Unilease Computer Corp. v. Major Computer Inc.

126 F.R.D. 490, 1989 U.S. Dist. LEXIS 7570, 1989 WL 73942
CourtDistrict Court, S.D. New York
DecidedJuly 6, 1989
DocketNo. 88 Civ. 0682 (JMC)
StatusPublished
Cited by11 cases

This text of 126 F.R.D. 490 (Unilease Computer Corp. v. Major Computer Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Unilease Computer Corp. v. Major Computer Inc., 126 F.R.D. 490, 1989 U.S. Dist. LEXIS 7570, 1989 WL 73942 (S.D.N.Y. 1989).

Opinion

MEMORANDUM AND ORDER

CANNELLA, District Judge:

Third-party defendant’s motion to strike the third-party complaint is granted. Fed. R.Civ.P. 14(a).

BACKGROUND

Defendant and third-party plaintiff Major Computer, Inc. [“Major”] is a broker of computer equipment engaged in the business of bringing together potential vendors and customers of computer hardware components. Third-party defendant Statistical Tabulating Corp. [“Stat Tab”] is a computer service bureau engaged in the business of providing data processing, computer programming and computer consulting services. On or about July 22, 1986, Major entered into a lease agreement [“Master Lease Agreement”] with Stat Tab whereby Major was to deliver a mainframe computer central processing unit [“CPU”] and various disk drives to Stat Tab. In addition to the Master Lease Agreement, Major and Stat Tab executed seven schedules which describe and govern particular portions of the overall group of components Major leased to Stat Tab. Schedule A-l governs the mainframe CPU. Schedule A-2 governs the disk drives and associated equipment.

In order to fulfill its obligations under the Master Lease Agreement, on or about July 29, 1986, Major entered into a lease agreement [the “Sublease Agreement”] with plaintiff Unilease Computer Corporation [“Unilease”] whereby Unilease was to rent certain disk drives to Major. On or about August 18, 1986, after receiving the disk drives from Unilease, Major delivered them to Stat Tab’s premises. Thereafter, Stat Tab executed a formal acceptance of the equipment.

Stat Tab failed to pay rent on the leased equipment alleging that the CPU delivered by Major was not the model it had contracted to lease. Thereafter, a dispute arose between Major and Stat Tab regarding Stat [492]*492Tab’s obligation to pay rent on the disk drives. On or about May 8, 1987, Stat Tab initiated an action against Major in the United States District Court for the Northern District of Illinois [the “Illinois action”] claiming damages as a result of Major’s failure to deliver the correct CPU. In response, Major filed a counterclaim contending that Stat Tab had breached the Master Lease Agreement and Schedule A-2 by failing to make rent payments on the disk drives. Major also alleged that Stat Tab had breached the Master Lease Agreement by refusing to pay the interest due on the late rent payments. Discovery has begun in the Illinois action and, on or about July 23, 1987, Major filed a motion for partial summary judgment on its counterclaim. That motion is sub judice.

On or about February 1, 1988, Unilease initiated the instant action against Major seeking damages for Major’s alleged failure to make $100,892 in rental payments on the disk drives subleased to Stat Tab. On or about March 14, 1988, Major filed a third-party complaint against Stat Tab seeking damages for Stat Tab’s alleged failure to pay rent on the disk drives. Stat Tab now moves for an order striking the third-party complaint or, in the alternative, for an order severing the third-party complaint and transferring it to the United States District Court for the Northern District of Illinois. Major opposes the motion. Unilease has taken no position on the motion.

DISCUSSION

Rule 14 of the Federal Rules of Civil Procedure provides in pertinent part:

At any time after the 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 part of the plaintiff’s claim against the third-party plaintiff____ Any party may move to strike the third-party claim, or for its severance or separate trial.

Fed.R.Civ.P. 14(a).

Stat Tab moves to strike the third-party complaint arguing that Major’s obligation to Unilease exists independent of any obligation that Stat Tab may have to Major. Major opposes the motion contending that Stat Tab is liable for Unilease’s claim against Major as any liability flowing from Major to Unilease is a direct result of liability flowing from Stat Tab to Major.

Third-party practice or impleader is permitted under the Federal Rules of Civil Procedure only where the defendant can show that if he is found liable to the plaintiff then the third-party defendant will be liable to him. See Southeast Mortgage Co. v. Mullins, 514 F.2d 747, 749 (5th Cir. 1975). “The procedural device of impleader may be utilized only when the third-party complaint necessarily depends upon the outcome of the main claim against the defendant.” Index Fund v. Hagopian, 417 F.Supp. 738, 744 (S.D.N.Y.1976).

[A]n entirely separate and independent claim cannot be maintained against a third party under Rule 14, even though it does arise out of the same general set of facts as the main claim____
The question whether a defendant’s demand presents an appropriate occasion for the use of impleader or else constitutes a separate claim has been resolved consistently by permitting impleader only in cases where the third party’s liability was in some way derivative of the outcome of the main claim. In most such cases it has been held that for impleader to be available the third party defendant must be “liable secondarily to the original defendant in the event that the latter is held liable to the plaintiff.” ... Stating the same principal in different words, other authorities declare that the third party must necessarily be liable over to the defendant for all or part of the plaintiff’s recovery, ... or that the defendant must attempt to pass on to the third party all or part of the liability asserted against the defendant, ... it is clear that impleader under Rule 14 requires that the liability of the third party be dependent upon the outcome of the main claim.

United States v. Joe Grosso & Son, Inc., 380 F.2d 749, 751-52 (5th Cir.1967) (cita[493]*493tions and footnotes omitted) (emphasis in original). Thus, under Rule 14 a third-party plaintiff’s claim against a third-party should accrue only upon a finding of defendant’s liability to the plaintiff on the main claim. See Index Fund, 417 F.Supp. at 744.

Major’s claim against Stat Tab is neither derivative of, nor dependent on the outcome of Unilease’s claim against Major. As evidenced by Major’s counterclaim filed in the Illinois action each lease agreement exists independently of the other. Major’s counterclaim in the Illinois action was filed ten months prior to the third-party complaint in the instant action. Unilease, however, has never been named as a party in the Illinois action. Major’s claim against Stat Tab accrued prior to a finding that Major is liable to Unilease.

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Bluebook (online)
126 F.R.D. 490, 1989 U.S. Dist. LEXIS 7570, 1989 WL 73942, Counsel Stack Legal Research, https://law.counselstack.com/opinion/unilease-computer-corp-v-major-computer-inc-nysd-1989.