Inc. v. Liberty Mutual Insurance Co.

          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. ...