Too, Inc. v. Kohl's Department Stores, Inc.

213 F.R.D. 138, 2003 U.S. Dist. LEXIS 2268, 2003 WL 342837
District Court, S.D. New York·Decided February 13, 2003·No. No. 01 CIV;.8200 (VM)·Published·Cited by 15 cases

Opinion

DECISION AND ORDER

MARRERO, District Judge.

Plaintiff Too, Inc., (“Too”) brought this action alleging copyright infringement, trademark infringement and unfair competition. Defendant Windstar Apparel, Inc. (“Winds-tar”) has moved the Court, pursuant to Fed. R.Civ.P. 14(a), for leave to file a third-party complaint seeking contribution and indemnification from two of Windstar’s former employees, Mia DeCaro (“DeCaro”) and Paula Abraham (“Abraham”). For the reasons set forth below, the motion is granted in part and denied in part.

I. BACKGROUND

The Complaint in this action was filed on August 31, 2001, and was thereafter super-ceded by an Amended Complaint filed on December 7, 2001 and a Second Amended Complaint filed on July 31, 2002. At this stage in the proceedings discovery is complete, having ended in late September of 2002. No trial date has been set at this time.

Windstar, which is engaged in the production and sale of apparel, hired DeCaro and Abraham in or about November, 2000. De-Caro and Abraham were employed to start up a girls sleep-wear division. Specifically, DeCaro was employed as Head Designer for Windstar and Abraham was the Windstar salesperson in charge of the Kohl’s Department Stores, Inc. (“Kohl’s”) account, responsible for all sales to Kohl’s. Windstar alleges that DeCaro represented to Jae C. Han (“Han”), Windstar’s production manager, that she had created each of the designs Too alleges infringed their copyrights and trademarks and that she knew her designs were to be sold by Windstar to third party retailers, including Kohl’s. Similarly, Windstar implicates Abraham for potential contribution by alleging that she proceeded to sell girls sleep-wear with the alleged infringing copyright and trademarks, knowing the sleepwear to contain designs that allegedly infringed Too’s copyrights and trademarks.

Based on these allegations, Windstar seeks to implead DeCaro and Abraham to enable it to seek contribution and indemnification that Windstar alleges would be derivatively owed [140] to it by DeCaro and Abraham if Windstar is found liable in the main cause of action brought by Too. Too opposes the motion on the grounds that (i) there is no factual basis for Windstar’s proposed allegations; (ii) there is no legal basis for Windstar’s proposed third-party complaint; (iii) impleading DeCaro and Abraham will prejudice them; (iv) Windstar deliberately delayed filing this motion; and (v) the third-party complaint will delay and/or unduly complicate the trial.

II. DISCUSSION

A. STANDARD OF REVIEW

Rule 14(a) of the Fed.R.Civ.P. provides, in relevant part, that: “At any time after commencement of the action a defending party, as a third-party plaintiff, may cause a summons and complaint to be served upon a person not a party to the action who is or may be liable to the third-party plaintiff for all or party of the plaintiffs claim against the third-party plaintiff.” Unless the third-party plaintiff files the third-party complaint within ten days of serving the original answer, the third-party plaintiff must seek leave from the court to file the third-party complaint. Id. Impleader is appropriate when the third-party defendant’s liability to the third-party plaintiff is “dependent upon the outcome of the main claim” or the third-party defendant is “potentially secondarily liable as a contributor to the defendant.” Kenneth Leventhal & Co. v. Joyner Wholesale Co., 736 F.2d 29, 31 (2d Cir.1984) (citing 6 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 1446 (1971)); Rodolico v. Unisys Corp., 189 F.R.D. 245, 249 (E.D.N.Y.1999). The purpose of this rule is to promote judicial efficiency by eliminating the necessity for the defendant to bring a separate cause of action against a third-party for contribution. See Gross v. Hanover Ins. Co., 138 F.R.D. 53, 54 (S.D.N.Y.1991); McLaughlin v. Biasucci, 688 F.Supp. 965, 967 (S.D.N.Y.1988).

The district court has considerable discretion in deciding whether to permit a third-party complaint. Leventhal, 736 F.2d at 31; Gross, 138 F.R.D. at 54. Upon determination that a third-party complaint would be appropriate and foster the interest of judicial economy, the factors to be considered in determining whether to grant leave to implead a third-party defendant are: (i) whether the movant deliberately delayed or was derelict in filing the motion; (ii) whether impleading would unduly delay or complicate the trial; (iii) whether impleading would prejudice the third-party defendant; and (iv) whether the third-party complaint states a claim upon which relief can be granted. Rodolico, 189 F.R.D. at 249 (citing Fashion-In-Prints, Inc. v. Salon, Marrow & Dyckman, L.L.P., 97 Civ. 0340, 1999 WL 500149, at *6 (S.D.N.Y. July 15, 1999); Middle Mkt. Fin. Corp. v. D’Orazio, No. 96 Civ. 8138, 1998 WL 872412, at *2 (S.D.N.Y. Dec.15, 1998)). “‘The court must balance the benefits derived from impleader — that is, the benefits of settling related matters in one suit — against the potential prejudice to the plaintiff and third-party defendants.’ ” Gross, 138 F.R.D. at 55 (citing Oliner v. McBride’s Industries, Inc., 106 F.R.D. 14, 20 (S.D.N.Y.1985)).

C. CONTRIBUTION

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Too, Inc. v. Kohl's Department Stores, Inc., 213 F.R.D. 138, 2003 U.S. Dist. LEXIS 2268, 2003 WL 342837 (S.D.N.Y. 2003).

213 F.R.D. 138 (Too, Inc. v. Kohl's Department Stores, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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