Thornapple Associate, Inc. v. Izadpanah
Filing
65
MEMORANDUM OPINION RE: Thornapple's Motion to Sever. Signed by District Judge James C. Cacheris on 12/17/14. (pmil, )
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
THORNAPPLE ASSOCIATES, INC.,
Plaintiff,
v.
ALLEN IZADPANAH,
Defendant,
v.
COLLETT CLARK LLP,
Third-Party Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
M E M O R A N D U M
1:14cv767 (JCC/TRJ)
O P I N I O N
This matter is before the Court on Plaintiff
Thornapple Associates, Inc.’s (“Thornapple” or “Plaintiff”)
Motion to Sever.
[Dkt. 56.]
For the following reasons, the
Court will deny the motion in part and order separate trials in
this action.
I. Background
This case arises out of a dispute over an expert fee
agreement.
Allen Izadpanah (“Izadpanah”) retained the legal
services of Collett Legal and later Collett Clark LLP to
represent him in a National Futures Association (“NFA”)
arbitration proceeding.
(Am. Third Party Compl. [Dkt. 53] ¶¶
1
12-13.)
As part of that proceeding, Collett Clark LLP and
Izadpanah engaged the expert witness services of Thornapple
Associates, Inc. (“Thornapple”) (Id. ¶ 7.)
In the original
complaint, Thornapple asserts claims of breach of contract,
account stated, quantum meruit, and unjust enrichment arising
out of Izadpanah’s alleged non-payment of expert witness fees.
(Id.)
Izadpanah denies liability for Thornapple’s fees.
Third Party Compl. ¶ 7.)
(Am.
However, to the extent that he is
found liable, Izadpanah contends that Collett Clark LLP is
responsible for half of the outstanding balance as well as half
of any money already paid to Thornapple pursuant to a contract
he had with the firm.
(Id. ¶ 9, ¶¶ 23-28.)
Izadpanah originally filed a third-party complaint
against Joseph Clark (“Clark”) and Gregory Collett (“Collett”)
individually, law partners at Collett Clark LLP.
Compl. [Dkt. 21].)
(Third Party
After considering Clark and Collett’s
motions to dismiss, the Court denied their motions in part and
granted them in part because Izadpanah had named the incorrect
parties.
(9/30/14 Order [Dkt. 48].)
The Court gave Izadpanah
ten days to re-file the suit naming Collett Clark LLP as the
proper party.
(9/30/14 Order [Dkt. 48].)
Izadpanah complied with the Court’s order and filed an
amended third-party complaint on October 9, 2014, raising the
same breach of contract claim against Collett Clark LLP.
2
(Am.
Third Party Compl. [Dkt. 53].)
October 10, 2014.
Discovery in the case closed on
(Scheduling Order [Dkt. 15].)
Collett Clark
LLP filed an answer and a counterclaim against Izadpanah on
December 9, 2014.
(Answer [Dkt. 60].)
The counterclaim alleges
that Izadpanah has failed to pay for arbitration expenses that
Collett Clark LLP advanced on his behalf.
(Id. ¶¶ 8-12.)
Thereafter, Thornapple moved to sever Collett Clark
LLP from the action.
(Motion to Sever [Dkt. 56].)
Thornapple
requested a hearing on this motion [Dkt. 59], but in accordance
with E.D. Va. Local Civil Rule 7(J) and Rule 78 of the Federal
Rules of Civil Procedure, the Court dispenses with oral argument
and issues this ruling without a hearing.
Having been fully
briefed, then, Thornapple’s motion is now before the Court.
II. Legal Standard
Federal Rule of Civil Procedure 14 governs third-party
practice.
Rule 14(a) allows a defending party to “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.”
Once a third-party
defendant is joined “[a]ny party may move to strike the thirdparty claim, to sever it, or to try it separately.”
Civ. P. 14(a)(4).
Fed. R.
The primary objective of third-party
procedure is to avoid circuity and multiplicity of actions.
Laborers’ Dist. Council & Disability Trust Fund No. 2. v.
Geofreeze, Inc., 298 F.R.D. 300, 301-02 (D. Md. 2014) (citing
3
Noland Co. v. Graver Tank & Mfg. Co., 301 F.2d 43, 50 (4th Cir.
1962)).
The rule does so
by drawing into one proceeding all parties
who may become ultimately liable, so that
they
may
therein
assert
and
have
a
determination of their various claims inter
sese. This is intended to save the time and
cost of duplicating evidence and to obtain
consistent results from identical or similar
evidence, as well as to avoid the serious
handicap of a time lag between a judgment
against
the
original
defendant
and
a
judgment in his favor against the third
party defendant.
Id. (quoting Am. Export Lines v. Revel, 262 F.2d 122, 124-25
(4th Cir. 1958)).
A court may, on motion or on its own, sever any claim
against a party.
Fed. R. Civ. P. 21.
