REDONDO CONSTRUCTION CORPORATION et al v. PUERTO RICO HIGHWAY AUTHORITY

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
In re: :
:
REDONDO CONSTRUCTION CORPORATION, : Case No. 02-02887 (GAC)
:
Debtor : Chapter 11
___________________________________:
:
REDONDO CONSTRUCTION CORPORATION, :
:
Plaintiff, :
:
v. : Adv. No. 02-0113
:
PUERTO RICO HIGHWAY AND :
TRANSPORTATION AUTHORITY, :
:
Defendant :
___________________________________:
DECISION AND ORDER
The debtor filed this adversary proceeding, alleging that the
Puerto Rico Highway and Transportation Authority (“PRHTA”) breached
six construction contracts, by primarily failing to pay for delays,
changes and inefficiencies allegedly caused by PRHTA. The debtor
sought the sum of $14,588,375.36 in incidental and contract
damages.
Trial commenced in November of 2006 at which time the debtor
withdrew a sub-contractor claim it was bringing on behalf of
Bonneville Construction, S.E. (“Bonneville”) related to the Las
Cumbres Avenue project. Debtor’s counsel indicated that he tried
to contact the representatives of Bonneville in preparation for
trial and received no response and thus the debtor withdrew the
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claim from the adversary proceeding. The trial continued in
December and March and is scheduled to reconvene in June.
On January 9, 2007, Bonneville filed an urgent motion
requesting intervention (dkt. #246). Bonneville indicated that it
is owed $234,463.55 related to the Las Cumbres project and argued
that allowing it to intervene would not cause an undue delay of the
case. Bonneville also argued that the request to intervene was
timely, that it has an interest related to the transaction base of
this proceeding and that disposition of the proceeding will
threaten its ability to protect its interest, which only Bonneville
can adequately represent.
The Court heard arguments related to this motion at the trial
on March 9, 2007, at which time the Court denied Bonneville’s
request for intervention. The Court concluded that because of the
late stage of the proceedings, it would be highly burdensome for
PRHTA to consider this additional claim. The Court indicated that
the claim could be raised in another forum, but that it was too
late to allow the claim in the adversary proceeding. Bonneville
argued that there was plenty of time to conduct discovery and
prepare the case. The Court allowed Bonneville ten days to seek
reconsideration in writing.
On March 19, 2007, Bonneville filed a motion for
reconsideration (dkt. #266). Bonneville suggests that the Court
consider how far the proceedings had gone when it sought to
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intervene, the prejudice which the delay resulting from the
intervention may cause to other parties and the reason for the
delay. Bonneville claims that PRHTA can not be prejudiced because
it was aware of Bonneville’s claim up until the time it was
withdrawn from the trial. Bonneville again argued that there was
sufficient time for discovery and that there was no delay in making
the claim since it was previously included in the adversary
proceeding.
PRHTA filed a response to Bonneville’s motion for
reconsideration (dkt. #273). PRHTA contends that Bonneville fails
to satisfy the standard for obtaining reconsideration; that
Bonneville failed to include the pleading in its request to
intervene; that Bonneville’s request for intervention was caused by
its failure to cooperate with the debtor; that PRHTA will be
prejudiced by the introduction of new evidence and witnesses at
this stage of the proceedings; and that Bonneville is protected in
another forum since it has a claim against the debtor in the
bankruptcy case.
DISCUSSION
The Court largely invited Bonneville to seek reconsideration
of the Court’s initial determination to deny Bonneville’s
intervention. Nonetheless, the Court expected Bonneville to
convincingly explain why the Court’s determination should be
reconsidered. A motion for reconsideration “must demonstrate the
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reason why the court should reconsider its prior decision and must
set forth facts or law of a strongly convincing nature to induce
the court to reverse its earlier decision.” Jimenez v. Rodriguez
(In re Rodriguez), 233 B.R. 212, 219 (Bankr. D.P.R. 1999), aff’d,
17 Fed. Appx. 5 (1st Cir. 2001). A motion for reconsideration is
not used to “repeat old arguments previously considered and
rejected . . .” Nat’l Metal Finishing Co. V.
BarclaysAmerican/Commercial, Inc., 899 F.2d 119, 123 (1st Cir.
1999).
Bonneville’s sub-contractor claim was dismissed by the debtor
in November of 2006, after counsel for the debtor received no
response to direct inquiries to the representatives of Bonneville.
Thereafter, Bonneville waited until January 9, 2007 to seek to
intervene as a co-plaintiff. Bonneville did not include a proposed
complaint or other pleading. Bonneville conceded that it intended
to introduce evidence and witnesses in a trial in which the
plaintiff has already concluded its case in chief.
The Court has concluded that Bonneville’s request for
intervention in the adversary proceeding was untimely. The trial
had already commenced. PRHTA would clearly be prejudiced in the
reopening of discovery and engaging in the preparation necessary to
defend against Bonneville’s claim, which Bonneville is also making
against the debtor in the bankruptcy case. Bonneville has failed
to give any explanation for its tardiness in seeking intervention.
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Bonneville’s intervention would disrupt and further delay these
proceedings. Accordingly, the request for reconsideration will be
denied.
ORDER
WHEREFORE IT IS ORDERED that the motion for reconsideration
(dkt. #266) of the court’s order denying Bonneville Construction
S.E.’s request to intervene in this adversary proceeding shall be,
and it hereby is, DENIED.
SO ORDERED.
San Juan, Puerto Rico, this 31st day of May, 2007.
BY THE COURT:
s/ Gerardo A. Carlo
_______________________
GERARDO A. CARLO
U.S. Bankruptcy Judge
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