Bird v. KKMI Sausalito, LLC et al

Filing 56

ORDER by Judge Maria-Elena James granting 49 Motion for Leave to File Third-Party Complaint; finding as moot 55 Motion to Appear by Telephone (cdnS, COURT STAFF) (Filed on 8/6/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JAMES BIRD,

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Case No. 14-cv-03277-MEJ

Plaintiff,
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ORDER GRANTING MOTION FOR
LEAVE TO FILE THIRD-PARTY
COMPLAINT

v.
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KEEFE KAPLAN MARITIME, INC., et al.,

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Re: Dkt. No. 49

Defendants.
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United States District Court
Northern District of California

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INTRODUCTION

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In this case for breach of contract, negligence, and breach of warranty, Plaintiff James Bird

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alleges his marine vessel sustained damage as a result of improper services performed by

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Defendants Keefe Kaplan Maritime, Inc. (“KKMI”) and Eric Koster dba J&H Marine.1 KKMI

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now moves pursuant to Federal Rule of Civil Procedure 14(a)(1) for leave to file a third-party

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complaint against Christopher Oschek, the captain of the vessel. Dkt. No. 49. Bird has filed an

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Opposition (Dkt. No. 51), and KKMI filed a Reply (Dkt. No. 53). The Court finds this matter

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suitable for disposition without oral argument and VACATES the August 20, 2015 hearing. See

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Fed. R. Civ. P. 78(b); Civil L.R. 7-1(b). Having considered the parties’ positions, relevant legal

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authority, and the record in this case, the Court GRANTS KKMI’s Motion for the reasons set

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forth below.
BACKGROUND

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Bird owns a marine vessel known as the Water Song. First Am. Compl. ¶ 9, Dkt. No. 7.

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KKMI and J&H Marine performed services on the Water Song pursuant to an agreement with

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Bird. Id. ¶¶ 10-11. Bird alleges that on or about July 24, 2013, the Water Song sustained severe

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An Entry of Default was entered as to Eric Koster on February 18, 2015. Dkt. No. 35.

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damage due to KKMI’s and J&H Marine’s improper services, which resulted in a loss of the

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vessel’s use and value and caused Bird to incur significant repair costs. Id. ¶¶ 12-13.

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Based on these allegations, Bird filed his initial Complaint on July 21, 2014, alleging three

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causes of action: (1) breach of contract, (2) negligence, and (3) breach of warranty. Dkt. No. 1.

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He subsequently filed his First Amended Complaint on August 11, 2014, alleging the same causes

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of action.

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KKMI filed the present Motion on July 15, 2015, stating its counsel deposed Christopher

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Oschek on June 19, 2015, and believes his testimony establishes he was either wholly or partially

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at fault for any damage sustained by the Water Song. Mot. at 1. KKMI contends it will be
entitled to indemnity and/or contribution from Oschek, should it be found responsible for any of

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United States District Court
Northern District of California

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the damage claimed by Bird. Id.

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LEGAL STANDARD
Federal Rule of Civil Procedure 14(a)(1) provides that a “defending party may, as third-

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party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all

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or part of the claim against it.” The purpose of Rule 14 is “to promote judicial efficiency by

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eliminating the necessity for the defendant to bring a separate action against a third individual who

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may be secondarily or derivatively liable to the defendant for all or part of the plaintiff’s original

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claim.” Sw. Adm’rs, Inc. v. Rozay’s Transfer, 791 F.2d 769, 777 (9th Cir. 1986). “Therefore,

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courts have construed the rule liberally in favor of allowing impleader.” Lehman v. Revolution

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Portfolio LLC, 166 F.3d 389, 393 (1st Cir. 1999); Universal Green Sols., LLC v. VII Pac Shores

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Inv’rs, LLC, 2013 WL 5272917, at *2 (N.D. Cal. Sept. 18, 2013).

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However, “a third-party claim may be asserted only when the third party’s liability is in

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some way dependent on the outcome of the main claim and is secondary or derivative thereto.”

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Stewart v. Am. Int’l Oil & Gas Co., 845 F.2d 196, 199 (9th Cir. 1988); see also Great Am. Ins. Co.

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v. Chang, 2013 WL 183976, at *2 (N.D. Cal. Jan. 17, 2013). “The crucial characteristic of a Rule

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14 claim is that [the] defendant is attempting to transfer to the third-party defendant the liability

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asserted against him by the original plaintiff” and so “[t]he mere fact that the alleged third-party

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claim arises from the same transaction or set of facts as the original claim is not enough.” Stewart,
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845 F.2d at 200 (internal quotation omitted).
“The decision to allow a third-party defendant to be impleaded under rule 14 is entrusted

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to the sound discretion of the trial court.” United States v. One 1977 Mercedes Benz, 708 F.2d

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444, 452 (9th Cir. 1983). In exercising its discretion, the Court must “balance the desire to avoid a

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circuitry of actions and to obtain consistent results against any prejudice that the plaintiff might

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suffer from complications of the case.” Irwin v. Mascott, 94 F. Supp. 2d 1052, 1056 (N.D. Cal.

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2000) (quoting Somportex Ltd. v. Phil. Chewing Gum Corp., 453 F.2d 435, 439 n.6 (3d Cir.

