Timm et al v. Goodyear Tire and Rubber Company et al

Filing 201

OPINION AND ORDER The Court DENIES Plaintiffs Motion for Order GrantingLeave of Court to File Plaintiffs Second Amended Complaint DE 152 and GRANTS Plaintiffs Uncontested Motion Requesting Ruling on Plaintiffs Motion for Leave to File Second Amended Complaint DE 189 . Signed by Magistrate Judge John E Martin on 1/14/16. cc:dft, Paul Comeau(kjp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
DONALD N. TIMM and
MARY K. TIMM,
Plaintiff,

)
)
)
)
v.
) CAUSE NO.: 2:14-CV-232-PPS-JEM
)
GOODYEAR DUNLOP TIRES
)
NORTH AMERICAN, LTD., et al.,
)
Defendants,
)
___________________________________ )
)
TEGOL, INC.,
)
Crossclaimant,
)
)
v.
)
)
BEIJING RIDER FASHION SPORT,
)
LTD., et al.,
)
Crossclaim Defendants.
)
OPINION AND ORDER
This matter is before the Court on Plaintiffs’ Motion for Order Granting Leave of Court to
File Plaintiffs’ Second Amended Complaint [DE 152], filed by Plaintiffs on July 16, 2015, and
Plaintiffs’ Uncontested Motion Requesting Ruling on Plaintiffs’ Motion for Leave to File Second
Amended Complaint [DE 189], filed by Plaintiffs on September 22, 2015. Defendants HarleyDavidson Motor Company Group, LLC, and Goodyear Dunlop Tires North America, Ltd.,
(“GDTNA”) each filed a response on July 30, 2015, and Plaintiffs filed a reply on August 14, 2015.
A.

Procedural History
On July 8, 2014, Plaintiffs filed a Complaint bringing claims of personal injury and products

liability against multiple defendants for injuries arising out of a motorcycle accident, specifically

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alleging a design defect related to Dunlop D402 motorcycle tires installed on a particular type of
Harley-Davidson motorcycle. The Court granted a previous motion to amend, and on May 22, 2015,
Plaintiffs’ First Amended Complaint was filed, adding entities alleged to be involved in the
fabrication, manufacture, importation, sale, and distribution of the motorcycle helmets at issue in
this case.
Shortly after filing their responses to the instant Motion to Amend, Counsel for Plaintiffs and
Counsel for Defendants Harley-Davidson and GDTNA informed the Court that the parties were
attempting to reach an agreement on the Motion and requested that the Court not rule on the pending
Motion to allow time for the parties to confer. On September 22, 2015, Plaintiffs filed the instant
Motion for Ruling indicating that the parties were unable to reach an agreement and requesting that
the Court rule on the pending Motion to Amend.
B.

Analysis
Plaintiffs seek leave to add individual employees of Defendant GDTNA and Defendant

Harley-Davidson as party defendants. GDNTA and Harley-Davidson object.
Federal Rule of Civil Procedure 15(a)(2) provides that “a party may amend its pleading only
with . . . the court’s leave.” Fed. R. Civ. P. 15(a)(2). Rule 15(a)(2) further provides that the court
“should freely give leave when justice so requires.” Id. Thus, if the underlying facts or
circumstances relied upon by a party are a potentially proper subject of relief, the party should be
afforded an opportunity to test the claim on the merits. Foman v. Davis, 371 U.S. 178, 182 (1962).
The decision whether to grant or deny a motion to amend lies within the sound discretion of the
district court. Campbell v. Ingersoll Milling Mach. Co., 893 F.2d 925, 927 (7th Cir. 1990).
However, leave to amend is “inappropriate where there is undue delay, bad faith, dilatory motive

