Video Towne, Inc. v. RB-3 Associates

125 F.R.D. 457, 1988 U.S. Dist. LEXIS 16213, 1988 WL 156147
CourtDistrict Court, S.D. Ohio
DecidedAugust 8, 1988
DocketNo. C-3-87-654
StatusPublished
Cited by2 cases

This text of 125 F.R.D. 457 (Video Towne, Inc. v. RB-3 Associates) is published on Counsel Stack Legal Research, covering District Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Video Towne, Inc. v. RB-3 Associates, 125 F.R.D. 457, 1988 U.S. Dist. LEXIS 16213, 1988 WL 156147 (S.D. Ohio 1988).

Opinion

EXPANDED OPINION SETTING FORTH REASONING BEHIND DECISION AND ENTRY OF JULY 21, 1988, GRANTING PLAINTIFF LEAVE TO FILE AN AMENDED COMPLAINT AND DIRECTING THAT SAID AMENDED COMPLAINT BE FILED INSTANTER (DOC. #16); DECISION AND ENTRY REMANDING CAPTIONED CAUSE TO MONTGOMERY COUNTY COURT OF COMMON PLEAS DUE TO THIS COURT’S LACK OF SUBJECT MATTER (DIVERSITY) JURISDICTION; CERTAIN DISCOVERY MOTIONS DEEMED MOOT (DOCS. # 13 AND # 15); TERMINATION ENTRY

RICE, District Judge.

On July 21, 1988, this Court filed a Decision and Entry which sustained the Plain[458]*458tiffs Motion for Leave to File an Amended Complaint and directed that said Amended Complaint be filed instanter (Doc. # 16). That same Decision and Entry stated that the filing of the Amended Complaint would destroy this Court’s subject matter jurisdiction based upon diversity due to the addition of two new Defendants who are “non-diverse” vis a vis the Plaintiff. Finally, the Court promised an Expanded Opinion which would set forth the reasoning behind its decision of July 21, 1988, following the filing of which said Expanded Opinion, this Court would order, pursuant to 28 U.S.C. § 1447(c), that the captioned cause be remanded to the Montgomery County Court of Common Pleas. The Expanded Opinion promised by the Court follows within.

This case is before the Court on Plaintiff’s Motion for Leave to File an Amended Complaint (Doc. # 7) pursuant to Rule 15(a) of the Federal Rules of Civil Procedure. For reasons briefly set forth below, Plaintiff's motion is granted. Because the granting of this motion will result in this Court’s being deprived of subject matter jurisdiction, the case will be remanded to state court pursuant to 28 U.S.C. § 1447(c).

The Plaintiff in this case is an Ohio corporation which filed its original Complaint in the Common Pleas Court of Montgomery County, Ohio. (Doc. # 1, Complaint) Defendants, all citizens and residents of the state of New York, properly removed the action to this Court based on diversity among the parties pursuant to 28 U.S.C. § 1441. (Doc. # 1) Plaintiff now moves the Court for leave to file an Amended Complaint pursuant to Rule 15(a) of the Federal Rules of Civil Procedure adding two defendants and a second cause of action. (Doc. #7).

Rule 15(a) states that leave to amend “shall be freely given when justice so requires.” The Sixth Circuit has held that “[tjhough the decision to grant leave to amend is committed to the trial court’s discretion, that discretion is limited by Fed. R.Civ.P. 15(a)’s liberal policy of permitting amendments.” Marks v. Shell Oil Co., 830 F.2d 68, 69 (6th Cir.1987). “Leave should be granted unless there is some apparent or declared reason not to allow the amendment.” Marx v. Centran Corp., 747 F.2d 1536 (6th Cir.1984).

In this case, the Defendants whom Plaintiff seeks to add through its Amended Complaint are citizens and residents of Ohio. (Doc. # 7). Joinder of these parties would destroy the complete diversity of citizenship which presently exists between the parties and which is necessary for subject matter jurisdiction in this Court. Strawbridge v. Curtiss, 3 Cranch. 267, 2 L.Ed. 435 (1806). As a general rule, in a discretionary decision as to whether to grant a motion which will result in the loss of subject matter jurisdiction, the district court should “balance the defendant’s interest in maintaining the federal forum with the competing interest of not having parallel lawsuits proceeding in federal and state courts.” Depriest v. BASF Wyandotte Corp., 119 F.R.D. 639, 640 (M.D.La. 1988).

In this case, however, Plaintiff contends that the Defendants sought to be added are indispensible parties under Rule 19 of the Federal Rules of Civil Procedure. In determining whether parties are indispensible such that in equity and good conscience the action should not proceed in their absence, the Court must consider

first, to what extent a judgment rendered in the person’s absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for non-joinder.

Fed.R.Civ.P. 19(b).

In this case, Plaintiff has filed an action alleging breach of a lease agreement by Defendant lessors. Plaintiff’s Complaint, HIT 7 and 10. In the proposed Amended Complaint, Plaintiff alleges that breach of the lease agreement was induced by Plaintiff’s chief competitor, the proposed Defendants, in whose favor the lease was termi[459]*459nated. Proposed Amended Complaint, 111115-17. Plaintiff contends that because determination of the action now before this Court would settle rights to the property at issue in the lease, the proposed Defendants, as holders of the subsequent, competing lease, must be regarded as indispensible parties to the action. Doc. # 7, Memorandum, p 1.

Defendant argues (Doc. # 11, p 4), however, and this Court concurs, that a person does not become an indispensible party to an action to determine rights under a contract simply because determination of the action will affect that person’s rights under a separate or subsequent contract—including the rights of a third party lessee to property at issue in the original action. Cherokee Nation v. Hitchcock, 187 U.S. 294, 23 S.Ct. 115, 47 L.Ed. 183 (1902); Helzberg’s Diamond Shops v. Valley West Des Moines Shopping Center, Inc., 564 F.2d 816 (8th Cir.1977); Com-Share, Inc. v. Computer Complex, Inc., 338 F.Supp. 1229 (E.D.Mich.1971).

Plaintiff’s allegations against the proposed Defendants are in the nature of a claim for tortious interference with contractual relations, a claim which is recognized in Ohio. Reichman v. Drake, 89 Ohio App. 222, 100 N.E.2d 533 (1951). Under Ohio law, in an action based upon tortious interference with contractual relations, a plaintiff may recover “any and all damages proximately caused by the tortfeasor’s misconduct ... including] but ...

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Bluebook (online)
125 F.R.D. 457, 1988 U.S. Dist. LEXIS 16213, 1988 WL 156147, Counsel Stack Legal Research, https://law.counselstack.com/opinion/video-towne-inc-v-rb-3-associates-ohsd-1988.