Patriot Insurance Company a/s/o Jessica Realty, LLC, and Harleysville Insurance Company a/s/o PDS Restauranteurs, Inc., d/b/a Portsmouth Gas Light Restaurant, Plaintiffs v. Tri State Hood & Duct, LLC, Tri State Fire Protection, LLC, and 11 Holland, Inc., d/b/a Clean Choice & Portsmouth Steam, Defendants

2019 DNH 196

• Court: District Court, D. New Hampshire
• Decided: November 20, 2019
• Docket: 18-cv-062-SM
• Status: Published

Opinion

UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Patriot Insurance Company a/s/o Jessica Realty, LLC, and Harleysville Insurance Company a/s/o PDS Restauranteurs, Inc., d/b/a Portsmouth Gas Light Restaurant, Plaintiffs

v. Case No. 18-cv-062-SM Opinion No. 2019 DNH 196 Tri State Hood & Duct, LLC, Tri State Fire Protection, LLC, and 11 Holland, Inc., d/b/a Clean Choice & Portsmouth Steam, Defendants

O R D E R

Defendants Tri State Hood & Duct, LLC, and Tri State Fire

Protection, LLC, (collectively, “Tri State”) have moved for

leave to file a third party complaint against PDS

Restauranteurs, Inc., d/b/a Portsmouth Gas Light Restaurant

(“Gas Light”). Plaintiffs, Harleysville Insurance Co., as

subrogee of Gas Light, and Patriot Insurance Company, as

subrogee of Jessica Realty, LLC, object. Tri State’s motion for

leave to file is necessarily denied.

BACKGROUND

The current action arises out of a fire that occurred on

December 9, 2015, at 64 Market Street, in Portsmouth. Jessica

Realty, LLC, is the owner of the property, and leases it to Gas Light. Gas Light operates two restaurants, a nightclub, and an

outdoor patio, at the property. At all relevant times, Tri

State Hood and Portsmouth Steam provided inspection, maintenance

and cleaning work and services to Gas Light with respect to its

commercial kitchen hood and ductwork. Tri State Fire, for its

part, provided inspection, testing, repair and maintenance work

and services for Gas Light’s commercial fire suppression system.

The December, 2015, fire began in Gas Light’s kitchen hood and

duct system. The fire caused extensive damage to the property,

including damage to equipment and inventory, as well as a

significant loss of business income.

Jessica Realty notified and submitted a claim to its

insurer, plaintiff Patriot Insurance Company. Gas Light, for

its part, duly made a claim to its insurer, Harleysville.

Patriot and Harleysville paid the claims and, as subrogees of

the insured parties, filed suit against Tri State and Portsmouth

Steam, alleging, inter alia, that defendants’ negligence in

cleaning, servicing and maintaining the kitchen hoods, ducts,

and fire suppression systems had proximately caused or

substantially contributed to the fire.

Tri State now moves for leave to file a third party

complaint against Gas Light. Tri State has not attached a

proposed third-party complaint to its motion for leave, as is

customary. However, in its motion for leave, Tri State states

2 that “supplemental discovery responses . . . indicate[] that the

negligence of Gas Light Restaurant and/or its employees caused

or contributed to the subject fire.” Mot. for Leave at ¶ 3.

Presumably, Tri State seeks to assert a claim for contribution

against Gas Light with respect to Patriot’s claim (Jessica

Realty).

DISCUSSION

Pursuant to Federal Rule of Civil Procedure 14(a)(1), a

“defending party may, as third-party plaintiff, 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.” The rule allows

defendants to bring a third party into the suit without leave of

court, provided defendants file within 14 days of submitting

their answer to the plaintiff’s complaint. Otherwise, the

defendant must seek leave of the court. “In that event, the

determination is left to the informed discretion of the district

court, which should allow impleader on any colorable claim of

derivative liability that will not unduly delay or otherwise

prejudice the ongoing proceedings.” Lehman v. Revolution

Portfolio LLC, 166 F.3d 389, 393 (1st Cir. 1999) (internal

citations omitted). However, “[c]ourts may deny a defendant’s

request for leave ‘when bringing in a third party will introduce

unrelated issues and unduly complicate the original suit,’ or

‘if the [third party] claim is futile.’” Signs for Jesus v.

