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Gross v. Hanover Insurance Co.

United States District Court for the Southern District of New York · Civil Procedure

Civil ProcedureImpleaderRule 14(a)Federal Rule of Civil Procedure 14(a)impleaderthird-party complaintjudicial efficiencyderivative liability

Facts

Plaintiff claimed losses for diamonds consigned to 3-R Jewelers and for diamonds and emeralds left there for safekeeping, and sought recovery under a jewelers' block insurance policy issued by defendant. The parties agreed that the jewelry was stolen from the 3-R store, which was owned by Anthony Rizzo, who employed his brother Joseph Rizzo. Defendant produced evidence suggesting Joseph may have facilitated the theft and that Anthony knew Joseph had a cocaine habit but continued to employ him. Defendant's proposed third-party complaint asserted claims against Joseph for negligent handling as consignee, bailee, or agent and for conversion, and against Anthony for negligent hiring, retention, and supervision.

Issue

Whether the insurer should be granted leave under Rule 14(a) to implead Joseph Rizzo and Anthony Rizzo as third-party defendants on claims that they may be liable to the insurer for all or part of plaintiff's claim, despite plaintiff's arguments that the claims were speculative, delayed, and prejudicial.

Rule

Under Rule 14(a), a defending party may implead a nonparty who is or may be liable to the defending party for all or part of the plaintiff's claim. When leave is required, the district court has considerable discretion and must balance the efficiency gained by resolving related matters in one suit against potential prejudice to the plaintiff and third-party defendants. Impleader is proper even if the third-party defendant's liability is not automatically established by the defendant's liability to the plaintiff, and claims arising from the same aggregate or core of facts may be sufficiently related for Rule 14(a) purposes.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In a federal action in Chicago, Nora Levin sued Lakefront Indemnity for coverage after specialty cameras disappeared from a repair studio. Lakefront answered the complaint in January, conducted several months of discovery, and in June moved to file a third-party complaint against the studio manager, Omar Vega, alleging he may be liable to Lakefront for all or part of Nora's claim because he mishandled or converted the cameras during the same incident.

How should the court treat Lakefront's attempt to implead Omar?

Explanation. Under the majority opinion, when a defending party seeks to file a third-party complaint more than ten days after serving its original answer, it must obtain leave on motion upon notice to all parties to the action. Rule 14(a) does not require plaintiff consent, and impleader does not depend on already-established liability. (Derived from Gross v. Hanover Insurance Co. (n.d.).)