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United States. v. Northcon, Inc.

United States District Court, D. Nevada

May 28, 2019

THE UNITED STATES OF AMERICA, for the Use of LV RESTORATION & PLUMBING, INC., a Nevada corporation, Plaintiff,
v.
NORTHCON, INC, et al., Defendants.

          ORDER

          KENT J. DAWSON UNITED STATES DISTRICT JUDGE.

         There are several motions currently pending before the Court. First is defendants Northcon, Inc. and Berkley Insurance Company's motion to drop parties or sever claims (#34). Co-defendants Alpha Energy & Electric, Inc. and American Contractors Indemnity Company joined the motion (#36). Plaintiff LV Restoration & Plumbing, Inc. opposed the motion (#37), and Northcon replied (#39). Magistrate Judge Ferenbach reviewed the motion and recommends that this Court grant the motion to sever (#42).

         Next are two motions filed by LV Restoration. The first is a motion to amend or correct its complaint (#44) to which only Northcon and Berkley responded (#47), and LV Restoration replied (#44). The second is a motion to modify scheduling order (#49). Again, Northcon and Berkley responded (#54), and LV Restoration replied (#56).

         Finally, co-defendants Alpha Energy and American Contractors Indemnity jointly filed a motion to stay this case (#57) or in the alternative to consolidate cases (#58). Both the plaintiff, LV Restoration (##60, 64), and co-defendants Northcon and Berkley (##59, 63) have responded to those motions, and Alpha Energy replied (##65, 66).

         Before the Court ruled on those motions, LV Restoration settled with Alpha Energy and American Contractors Indemnity. Those parties stipulated to dismissal (#69). Northcon objected to the dismissal (#70). However, the Court granted the stipulation over Northcon's objection and ordered Alpha Energy and American Contractors dismissed (#72).

         That dismissal shifts the landscape of these pending motions. To start, it moots Alpha Energy's pending motion to stay case (#57) and its motion to consolidate cases (#58). The Court need not consider the motions of parties no longer involved in the case. The Court therefore denies those motions as moot. The dismissal also moots Northcon's motion to sever or drop parties. Given that the Court dismissed the parties that Northcon asked the Court to drop, there is no reason to decide that motion on its merits. Therefore, it too is dismissed as moot. That leaves only LV Restoration's motions to modify the scheduling order (#49) and to amend its complaint (#44). For the reasons below, the Court also denies LV Restoration's motion to modify the scheduling order (#49) and with it the motion to amend (#44).

         I. Background

         This is a dispute over outstanding change orders on two public works projects on Nellis Air Force Base. The first project-called the “Saber Project”-involved the construction and renovation of two buildings on the base. The buildings are known as “Building 61664” and “Building 2102.” Def's Mot. to Sever 3 (#34). Northcon served as prime contractor for the Saber Project and oversaw work on both buildings. Id Northcon secured payment bonds for both buildings under the Miller Act. Co-defendant Berkley Insurance Company provided surety for the payment bonds. LV Restoration was subcontractor to Northcon. Id It claims that Northcon refused to pay over $165, 000 in outstanding change orders that arose during construction. Compl. 3-4 (#1).

         The other public works project is the “FamCamp Project.” That project was to build a “Family Camp RV Park” on Nellis Air Force Base. Def's Mot. to Sever 3 (#34). Alpha Energy was the prime contractor on the FamCamp Project with LV Restoration as its subcontractor. Id. Alpha Energy also secured a Miller Act payment bond for the construction. Id Co-defendant American Contractors Indemnity Company is surety of that payment bond. Id at 3-4. Like the Saber Project, LV Restoration claims that Alpha Energy refuses to pay outstanding change order balances.

         Shortly after LV Restoration brought this case, Northcon moved to sever claims or drop parties (#34). At bottom, Northcon wished to separate LV Restoration's claims arising out of the Saber project from those arising out of the FamCamp project. See id. Every defendant joined Northcon's motion. Magistrate Judge Ferenbach found that the Saber Project claims and FamCamp Project claims arose out of similar fact patterns but did not share enough common facts to join them in the same suit. R&R 4 (#42). He recommends that this Court sever the Saber Project and FamCamp Project claims. Id To escape an order severing claims or dropping parties, LV Restoration filed a motion to amend its complaint (#44).[1] When it discovered that the motion to amend was untimely, [2] LV Restoration moved to modify the scheduling order (#49).

         Meanwhile, Alpha Energy and American Contractors moved to stay this case (#57), or in the alternative, to consolidate (#58) it with a case in this district that also arises out of the FamCamp Project. Def.'s Mot. to Consolidate (referencing United States of America for the Use of Wells Cargo, Inc., v Alpha Energy and Electric, Inc., et al, No. 2:18-cv-1182-JCM-CWH (D. Nev. June. 28, 2018)). Shortly thereafter, LV Restoration settled with Alpha Energy and American Contractors, and the Court dismissed those parties. Order of Dismissal (#72).

         II. Analysis

         LV Restoration moves to modify the parties' prior scheduling order because it wishes to amend its complaint after the deadline to do so has passed.[3] It claims that Northcon's discovery responses revealed facts that support an additional claim against Northcon for unjust enrichment arising out of the FamCamp Project. Namely, LV Restoration argues that in addition to being general contractor for the Saber Project, Northcon was project manager on the FamCamp construction. See Pl.'s Mot. to Amend 2 (#44). LV Restoration brings its motion to amend under FRCP 15(a), which created a lax standard to amend a complaint. Under rule 15(a), amendment is “freely given” unless it would prejudice the opposing party, is sought in bad faith, is futile, or would create undue delay. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992).

         Northcon argues that rule 15(a) is inapplicable here because the Court has already issued a scheduling order. That order, it argues, subjects LV Restoration to the more demanding “good-cause” standard of FRCP 16(b). Northcon claims that LV Restoration has not met that standard because it did not diligently attempt to modify the scheduling order. The argument hinges on LV Restoration's knowledge that Northcon had limited administrative authority over ...


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