Siddle et al v. Connectgov, Inc. et al

Filing 359

MEMORANDUM AND ORDER: Therefore, for the reasons stated herein, the Siddles' Motion to Amend or Transfer is hereby DENIED in all respects. It is so ORDERED. Signed by District Judge Aleta A. Trauger on 4/25/13. (xc:Pro se party by regular and certified mail.)(DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(tmw)

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
BRUCE K. SIDDLE, ET AL.,

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Plaintiffs,
v.
DOCTOR R. CRANTS, JR., ET AL.,
Defendants.

BRUCE K. SIDDLE, ET AL.,

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Plaintiffs,
v.
CONNECTGOV, INC., ET AL.,
Defendants.

Case No. 3:09-cv-00175
Judge Aleta A. Trauger

Case No. 3:09-cv-01137
Judge Aleta A. Trauger

MEMORANDUM AND ORDER
The Siddles have filed a Motion to Alter or Amend, for Leave to Amend the Third-Party
Complaints, and for Transfer to Another Venue (Siddle I Docket No. 481; Siddle II Docket No.
358) (“Motion to Amend and Transfer”) in the above-captioned cases.1 The court, acting sua
sponte, previously dismissed the Siddles’ Third-Party Complaint against their former attorneys in

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Familiarity with the court’s March 26, 2013 opinion, docketed in both cases, is assumed.
See Siddle v. Crants, Nos. 3:09-CV-00175, 3:09-CV-01137, 2013 WL 1245678 (M.D. Tenn.
Mar. 26, 2013) [Siddle I Docket No. 477; Siddle II Docket No. 355] (opinion referred to
hereinafter as “Siddle). Consistent with the nomenclature utilized therein, the court will refer to
docket entries in Siddle, et al. v. Crants, et al., Case No. 3:09-cv-00175, as “Siddle I Docket No.
[X],” and to entries in Siddle, et al. v. ConnectGov., Inc., et al., Case No. 3:09-cv-01137, as
“Siddle II Docket No. [X].”
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these cases – the Carrs – for failure to obtain leave of court to add the Carrs as parties after
judgment. In a footnote, the court also suggested that it likely lacked subject matter jurisdiction
over the Third-Party Complaint, which asserted Illinois state law legal malpractice claims that
were not part of the same case or controversy as the Siddles’ underlying lawsuit. See Siddle,
2013 WL 1245678, at *37 n.34. The Siddles now argue that the court should (a) permit them to
reinstate their claims against the Carrs through a proposed Amended Third-Party Complaint (see
Siddle I Docket No. 481, Ex. 1; Siddle II Docket No. 358, Ex. 1) (“proposed Amended ThirdParty Complaint”) and (b) once the Siddles file that pleading, transfer the case to the Southern
District of Illinois under 28 U.S.C. § 1391 for further proceedings.
Rule 14 is designed to permit the parties to join “parties whose rights may be affected by
the decision in the original action to be joined so as to expedite the final determination of the
rights and liabilities of all the interested parties in one suit.” Am. Zurich Ins. Co. v. Cooper Tire &
Rubber Co., 512 F.3d 800, 805 (6th Cir. 2008). Rule 14 is procedural, not jurisdictional; thus,
any claim asserted through Rule 14 requires a basis for federal subject matter jurisdiction over
that claim. See Caterpillar, Inc. v. Lewis, 519 U.S. 61, 67 n.1, 117 S. Ct. 467, 136 L. Ed. 2d 437
(1996); see also Fed. R. Civ. P. 82 (“These rules do not extend or limit the jurisdiction of the
district courts . . . .”)
By attempting to utilize Rule 14 to assert post-judgment legal malpractice claims against
the Carrs, the Siddles are essentially seeking to implead a party that had no role in the
transactions giving rise to the Siddles’ claims. Here, the Siddles’ underlying lawsuits concerned
actions by the defendants relative to the Homeland Security Corporation (“HSC”), a former joint
venture between the Siddles and certain defendants. However, the Siddles’ claims against the

