FTW, LLC v. Inguran, LLC

Filing 25

ORDER that plaintiff FTW's 17 MOTION for Joinder is Denied without prejudice to resubmission, within (21) days of the date of this Order, as a motion for leave to serve a summons and third-party complaint upon Alan Brinker and Monte Thompson pursuant to FRCP 14. Plaintiff shall attach a copy of the proposed third-party complaint to its motion for the Court's review. Signed by Magistrate Judge Karen L. Litkovitz on 8/22/2013. (art)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

FTW, LLC,
Plaintiff,

Case No. 1:13-cv-167
Litkovitz, M.J.

vs.
INGURAN, LLC, D/B/A/
SEXING TECHNOLOGIES,
Defendant.

ORDER

This matter is before the Court on plaintiffs motion for joinder (Doc. 17) and
defendant's memorandum in opposition (Doc. 18).
I. Background
PlaintiffFTW, LLC (FTW) instituted this action on February 13, 2013, by filing a
complaint against defendant Inguran, LLC d/b/a Sexing Technologies (Inguran) in the Clinton
County, Ohio Court of Common Pleas. (Doc. 2). Plaintiffbrings claims against Inguran arising
from the alleged breach of an agreement pursuant to which plaintiff agreed to provide certain
livestock care and housing services to Inguran in exchange for payment by Inguran (hereafter,
"Agreement"). (!d.). Plaintiff seeks judgment against Inguran in the amount of$96,169.06, plus
interest, attorneys fees, and costs. (!d.).
Defendant Inguran removed the action to this Court on March 14, 2013, based on the
Court's diversity jurisdiction. (Doc. 1). Defendant Inguran filed an answer to the complaint and
a counterclaim on April18, 2013, denying that FTW provided the agreed upon services to
Inguran and that Inguran breached any obligation to FTW. (Doc. 10). For its counterclaim,
Inguran asserts that it is a limited liability company organized under the laws of the State of
Delaware with its principal place ofbusiness in Texas, whose business activities include

artificially inseminating and selling cows for export to customers in foreign countries. (!d.,
Counterclaim, ,-r 1). Ingman asserts that FTW' s business activities include operating facilities to
house and care for cattle. (!d., ,-r 2). Ingman alleges that pursuant to the Agreement, FTW was
initially obligated to supply feed for cattle owned by Ingman located at facilities in Ohio. (!d.).
Ingman asserts that FTW later acquired the additional duties of housing and caring for Ingman
cattle, which were usually held for several weeks prior to being exported to Ingman's customers.
(!d., ,-r 4). Ingman alleges that FTW managed Inguran cattle at facilities in Zainesville,

Frazeysburg, Hillsboro, and New Vienna, Ohio, where FTW was obligated to properly feed the
cattle and provide veterinary and other services. (!d., ,-r,-rs, 6). Ingman contends that while its
cattle were in FTW's care, FTW failed to properly feed the cattle and to seek proper veterinary
care for the underfed and sickly cattle, which caused some of the cattle to die, including during
transport overseas, and resulted in customers purchasing fewer cattle, demanding refunds, and
cancelling future orders. (Id., ,-r,-r 7-13). Defendant Ingman seeks damages in excess of$500,000
for breach of contract based on FTW' s failure to properly care for the cattle; tortious interference
with business relationships, resulting in a termination and/or loss oflnguran's relationships with
its customers; negligence based on FTW' s breach of its duty to properly feed and otherwise care
for Ingman's cattle; and unjust enrichment based on FTW's knowing retention of amounts paid
by Inguran despite FTW's failure to provide services in exchange for the payments. (!d., ,-r,-r 1434).
PlaintiffFTW filed an answer to the counterclaim on May 23, 2013. (Doc. 16). FTW
asserted a number of defenses, including the defense that defendant Inguran had intentionally
failed to join necessary and indispensable parties Alan Brinker, Monte Thompson, and Larry
Baker, all of whom are Ohio residents and whose joinder would necessarily result in dismissal of
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(!d.,~

the action for lack of subject matter jurisdiction.

37). Plaintiff also asserted the defense

that defendant Inguran's damages were the direct result of its own acts of providing defective
cattle and the intervening and/or superseding negligence and/or intentional acts of third parties
over whom plaintiff exercised no control or responsibility.

(!d.,~

44).

