United States District Court, N.D. Indiana, LaFayette Division
OPINION AND ORDER
P. Rodovich United States Magistrate Judge
matter is before the court on the Motion for Leave to File
Third-Party Complaint [DE 46] filed by the defendant, Billy
Jack Isom, on August 31, 2018. For the following reasons, the
motion is DENIED.
plaintiff, Fidelity & Deposit Company of Maryland,
initiated this matter on February 27, 2017. Fidelity alleged
that the defendants, Jack Isom Construction Co., Inc. and
Billy Jack Isom, were liable for their failure to reimburse
Fidelity for its damages and losses incurred from Bonded
Projects. Fidelity has indicated that on or about May 13,
2005 Billy Jack, as president for Jack Isom Construction
Company, executed an Agreement of Indemnity with Fidelity
relating to the Bonded Projects. Fidelity contends that Billy
Jack has failed to reimburse Fidelity for its losses, as
required by the Agreement of Indemnity.
September 25, 2017, the court entered a default judgment
against the defendants. The court vacated the default
judgment against Billy Jack on April 17, 2018. Therefore, the
claims asserted in this matter now relate only to Billy Jack.
Billy Jack filed his answer on May 10, 2018. However, he did
not file a third-party complaint with his answer.
Jack now has filed a motion requesting leave to file a
third-party complaint against Billy Ray Isom. Billy Jack
contends that he did not sign the Agreement of Indemnity.
Rather, he has argued that Billy Ray signed the Agreement.
Moreover, Billy Jack has indicated that Billy Ray took over
Jack Isom Construction in 2005 and that Billy Ray sold all
the assets and terminated Jack Isom Construction. Therefore,
it is Billy Jack's contention that it is necessary for
Billy Ray to brought into this matter as a third-party
defendant to answer to his stewardship and control of the
Jack Isom Construction Company since 2005. Fidelity filed a
response in opposition on September 14, 2018, and Billy Jack
did not file a reply.
Rule of Civil Procedure 14(a)(1) states that
“[a] defending party may, as third-party plaintiff,
serve a summons and complaint on a nonparty who is or may be
liable to it for all or part of the claim against it.”
A defendant must seek leave of court to file a third-party
complaint if more than fourteen days have passed since it
served its original answer. Rule 14(a)(1).
The decision to grant leave to file a third-party complaint
is committed to the discretion of the trial court.
Highlands Insurance Co. v. Lewis Rail Service Co.,
10 F.3d 1247, 1251 (7th Cir. 1993).
interpreting this rule have recognized that “[t]he
third-party defendant must be secondarily liable [derivative
liability] to the third-party plaintiff in the event the
third-party plaintiff is found to be liable to the
plaintiff.” Greene Line Mfg. Corp. v. Fibreboard
Corp., 130 F.R.D. 397, 399 (N.D. Ind. 1990). “The
rule is not altered merely by the fact that the alleged
third-party claim grew out of the same transaction.”
U.S. Gen., Inc. v. City of Joliet, 598 F.2d 1050,
1053 (7th Cir. 1979). “The distinguishing
characteristic of a claim filed pursuant to Rule 14(a) is
that the defendant is attempting to transfer to the
third-party defendant the liability asserted against the
defendant by the original plaintiff.” Green,
130 F.R.D. at 399 (quoting Forum Ins. Co. v. Ranger Ins.
Co., 711 F.Supp. 909, 915 (N.D. Ill. 1989).
Jack has requested leave to file his third-party complaint
against Billy Ray. Billy Jack contends that it is necessary
for Billy Ray to be brought into the instant matter. Billy
Jack asserts that he did not sign the Agreement of Indemnity,
rather he believes that it was signed by Billy Ray. The
third-party complaint has alleged that the alleged misconduct
asserted in the complaint was within the purview and
responsibility of Billy Ray.
contends that Billy Jack's claims against Billy Ray are
for fraudulent control of Jack Isom Construction and for
fraudulently signing Billy Jack's name to the Agreement
of Indemnity. Fidelity asserts that Billy Ray is not required
to indemnify Billy Jack for his failure to pay or indemnify
Fidelity. Therefore, Fidelity has argued that the third-party
claim does not arise from Fidelity's claim and therefore
court finds that under Rule 14(a), Billy Ray could not be
added as a third-party defendant because Billy Jack has not
alleged facts sufficient to establish secondary liability
against Billy Ray. Fidelity maintains that the Agreement of
Indemnity was signed by Billy Jack. However, Fidelity
contends that even if the Agreement of Indemnity was signed
by Billy Ray, Billy Jack had issued a general power of
attorney to Billy Ray to act and sign on his behalf. Fidelity
represents that the general power of attorney was valid at
the time the Agreement of Indemnity was executed. [J. Kutch
Aff. 5-6]. Therefore, Billy Ray's signature on behalf of
Billy Jack was valid and thus binding at the time the
Agreement of Indemnity was executed. In light of the power of