ¶ 20.
Plaintiff seeks judgement against Defendant for $79, 957.44
along with a twelve percent penalty, pre-judgment and
post-judgment interest, and fees and costs.
Robertson
filed the instant Motion to Intervene on August 29, 2018. ECF
No. 10. Robertson argues that it is entitled to intervene as
a matter of right under Federal Rule of Civil Procedure
(“FRCP”) 24(a). Likewise, Robertson asserts that
permissive intervention is proper under FRCP 24(b). Robertson
claims that some of the materials provided under the relevant
subcontracts were not in compliance with the terms,
conditions, plans and specifications required by the ASHC.
ECF No. 10, p. 1. Robertson further states that due to the
deficiency of the materials provided by Plaintiff, it was
required to remove the non-compliant materials and replace
them with the correct materials. Robertson asserts that it
suffered significant costs and expenses in removing and
replacing the deficient materials provided by Plaintiff. In
response, Plaintiff asserts that the instant motion is
untimely and that, therefore, intervention should not be
allowed. Plaintiff further argues that if the Court allows
intervention, it should continue the trial date and issue a
new final scheduling order.
DISCUSSION
The
Court will first address whether intervention is proper under
FRCP 24(a). The Court will then determine whether
intervention is permissible pursuant to FRCP 24(b).
I.
Intervention as a Matter of Right
Rule
24(a) provides, in relevant part, that:
On timely motion, the court must permit anyone to intervene
who . . . claims an interest relating to the property or
transaction that is the subject of the action, and is so
situated that disposing of the action may as a practical
matter impair or impede the movant's ability to protect
its interest, unless existing parties adequately represent
that interest.
Fed. R. Civ. P. 24(a)(2). To intervene pursuant to Rule
24(a)(2), the party seeking to intervene must establish that:
“(1) it has a recognized interest in the subject matter
of the litigation; (2) the interest might be impaired by the
disposition of the case; and (3) the interest will not be
adequately protected by the existing parties.”
South Dakota ex rel. Barnett v. U.S. Dept. of
Interior, 317 F.3d 783, 785 (8th Cir. 2003); United
States v. Union Elec. Co., 64 F.3d 1152, 1158 (8th Cir.
1995). Furthermore, under Eighth Circuit precedent, a party
who seeks to intervene as a matter of right must also have
standing to sue under Article III of the Constitution.
North Dakota ex rel. Stenehjem v. United States, 787
F.3d 918, 920 (8th Cir. 2015) (“In this circuit,
prospective intervenors must satisfy both the requirements of
Rule 24(a) and Article III standing to intervene as of
right.”); U.S. v. Metro. St. Louis Sewer
Dist., 569 F.3d 829, 833 (8th Cir. 2009). To establish
standing, Robertson must establish that it has “(1)
suffered an injury in fact, (2) that is fairly traceable to
the challenged conduct of the defendant, and (3) that is
likely to be redressed by a favorable judicial
decision.” Spokeo, Inc. v. Robins, __ U.S. __,
136 S.Ct. 1540, 1547 (2016). In determining whether a
potential intervenor has standing and whether he has
satisfied the conditions of Rule 24(a)(2), a court looks to
the motion for leave to intervene and the attached pleading
and, “absent sham or frivolity, accepts the
non-conclusory allegations in those pleadings as true.”
Id. The court notes “Rule 24 should be
liberally construed with all doubts resolved in favor of the
proposed intervenor.” Tweedle v. State Farm Fire
& Cas. Co., 527 F.3d 664, 671 (8th Cir. 2008)
(quoting South Dakota ex rel. Barnett, 317 F.3d at
785).
As
noted above, Robertson asserts that it is entitled to
intervene as a matter of right. In response, Plaintiff relies
on the argument that the instant motion is untimely, failing
to offer argument as to any of the relevant factors outlined
in Rule 24(a).
A.
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