ENGINEERED DEVICES CORPORATION v. PARAMOUNT BUILDERS GROUP LLC

Filing 8

MEMORANDUM OPINION/ORDER denying 5 Motion to Dismiss for failure to join a necessary party. Signed by Judge Kevin McNulty on 4/26/17. (DD, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

ENGINEERED DEVICES
CORPORATION,

Civ. No. 16-5346 (KMMAH)

Plaintiff,

MEMORANDUM OPINION and
ORDER

v.
PARAMOUNT BUILDERS GROUP LLC,
a foreign limited liability company,
Defendant.

KEVIN MCNULTY. U.S.D.J.:
This is an action for damages based on a written contract. The plaintiff,
Engineered Devices Corporation, is a supplier (by lease or sale) of materials,
equipment, to the construction industry. The defendant, Paramount Builders
Group LLC (“PBG”), engaged in a construction project in New York known as
310 West Hotel (the “Project”). Engineered’s complaint alleges that PGB failed
to return leased equipment or pay for purchased equipment. PBG blames a
third party contractor, Martins, which worked on the Project. According to
PBG, it was Martins who used, and failed to return, the equipment. Thus, says
PBG, Martins is a necessary party under Fed. R. Civ. P. 19, and the action
must be dismissed because Engineered did not name Martins as a defendant.
For the reasons stated herein, the motion is denied.
I.

THE COMPLAINT

The complaint alleges that Engineered maintains a rental inventory of
shorting and forming equipment, and also manufactures equipment to order.
(Cplt. ¶j 4—6) On May 27, 2015, Paramount (by its president, Gary Labovskiy)
executed a commercial credit application, release, and Master Rental
Agreement with Engineered. (Cplt.

¶J

13—15) Copies are attached to the
1

Complaint. On the same date, PBG delivered a job information sheet for the
310 West Hotel Project, naming ZDG LLC as the general contractor. (Cplt.
18)
Engineered approved Paramount’s credit and delivered the equipment to P8G.
(Cplt.

19) PBG failed to make payment for the goods sol, rented, and
delivered. (Cplt. ¶ 20) Engineered claims damages in the total amount of

¶

$380,823.17. (Cplt.

¶

21) Jurisdiction is founded on diversity. (Cplt.

¶

22)

The Complaint has four counts. Count 1 asserts claims of book account
and unjust enrichment in the amount of $156,319.31. Count 2 asserts breach
of contract and unjust enrichment in that Engineered, at PBG’s request,
delivered equipment and materials valued at $136,621.59 to the project site,
for which it was not paid. Count 3 alleges conversion of the same materi
als
referred to in Count 2 and seeks the same damages. Count 4 seeks a
contractual 30% collection charge in the amount of $87,882.27.
II.

DISCUSSION

PBG moves to dismiss the Complaint for failure to join Martins as a
necessary party defendant under Federal Rule of Civil Procedure 19:
(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject to service of
process and whose joinder will not deprive the court of subjectmatter jurisdiction must be joined as a party if:
(A) in that person’s absence, the court cannot accord
complete relief among existing parties; or
(B) that person claims an interest relating to the subject of
the action and is so situated that disposing of the action in the
person’s absence may:
(i) as a practical matter impair or impede the person’s ability
to protect the interest; or
(ii) leave an existing party subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent obligations
because of the interest.
2

Fed. R. Civ. P. 19(a).
PBG’s motion tells a tale whereby Martins, and not itself, is to blame for
the failure to pay for or return equipment supplied by Engineered. Accord
ing to
PBG, it happened this way. Mr. Martins, doing business as Paramount
Concrete, Inc. (for simplicity, “Martins”),’ contracted with the genera
l
contractor, ZDG, to provide contract services on the Project. PBG
subcontracted with Martins to perform concrete services. It was as a
subcontractor on the Project that PBG entered into the Rental Agreem

ent with

Engineered.
Martins and the principal of PBG, Labovskiy, had a falling out, and
Martins stopped working. On October 16, 2015, ZDG fired Martins
as general
contractor. As a result, PBG lost its status as subcontractor. The forms
2 that
PBG leased from Engineered apparently remained on site, and at
some point
were carted away by Martins. Martins, despite requests by Labovskiy,
has
declined to return them to Engineered.
PBG argues that Martins has, by retaining the forms, effectively asserte
d
a competing ownership interest. Thus, says PBG, this action subjects it
to “a
substantial risk of incurring double, multiple, or otherwise inconsistent
obligations because of the interest.” Fed. R. Civ. P. 19(a)(1)(B)(ii).
This situation
is comparable, it says, to a suit in which patent royalties are sought,
but
another party aside from the plaintiff claims to own the patent. (PBG
Brf. 5
(citing Princeton Biochemical, Inc. v. Beckman Coulter, Inc., 223 F.R.D.
326
(D.N.J. 2004)).
The situation is not comparable. The claims here essentially arise
from an equipment rental agreement between Engineered and PBG.
There is no agreement between Engineered and Martins. PBG undert
ook

Paramount Concrete, Inc. is not to be confused with the defendant, Param
ount
Builders Group, LLC.
1

2

“Forms,” in this context, seems to refer to molds into which concrete is poured
.
3

to pay a fee for the use of the equipment and return the equipment at the
end of the lease term. By signing this simple Agreement, Engineered was
not committing itself to referee a feud between Martins and Labovskiy.
Under the Agreement, PBG is the responsible party.
In short, these are not “double” or “inconsistent” obligations that require
joinder, let alone dismissal. If Engineered is correct, PBG owes it the money.
3
PBG does not also owe the same money to someone else.
What PBG is really arguing is that it has a third-party claim against
Martins, which, as the party to blame, should reimburse PBG. This is a classic
third-party claim, by which B says, “If I am liable to A, then C should be liable
to me.” PBG’s rights are not being compromised, nor is it being prevented from
asserting them. What PBG cannot do is deliberately refrain from asserting such
a claim against Martins, and then complain that it is prejudiced because
Martins is absent from the case.
ORDER
Accordingly,
IT IS this 26th day of April, 2017,
ORDERED that the motion to dismiss for failure to join a necessary party
(ECF no. 5) is DENIED.

/

HON. KEVIN MCNULTY, U.S.f.

Big “if,” of course; for purposes of this motion to dismiss, I do not adjudicate the
validity of the claims.
4