United States District Court, S.D. Texas, Houston Division
DAVID H. RUSSELL FAMILY LTD. PARTNERSHIP, LLLP, Plaintiff,
STEPHEN H DERNICK, et al, Defendants.
ORDER AND OPINION OF CONSOLIDATION
MELINDA HARMON, UNITED STATES DISTRICT JUDGE.
the Court is Defendants Stephen H. Dernick and David D.
Dernick's (collectively, the “Dernicks” or
“Defendants”) Motion to Consolidate this action
with Northstar Gas Ventures, LLC, v. Dernicks, Civil
Action No. 4:17cv-1266. Doc. 18. Plaintiff Northstar Gas
Ventures, LLC (“Northstar”) responded, Doc. 21,
Plaintiff David H. Russell Family Limited Partnership, LLLP
(“Russell”) separately responded, Doc. 22, and
the Dernicks replied, Doc. 23. Then, in February of 2018,
Russell amended its response to support consolidation, Doc.
34, Northstar re-urged its objections to consolidations, Doc.
35, and Russell responded to Northstar, again, in favor of
consolidation, Doc. 36. In both cases and in very similar
pleadings, Russell and Northstar assert the Dernicks breached
their promissory notes by failing to pay. Docs. 1 & 1
under cause nos. 4:17-CV-01230 and 4:17-CV-01266. After
considering these documents and the applicable law, the Court
grants consolidation of Civil Action No. 4:17-CV-01230 and
Rule of Civil Procedure 42(a) provides,
If the actions before the court involve a common question of
law or fact, the court may: (1) join for hearing or trial any
or all matters at issue in the actions; (2) consolidate the
actions; or (3) issue any other orders to avoid unnecessary
cost or delay.
has wide discretion in deciding whether two or more actions
have common questions of law and fact and whether
consolidation would save time and money. Mills v. Beech
Aircraft Corp., 886 F.2d 758, 761-62 (5th Cir. 1989).
Factors for the court to consider in determining if
consolidation is appropriate are whether (1) the actions are
pending before the same court; (2) there are common parties;
(3) there are common questions of law or fact; (4) there is
risk of prejudice or confusion if the cases are consolidated
and if so, whether the risk is outweighed by the risk of
inconsistent adjudications of factual and legal issues; (5)
consolidation will conserve judicial resources and reduce the
time and cost of handling the cases separately; and (6) the
cases are at different stages. In re Enron Corp. Sec.,
Derivative & ERISA Litig., Nos. H-01-3624, et
al., 2007 WL 446051, *1 (S.D. Tex. Feb. 7, 2007). The
Court may order consolidation even where the parties are
opposed to it and its determination many “take
precedence over the desires of counsel.” Id.
(citing In re Air Crash Disaster at Florida Everglades on
Dec. 19, 1972, 549 F.2d 1006, 1013, 1014 (5th Cir.
1977)). District courts frequently consolidate cases before
them that overlap substantially. Gate Guard Services, LP
v. Solis, Civ. A. No. V-10-91, 2011 WL 2784447, *14
(S.D. Tex. July 12, 2011), citing O'Hare v. Vulcan
Capital, LLC, No. SA-04-CA-566-OG, 2007 WL 996437, *3
(W.D. Tex. Feb. 20, 2007).
does not merge suits into a single cause of action or change
the rights of the parties, In re Enron, 2007 WL
446051, *1 (citing Frazier v. Garrison I.S.D., 980
F.2d 1514, 1532 (5th Cir. 1983) (“[A]ctions maintain
their separate identity even if consolidated”);
McKenzie v. United States, 678 F.2d 571, 574 (5th
Cir. 1982) (“[C]onsolidation does not cause one civil
action to merge from two”); Miller v. U.S. Postal
Serv., 729 F.2d 1033, 1036 (5th Cir. 1984) (courts have
emphasized that following consolidation it is vital that
“the two suits retain their separate identities”
even to the point that each requires “the entry of a
two cases are (1) in the Southern District of Texas, they
have a (2) common defendant, the Dernicks, they have (3)
common issues of law and fact concerning interpretation of
the notes: the case arises out of the Dernicks' alleged
failure to pay on nearly identical promissory notes, and
subsequent agreements signed by both Russell and Northstar,
see Docs. 1 & 1, Ex. A-D, there is (4) no risk
of confusion, and (5) consolidation will conserve judicial
resources and reduce the time and cost of handling the cases
separately. As to the (6) pleading stage, both Russell and
Northstar have filed nearly identical Motions for Summary
Judgment, and the Dernicks have responded with nearly
identical responses and cross-motions in both cases. Docs. 12
& 16 under No. 4:17-CV-01230; Docs. 10 & 12 under No.
differences, Russell's case is assigned to Judge Melinda
Harmon's court and Northstar's case is assigned to
Judge David Hinter's court. The scheduling order is
different. Also, Russell has moved to strike portions of the
Dernicks' Cross-Motion for Final Summary Judgment, Doc.
20, and Northstar has filed a Motion for Extension of Time
Discovery, Doc. 26. Next, Bluescape Riley Exploration
Acquisition, LLC and Northstar have filed a Motion to Quash
in Northstar's case, Doc. 21 & 23. Russell and
Northstar are represented by different counsel. Thus, in
weighing the factors, the Court finds the scale is heavily
weighted towards consolidation.
most recent Response, Northstar contends that the cases
should not be consolidated because it is not a necessary
party to the other suit, the discovery deadline in its suit
passed on March 1, and a delay to a later trial date could
result in “depletion of assets by the
Defendants.” Doc. 35. Taking the assertions in reverse
order, the scheduling deadlines will be vacated pending
resolution of the motions and cross-motions for summary
judgment that all parties contend will quickly dispose of the
case. Also, the Court notes that Northstar is requesting
additional time for discovery, and so it cannot also contend
that discovery deadlines are a basis to avoid consolidation.
Finally, Northstar does not provide any authority for its
assertion that consolidation is only appropriate where it is
a necessary part. Docs. 21 & 35. Thus, the Court holds
that none of Northstar's assertions counterbalance the
other factors favoring consolidation.
considered Northstar's assertions, Docs. 21 & 35, and
the factors above, the Court finds that consolidation is
appropriate and ORDERS that the
Dernicks' Motion to Consolidate, Doc. 18, is
GRANTED, and the cases shall proceed under
Civil Action No. 4:17-CV-01230. The Court further
that the existing scheduling orders are vacated pending the
resolution of the motions for summary judgment. The Court
upon consolidation and vacation of scheduling orders,
Northstar's Motion for Extension of Time ...