Austin et al v. Maryland Casualty Company

Filing 18

ORDER denying 13 Motion for Leave to File Third Party Complaint. So Ordered by Magistrate Judge James R. Muirhead. (kad)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE Everett R. Austin, II Nancy Austin v. Maryland Casualty Company Civil No. 09-cv-22-JM

ORDER

Defendant seeks leave to file a third party complaint. Plaintiff objects. is denied. Background Everett Austin, II, was injured in a motor vehicle accident which he alleges was caused by the negligent operation of a motor vehicle driven by Catherine Manthey. policy is limited to $100,000. Ms. Manthey's liability For the reasons set forth below, the motion

The policy has been tendered by

her carrier but the claim has not been settled, presumably because defendant has not authorized plaintiff to accept it and release Manthey. Plaintiffs notified defendant of their claim

for under-insured motorist benefits and have instituted this action for those benefits. The plaintiffs' action is a contract action. Plaintiffs are

New Hampshire residents.

Defendant is incorporated in Maryland The requested

with a principal place of business in Illinois.

third-party defendant is a New Hampshire resident. Discussion Because the defendants did not serve their third-party complaint within ten (10) days of their answer, they must obtain leave of court to proceed. See Fed. R. Civ. P. 14(a). The

decision as to whether to allow impleader "is left to the informed discretion of the district court, which should allow impleader on any colorable claim of derivative liability that will not unduly delay or otherwise prejudice the ongoing proceedings." Lehman v. Revolution Portfolio L.L.C., 166 F.3d

389, 393 (1st Cir. 1999) (citations omitted). 1. Contribution Count N.H. RSA 507:7-e has no application to this case and the count makes no sense. Defendant's liability to plaintiff is

one hundred percent of the purported third party's liability. There is no apportionment. allowed. 2. Subrogation Count Clearly, the claim by defendant against the proposed The claim is futile and is not

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third-party defendant is against "a nonparty who is or may be liable to it for all . . . of the claim against it." P. 14(a). Fed. R. Civ.

Put another way, it is clear that but for the

negligence of the proposed third-party defendant, defendant would have no liability to plaintiff. New Hampshire statutes N.H. RSA

specifically provide for the right of subrogation. 164:15(IV).

Further, "the fact that a third-party complaint may

be based on a different legal theory from the underlying case . . . does not bar impleader." 3 James Wm. Moore, et al., Moore's

Federal Practice § 14.04(2) (3rd ed. 2008). The central issues in both the plaintiffs' claim and the defendant's third-party claim are: (1) the third-party's negligence; (2) any comparative negligence by plaintiff; and (3) damages. Trying the claims together avoids the risk of

inconsistent verdicts and results in more efficient utilization of judicial resources and the resources of the parties. Furthermore,

with the trial date nine (9) months away, the two-month delay in filing the third-party claim is not an undue delay. "Of course the court must be sensitive to the possibility of prejudice to the original plaintiff . . . that may result from permitting the assertion of the third-party claim." Charles A.

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Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d § 1443 (1990). Plaintiff's concern is that

the jury will know that the third-party defendant is under-insured and will hold down any award of damages out of sympathy or bias for her. law. New Hampshire has long recognized that a party's lack of automobile liability insurance is, in effect, an impermissible plea of poverty. The New Hampshire Supreme Court found that it Plaintiff's claim is well founded under New Hampshire

may be "used . . . to create sympathy for the uninsured defendant." Piechuck v. Magusiak, 82 N.H. 429, 431 (1926).

Experienced trial lawyers and judges recognize the considerable risk of such prejudicial sympathy and know that instructions to the jury to try to avoid such sympathy prejudice would only call greater attention to the third party's situation. New Hampshire is not alone in precluding pleas of poverty. In Goldstein v. Gontarz, 364 Mass. 800, 809 (1974), the court ruled that a plea of poverty is "not only irrelevant but prejudicial in that they might influence jurors toward giving defendants compassionate but strictly unmerited relief from personal liability." See also King v. Starr, 43 Wash. 2d 115,

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119-121, 260 P.2d 351 (1953); Socony Vacuum Oil Co. v. Marvin, 313 Mich. 528, 538-540, 21 N.W. 2d. 841 (1946); Charles T. McCormick, Evidence (2d ed.) § 201 at 481-82 (1972); John Alan Appleman, Insurance Law and Practice, § 12838 (1962). Defendant can proceed at the appropriate time by separate suit. The potential prejudice to it is slight in comparison.

I find that the risk of prejudice to plaintiff is so great that it outweighs all other factors. (document no. 13) is denied. SO ORDERED. ____________________________________ James R. Muirhead United States Magistrate Judge Date: May 26, 2009 cc: Jeffrey B. Osburn, Esq. David S.V. Shirley, Esq. Andrew Ranks, Esq. Mark W. Shaughnessy, Esq. Andrew D. Dunn, Esq. Consequently, the motion

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