II. Motion for joinder

PlaintiffFTW filed its motion for joinder on May 23, 2013, the same date it filed its
answer to the counterclaim. (Doc. 17). FTW moves pursuant to Fed. R. Civ. P. 13, 14 and 19 to:
(1) add Brinker, Thompson and Baker as defendants to Inguran's counterclaim brought against
FTW; and (2) add Brinker and Thompson as "Third-Party Defendants because they may be liable
to FTW for some or all ofthe claims asserted against it." (!d. at 1). PlaintiffFTW asserts that
complete relief cannot be afforded in the absence of the addition of Brinker, Thompson and
Baker as parties, and their joinder is therefore mandated by Fed. R. Civ. P. 19(b). (!d.). In
support of the motion for joinder, plaintiff makes two general allegations. Plaintiff alleges that
Baker, not FTW, was responsible for Inguran's cattle during the incidents referenced in the
counterclaim, and to the extent FTW bears any responsibility, Brinker and Thompson are the
responsible parties. (!d. at 2). Plaintiff does not explain what role these individuals played in the
incidents that form the basis for either the complaint or the counterclaim. Plaintiff has not
submitted an amended complaint but states it will file the appropriate pleadings if it is granted
leave to join these individuals as parties to the lawsuit. (!d.).
Defendant Inguran opposes plaintiffs motion for joinder. (Doc. 18). Inguran argues that
federal law does not permit FTW to force Inguran to join Brinker, Thompson and Baker as
defendants to its counterclaim. Inguran argues that instead, the most FTW can argue is that
complete relief cannot be accorded among the existing parties unless another defendant to the
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counterclaim is joined, in which case Inguran must be given an opportunity to amend its
counterclaim to name any "indispensable" additional defendant. (!d. at 4).

III. Federal law governing joinder of parties
Fed. R. Civ. P. 13 governs counterclaims and crossclaims. Rule 13(h) provides that the
addition of a party to a counterclaim or crossclaim is governed by Fed. R. Civ. P. 19 and 20.
Fed. R. Civ. P. 13(h). Rule 13(h) authorizes the court to join additional persons "only in order to
adjudicate a counterclaim or cross-claim that is already before the court or that is being asserted

at the same time the addition of a nonparty is sought." Various Markets, Inc. v. Chase
Manhattan Bank, 908 F. Supp. 459, 471 (E.D. Mich. 1995) (emphasis in original) (quoting
F.D.I.C. v. Bathgate, 27 F.3d 850, 873-74 (3d Cir. 1994)). See also Brown v. Int'l Union, United
Auto., Aerospace & Agric. Implement Workers ofAm. (UA W), 85 F.R.D. 328, 333 (W.D. Mich.
1980) ("Rule 13(h) permits persons other than those made parties to the original action to be
made parties to a cross-claim in accordance with the provisions of Rules 19 and 20. It is well
established, however, that the cross-claim must include as cross-defendant at least one existing
co-party."). Thus, under Rule 13(h), "a counterclaim or cross-claim may not be directed solely
against persons who are not already parties to the original action, but must involve at least one
existing party." Various Markets, Inc., 908 F. Supp. at 471 (quotingF.D.I.C., 27 F.3d at 873-74)
(citing Charles Alan Wright et al., Federal Practice and Procedure, Vol. 7A, § 1435,270-71 (2d
ed., West 1990)); Brown, 85 F.R.D. at 333 ("An additional party ... may not be brought in
where the cross-claim is directed solely against the new party.").

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Rule 19 governs compulsory joinder. It provides, in pertinent part, as follows:
(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 subject-matter 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.

