Donovan v. H.C. Associates, Inc.

Citations: 174 F.R.D. 12; 1997 U.S. Dist. LEXIS 10888; 1997 WL 422434Docket: No. 92-CV-201

Court: District Court, N.D. New York; July 25, 1997; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Defendant NBW's motion to dismiss the case for failure to join an indispensable party is denied by the Court, which also denies the plaintiff’s motions to stay the dismissal, to enforce settlement, and for sanctions without prejudice. The case is based on diversity jurisdiction under 28 U.S.C. § 1332(a). The plaintiff, who authored a book titled *The Game of Golf and the Printed Word*, initially contracted with H.C. Associates for printing. After unsatisfactory results, they agreed to destroy the defective books, which the plaintiff claims were not destroyed and were instead sold by NBW and Universal Sales. The plaintiff alleges conversion of his intellectual property by NBW and Universal Sales. Universal Sales was previously dismissed from the suit, and after settling with H.C. Associates, only NBW remains. NBW argues that the joinder of Universal Sales is necessary and would destroy diversity jurisdiction, a claim the plaintiff contests. The plaintiff’s motions related to sanctions and settlement discussions are also contested by NBW, which denies any wrongdoing. The Court proceeds to address the motions in order.

Plaintiff claims that he accepted a $25,000 settlement offer from NBW on September 17, 1996, and subsequently settled with H.C. Associates and third-party defendants for less than he had sought, believing he had a binding agreement. NBW contends that the Court's November 8, 1996 Order found it had withdrawn its settlement offer, allowing it to remain a defendant. The Court stated that motions should be filed in accordance with General Order 41. Plaintiff's motion to enforce the settlement, filed on June 18, 1997, is untimely under Local Rule 7.1(g), which applies to all orders, including the November 8 Order. The Court dismisses the motion as it does not meet the required timeframe.

Regarding sanctions, Plaintiff alleges that NBW has committed discovery abuses regarding the production of documents related to defective copies of his book. The Court interprets this as a motion under Fed. R.Civ. P. 37(c)(1) for failure to disclose information. However, Plaintiff failed to submit a memorandum of law as required by Local Rule 7.1(c), providing only a factual brief without legal support. Therefore, the Court dismisses the motion for sanctions without prejudice, advising Plaintiff to adhere to federal and local rules upon refiling.

Lastly, NBW's motion to dismiss argues that Plaintiff has not joined an indispensable party, Universal Sales, which is a New York citizen and lacks diversity from Plaintiff. NBW must demonstrate that Universal Sales is indeed an indispensable party, referencing Myers v. American Dental Ass’n for the burden of proof.

Rule 19 establishes a two-step process to determine if a party is indispensable in a legal action. Initially, the court assesses whether a party is necessary under Rule 19(a). If deemed necessary, the court then evaluates under Rule 19(b) whether the party is indispensable, which would necessitate dismissal if the party cannot be joined. In this case, NBW failed to prove that Universal Sales is a necessary party under Rule 19(a). NBW's argument hinged on the assumption that the plaintiff believed Universal Sales had liability, as evidenced by its inclusion in the second amended complaint. Despite the plaintiff's dismissal of claims against Universal Sales, NBW expressed concern about potential future claims against it by the plaintiff in state court, who might then seek contribution from NBW. However, the court found this reasoning too speculative and noted that NBW did not demonstrate that complete relief could not be granted in Universal Sales's absence. The court reiterated that, under federal law, joint tortfeasors and co-conspirators are not considered indispensable parties. Consequently, NBW's motion to dismiss for failure to join an indispensable party was denied. 

Additionally, the court denied the plaintiff's motion to stay NBW's motion to dismiss as moot, as well as the motion to enforce settlement and the motion for sanctions, which may be refiled only if compliant with federal and local rules. H.C. Associates, involved in third-party complaints against Hackensack Paper Co. and Recycling Specialist, Inc., had reached a settlement with the plaintiff, which included payments among the parties. The plaintiff's request for a stay was rendered moot following the court's consideration of these motions.