TOWNE MORTGAGE COMPANY V. SUNSHINE, ET AL.

Filing 42

ORDER denying 39 Motion for Leave to File Defendant Sunland's Third Party Complaint. Signed by Magistrate Judge Mark J. Dinsmore on 6/29/2015. (CBU)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

TOWNE MORTGAGE COMPANY,

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Plaintiff,
vs.
DEBBIE SUNSHINE,
SUNLAND APPRAISAL SERVICES,
Defendants.

No. 1:13-cv-01796-SEB-MJD

ORDER ON DEFENDANT’S MOTION FOR LEAVE
TO FILE THIRD PARTY COMPLAINT
This matter comes before the Court on Defendant Sunland’s Motion for Leave to File a
Third Party Complaint. [Dkt. 39.] For the reasons set forth below, the Court finds that the motion
should be DENIED.
I.

Background

On November 11, 2013, Towne Mortgage Company (“Plaintiff”) sued Debbie Sunshine
(“Sunshine”) and Sunland Appraisal Services (“Sunland”) (collectively “Defendants”), alleging
that Defendants had materially misrepresented the value of property that had been used to secure
a loan assigned to Plaintiff. [Dkt. 1.] Approximately one month later, Sunland requested that its
two insurers—General Star National Insurance Company (“General Star”) and Navigators
Insurance Company (“Navigators”)—defend the lawsuit and pay any resulting claims. [Dkt. 40 ¶
14.] Both General Star and Navigators declined to defend the lawsuit, [id. ¶ 17], and the case
proceeded without any involvement on the part of either company.

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The parties ultimately settled the case, and on June 13, 2014, the Court entered judgment
in favor of Plaintiff and against Defendants, jointly and severally, in the amount of $85,365.28.
[Dkt. 38.] The judgment further provided that it would not be enforced, except to the extent that
Defendants received any proceeds pursuant to any real estate appraisal insurance policies to
which Defendants had been or were parties, including any such policies that had been executed
between Defendants, General Star, and Navigators. [Id.]
On May 1, 2015, Defendant Sunland filed the currently pending Motion for Leave to File
a Third Party Complaint. [Dkt. 39.] Sunland asserts that its efforts to obtain coverage from
General Star and Navigators proved unsuccessful, and it claims that General Star and Navigators
breached their contractual obligations to provide such coverage. [See id.; see also Dkt. 40 ¶ 23
(Proposed Third Party Complaint).] Sunland also asserts that General Star and Navigators
breached their duty of good faith and faith dealing, engaged in a deceptive consumer practice,
and engaged in “deception,” as that offense is defined in the Indiana Code. [Dkt. 40 ¶¶ 26-31.]
II.

Discussion

A defendant such as Sunland “may, as third-party plaintiff, serve a summons and
complaint on a nonparty who is or may be liable to it for all or part of the claim against it.” Fed.
R. Civ. P. 14(a)(1). Where, as here, the defendant has waited more than fourteen days since the
filing of its answer, the defendant “must, by motion, obtain the court’s leave.” Id. The Court has
substantial discretion in deciding whether to grant such leave. Highlands Ins. Co. v. Lewis Rail
Serv. Co., 10 F.3d 1247, 1251 (7th Cir. 1993). In doing so, the Court should consider the
timeliness of the motion and any reasons offered for the movant’s delay, id., as well as factors
such as procedural economy and the potential for unfair prejudice to the non-movant. Marseilles
Hydro Power, LLC v. Marseilles Land & Water Co., 299 F.3d 643, 650 (7th Cir. 2002).

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Motions for leave to file third party complaints after pleadings have closed are typically
granted when the prospective third party plaintiff provides a substantial reason for the motion’s
delay, the granting of such motion would cause no more than minimal prejudice to the other
parties, and the granting of such motion would not substantially hamper the proceedings. See,
e.g., Ruderman v. Bank of Am., 2012 WL 4795705, at *2 (N.D. Ill. Oct. 9, 2012) (leave to file
third party complaint granted where motion for leave filed nine months after answer but before
discovery deadline, prospective third party plaintiff cited the need for a “thorough investigation”
as reason for delay, and original plaintiff would experience only a minimal adverse effect from
the granting of leave). See generally 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,
Federal Practice and Procedure § 1454 (3d. ed.) (motions for leave should be filed “as soon as
possible after the filing of pleadings in the suit;” otherwise they will generally be denied,
especially when accompanied by prejudice to the parties, delay of the trial, or deficient
explanation for delay).
Conversely, motions for leave to file a third party complaint are typically denied when
filed during the late stages of a trial or when they would unnecessarily complicate and burden
litigation. In Conservancy v. Wilder Corp. of Delaware, for instance, the court denied the motion
at issue because it was filed one month after summary judgment was entered; because it was
filed without any explanation for the delay; and because granting the motion would have
“unnecessarily complicate[d] and delay[ed] the resolution of proceedings that ha[d] essentially
been resolved but for the entry of the final judgment document.” 2009 WL 2050985, at *2-3
(C.D. Ill. July 10, 2009). Other courts have considered similar situations and have come to the
same conclusion. See, e.g., Cent. States, Se. & Sw. Areas Pension Fund v. Gopher News Co., 542
F.Supp. 2d 823, 827 (N.D. Ill. 2008) (leave denied when motion was filed after eight months of

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settlement talks and three additional months of unexplained delay); Milano v. U.S., 92 F.Supp.
2d 769, 777-78 (N.D. Ill. 2000) (leave denied when motion was filed three years after answer
filed because impleading third party would unduly prejudice original plaintiff and hamper
proceedings).
Here, Defendant Sunland’s motion for leave is patently untimely. It was filed nearly
eleven months after judgment was entered in this case, and a full fourteen months after
Defendants filed their answer. [Dkts. 17, 38 & 39.] Sunland offers no explanation for this
flagrant delay in filing its motion for leave to file a third party complaint, and merely cites to
judicial efficiency and the purported benefit to the original parties as reasons for granting leave
to file a third party complaint. [Dkt. 39 ¶¶ 8-9.] Just as in Conservancy, however, the motion for
leave at bar is “blatantly untimely,” and impleading a third party after final judgment without any
reasonable explanation would tremendously and unnecessarily complicate the proceedings. In
addition, granting the motion would not simply delay resolution of these proceedings; instead, it
would disrupt the resolution of the case that the parties and this Court have already reached. [See
Dkt. 38 (final judgment).] For these reasons, the factors outlined above, see Highlands, 10 F.3d
at 1251, indicate that the Court may appropriately DENY Sunland’s motion.
III.

Conclusion

In light of the foregoing, the Court DENIES Defendant Sunland’s Motion for Leave to
File a Third Party Complaint, [Dkt. 39].

Date: 06/29/2015

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Distribution:
Jonathan Tappan
JONATHAN W. TAPPAN, PLLC
[e-mail]
Richard A. Cook
YOSHA COOK SHARTZER & TISCH
[e-mail]

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