Vaughn v. Konecranes, Inc.

Filing 86

MEMORANDUM OPINION AND ORDER: it is ORDERED as follows: 1. Third Party Defendant CMWA's 72 Motion for Leave to File Amended Answer and Counterclaim is GRANTED; 2. Clerk is DIRECTED to file the Amended Answer and Counterclaim previously tendered by Third Party Defendant CMWA (Record No. 72- 2). Signed by Judge Danny C. Reeves on January 22, 2015. (MWZ) cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Lexington)
GEORGE VINCENT VAUGHN,
Plaintiff,
V.
KONECRANES, INC.,
Defendant/Third Party Plaintiff
V.
DEMAG CRANES AND COMPONENTS
CORP.; HETRONIC USA, INC.; and
CENTRAL MOTOR WHEEL OF
AMERICA, INC.,
Third Party Defendants.

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Civil Action No. 5: 14-136-DCR

MEMORANDUM OPINION
AND ORDER

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This matter is pending for consideration of Third Party Defendant Central Motor
Wheel of America, Inc.’s (“CMWA”) motion for leave to file an Amended Answer and
Counterclaim against Third Party Plaintiff Konecranes, Inc. (“Konecranes”). [Record No.
72] The proposed Amended Answer and Counterclaim allege that CMWA has a statutory
right to recover workers’ compensation benefits paid to Plaintiff George Vincent Vaughn as
a result of the workplace accident. [Record No. 72-2, p. 2] Konecranes opposes the motion.
[Record No. 75] For the reasons set forth below, leave will be granted to CMWA to file the
Amended Answer and Counterclaim.
Federal Rule of Civil Procedure 15(a)(2) provides that if a party fails to amend his
pleading more than 21 days after serving the pleading, he may amend it with leave of the
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court. The Rule also indicates that leave should be freely given “when justice requires.” In
other words, a court should allow parties to amend their pleadings in the absence of undue
delay, bad faith, dilatory motive, or futility. Foman v. Davis, 371 U.S. 178, 182 (1962).
CMWA’s proposed Amended Answer and Counterclaim seeks relief through
subrogation under the Kentucky Workers’ Compensation Act, KRS 342.700, to recoup
benefits paid to the Plaintiff.

[Record No. 72-1, p. 1]

In opposition to the motion,

Konecranes initially argued that the proposed amendments would be futile. [Record No. 75]
The company originally disputed CMWA’s standing under the statute, suggesting that any
workers’ compensation benefits would have been paid by CMWA’s insurance provider,
Mitsui Sumitomo Insurance Company. However, in light of the $250,000.00 deductible paid
directly by CMWA in workers’ compensation benefits to the Plaintiff, Konecranes concedes
that “CMWA would have been entitled to seek reimbursement.” [Record No. 81-1] Thus,
the proposed amendment would not be futile.
Nevertheless, Konecranes asserts that CMWA is barred from seeking any
reimbursement because CMWA failed to assert its compulsory counterclaim in its original
Answer. According to Konecranes, CMWA is now precluded from pursuing the claim under
Federal Rule of Civil Procedure 13. This rule provides, in relevant part, that “[a] pleading
must state as a counterclaim any claim that […] the pleader has against an opposing party if
the claim arises out of the transaction or occurrence that is the subject matter of the opposing
party’s claim.” Fed. R. Civ. P. 13(a).
Konecranes has filed a Third Party Complaint against CMWA. [Record No. 24]
Neither party denies that CMWA’s counterclaim arises out of the transaction or occurrence
that is the subject matter of Konecranes’ claim.
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Thus, CMWA’s counterclaim is a

compulsory counterclaim that should have been raised in its Answer. Fed. R. Civ. P. 13(a).
However, its failure to assert the claim at the proper time does not bar it from amending its
Answer to include the counterclaim with the Court’s permission. This Court has previously
held that a compulsory counterclaim not raised in an answer cannot be raised in subsequent
litigation but may be filed in the instant litigation with the Court’s permission. Dixie Fuel
Co., LLC v. Straight Creek, LLC, 2011 U.S. Dist. LEXIS 23321 at *6-7 (E.D. Ky. Mar. 8,
2011). Here, the Court concludes that CMWA did not waive the compulsory counterclaim
when it failed to raise it in its Answer to Konecranes’ claim. Instead, CMWA may request
leave to amend, as it has done. Accordingly, it is hereby
ORDERED as follows:
1.

Third Party Defendant CMWA’s Motion for Leave to File Amended Answer

and Counterclaim [Record No. 72] is GRANTED.
2.

The Clerk of Court is DIRECTED to file the Amended Answer and

Counterclaim previously tendered by Third Party Defendant CMWA [Record No. 72- 2].
This 22nd day of January, 2015.

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