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Carrs stemming from the Carrs’ conduct in this litigation have no factual relationship to the
underlying financial transactions related to HSC that formed the basis of the Siddles’ lawsuits.
That is, the Carrs had no role with respect to the Siddles’ underlying factual allegations,
including the alleged acts supporting the federal Exchange Act claims, RICO claims, and/or
Lanham Act claims in each case – the only claims over which the Siddles alleged that this court
had original jurisdiction. (See Siddle I Docket No. 201, Second Am. Compl., at Counts I-IV (18
U.S.C. §§ 1962(a)-(d) (RICO)), V (15 U.S.C. § 78j(b), Securities and Exchange Act), and VI (15
U.S.C. § 1125, Lanham Act); Siddle II Docket No. 2, Compl., at Counts I-IV (RICO)).
Furthermore, the Carrs did not have any role in the promulgation or execution of the Releases
themselves.2
The Siddles seek to treat the defendants’ Rule 54 motions as “claims” for purposes of
Rule 14, perhaps as a backdoor method to stay enforcement of the court’s post-judgment
assessment of attorney’s fees and costs in favor of the defendants. However, the Siddles have
provided no authority demonstrating that Rule 14 permits post-judgment impleader under the

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By contrast, in Kerschner v. Weiss & Co., 667 N.E.2d 1351 (Ill. App. Ct. 1996), the case
relied upon by the Siddles here, an Illinois appellate court found that it was appropriate for a
defending party to implead a law firm that was involved in the transactions that formed the basis
of the plaintiffs’ claims. There, three members of a five-member business partnership, Weiss &
Co., withdrew from the company, solicited clients away from the company, and started their own
business. They did so based on questionable legal advice provided by an attorney, Goodman.
The remaining two partners in Weiss & Co. sued the three partners who had withdrawn, alleging,
inter alia, tortious interference with Weiss & Co.’s contractual relations. Two of the three
withdrawing partners – now defendants in the case – sought to implead Goodman as a third-party
defendant, alleging that Goodman had committed legal malpractice in advising them to commit
the tortious acts, thereby triggering an obligation by Goodman to indemnify them against the
plaintiffs’ claims. Under the circumstances, the Illinois court held that, pursuant to the Illinois
impleader statute, the defendants were entitled to implead the attorney as a third-party defendant
under an “implied indemnity” theory stemming from his pre-tort conduct.
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procedural circumstances presented here, in which, after judgment, the Siddles seek to implead a
third-party with no connection to the facts underlying their causes of action or to the formation
and execution of the Releases. Indeed, consistent with its purpose, Rule 14 is located in the
sections of the federal rules relating to the early pretrial stages of a lawsuit, such as Rule 12
(responsive pleadings and motions to dismiss), Rule 13 (counterclaims and cross-claims), Rule
15 (amending and supplementing pleadings), and Rule 16 ( pretrial conferences, scheduling, and
pretrial case management), but not in the sections dealing with post-judgment procedures,
including Rule 54. Under the circumstances and in the absence of federal precedent for the
Siddles’ position here, the court remains unpersuaded that the federal rules permit the Siddles
unilaterally to add parties to the lawsuit (1) post-judgment, (2) at any point after the Rule 54
motions were filed, and (3) where those parties were not involved in the conduct giving rise to
the lawsuit or in the formation or execution of the documents supporting the defendants’
meritorious contract defense.3
Even if Rule 14 permitted this type of post-judgment impleader by plaintiffs without
leave of court, the court would lack subject matter jurisdiction over the Siddles’ Illinois claims
against the Carrs. Under 28 U.S.C. § 1367(a), a federal court “has supplemental jurisdiction over
all other claims that are so related to claims in the action within such jurisdiction that they form
part of the same case or controversy.” Harper v. AutoAlliance Int’l, Inc., 392 F.3d 195, 209 (6th
Cir. 2004) (quoting § 1367(a)). Claims form part of the same case or controversy when they
derive from a common nucleus of operative facts. Harper, 392 F.3d at 209. Here, the Third-

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Moreover, the Siddles’ position, if correct, would seem to be self-defeating. If the Rule
54 motions constituted “claims,” the Siddles would have had an obligation to file a timely
responsive pleading thereto – but they did not.

