Mariani et al v. D & H Management Services, LLC et al

Filing 84

RULING AND ORDER granting 75 Motion to Dismiss for Lack of Jurisdiction; granting 75 Motion to Dismiss for Lack of Prosecution.. Signed by Judge Robert N. Chatigny on 3/30/14. (Glynn, T.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
MARIANI et al.,
Plaintiff,
v.
D & H MANAGEMENT
SERVICES, LLC, et al.,
Defendant.

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CASE NO. 3:12-cv-930(RNC)

RULING AND ORDER
Third-party defendant Travelers Indemnity Company moves to
dismiss the amended third-party complaint arguing that the Court
should decline to exercise supplemental jurisdiction under 28
U.S.C. § 1367(c).

The amended third-party complaint seeks

indemnification for any judgment that might be entered against
defendants D&H Management Services, LLC (D&H) and William Henry
Condominium, Inc. (William Henry) in the original action brought
by plaintiffs Bethany Mariani and Miguel Alonso, as well as
reimbursement for any attorney’s fees, expenses and costs
incurred in defense of the action.

For the reasons that follow,

the Court concludes that the motion to dismiss should be granted.
The amended complaint in the original action seeks
compensatory and punitive damages for housing discrimination
based on family status in violation of federal and state statutes
and negligent infliction of emotional distress.

The amended

complaint alleges that D&H and William Henry violated the
plaintiffs’ rights and caused them severe emotional distress by
attempting to enforce a condominium bylaw prohibiting persons
under the age of eighteen from residing at the plaintiffs’
condominium.

The female plaintiff was expecting her first child

at the time.
The amended third-party complaint alleges that at the
relevant time D&H and William Henry were named insureds under a
general liability insurance policy issued by Travelers and that
Travelers has wrongfully denied coverage for the claims asserted
by Ms. Mariani and Mr. Alonso.

It is undisputed that the third

party complaint does not itself provide a basis for federal
subject matter jurisdiction because the claims do not arise under
federal law and the parties are not of diverse citizenship.
Travelers argues that the Court should decline to exercise
supplemental jurisdiction because the breach of contract claims
in the third party complaint raise complex issues of state law;
the state law claims substantially predominate over the federal
housing discrimination claim; requiring Travelers to litigate the
coverage dispute in the context of the underlying action would
not be permitted in state court; and exercising supplemental
jurisdiction would require that the deadlines in the scheduling
order be extended significantly.
Defendants do not deny that if the original action were

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pending in state court, they would not be allowed to implead
Travelers.

They argue, however, that the state court practice is

not controlling in federal court and that supplemental
jurisdiction should be exercised in the interest of conserving
their limited resources.

They also contend that Travelers’ bare

assertions concerning the alleged complexity and predominance of
the breach of contract claims should not be credited.

Finally,

they point out that although the original case is nearly two
years old, little discovery has actually been done.
Supplemental jurisdiction may be exercised when an insured
impleads an insurer for the purpose of litigating an
indemnification claim.

See WTC Captive Ins. Co., Inc. v. Liberty

Mut. Fire Ins. Co., 537 F.Supp.2d 619, 626 (S.D.N.Y. 2008).

In

such a case, the risk of prejudice to the insurer, which appears
to motivate the state court practice on which Travelers relies,
can be avoided by severing the indemnification claim or ordering
separate trials.

See 6 Charles Alan Wright, Arthur R. Miller &

Mary Kay Kane, Federal Practice and Procedure § 1449
(2010)(discussing third party indemnification actions against
insurers under Rule 14).
The problem with this approach in the present case is
largely a matter of timing.

The defendants did not seek to add

Travelers to this action until the case had been pending for
almost one year.

Under the existing deadlines in the tailored

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scheduling order, which already have been extended a number of
times at the request of the original parties, discovery must be
completed by April 25, 2014, and dispositive motions must be
filed by May 25, 2014.

Thus, exercising supplemental

jurisdiction over the third party claims would require the Court
to effectively reopen discovery in the original case and delay
adjudication of the original claims.
How much discovery and delay would be required is somewhat
unclear.

As the defendants correctly point out, Travelers has

not demonstrated that the breach of contract claims in the third
party complaint raise complex issues of state law, or that those
claims predominate over the federal claim.

But the apparent lack

of significant discovery activity in the original case,
notwithstanding the deadlines in the scheduling order, strongly
indicates that the facts relating to the federal claim are not
particularly complicated or even disputed.

Moreover, if the

third party claims are relatively simple and straightforward, as
the defendants seem to suggest, one would expect the defendants
to cite the policy provisions on which they rely, but they have
not done so.

In the absence of such a submission, it is

reasonable to assume that litigating the third party claims from
scratch would require extending the deadlines in the scheduling
order, and thus delaying resolution of the original claims, for a
year or more.

The values of judicial economy and efficiency

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would not be served by that approach.
After careful consideration, the Court concludes that the
age and status of the original case at the time the motion to
implead Travelers was filed, and the probability that the
existing deadlines in the scheduling order would have to be
extended by a year or more in order to accommodate the third
party claims, create exceptional circumstances that warrant
declining to exercise supplemental jurisdiction under 28 U.S.C. §
1367(c)(4).
Accordingly, the motion to dismiss [ECF No. 75] is hereby
granted and the amended third party complaint [ECF No. 70] is
dismissed.
So ordered this 30th day of March 2014.

_________________/s/_______________
Robert N. Chatigny
United States District Judge

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