Mitchell v. Carhartt, Inc.

Filing 66

MEMORANDUM OPINION AND ORDER re 43 Motion for Summary Judgment. Quest's Motion for Summary Judgment is DENIED. Carhartt's claim for common law indemnity is DISMISSED without prejudice. This matter is referred to the Magistrate to conduct a settlement conference. Signed by Chief Judge Joseph H. McKinley, Jr on 4/14/2016. cc: Counsel, HBB (CM)(JBM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
OWENSBORO DIVISION
CIVIL ACTION NO. 4:14-cv-00057-JHM
MARTHA MITCHELL

PLAINTIFF

v.
CARHARTT, INC.

DEFENDANT/
THIRD PARTY PLAINTIFF

v.
QUEST DIAGNOSTIC CLINICAL
LABORATORIES, INC.

THIRD PARTY DEFENDANT

MEMORANDUM OPINION AND ORDER
This matter is before the Court on motion by Third Party Defendant Quest Diagnostics
Clinical Laboratories, Inc., for Summary Judgment. [DN 43]. Fully briefed, this matter is ripe
for decision.
I. BACKGROUND
Third Party Defendant, Quest Diagnostic Clinical Laboratories, Inc. (hereinafter “Quest”)
contracted with Defendant Carhartt (hereinafter “Carhartt”), “pursuant to which Quest agreed to
provide certain laboratory testing, biometric measurements, and health questionnaire services to
Carhartt[’s employees]”. (Carhartt’s Resp. [DN 61] at 2.) Quest entered into a contract with
Plaintiff, Martha Mitchell, in which she would perform said medical examination services for
Carhartt’s employees. (Quest’s Mem. Supp. Mot. Summ. J. [DN 43-1] at 2.) Mitchell was to
travel to Carhartt’s facility and perform her services as an independent contractor in order to
fulfill portions of the contract between Quest and Carhartt. (Id. at 4.) After performing her
duties on August 7, 2013, Mitchell was exiting Carhartt’s facility when she tripped and fell over

a floor mat. (Id. at 2.) Subsequently, Mitchell filed her Complaint in Hopkins County Circuit
Court on May 9, 2014, which Carhartt later removed to this Court. (Carhartt’s Notice of
Removal [DN 1] at 1.) Mitchell alleged that Carhartt was negligent, as it had failed to warn her
of the dangerous condition posed by the mat on Carhartt’s property. (Quest’s Mem. Supp. Mot.
Summ. J. [DN 43-1] at 2, 6.) Carhartt responded by claiming that Mitchell herself was negligent
because she failed to exercise ordinary care as to prevent the fall. (Id. at 2.) Carhartt then filed a
Third Party Complaint against Quest, claiming a right to indemnification. (Id. at 6.) This Court
granted Carhartt’s Motion for Summary Judgment against Mitchell, finding Mitchell had not met
her burden of proof to show that material questions of fact exist regarding the dangerous
condition of the floor mat, thereby dismissing her claims against Carhartt. (Mem. Op. [DN 54]
at 9–10.)
Now before the Court is Quest’s Motion requesting that the Court grant summary
judgment in its favor and dismiss Carhartt’s Third Party Complaint seeking indemnification.
(Quest’s Mem. Supp. Mot. Summ. J. [DN 43-1] at 13.)
II. DISCUSSION
Carhartt acknowledges that its common law indemnity claim should be dismissed given
the fact that the Court granted Carhartt summary judgment against Mitchell. Therefore, the
common law indemnity claim asserted against Quest is dismissed, without prejudice.
Quest seeks summary judgment on Carhartt’s contractual indemnity claim as well. It is
important to understand the nature of that claim now that summary judgment has been granted in
favor of Carhartt against the Plaintiff Mitchell. Rule 14(a) of the Federal Rules of Civil
Procedure allows a defendant to implead a third party defendant “who is or may be liable to him
for all or part of the plaintiff’s claim against him.” Impleader, or third party practice, is only

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available when the third party defendant’s liability is secondary to, or a derivative of, the original
defendant’s liability on the original plaintiff’s claim. Am. Zurich Ins. Co. v. Cooper Tire &
Rubber Co., 512 F.3d 800, 805 (6th Cir. 2008); Faser v. Sears, Roebuck & Co., 674 F.2d 856,
860 (11th Cir. 1982); United States v. Joe Grasso & Son, Inc., 380 F.2d 749, 751 (5th Cir. 1967).
Thus, “a defendant’s claim against a third-party defendant cannot simply be an independent or
related claim, but must be based upon the original plaintiff’s claim against the defendant.”
Cooper, 512 F.3d at 805 (citing Stiber v. United States, 60 F.R.D. 668, 670 (E.D. Pa.1973)
(“Under Rule 14, the liability of the third-party must be dependent on the outcome of the main
claim.”)).

