Scott Paper Co. v. National Casualty Co.

151 F.R.D. 577, 27 Fed. R. Serv. 3d 1382, 1993 U.S. Dist. LEXIS 16372, 1993 WL 482464
District Court, E.D. Pennsylvania·Decided November 19, 1993·No. Civ. A. No. 93-2141·Published·Cited by 4 cases

Opinion

MEMORANDUM AND ORDER

ANITA B. BRODY, District Judge.

I must decide whether I should require joinder of, or dismiss for failure to join in this action, three absent parties which the defendant alleges to be necessary and indispensable under Federal Rule of Civil Procedure 19 because the absent parties’ interests will be prejudiced if they are not part of this action. After having notice served on the three absent parties soliciting their input on the pending motion, and having received no response to the notice, I now find after considering the practical considerations recommending for and against joinder, including the parties’ failure to respond to the notice, that they are not necessary parties and that this action will proceed without them.

FACTS

On June 9, 1992, Mr. Glen Senkowski filed a civil complaint in Pennsylvania state court against Scott Paper Company, owner of Scott Plaza II, and Realty Services, Inc., a janitorial sub-contractor, regarding a slip and fall accident which occurred in the Scott Plaza II lobby on June 27, 1990. Senkowski v. Scott Paper and Realty Services, Inc. (Philadelphia County Court of Common Pleas, June Term, 1992, No. 1348). See Complaint for Declaratory Judgment, Scott Paper Company v. National Casualty Company, Civil Action 93-2141 (E.D.Pa.), Exhibit A. The Scott Paper Company, the plaintiff in this federal action, contends that it was added by its contract with Realty as an “other insured” to an insurance policy issued to Realty by National Casualty Company, the defendant in this federal action. See Complaint.

Scott Paper Company filed this action for a Declaratory Judgment before me, alleging National Casualty Company’s refusal to defend it in the state court action filed by Mr. Senkowski, and requesting an order directing it to do so. See Complaint.

National Casualty Company then filed this Motion to Dismiss for Failure to Join Indispensable Parties as required by Federal Rule of Civil Procedure 19. National Casualty contends that three absent parties are necessary and indispensable to this federal action: Glen Senkowski, the state court plaintiff; Realty Services, Inc., a defendant in Mr. Sen-kowski’s state court action and a signatory to both the insurance policy with National Casualty and to the indemnification or “other insured” agreement with Scott Paper Company; and Wausau, the primary insurer of Scott Paper Company, which is not a party to either the state or federal actions.

Because 'National Casualty’s motion to dismiss was grounded only in the interests of the absent parties, I ordered National Casualty to serve on the absent parties a notice inviting them to inform me how they felt their interests would be effected by joinder or non-joinder. See 151 F.R.D. 60. I urged the absent parties to enlighten me with any considerations, both practical and legal, which militated for or against joining them to this action. The time granted the absent parties to contact the court is now past and none of them have responded.

DISCUSSION

Rule 19, provides that a party is “necessary” and should be joined if feasible if:

(1) in the person’s absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person’s absence may (i) as a practical matter impair or impede the person’s ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. FED.R.CIV.P. 19.

If I find that a party is “necessary” then I must continue the Rule 19 inquiry. Scott Paper v. National Casualty Co., 151 F.R.D. 60 (E.D.Pa.) If the party can be joined then I must do so. Id. If joinder is impeded by jurisdictional or other considerations then I must make a further determination of wheth[579] er the party is “indispensable” to the action, or whether the action can proceed in the party’s absence. Id. However, if the party is not “necessary” then the action can proceed in its absence, and no further analysis is required. Id. Accordingly, whether the party is “necessary” is the threshold determination.

National Casualty Company has made no contentions in its Motion that failure to join any of the absent parties will impede my ability to accord complete relief between itself and Scott Paper Company. Nor has it argued that the failure to join will leave either itself or Scott Paper subject to the risk of multiple or inconsistent obligations. Its only explicitly stated grounds for requiring joinder of the absent parties is that those absent parties’ interests will be harmed, or as provided by Rule 19(a)(2)(i) “the [parties’] absence may ... as a practical matter impair or impede the [parties’] ability to protect [their] interest^]”. FED.R.CIV.P. 19.

The practical considerations regarding the absent parties will be predicated partly on the remedy sought. Scott Paper has brought this action only for a declaration that National Casualty must defend it in the state court action. “Under Pennsylvania law, an insurer has a duty to defend if the complaint [against the insured] alleges facts that support recovery within the policy.” Terra Nova Ins. Co., Ltd. v. 900 Bar, Inc., 887 F.2d 1213, 1216 (3d Cir.1989). Therefore I need not pierce the facts of the case as I would if a claim for indemnification was before me. Id. This circumstance sharply mitigates, if not in fact eliminates, any concerns of issue preclusion or negative precedent for the absent parties. In re Braen, 900 F.2d 621, 624 (3d Cir.1990) (“[Disparate burdens of proof foreclose application of the issue preclusion doctrine.”)

The absent parties decision not to respond indicates that they perceive no substantial prejudice by not being joined. Therefore I am left with the more objective contentions of National Casualty regarding their interests. National Casualty has cited analogous case law in support of treating the absent parties as “necessary.” However, my determination is largely controlled by the facts and individual circumstances of the case before me. Kint v. Terrain King Corp., 79 F.R.D. 10, 11 n. 3 (M.D.Pa.1977). In my estimation, the non response to my notice is one fact which strongly militates against designating the absent parties as “necessary.”

Of course the determination of necessary parties is not dependent on the absent parties assent or agreement. Rule 19 by its terms allows parties to an action to advocate the interests of outsiders, even when their presence or absence otherwise has no effect on the parties’ rights and duties. This provision of the rule serves as a vehicle for bringing considerations to the attention of the court which otherwise might go undiscovered. National Casualty’s motion serves that purpose in this case.

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Scott Paper Co. v. National Casualty Co., 151 F.R.D. 577, 27 Fed. R. Serv. 3d 1382, 1993 U.S. Dist. LEXIS 16372, 1993 WL 482464 (E.D. Pa. 1993).

151 F.R.D. 577 (Scott Paper Co. v. National Casualty Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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