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Price v. CTB, Inc.

United States District Court for the Middle District of Alabama · 2001 · Civil Procedure

Civil ProcedureThird-Party PracticeImpleaderLachesRule 14(a)impleaderthird-party complaintderivative liability

Facts

Lateo, a building contractor, was sued by Alabama farmers over allegedly defective construction of chicken houses, including claims for breach of contract, fraudulent misrepresentation, negligence, and wantonness. Lateo then filed a third-party complaint against ITW, a nail manufacturer, alleging that defectively designed nails used in the construction caused the problems; the complaint asserted breach of warranty, AEMLD, and common law indemnity. Lateo first sought to implead ITW in February 2001 but did not properly serve it until July 19 because it initially failed to name the proper agent for service. ITW contended that the claims were not proper under Rule 14 and that the delay in impleading it warranted dismissal under laches.

Issue

Whether Lateo could properly implead ITW under Rule 14(a) on a theory of common law implied indemnity arising from alleged defects in ITW's products, and whether the third-party complaint should nonetheless be barred by laches because of Lateo's delay in effecting proper service.

Rule

Under Rule 14(a), a defendant may implead a nonparty only when that nonparty's potential liability is derivative of the original claim, meaning the defendant seeks to pass on all or part of the liability asserted against it; impleader is not proper for a separate and independent claim. Alabama recognizes common law implied indemnity where a seller is without fault, the manufacturer is responsible, and the seller has been required to pay a monetary judgment. Laches requires a showing of prejudice from unreasonable delay and does not apply absent sufficient information and some indicia of culpable failure by the delayed party.

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

In federal court in Birmingham, a hotel owner sued Mason Pike Builders for negligent renovation and misrepresentation about the quality of balcony railings. Mason Pike then filed a third-party complaint against Ironclad Fasteners, alleging that if Mason Pike is held liable, defective bolts supplied by Ironclad caused the railing failures and Ironclad must indemnify Mason Pike under Alabama law.

Is the third-party complaint most likely proper under Rule 14(a)?

Explanation. Rule 14(a) permits impleader when the proposed third-party defendant may be liable to the defending party for all or part of the plaintiff’s claim. The key is derivative liability, not merely factual overlap. Here, Mason Pike alleges that if it is liable to the hotel owner, Ironclad must indemnify it because the defect came from Ironclad’s product. Under the majority opinion, that is a proper Rule 14 theory even though Mason Pike has not yet proved the ultimate elements of indemnity.