In other words, if a defendant has no liability to a plaintiff, then a third party

defendant has no liability to that defendant.
“Underlying Rule 14 is a desire ‘to promote economy by avoiding the situation where a
defendant has been adjudicated liable and then must bring a totally new action against a third
party who may be liable to him for all or part of the original plaintiff’s claim against him.’” Id.
(quoting 6 Charles Alan Wright et al., Federal Practice and Procedure § 1441 (2d ed. 1990)).
Third party complaints typically take the form of either indemnity or contribution actions. Id.
“Accordingly, it is rare that a court renders judgment in favor of the defendant or dismisses the
underlying action but nonetheless chooses to address a third-party claim.” Id.
Here, a portion of Carhartt’s Third Party Complaint was a proper impleader under Rule
14(a) because it sought indemnification from Quest for all or part of the claims asserted against it
by the Plaintiff Mitchell. That portion of the third party claim for contractual indemnity is
derivative of the original action between Mitchell and Carhartt. Quest’s potential liability for
that portion of the claim is dependent on the outcome of the litigation in that original action.
Now that the Court has granted Carhartt’s Motion for Summary Judgment, the derivative portion

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of the contractual claim must be dismissed. There is nothing to recover under that portion of the
claim now. However, there is another aspect of Carhartt’s Third Party Complaint which is not
derivative of the outcome of the litigation in that original action. It was properly joined under
Fed. R. Civ. P. 18. Specifically, Carhartt claims that in “the indemnification provision of the
[c]ontract” between Carhartt and Quest, Quest agreed to “indemnify Carhartt from and against
any and all damages, including attorneys’ fees, arising out of or attributable to Quest or Quest’s
employees, servants, or agents.” (Carhartt’s Resp. [DN 61] at 8.) Thus, the matter of defense
costs is still at issue in this case and the success of that claim depends on a finding of negligence
on the part of Ms. Mitchell, an agent of Quest.
Quest is correct that there has been no such finding. The Court rejects Carhartt’s
suggestion that the summary judgment it issued in its favor necessarily means that Ms. Mitchell
was negligent. All that decision means is that Ms. Mitchell did not come forward with enough
evidence to support her claim that Carhartt was negligent. Negligence is defined as “conduct
which falls below the standard established by law for the protection of others against
unreasonable risk of harm.” Restatement (Second) of Torts § 282 (1965). Negligence depends
on breach of a duty. Indeed, Ms. Mitchell fell. But, did she owe Carhartt a legal duty not to fall?
Whether a duty exists depends on whether Carhartt’s interests are entitled to legal protection
against Ms. Mitchell’s conduct. Shelton v. Kentucky Easter Seals Soc., Inc., 413 S.W. 3d. 901,
908 (Ky. 2013).

These are interesting questions which the parties will need to help the Court

sort out. The bottom line for now is that the question of whether Ms. Mitchell was negligent, in
the legal sense of the word, is still very much at issue. Neither party is entitled to summary
judgment at this time.

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A number of other interesting questions are presented by this lingering claim.
Presumably, the Court originally had supplemental jurisdiction under 28 U.S.C. § 1367(a) over
the Third Party Complaint.1

Under 28 U.S.C. § 1367(a), “the district courts shall have

supplemental jurisdiction over all other claims that are so related to claims in the action within
such original jurisdiction that they form part of the same case or controversy.” There is a good
argument to be made that this lingering aspect of Carhartt’s indemnification claim is not so
related so as to form the same case or controversy as Plaintiff Mitchell’s claims against Carhartt.
Plaintiff Mitchell’s claims were premises liability claims.

As noted, Carhartt’s remaining

indemnity claims are contractual claims for defense costs which are not contingent upon the
outcome of the underlying complaint.
But even if the claims are so related, should the Court choose to exercise supplemental
jurisdiction of this matter now that the underlying claim has been dismissed? Under 28 U.S.C. §
1367(c), the Court has discretion to decline to exercise supplemental jurisdiction if: “(1) the
claim raises a novel or complex issue of State law, (2) the claim substantially predominates over
the claim or claims over which the district court has original jurisdiction, (3) the district court has
dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances,
there are other compelling reasons for declining jurisdiction.” Since the underlying action has
been dismissed, the Court would be inclined not to exercise supplemental jurisdiction over this
remaining portion of Carhartt’s third party claim. 2

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As will be discussed, it is not clear there is any other sound basis for jurisdiction.
The third-party complaint is in the nature of an indemnity or contribution claim. Accordingly, it is rare that
a court renders judgment in favor of the defendant or dismisses the underlying action but nonetheless
chooses to address a third-party claim. Ultimately, a court has the discretion to dismiss a third-party claim
after the original claims have been settled, and relegate the third-party plaintiff to a separate suit.

Cooper, 512 F.3d at 805–06.

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However, if there is an independent basis for subject matter jurisdiction supporting the
Third Party Complaint, then the Court has no discretion to dismiss the matter—it must decide the
issue. 3 While the Third Party Complaint alleges complete diversity, it does not recite an amount
in controversy. Does the Third Party Complaint meet with the requirements of Fed. R. Civ. P.
8(a)(1)? Is the claim subject to dismissal on these grounds? These are unresolved issues which
need to be addressed.
III. CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED that Quest’s Motion for
Summary Judgment is DENIED. IT IS FURTHER ORDERED that Carhartt’s claim for
common law indemnity is DISMISSED without prejudice. FURTHERMORE, this matter is
referred to the Magistrate to conduct a settlement conference. In the absence of settlement, the
Magistrate shall enter appropriate scheduling orders to bring this litigation to a close.

April 14, 2016

cc: counsel of record

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“[F]ederal courts have a duty to consider their subject matter jurisdiction in regard to every case and may raise the
issue sua sponte.” Answers in Genesis of Kentucky, Inc. v. Creation Ministries Int’l, Ltd., 556 F.3d 459, 465 (6th
Cir. 2009); see Gonzalez v. Thaler, 132 S.Ct. 641, 648 (2012); Vander Boegh v. EnergySolutions, Inc., 772 F.3d
1056, 1064 (6th Cir. 2014).

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