United States District Court, S.D. Indiana, Indianapolis Division
Jane Magntts-Stinson, Chief Judge United States District
January 27, 2017, the Court ordered the parties to show cause
why Timarron Real Estate LLC's (“Timarron”)
crossclaims should not be severed pursuant to Federal Rule of
Civil Procedure 21 and the resulting new action stayed
pursuant to Colorado River Water Conservation District v.
United States, 424 U.S. 800 (1976). [Filing No. 254.]
The parties have responded to the Court's Order. Timarron
partially supports the proposed actions [Filing No. 261;
Filing No. 282], while the Crossclaim Defendants
(“Tenants”) [Filing No. 280] and Plaintiff Diana
Sturgis (“Ms. Sturgis”) [Filing No. 281] oppose
them. Having considered the parties' submissions and all
relevant factors, the Court concludes that a severance and
stay of Timarron's crossclaims is appropriate and in the
interests of justice.
Procedural History in this Case
Sturgis brought this personal injury action in May 2015,
alleging that Timarron, the owner of the property at which
she was injured, was responsible for the injuries she
suffered after falling from a deck during a social gathering
after the deck's railing broke. [Filing No. 1.] Ms.
Sturgis amended her complaint in October 2015 to add
negligence claims against the Tenants of Timarron's
property. [Filing No. 33; see Filing No. 42
(currently-operative third amended complaint).]
November 11, 2015, Timarron brought a three-count crossclaim
against the Tenants. [Filing No. 49.] Count I alleges breach
of contract for the property damage the Tenants caused during
their tenancy. [Filing No. 49 at 12-13.] Counts II and III
allege contractual and common-law indemnification claims for
Timarron's defense against any personal injury actions
arising out of the social gathering where the deck railing
broke. [Filing No. 49 at 13-16.]
litigating its crossclaims in this Court, Timarron has
simultaneously pursued similar claims against the Tenants in
a previously-filed Indiana state court action (“Indiana
Case”). In April 2014, more than a year before the
instant case was filed, Timarron brought an action for
eviction and damages against the Tenants in Monroe Circuit
Court. [See Filing No. 254-1; Filing No. 254-2.] In
July 2015, Timarron filed an amended complaint in the state
court action, alleging breach of contract for the property
damage and contractual indemnification for its damages in
defending against Ms. Sturgis's lawsuit. [Filing No.
254-3.] The Indiana Case has not materially progressed by
agreement of the parties since November 2015. [Filing No. 280
at 5; Filing No. 261 at 6.]
has also pursued crossclaims in a personal injury suit
brought by another person injured when the deck railing
broke. On April 1, 2016, Adam Perlman brought suit in Indiana
state court against Timarron and the Tenants for his injuries
suffered in the same incident (“Perlman Case”).
Plaintiff's Complaint for Damages, Perlman v.
Timarron Real Estate, LLC, No. 53C01-1604-CT-000725
(Monroe Cir. Ct. Apr. 1, 2015). On August 15, 2016, Timarron
crossclaimed against the Tenants with claims identical to
those asserted in this case, including breach of contract for
property damage and indemnification for any lawsuit stemming
from the broken railing incident. Timarron Answer and
Cross-Claims, Perlman, at 10-17 (Monroe Cir. Ct.
Aug. 15, 2016). On November 28, 2016, Mr. Perlman settled his
claims against Timarron and dismissed them with prejudice.
Joint Motion for Order of Dismissal, Perlman (Monroe
Cir. Ct. Nov. 28, 2016). Timarron's crossclaims remain
pending in the Perlman Case.
Sturgis-Timarron Settlement in this Case
January 4, 2017, Ms. Sturgis settled her claims in this case
against Timmaron and dismissed them with prejudice. [Filing
No. 212.] Timarron is therefore no longer a defendant to Ms.
Sturgis's personal injury suit in this Court.
Timarron's breach of contract and indemnification
crossclaims, however, remain pending against the Tenants.
summary, Timarron has similar or identical breach of contract
and indemnification claims against the Tenants in three
different actions: the first-filed Indiana Case, this case,
and the Perlman Case. This Order addresses the appropriate
treatment of Timarron's crossclaims in this matter given
the trifurcated proliferation of these actions.
Rule of Civil Procedure 21 provides that the “court may
at any time, on just terms, add or drop a party.”
Fed.R.Civ.P. 21. “It is within the district court's
broad discretion whether to sever a claim under Rule
21” where there is “a discrete and separate
claim.” Rice v. Sunrise Express, Inc., 209
F.3d 1008, 1016 (7th Cir. 2000). Claims may be
“discrete and separate” even where “the
facts underlying the claims overlap.” Gaffney v.
Riverboat Servs. of Ind., Inc., 451 F.3d 424, 434 (7th
Cir. 2006). Severance is proper where “severance would
simplify the proceedings, ” id., though the
Court may not “abuse its discretion to separate an
essentially unitary problem, ” Hebel v.
Ebersole, 543 F.2d 14, 17 (7th Cir. 1976) (internal
quotation omitted). In evaluating the propriety of severance
in a particular case, courts generally consider factors such
as “(1) whether the claims arise out of the same
transaction or occurrence; (2) whether the claims present
some common questions of law or fact; (3) whether settlement
of the claims or judicial economy would be facilitated; (4)
whether prejudice would be ...