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Party Complaint alleged, without further elaboration, that the Siddles’ malpractice claims against
the Carrs shared “a common nucleus of operative facts” with the Siddles’ underlying claims
based on federal question jurisdiction, as asserted in the operative complaint in each case. (See
Third-Party Compl. ¶ 8; proposed Third-Party Compl. ¶ 8).4 However, the Siddles did not
articulate, and still have not articulated, what that common nucleus of facts would be – nor does
the court perceive any such connection among the claims. The third-party malpractice claims
turn on the nature of internal communications between the Siddles and the Carrs in the course of
this case, not facts concerning the HSC-related transactions that formed the basis for the Siddles’
federal claims against the defendants – pre-tort conduct that did not involve the Carrs in any
respect. Even if the court were to construe the defendants’ post-judgment Rule 54 motions as
“claims,” the Rule 54 motions required only a determination as to whether the fees and costs
incurred by each defendant were reasonable, not an inquiry into the nature of the Siddles’
communications with their own attorneys. Thus, even under this assumption, the Siddles’ legal
malpractice claims would not be part of the same “case or controversy” as the defendants’ postjudgment motions for fees and costs.5
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The Third-Party Complaint also purported to invoke Rule 14(b) as a basis for
jurisdiction. As discussed above, the federal rules are procedural, not jurisdictional.
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Crants III filed a “Counterclaim” in Siddle I demanding attorney’s fees and costs under
the Releases (Docket No. 299), to which the Siddles filed a Motion to Dismiss (Docket No. 354)
that essentially repeated the same arguments concerning the validity and enforceability of the
Releases that the court had rejected in its earlier opinions granting summary judgment to the
defendants. After the Siddles appealed the court’s judgments, the court termed the Siddles’
Motion to Dismiss Crants III’s Counterclaim (Docket Nos. 359 and 374). After the Sixth Circuit
affirmed the court’s judgments and adopted the court’s grounds for issuing them, the Siddles’
Motion to Dismiss the Counterclaim was not reinstated on the Siddle I docket. At that time, the
Siddles did not seek relief from the court to renew the motion (perhaps because the grounds for it
had been rejected by the Sixth Circuit), nor did Crants III move for “judgment” on his
Counterclaim. Instead, after the appeal was concluded, Crants III filed a Rule 54 motion that, as
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Moreover, the Siddles’ associated request to transfer venue implicitly acknowledges what
this court suggested in its March 22, 2013 opinion: the Siddles’ claims against their former
attorneys belong in another court (presumably Illinois state court) that has personal jurisdiction
over the parties, where venue is appropriate, and in which the court has subject matter jurisdiction
over this distinct attorney-client dispute. The court recognizes that the Siddles will be placed in
an unenviable position while seeking to collect from the Carrs in Illinois, who apparently are
already the subject of some type of malpractice-related lawsuit in Illinois state court. Be that as it
may, this is a court of limited jurisdiction, and the claims at issue in both cases have been fully
and finally adjudicated.
Therefore, for the reasons stated herein, the Siddles’ Motion to Amend or Transfer is
hereby DENIED in all respects.
It is so ORDERED.
Enter this 25th day of April 2013.

_____________________________
ALETA A. TRAUGER
United States District Judge

with the Rule 54 motions filed by other defendants, demanded his attorney’s fees and costs under
the Releases. In support of their motion here, the Siddles have not, for purposes of Rule 14,
drawn any meaningful distinction between Crants III’s so-styled Counterclaim and Crants III’s
Rule 54 motion. At any rate, even if the court’s Rule 14 analysis were inapplicable in light of
the Siddles’ otherwise timely response to the Counterclaim, the court still lacks subject matter
jurisdiction over the Siddles’ third-party claims for the reasons stated herein.
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