(b) When Joinder Is Not Feasible. If a person who is required to be joined if
feasible cannot be joined, the court must determine whether, in equity and good
conscience, the action should proceed among the existing parties or should be
dismissed. The factors for the court to consider include:
(1) the extent to which a judgment rendered in the person's absence might
prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person's absence would be adequate; and
(4) whether the plaintiff would have an adequate remedy if the action were
dismissed for nonjoinder.
Fed. R. Civ. P. 19.
A three-part test applies to determine whether a party is indispensable under Rule 19: (1)
whether the person is a necessary party under Rule 19(a); (2) if the person is a necessary party,
whether joinder of that person will deprive the court of subject matter jurisdiction; and (3) if
joinder is not feasible because it will deprive the court of its ability to hear the case, whether an
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analysis of the Rule 19(b) factors shows the court should "in equity and good conscience dismiss
the case because the absentee is indispensable." Laethem Equip. Co. v. Deere & Co., 485 F.
App'x 39, 43-44 (6th Cir. 2012) (citing Glancy v. Taubman Centers, Inc., 373 F.3d 656, 666 (6th
Cir. 2004)). "A party is necessary under Rule 19 if either (1) in the party's absence, the court
cannot accord complete relief among existing parties, Fed. R. Civ. P. 19(a)(1)(A), or (2) if the
party claims an interest relating to the subject of the action and disposing of the action in the
party's absence may (i) as a practical matter impair or impede the party's ability to protect the
interest; or (ii) leave an existing party subject to a substantial risk of incurring multiple or
otherwise inconsistent obligations because ofthe interest, Fed. R. Civ. P. 19(a)(1)(B)." ld.
Rule 20 governs permissive joinder. It provides that persons may be joined in one action
as defendants if "any right to relief is 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 "any question oflaw or fact common to all defendants will arise in the action."
Fed. R. Civ. P. 20(a)(2).
Fed. R. Civ. P. 14 governs the addition of third-party defendants who may be liable to the
third-party plaintiff for part or all of the damages claimed by the original plaintiff. Rule 14
states, in pertinent part:
(1) Timing of the Summons and Complaint. A defending party may, as third-party
plaintiff, serve a summons and complaint on a nonparty who is or may be liable to
it for all or part of the claim against it. But the third-party plaintiff must, by
motion, obtain the court's leave if it files the third-party complaint more than 14
days after serving its original answer.
Fed. R. Civ. P. 14(a). Rule 14(b) provides that when a claim is asserted against a plaintiff, "the
plaintiff may bring in a third party" if Rule 14 would allow a defendant to do so. Fed. R. Civ. P.
14(b).
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It is not necessary for a party who files a third-party complaint within fourteen days after

serving the original answer to obtain leave of court; however, a party who attempts to implead a
party after that period must "by motion, obtain the court's leave" to do so. Fed. R. Civ. P. 14(a).
The better practice is for the third-party plaintiff who seeks leave to file a third-party complaint
to attach the third-party summons and complaint to its motion for leave to file same so that the
court can assess whether leave is properly granted. Liberty Folder v. Curtiss Anthony Corp., 90
F.R.D. 80, 84 (S.D. Ohio 1981).
Both Rule 13 and Rule 14 are remedial and are construed liberally. LASA Per
L 'Industria Del Marmo Soc. Per Azioni v. Alexander, CA., 414 F.2d 143, 146 (6th Cir. 1969).
The intent of both Rule 13 and Rule 14 is to "avoid circuitry of action and to dispose of the entire
subject matter arising from one set of facts in one action, thus administering complete and
evenhanded justice expeditiously and economically." !d. (citation omitted). The preference is
for the rights of all parties to the controversy to be adjudicated in a single action. !d. at 147.

