PMA Companies v. Genox Transportation, Inc. et al

Filing 44

ORDER granting 39 Motion for Leave to File Third-Party Complaint. Cleancor SHALL file the third-party complaint attached to its Motion within seven (7) days of the electronic docketing of this Order. Signed by Judge Janis L. Sammartino on 7/19/2021. (jmr)

Case 3:20-cv-02540-JLS-RBM Document 44 Filed 07/19/21 PageID.233 Page 1 of 4

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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PMA COMPANIES,

Case No.: 20-CV-2540 JLS (RBM)
Plaintiff,

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GENOX TRANSPORTATION, INC.;
APPLIED LNG TECHNOLOGIES, LLC;
LAIRD TRANSPORTATION, LLC; and
DOES 1 to 20, inclusive,

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ORDER GRANTING CLEANCOR
LNG, LLC’S MOTION FOR LEAVE
TO FILE THIRD-PARTY
COMPLAINT

v.

Defendants.

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(ECF No. 39)

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Presently before the Court is Third-Party Defendant Cleancor LNG, LLC’s

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(“Cleancor”) Motion for Leave to File Third-Party Complaint (“Mot.,” ECF No. 39). No

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Party filed an opposition to the Motion. See generally Docket. Cleancor seeks leave to

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file a third-party complaint against Phillips Cattle Company (“Phillips”), which is a cattle

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and feed company insured by Plaintiff PMA Companies (“PMA”). See generally Mot.

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BACKGROUND

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This is a subrogation action by PMA, an insurer of Phillips, to recover insurance

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benefits paid for damages to Phillips’s property as a result of a fire that occurred on

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Phillips’s premises on or about May 15, 2019. See ECF No. 1-2 (“Compl.”) ¶ 1. PMA
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alleges that Phillips contracted with Applied LNG Technologies, LLC (“Applied”) to

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deliver liquid natural gas to Phillips’s grain milling facility. Id. ¶ 9. Applied allegedly

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subcontracted with GenOx Transportation, Inc. (“GenOx”) and Laird Transportation, LLC,

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(“Laird”) to complete the delivery. Id. ¶ 3. PMA claims that Defendants were negligent

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during the unloading process of the liquid natural gas, which caused a fire and damaged

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Phillips’s property. Id. ¶¶ 14, 16. PMA asserts claims for negligence, negligence per se,

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and strict liability against Applied, GenOx, and Laird. See generally id.

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On December 31, 2020, GenOx filed for removal of PMA’s action to this Court. See

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ECF No. 1. On January 29, 2021, Applied filed a third-party action against Cleancor for

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contractual indemnity and declaratory relief. See ECF No. 9. Pursuant to Federal Rule of

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Civil Procedure 14(a)(1), Cleancor moves for leave to file a third-party complaint against

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Phillips for contractual indemnity, breach of contract, and declaratory judgment pursuant

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to the parties’ contract. See generally Mot.

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LEGAL STANDARD

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Rule 14(a)(1) provides, in pertinent part, that with the court’s leave, “a defending

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party may, as third-party plaintiff, serve summons and complaint on a non party who is or

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may be liable to it for all or part of the claim against it.” Accordingly, a third-party claim

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may be asserted under Rule 14(a)(1) only when the third-party’s liability is in some way

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dependent on the outcome of the main claim, or when the third-party is secondarily liable

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to the defending party. See Stewart v. Am. Int’l Oil and Gas Co., 845 F.2d 196, 199–200

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(9th Cir. 1988). In other words, a defendant bringing a third-party claim must be attempting

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to transfer to the third-party a liability asserted by the original plaintiff against that

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defendant. Id. at 200; C. Wright, et al., 6 Federal Practice and Procedure § 1446 (3d ed.

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2018).

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Whether to grant a Rule 14(a)(1) impleader motion rests in the sound discretion of

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the trial court. United States v. One Mercedes Benz, 708 F.2d 444, 452 (9th Cir. 1983).

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“In a non-exhaustive list of considerations, the court will seek to balance the benefits

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afforded by liberal federal third-party practice against the possible prejudice to the plaintiff
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and the third-party defendant, complexity of the issues, likelihood of delay, and timeliness

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of the motion to implead.” Three Rivers Provider Network, Inc. v. Jett Integration, No.

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14cv1092 JM (KSC), 2015 WL 859448, at *7 (S.D. Cal. Feb. 27, 2015) (citing Irwin v.

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Mascott, 94 F. Supp. 2d 1052, 1056 (N.D. Cal. 2000)).

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ANALYSIS

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Here, Cleancor satisfies the requirements for impleader. With respect to Rule 14’s

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derivative liability requirement, the basis for Cleancor’s proposed complaint is that

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Cleancor leased a liquid natural gas tank trailer to Phillips, and that the lease agreement

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included an indemnity clause. See Ex. A ¶¶ 7, 9, ECF No. 39-2. Cleancor alleges the

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agreement requires Philips to defend or indemnify Cleancor “for any claims arising from

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or relating to injury to any personal property, from whatever the cause, by reason of any

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spill or leak.” Id. ¶ 9. In its third-party complaint against Cleancor, Applied alleges

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Cleancor is at least partially liable for the fire at issue in this action because of Cleancor’s

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failure to comply with safety procedures related to the tank trailer. See ECF No. 9, ¶ 6.

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The allegations set forth in Cleancor’s proposed third-party complaint could possibly

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impose liability on Phillips. Accordingly, without addressing the merits or ultimate

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viability of the third-party complaint, this threshold requirement is satisfied.

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With regard to timeliness and prejudice, the Court finds that the other Parties to this

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action and Phillips will not be prejudiced. The Court set June 21, 2021, as the deadline to

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join other parties, amend pleading, or file additional pleading, see ECF No. 37, and

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Cleancor timely filed the present Motion. The Court also finds that Phillips’s joinder will

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not substantially complicate the action, and the impact on the timely resolution of this case

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will not be seriously compromised. The Court concludes that the judicial economy benefits

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of allowing Cleancor to implead Phillips outweigh any prejudice.

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CONCLUSION

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Accordingly, the Court GRANTS Defendants’ Motion (ECF No. 39). Therefore,

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the Court VACATES the hearing date set for July 22, 2021, at 1:30 p.m. Cleancor SHALL

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///
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file the third-party complaint attached to its Motion within seven (7) days of the electronic

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docketing of this Order.

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IT IS SO ORDERED.
Dated: July 19, 2021

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