Duke v. Compass Bank

Filing 22

Memorandum Opinion and Order...The defendant's motion for leave to file its third-party complaint is DENIED. (Ordered by Judge John McBryde on 3/5/2014) (wrb)

ui:W'· DISTRICT COliRf ·-- ·-···
IN THE UNITED STATES DISTRI
A-j8RTHERN DISTRICT OF TEXAS :
NORTHERN DISTRICT OF TE
FORT WORTH DIVISION
L

LISA DUKE, AS TRUSTEE OF THE
DAVID DUKE TRUST NO. 1,

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vs.
COMPASS BANK,
Defendant.

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FJ~~;~_j ·

CLERK, U.S. DISTRICT CO:· t< l

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Plaintiff,

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BY-----~Ocput~·

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NO. 4:13-CV-1012-A

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MEMORANDUM OPINION
and
ORDER
Came on for consideration the motion for leave to file its
third-party complaint, filed in the above-captioned action by
defendant, Compass Bank ("Compass").

Plaintiff, Lisa Duke, as

Trustee of the David Duke Trust No. 1 ("Duke"), filed a response
in opposition.

Having considered the parties' filings and the

applicable legal authorities, the court concludes that
defendant's motion should be denied.
I.

Amended Complaint and Proposed Third-Party Complaint
In Duke's amended complaint, Duke claims that she entered
into an agreement with Compass to purchase a promissory note
owned and held by Compass and made by Bristolwood Homes, Inc.
("Bristolwood").

Duke alleges that after receiving payment for

the note from Duke, Compass failed to transfer the note to Duke
and instead returned the note to Bristolwood.
In the instant motion, Compass seeks leave to file a thirdparty complaint against Bristolwood and J. Michael Slusser
("Slusser"), who Compass asserts was the director and officer of
Bristolwood at the time the note was made.

Compass claims that

although it mistakenly executed and recorded a release of lien in
favor of Bristolwood on or about December 19, 2012, Compass
attempted to revoke the release on or about February 2, 2013.
Compass contends that Bristolwood and Slusser have refused to
execute the revocation agreement and return the note.

Compass

further claims that Bristolwood and Slusser have ceased paying on
the note and that the note has fallen into default.

The proposed

third-party complaint asserts causes of action for breach of
contract, breach of the note, and unjust enrichment, and requests
an order allowing foreclosure or a declaratory judgment
authorizing foreclosure, equitable rescission, and a declaratory
judgment to correct the unintended mistake.

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II.

Legal Standard under Rule 14(a)
Under Rule 14(a) of the Federal Rules of Civil Procedure, a
defendant, as third-party plaintiff, may sue "a nonparty who is
or may be liable to it for all or part of the claim against it."
Fed. R. Civ. P. 14(a) (1).

The purpose of Rule 14(a) is "to bring

in third parties who are derivatively liable to the impleading
party."

Hassan v. La. Dep't of Transp. & Dev., No. 98-31224,

1999 WL 642861, at *2 (5th Cir. July 26, 1999)

(per curiam).

Therefore, impleader is appropriate "only in cases where the
third party's liability [is] in some way derivative of the
outcome of the main claim."
Inc~,

United States v. Joe Grasso & Son,

380F.2d 749, 751 (5th Cir. 1967).

In other words,

"impleader under Rule 14 requires that the liability of the third
party be dependent.upon the outcome of the main claim."

Id.

Thus, separate and independent claims against a third party are
not permitted under Rule 14 even if such claims arise out of the
same general set of facts as plaintiff's main claim.

Id.

Further, factors that courts have considered in deciding whether
to permit a third-party complaint include possible prejudice to
the other parties, undue delay by the third party plaintiff, and
whether allowing the third party complaint would· further the
goals of Rule 14 by eliminating duplicative suit~ and promoting
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judicial economy.

See 6 Charles Alan Wright, et al., Federal

Practice and Procedure

1443 (3d ed. 2010).

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See also

~m.

Int'l

Specialty Lines Ins. Co. v. 7-Eleven, Inc., No. 3:08-CV-807-M,
2009 WL 2448440,at *2 (N.D. Tex. Aug. 7, 2009); Briones v. Smith
Dairy.Queens, Ltd., No. V-08-48, 2008 WL 4200931, at *2 (S.D.
Te~.

Sept. 9, 2008).

The

co~rt

is afforded "wide discretion" in

deciding whether to permit such third-party practice.

McDonald

v. Union Carbide Corp., 734 F. 2d 182, 184 (5th Cir. 1984)

(per

curiam).
III.
Analysis
In her response, Duke argues that the claims in Compass's
proposed third-party complaint are separate and independent
claims and are not derivative of the outcome of the main claim.·
The court agrees.

Duke's main claim in this action is that

Compass breached a contract with Duke regarding the sale of a
promissory note.

In contrast, Compass alleges in its proposed

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third-party complaint that Bristolwood and Slusser breached a
separate agreement by refusing to cooperate with Compass in
revoking the release of the note, and that they subsequently
defaulted on the note.

The claims Compass asserts against

Brisolwood and Slusser do not emanate from the main claim.

In

other words, Bristolwood and Slusser could still be liable to
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Compass for breach of contract, breach of the note, and unjust
enrichment regardless of whether Compass is found liable to
plaintiff on plaintiff's breach of contract claim.

Accordingly,

the liability of Bristolwood and Slusser is independent of
defendant's liability to plaintiff and is not dependent on the
outcome of plaintiff's claim against defendant.

Therefore,

defendant's proposed third-party complaint is not appropriate
under Rule 14.
Further, the court finds that the relevant factors to be
considered in deciding whether to permit a third-party complaint
weigh against granting defendant's motion.

Specifically,

addition of the proposed third-party defendant would not further
the goals of Rule 14, would likely prejudice plaintiff by
increasing the cost of litigation, and would potentially dely the
case.

Finally, the court notes that denying defendant's motion

would not prejudice defendant, as defendant.would still be free
to file its claims against

Bri~tolwood

action.

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and s1usser in a separate

IV.

Order
Therefore,
The court ORDERS that defendant's motion for leave to file
its third-party complaint be, and is hereby,
SIGNED March 5, 2014.

Judge

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