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1971)). In making this determination, courts usually consider the following factors: (1) prejudice

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to the original plaintiff; (2) complication of issues at trial; (3) likelihood of trial delay; and (4)

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United States District Court
Northern District of California

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timeliness of the motion to implead. Id.
DISCUSSION
KKMI seeks leave to file a third-party complaint against Oschek based upon evidence it

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obtained during his June 19 deposition, which it alleges demonstrates his liability for all or part of

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the damages Bird claims. Mot. at 8. KKMI provides the following allegations regarding Oschek,

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which it states were previously unknown to it: (1) He did not carry out a reasonable pre-voyage

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inspection of the Water Song; (2) he did nothing to insure the swim step hatch was sealed so the

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swim step compartment would not take on water; (3) he did nothing to insure the other two swim

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step hatches were sealed against the incursion of seawater; (4) he did not discover the holes

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between the swim step compartments and the lazarette to insure that, if water entered the swim

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step compartments at the back of the vessel, it would not progress into the lazarette; (5) he did not

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monitor the National Oceanic and Atmospheric Administration weather broadcasts for the time

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and location into which he navigated the vessel; (6) he navigated the vessel directly into the

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coastal area for which advisories had been given; (7) he kept no record and has no record of

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carrying out regular checks of the vessel’s various compartments during the voyage, which would

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include checking the master stateroom, lazarette, and swim step; and (8) he did not discover the

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water incursion until it had already flooded the swim step and lazarette. Id. at 4-6.

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Bird counters he will suffer prejudice if the Court permits KKMI to file its third-party
complaint because he disclosed Oschek as the captain of the Water Song in his initial disclosures
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in December 2014, yet KKMI did not depose him until June 2015. Opp’n at 2. He also notes the

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deadline to seek leave to amend pleadings was March 2, 2015, discovery closes in less than one

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month, and trial is scheduled for December 2015. Id. Bird argues a third-party complaint against

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Oschek will necessitate a continuance of all discovery and trial deadlines. Id. at 3.

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Having reviewed the parties’ positions, the Court finds the Motion should be granted.
First, regarding Bird’s contention that some delay in trial will arise due to the third-party

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complaint, there is no showing that any delay would be substantial enough to outweigh the gains

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in judicial efficiency accomplished by obviating the need for a separate action by KKMI against

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Oschek. See Rozay’s Transfer, 791 F.2d at 777 (“The purpose of [Rule 14] is to promote judicial

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efficiency by eliminating the necessity for the defendant to bring a separate action against a third

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United States District Court
Northern District of California

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individual who may be secondarily or derivatively liable to the defendant for all or part of the

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plaintiff's original claim.”). Therefore, the delay in resolution of this case caused by permitting

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the third-party complaint does not justify denying the Motion.

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Second, because Oschek will already be a witness at trial, and his involvement in the

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damages sustained to the Water Song will likely be litigated regardless of whether KKMI is

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permitted to file a third-party complaint, the Court finds granting the Motion would not

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substantially complicate trial. To the extent KKMI has an actionable claim against Oschek,

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resolving all disputes in one litigation would “avoid a circuitry of actions” and inconsistent results.

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Irwin, 94 F. Supp. 2d at 1056. With discovery still open and the parties prepared to attend

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mediation later this month, Bird does not show that any delay would be substantial enough to

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outweigh the benefit of resolving all issues in one proceeding. See Susilo v. Robertson, 2013 WL

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4213902, at *4 (C.D. Cal. Aug. 14, 2013). Further, as to any prejudice Bird might claim if

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Oscheck is brought in, the Court could entertain a motion to bifurcate if any party is able to make

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a strong showing that trying all claims at the same time would prejudice that party’s case.

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Third, regarding its delay in filing this Motion, KKMI maintains that prior to taking

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Oschek’s deposition, no other evidence obtained in discovery revealed Oschek’s alleged acts and

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omissions. Mot. at 6. KKMI contends it was not until Bird’s deposition in May 2015, when

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KKMI learned Bird was only able to testify as to basic information following the incident based
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on what Osckek verbally told him, that KKMI realized it needed to depose Oschek. Id. at 7.

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Further, part of the delay was due to the need to resolve KKMI’s prior motion to bring Bird’s

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insurer into the action. Dkt. No. 20. After the Court denied that motion on March 5, 2015 (Dkt.

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No. 39), KKMI subpoenaed the insurer’s records on March 6, 2015, intending to depose Bird after

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the records were produced. Reply at 3. Given this procedural delay, Plaintiff does not offer any

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explanation regarding why KKMI should have uncovered this information sooner, and the Court

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therefore finds no grounds for denying the Motion due to KKMI’s delay. See Susilo, 2013 WL

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4213902, at *4 (finding no reason to doubt defendants’ assertion that they uncovered the relevant

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agreement during discovery); cf. Zero Tolerance Entm’t, Inc. v. Ferguson, 254 F.R.D. 123, 127-28
(C.D. Cal. 2008) (denying leave where defendant waited three months from the time when it had

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United States District Court
Northern District of California

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clear notice of the third-party claim to request impleader). The Court has no reason to believe

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KKMI makes this assertion in bad faith. Regardless, even if the Motion could have been brought

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earlier, the Court is not persuaded that this delay alone justifies denying KKMI’s request. See

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Square 1 Bank v. Lo, 2014 WL 1154031, at *3 (N.D. Cal. Mar. 20, 2014) (failure to bring Rule 14

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motion in a timely fashion, without more, is not valid reason to deny motion).
CONCLUSION

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The Court finds each factor weighs in favor of allowing KKMI’s third-party complaint

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against Oschek. The benefit of resolving the entire dispute in one case outweighs any resulting

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prejudice or delay to Bird. Accordingly, for the reasons discussed above, the Court GRANTS

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KKMI’s Motion. KKMI shall e-file its complaint by August 7, 2015 (no chambers copy is

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required). The parties, including Oschek, shall appear for a Case Management Conference on

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September 10, 2015. The parties shall file a joint case management statement by September 3,

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2015.

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IT IS SO ORDERED.

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Dated: August 6, 2015
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MARIA-ELENA JAMES
United States Magistrate Judge
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