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on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed,
undue prejudice to the opposing party by virtue of allowance of the amendment, or futility of the
amendment.” Villa v. City of Chicago, 924 F.2d 629, 632 (7th Cir. 1991) (citing Foman, 371 U.S.
at 183).
When a plaintiff seeks to add new defendants through an amended complaint, Federal Rule
of Civil Procedure 20 is implicated. See Chavez v. Ill. St. Police, 251 F.3d 612, 631-32 (7th Cir.
2001). It provides that defendants may be joined to an action if “(A) any right to relief is asserted
against them jointly, severally, or in the alternative with respect to or arising out of the same
transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact
common to all defendants will arise in the action.” Fed. R. Civ. P. 20(a)(2). “The standard for
permissive joinder under Rule 20 is liberal,” Eclipse Mfg. Co. v. M & M Rental Ctr., Inc., 521 F.
Supp. 2d 739, 744 (N.D. Ill. 2007), and “courts are inclined to find that claims arise out of the same
transaction or occurrence when the likelihood of overlapping proof and duplication in testimony
indicates that separate trials would result in delay, inconvenience, and added expense to the parties
and to the court.” 7 Charles Alan Wright et al., Federal Practice and Procedure § 1653 (3d ed.
2001); see also Chavez, 251 F.3d at 632; Thompson v. Boggs, 33 F.3d 847, 858 (7th Cir. 1994).
In this case, Plaintiffs seek to add 44 individual employees of Harley-Davidson and GDTNA,
including officers, managers, and other employees. Plaintiffs argue generally that these individuals
should be held personally liable because they had knowledge of a defect in the products being sold.
Harley-Davidson and GDTNA argue that the proposed second amended complaint would be futile
because the individual employees cannot be held personally liable and are not subject to the
jurisdiction of the Court.

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An amendment is considered “futile” if it would not withstand a motion to dismiss or motion
for summary judgment. Sound of Music Co. v. Minnesota Min. & Mfg. Co., 477 F.3d 910, 923 (7th
Cir. 2007); Vargas-Harrison v. Racine Unified Sch. Dist., 272 F.3d 964, 974 (7th Cir. 2001). In this
case, Plaintiffs are attempting to add individuals as defendants in addition to the corporate
manufacturers. Plaintiffs do not provide facts particular to the individuals to explain their theories
of liability. To survive a 12(b)(6) motion to dismiss for failure to state a claim, the complaint must
first comply with Rule 8(a) by providing “a short and plain statement of the claim showing that the
pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), such that the defendant is given “fair notice of
what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)); see also Ashcroft v. Iqbal, 556
U.S. 662, 677-78 (2009). Furthermore, the “complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678
(citing Twombly, 550 U.S. at 570); see also Tamayo v. Blagojevich, 526 F.3d 1074, 1082 (7th Cir.
2008).
The proposed Amended Complaint includes products liability claims against HarleyDavidson, GDTNA, and their employees for alleged design defect in Dunlop D402 tires, including
strict liability claims for delivery of defective tires, breach of the duty to recall the tires and cease
their manufacture, and failure to warn of the danger. It adds “the individually named defendant
employees” to counts brought against Harley-Davidson and GDTNA, but does not include any
statements of the claims showing that Plaintiffs are entitled to relief from any of the proposed
individual defendants. Nor does their opening brief contain any argument indicating a theory of
personal liability: Plaintiffs merely argue generally that “in the interest of justice, individual

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personnel of Defendant Harley-Davidson Motor Company, LLC and Defendant Goodyear Dunlop
Tires North America, LTD should be named as parties defendant in a Second Amended Complaint
in this cause for failing to take appropriate corrective action.” Plaintiffs’ reply refers to decades-old
cases from other states, none of which provide a basis for holding individual employees liable for
a manufacturing or design defect. Rather, “[u]nder Indiana law, it is well settled that a corporate
stockholder, director, or officer is not personally liable for the torts of the corporation or any of its
agents merely because of his or her office or holdings; some additional connection with the tort is
required.” Wauchop v. Domino’s Pizza, Inc., 832 F. Supp. 1572, 1575 (N.D. Ind. 1993) (citing
Roake v. Christensen, 528 N.E.2d 789, 791-92 (Ind. Ct. App.1988); Bowling v. Holdeman, 413
N.E.2d 1010, 1014 (Ind. Ct. App.1980); Birt v. St. Mary Mercy Hosp. of Gary, Inc., 370 N.E.2d 379,
381 (Ind. Ct. App. 1977)) (other citation omitted). No such additional connection has been identified
in either the proposed second amended complaint or in Plaintiffs’ briefing.
To the extent that Plaintiffs are seeking to disregard the corporate entities of HarleyDavidson and GDTNA, the burden is on Plaintiffs to “establish[] that the corporation was so
ignored, controlled or manipulated that it was merely the instrumentality of another, and that the
misuse of the corporate form would constitute a fraud or promote injustice.” Gurnik v. Lee, 587
N.E.2d 706, 710 (Ind. Ct. App. 1992). There are eight practices that most often result in a court
deciding to disregard the corporate form:
(1) undercapitalization; (2) absence of corporate records; (3)
fraudulent representation by corporation shareholders or directors; (4)
use of the corporation to promote fraud, injustice or illegal activities;
(5) payment by the corporation of individual obligations; (6)
commingling of assets and affairs; (7) failure to observe required
corporate formalities; or (8) other shareholder acts or conduct
ignoring, controlling, or manipulating the corporate form.

