Stewart Engineering, Inc. v. Continental Casualty Company et al

Filing 51

ORDER granting 48 Motion for Misjoinder. Zurich is DISMISSED WITHOUT PREDJUDICE from this action pursuant to Rule 21 of the Federal Rules of Civil Procedure. Signed by Senior Judge James C. Fox on 1/31/2017. (Grady, B.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:15-CV-377-F

STEWART ENGINEERING, INC.,
Plaintiff,
vs.
CONTmENTALCASUALTY
COMPANY, ZURICH AMERICAN
mSURANCE COMPANY, SKANSKA
USA BUILDING, INC., and CLARK
NEXSEN, me.,
Defendants.

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ORDER

___________________________ )
Before the court is Zurich American Insurance Company's ("Zurich") motion for
misjoinder pursuant to Rule 21 of the Federal Rules of Civil Procedure. [DE 48]. Plaintiff did
not respond.
I.

BACKGROUND

Plaintiff brings suit against its insurer, Continental Casualty Company ("CNA"), 1
pursuant to 28 U.S.C. § 2201 seeking an adjudication of its rights and obligations under the
Architects/Engineers Professional and Pollution Incident Liability Insurance ("the Policy")
issued by CNA. In particular, Plaintiff seeks a declaration that CNA is obligated to defend and
indemnify Plaintiff in connection with claims asserted by Zurich and co-defendants Clark
Nexsen, Inc. and Skanska USA Building, Inc. ("Skanska") 2 against Plaintiff relating to the

The parties identify Continental Casualty Company by the acronym, CNA. For consistency purposes, the
court does the same.
2

Plaintiff classifies the claims as follows: (I) the Rosales-Nava/Lopez claims; (2) the
Chavez!Hernandez!Vargas claims; (3) the Skanska/Zurich claims; (4) the Clark Nexsen claim; and (5) the WTCC

Stewart Eng'g, Inc. v. Continental Casualty Co. eta/.
No. 5:15-CV-377-F
Page 2

separate collapses of two pedestrian bridges located on the Wake Technical Community College
("WTCC") Northern Campus in Raleigh, North Carolina ("the project").
According to the amended complaint, WTCC contracted with Skanska to provide
construction management services for the project. Am. Compl.

~

19. Skanska in tum sought a

builder's risk policy for the project from Zurich, its insurer. !d. ~52. On November 13, 2014,
the first bridge collapsed. The second bridge collapsed on November 14, 2014. !d.

~~

27-28.

Subsequently, Skanska asserted claims for damages exceeding $4,800,000 against Plaintiff.

!d.~

56. On March 2, 2015 , Plaintiff received a letter from Zurich regarding its subrogation interest
in Skanska's claims. !d.

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54. Skanska's claims associated with the first bridge collapse have

been resolved- those associated with the second bridge collapse have not.

!d.~

58.

In April 2015, Plaintiff contacted CNA regarding coverage for claims made against the
Policy associated with the collapsed bridges. !d. ~ 71 . CNA informed Plaintiff that the Policy's
per claim $3 ,000,000 limit of liability applied to all claims arising out of the collapse of both
bridges.

!d.

Plaintiff disputes CNA's interpretation of the Policy and argues CNA has an

obligation to indemnify Plaintiff up to the aggregate policy limit of $5 ,000,000. !d. ~ 2.

II.

LEGALSTANDARD

Rule 21 governs the misjoinder of parties and allows the court to, inter alia, drop a party.
FED.

R. C!V. P. 21. "Dismissal of a misjoined party under Rule 21 is without prejudice; a claim

by or against such a party may be refiled as a separate suit." John S. Clark Co. v. Travelers

Indem. Co., 359 F. Supp. 2d 429, 437 (M.D.N.C. 2004). Misjoinder occurs when a single party
or multiple parties fail to satisfy the requirements for permissive joinder under Rule 20. See id.
Under Rule 20, multiple defendants may be joined in one action where: (1) "any right to relief is
claims. These claims include wrongful death, personal injury and property damage. Am. Compl. ~ 2.

Stewart Eng'g, Inc. v. Continental Casualty Co. et a!.
No. 5:15-CV-377-F
Page 3

asserted against them jointly, severally, or in the alternative with respect to or arising out of the
same transaction, occurrence, or series of transactions or occurrences;" and (2) "any question of
law or fact common to all defendants will arise in the action." FED. R. CIV. P. 20(a)(2). It is
well-settled that a district court has broad discretion under Rule 21. Matthew Bender, Moore's
Federal Practice § 21.05 (3d ed. 2011) ("Rule 21 gives the court tools to jettison those parties and
claims that are not within its jurisdiction or that are not conveniently prosecuted together,
preserving parties and claims that are properly before it.").

III.

DISCUSSION

Plaintiff brings two causes of action: ( 1) declaratory judgment and (2) breach of contract.
Both claims are against CNA only. Plaintiff asserts no claims against Zurich. Rather, in its
amended complaint, Plaintiff states only that Zurich is "named in this action in order to
adjudicate any rights [it has], or allegedly ha[s], under (the Policy]." 3

Am. Compl. ~ 3.

Moreover, there is no question of law or fact common to all defendants . Plaintiff brought this
action seeking a declaration that CNA is obligated to defend and indemnify Plaintiff up to the
aggregate limit ($5,000,000.00) of the Policy and that in failing to defend and indemnify
Plaintiff, CNA breached its obligation under the Policy.

Accordingly, the court finds the

dismissal of Zurich pursuant to Rule 21 is appropriate.

Plaintiff also provides the same rationa le for naming Clark Nexsen, Inc. and Skanska as defendants. Am.
Compl. ~ 3. On November 16, 2016, the court dismissed Clark Nexsen, Inc. without prejudice from this action.
[DE 47] .

Stewart Eng'g, Inc. v. Continental Casualty Co. et al.
No. 5:15-CV-377-F

Page 4

IV.

CONCLUSION

For the foregoing reasons, Zurich's Motion for Misjoinder [DE 48] is ALLOWED.
Zurich is DISMISSED WITHOUT PREDJUDICE from this action pursuant to Rule 21 of the
Federal Rules of Civil Procedure.
SO ORDERED.
This the 31st day of January, 2017.

ESC. FOX
Senior United States District Judge