IV. Resolution
In its motion for joinder, plaintiff does not identify Brinker, Thompson and Baker beyond
naming them and providing their addresses. Nor does plaintiff explain their role in the incidents
that form the basis for the complaint or the counterclaim. Plaintiff simply asserts that it seeks to
add these individuals as defendants to the counterclaim that defendant Inguran has asserted
against FTW. PlaintiffFTW further states that it seeks to add two of the three individualsBrinker and Thompson - as third-party defendants on the ground they may be liable for all or
some of the claims asserted against FTW. Plaintiff alleges that joinder of all three individuals is
mandated by Fed. R. Civ. P. 19(b) because these individuals are necessary parties to the
litigation in whose absence complete relief cannot be afforded. Plaintiff has not proffered an
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amended complaint with its motion for joinder but instead asserts that it will file the "appropriate
pleadings" if it is granted leave to join these individuals as parties to the lawsuit. (Doc. 17).
Plaintiffs motion for joinder is not well-taken. First, plaintiffhas not cited, and the
Court is not aware of, any authority under which the Court could compel Inguran to name
additional defendants to its counterclaim. Plaintiff alleges that the joinder of Brinker, Thompson
and Baker is mandated by Rule 19 because they are necessary parties to the litigation in whose
absence complete relief cannot be afforded. (Doc. 17 at 1). However, Rule 19 makes no
provision for mandatory joinder of an additional defendant by an unwilling plaintiff or
counterclaimant. See Stanley v. Darlington County School Dist., 84 F.3d 707, 714 (4th Cir.
1996) (finding the federal rules "do not authorize a defendant to compel an unwilling plaintiff to
assert a claim against a second defendant") (citing Muir v. US. Steel Corp., 41 F.R.D. 428 (E.D.
Pa. 1967) (stating that the Court knew of "no basis for permitting a defendant in any case to use
Rule 19 to compel joinder of other defendants.")). Instead "[t]he most that a defendant can
accomplish by invoking Rule 19 is to obtain an order dismissing the complaint if plaintiff fails to
join additional parties." Muir, 41 F.R.D. at 430 (citing Humphrey v. Stanolind Oil & Gas Co.,
232 F.2d 925 (5th Cir. 1956)). See also Stanley, 84 F.3d at 714 (finding that the most a
defendant can do is argue under Fed. R. Civ. P. 19(a) that complete relief cannot be afforded
without joinder of the second defendant, and if the court agrees, plaintiff is given the choice
under Fed. R. Civ. P. 19(b) of amending its complaint to name the indispensable second
defendant or having its complaint dismissed). Accordingly, plaintiff FTW is not authorized to
compel Inguran to join Brinker, Thompson and Baker as defendants to Inguran's counterclaim
pursuant to Fed. R. Civ. P. 19(b). In any event, the Court is unable to discern whether the
criteria for compulsory joinder are met here in the absence of factual allegations that explain the
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role these individuals played in the events giving rise to the lawsuit and their relation to the
existing parties, and absent information concerning applicability of the Rule 19(b) factors.
Plaintiff also seeks to join Brinker and Thompson as third-party defendants to the lawsuit
because they may be liable to FTW on some or all of the claims asserted against FTW in
Inguran's counterclaim. (Doc. 17 at 1). To the extent FTW seeks to bring claims against
Brinker and Thompson under Rule 13, new parties cannot be joined to the lawsuit pursuant to
Fed. R. Civ. P. 13(h) for adjudication of a crossclaim against them unless there is a crossclaim
already before the Court or there is a crossclaim being asserted in connection with FTW's
request to add the third parties. See Various Markets, 908 F.Supp. at 471. A crossclaim is not
pending before the Court and plaintiffFTW has not asserted a crossclaim in connection with the
motion for joinder. Furthermore, although Rule 14 authorizes FTW as third-party plaintiff to
assert claims against third-party defendants who may be liable to FTW if it is found liable to
Inguran on its counterclaim, plaintiff has neither moved for leave to serve a summons and
complaint on the individuals it seeks to add as third-party defendants nor proffered an amended
complaint as contemplated under Rule 14. See Roe v. Bryant & Johnson Co., 193 F.Supp. 804,
805 (W.D. Mich. 1961). Accordingly, the Court is unable to discern whether, as plaintiff asserts,
any individual FTW seeks to add as a third-party defendant may be liable to FTW for all or part
oflnguran's counterclaim against FTW. See Fed. R. Civ. P. 14. In addition, absent a proffered
third-party complaint, it is impossible to know whether FTW has a right to relief against these
individuals under the applicable substantive law. See Bryant & Johnston Co., 193 F .Supp. at 805
(Rule 14 is procedural only and the substantive rights of a third-party plaintiff must be
determined by applying the appropriate state law) (citation omitted).

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Nonetheless, although plaintiffs motion is deficient, joinder of Brinker and Thompson as
third-party defendants is not necessarily precluded under the federal rules and the substantive
law that governs the parties' claims. Accordingly, consistent with the intent of the rules
governing joinder to avoid multiplicity oflawsuits and foster judicial economy, see LASA Per

L 'Industria Del Marmo Societa Per Azioni, 414 F.2d at 143, the Court will not deny plaintiff
FTW the opportunity to join these two individuals as third-party defendants to the lawsuit and to
bring crossclaims against them. Instead, insofar as plaintiff seeks to assert crossclaims against
Brinker and Thompson, the Court will deny plaintiffs motion for joinder without prejudice to
resubmission as a motion for leave to serve a summons and third-party complaint upon Brinker
and Thompson pursuant to Fed. R. Civ. P. 14, with a proposed third-party complaint attached to
the motion for the Court's review.

IT IS THEREFORE ORDERED THAT:
PlaintiffFTW's motion for joinder (Doc. 17) is DENIED without prejudice to
resubmission, within twenty-one (21) days of the date of this Order, as a motion for leave to
serve a summons and third-party complaint upon Alan Brinker and Monte Thompson pursuant to
Fed. R. Civ. P. 14. Plaintiff shall attach a copy of the proposed third-party complaint to its
motion for the Court's review.

IT IS SO ORDERED.

Date:

~!L3

~cL~

Karen L. Litkovitz
United States Magistrate Judge

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