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JMB Mfg., Inc. v. Child Craft, LLC, 939 F. Supp. 2d 909, 918-19 (S.D. Ind. 2013) (quoting Aronson
v. Price, 644 N.E.2d 864, 867 (Ind. 1994)). The party seeking to pierce the corporate veil “must
show a causal connection between misuse of the corporate form and the harm suffered by the
movant.” Id. (citing CBR Event Decorators, Inc. v. Gates, 962 N.E.2d 1276, 1282 (Ind. Ct. App.
2012)). In this case, Plaintiffs have not alleged any misuse of the corporate form, nor explained why
it is appropriate to hold employees liable for a product manufactured by the corporate entities who
are already defendants in this suit. See Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1232
(Ind. 1994) (“Indiana courts are reluctant to disregard a corporate entity, but will do so to prevent
fraud or unfairness to third parties.”) (citing Magic Packing Co. v. Stone-Ordean-Wells Co., 64 N.E.
11, 12 (Ind. 1902); Gurnik, 581 N.E. 2d at 710).
It appears in one section of their reply brief that Plaintiffs may be gesturing towards an
allegation of fraud against individual employees and officers. Indeed, Indiana law provides that “[a
corporate] officer is personally liable for the torts in which she has participated or which she has
authorized or directed.” Civil Rights Comm’n v. Cnty Line Park, Inc., 738 N.E.2d 1044, 1050 (Ind.
2000); see also DFS Secured Healthcare Receivables Trust v. Caregivers Great Lakes, Inc., 384
F.3d 338, 346 (7th Cir. 2004) (“Under Indiana state law, an officer or shareholder of a corporation
can be held individually liable, without the need to pierce the corporate veil, if he personally
participates in the fraud.”). However, nowhere in the proposed second amended complaint do
Plaintiffs allege fraud with the particularity needed to survive a motion to dismiss. Fed. R. Civ. P.
9(b); see also Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d
436, 441-42 (7th Cir. 2011) (“[A] plaintiff ordinarily must describe the ‘who, what, when, where,
and how’ of the fraud – ‘the first paragraph of any newspaper story.’” ) (quoting United States ex
rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 854 (7th Cir. 2009)).
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The Court need not reach Harley-Davidson’s and GDNTA’s arguments about personal
jurisdiction since the request to amend is being denied for the reasons described above, but notes
that, despite Plaintiffs’ arguments about the propriety of jurisdiction in the Northern District of
Indiana as to the corporate defendants, which is not disputed, they have not addressed the Court’s
personal jurisdiction over the individual employees it seeks to add as defendants. See N. Grain
Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir. 2014) (“The plaintiff bears the burden of
establishing personal jurisdiction.”); see also Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1946) ([I]n
order to subject a defendant to a judgment in personam, if he be not present within the territory of
the forum, he have certain minimum contacts with it such that the maintenance of the suit does not
offend ‘traditional notions of fair play and substantial justice.’”) (quoting Milliken v. Meyer, 311
U.S. 457, 463 (1940)).
C.

Conclusion
For the foregoing reasons, the Court hereby DENIES Plaintiffs’ Motion for Order Granting

Leave of Court to File Plaintiffs’ Second Amended Complaint [DE 152] and GRANTS Plaintiffs’
Uncontested Motion Requesting Ruling on Plaintiffs’ Motion for Leave to File Second Amended
Complaint [DE 189].
SO ORDERED this 14th day of January, 2016.
s/ John E. Martin
MAGISTRATE JUDGE JOHN E. MARTIN
UNITED STATES DISTRICT COURT
cc:

All counsel of record
Defendant Paul Comeau, pro se

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