3 Town of Pembroke, No. 15-CV-482-PB, 2016 WL 4083723, at *2

(D.N.H. Aug. 1, 2016) (quoting S. Shore Hellenic Church, Inc. v.

Artech Church Interiors, Inc., No. 12–11663–GAO, 2015 WL 846533,

at *18 (D. Mass. Feb. 26, 2015)) (alterations in original).

Under New Hampshire law, “a right of contribution exists

between or among 2 or more persons who are jointly and severally

liable upon the same indivisible claim, or otherwise liable for

the same injury, death, or harm.” N.H. Rev. Stat. Ann. (“RSA”)

507:7–f. The statute further provides: “Except as provided in

RSA 507:7-g I, and IV, the right of contribution may be enforced

only by a separate action brought for that purpose.” Id.

Pursuant to N.H. Rev. Stat. Ann. § 507:7–g, that separate action

arises following judgment rendered against a defendant in the

principal action, and “must be commenced [in a separate action]

within one year after the judgment becomes final.” N.H. Rev.

Stat. Ann. § 507:7–g(III).

However, if judgment has not been recovered in the

principal action, one of two conditions must be fulfilled before

a contribution cause of action arises:

If no judgment has been rendered, the person bringing the action for contribution must have either (a) discharged by payment the common liability within the period of the statute of limitations applicable to the claimant's right of action against that person and commenced the action for contribution within one year after payment, or (b) agreed while the action was 4 pending to discharge the common liability and, within one year after the agreement, have paid liability and commenced an action for contribution.

N.H. Rev. Stat. Ann. § 507:7–g(III). “In each circumstance

described, the defendant must bring the contribution cause of

action in a separate suit, the principal suit having been either

settled or never commenced by the potential plaintiff.” Connors

v. Suburban Propane Co., 916 F. Supp. at 76.

“The single exception to the ‘separate action’ rule of

section 507:7–f(I) applicable here is found in section 507:7–

g(IV).” Id. That section provides:

[I]f and only if the plaintiff in the principal action agrees, a defendant seeking contribution may bring an action in contribution prior to the resolution of the plaintiff's principal action, and such action shall be consolidated for all purposes with the principal action.

N.H. Rev. Stat. Ann. § 507:7–g(IV)(c) (emphasis added). Thus,

“New Hampshire law prescribes four ways in which a defendant may

bring a contribution cause of action against a third-party, but

restricts a defendant's ability to bring a contribution suit

prior to resolution of the plaintiff's principal case to those

circumstances in which the plaintiff in the principal action

consents.” Connors, 916 F. Supp. at 77.

Accordingly, assuming that Tri State can allege the

elements of a viable contribution claim under New Hampshire

5 statutory law, this action is not the proper vehicle in which to

pursue that claim. The court has previously discussed this

issue in detail, see Connors, 916 F. Supp. 73 (D.N.H. 1996), and

that analysis need not be repeated. Suffice it to say, the

court concluded in Connors:

Because its use to implead third-party contribution defendants would violate the Rules Enabling Act (by limiting plaintiffs' and enlarging defendant’s substantive rights under applicable state law), Fed. R. Civ. P. 14 cannot be invoked, without plaintiffs' consent, to bring a contribution action premised on N.H. Rev. Stat. Ann. § 507:7-f & g against a third- party defendant in this diversity action.

Id. at 81. But cf., Gilbert v. CPM Constructors, 96–cv–481–PB

(D.N.H. 1998) (slip op. at 2-3) (holding that “the right to

engage in third-party practice under Rule 14(a) affects only the

process of enforcing litigant’s rights rather than the rights

themselves”). Plaintiffs in this action both oppose Tri State’s

efforts to pursue a statutory contribution claim against PDS.

Harleysville makes the argument that Tri State’s motion to

amend is also futile because, under New Hampshire law, no

contribution claim exists against a claimant at fault, like Gas

Light. See NH RSA § 507:7-f. It is doubtful, however, that

such a proposition would apply to a later-filed separate

contribution action brought by defendants against PDS to recover

damages attributable to PDS’s own negligence recovered by

6 Jessica Realty. But, that remains an issue for another day and

a different case.

CONCLUSION

For the foregoing reasons, Tri State’s motion for leave to

file a third party complaint (document no. 54) is DENIED.

SO ORDERED.

____________________________ Steven J. McAuliffe United States District Judge

November 20, 2019

cc: All counsel of record