“[A] court has virtually
unfettered discretion in determining whether or not severance is
appropriate.”
17th Street Assocs., LLP v. Markel Int’l Ins. Co.
Ltd., 373 F. Supp. 2d 584, 598 n. 9 (E.D. Va. 2005).
“For convenience, to avoid prejudice, or to expedite
and economize, the court may order a separate trial of one or
more separate issues, claims, cross-claims, counterclaims, or
third-party claims.”
Fed. R. Civ. P. 42(b).
The decision
whether to order separate trials is in the sound discretion of
the trial judge.
Saint John’s African Methodist Episcopal
Church v. GuideOne Specialty Mut. Ins. Co., 902 F. Supp. 2d 783,
4
785 (E.D. Va. 2012) (citation and internal quotation marks
omitted).
III. Analysis
Thornapple argues that it is prejudiced by the “late
filing” of the Amended Third-Party Complaint and joinder of
Collett Clark LLP.
(Pl.’s Mot. [Dkt. 56] at 2.)
Thornapple
believes more motions practice is likely from Collett Clark LLP.
(Id. at 3.)
Additionally, Thornapple asserts that Izadpanah’s
claim against Collett Clark LLP can be resolved independently of
its collection dispute with Izadpanah.
(Id.)
Izadpanah
responds that it is inefficient to have two separate trials on
this issue.
(Def.’s Opp. [Dkt. 62] at 1.)
Izadpanah is
requesting indemnification from Collett Clark LLP for half of
any potential damage award.
(Id. at 2.)
Furthermore, “[t]he
central issue in the trial is the reasonableness of the fees
charged by [Thornapple].
Collett Clark LLP was instrumental in
directing [Thornapple’s] activities and communicating with them
on behalf of their client[,] the Defendant.”
(Id. at 2-3.)
Collett Clark LLP has filed nothing in response to Thornapple’s
motion to sever.
Assuming, arguendo, that the Court grants the motion
to sever, it must consider the possibilities as to what will
happen.
If the original action (“the Thornapple action”)
reaches judgment first and Izadpanah is liable, then Izadpanah
5
must proceed with a second suit to determine whether Collett
Clark LLP owes him any indemnity obligation.
If, instead, the
judgment in the Thornapple action is in Izadpanah’s favor, then
Izadpanah does not need to concern himself with additional
lawsuits.
But severing the cases effectively acts as a
dismissal of the third-party complaint.
Until there is a
judgment that he is liable to Thornapple, any injury to
Izadpanah is speculative.
Without injury, Izadpanah lacks
standing under Article III of the Constitution to bring suit
against Collett Clark LLP.
See Lujan v. Defenders of Wildlife,
504 U.S. 555, 560 (1992) (“[B]y injury in fact we mean] an
invasion of a legally protected interest which is (a) concrete
and particularized, . . . and (b) actual or imminent, not
‘conjectural’ or ‘hypothetical.’”).
The Court also finds persuasive case law that states
where the governing state law recognizes a right of contribution
in tort cases, “impleader under Rule 14 is a proper procedure by
which to seek relief from joint tortfeasors.”
6 Wright &
Miller, Fed. Prac. & Proc. Civ. § 1448 (3d ed. 2002).
“The
availability of impleader enables the right of contribution to
be litigated concurrently with the main claim.”
Id.
Though
this is not a tort case, Izadpanah is seeking contribution from
Collett Clark LLP for potential liability on an outstanding
6
debt.
Therefore, it promotes judicial economy to resolve who is
liable to whom and in what amount in one action.
However, the Court finds that separate trials are
appropriate under Federal Rule of Civil Procedure 42(b).
Separate trials are a distinct procedure from severance.
9A
Wright & Miller, Fed. Prac. & Proc. Civ. § 2387 (3d ed. 2002).
“Separate trials of claims originally sued upon together usually
will result in the entry of one judgment, but severed claims
become entirely independent actions to be tried, and judgment
entered thereon, independently.”
Id.
As noted above, the Court
has serious concerns about judicial economy if it were to sever
this case, resulting in two independent actions.
Ordering two
separate trials addresses these economy concerns while also
allowing the underlying action to proceed on schedule.
Furthermore, it prevents confusion.
As there is now a
counterclaim in the third-party suit, litigating all the claims
in one trial will be needlessly distracting for the jury.
Therefore, if necessary, a separate trial date will be set for
third-party plaintiff Izadpanah’s claim against Collett Clark
LLP after there has been a resolution in the Thornapple action. 1
1
The Thornapple action is currently set for a two-day jury trial starting
February 3, 2015. ([Dkt. 22].)
7
IV. Conclusion
For the foregoing reasons, Thornapple’s motion to
sever is denied in part.
in this action.
The Court will order separate trials
An appropriate order will issue.
December 17, 2014
Alexandria, Virginia
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?