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Homesite Insurance Co. v. Triangle Tube/Phase III Co. Inc.

United States District Court, D. Connecticut

November 23, 2016

HOMESITE INSURANCE COMPANY, a/s/o Margaret Lofrumento, and MARGARET LOFRUMENTO, individually, Plaintiffs,


          CHARLES S. HAIGHT, JR. Senior United States District Judge.

         I. BACKGROUND

         Plaintiffs Homesite Insurance Company and Margaret Lofrumento (collectively "Plaintiffs") commenced this product liability action against Triangle Tube/Phase III Co., Inc. ("Triangle Tube"), alleging that a water tank it manufactured failed, resulting in a "significant water loss" at Lofrumento's property in Brookfield, Connecticut, on November 19, 2014.[1] Doc. 1 ("Complaint"), ¶ 8. In particular, Lofrumento and Homesite, the insurer of Lofrumento's Brookfield property, allege that "the failure of the 35 gallon Triangle Tube water tank" was due to corrosion that occurred "less than three years" after the tank was in service - i.e., "within the warranty and useful life period for this water heater." Id., ¶¶ 8- 9. Plaintiffs bring this claim under Connecticut's product liability statute, Conn. Gen. Stat. § 52-572m, et seq., asserting that the "water tank was in a defective and unreasonably dangerous condition." Id., ¶ 14(a). Plaintiffs further allege that the tank was designed and manufactured in a condition which subjected Lofrumento to "an unreasonable risk of harm;" and the tank was "not merchantable" or fit for its intended and foreseeable use. Id., ¶¶ 14 (b)-(c).

         With respect to damages, pursuant to the terms and conditions of the Homesite insurance contract issued to Lofrumento (Policy No. 31345716), Homesite paid Lofrumento in excess of $132, 406.32 for the water damage to the Brookfield property. Id., ¶¶ 7, 10. Homesite claims that "pursuant to the contract of insurance and by operation of law, " it is "subrogated to the rights of Ms. Lofrumento against all parties responsible for the occurrence of said damages" due to failure of the water tank. Id., ¶ 10. In addition to the payments made by Homesite, Lofrumento incurred $79, 721.66 in damages and costs to repair her property. Id., ¶ 11.


         A. Pending Motion

         Pending before the Court is Triangle Tube's motion, pursuant to Rule 14(a), Fed. R. Civ. P., requesting leave to join Hoffman Fuel Company of Danbury ("Hoffman") as a third party defendant on the ground that "Hoffman is or may be liable to Triangle Tube for all or part of the claim that the plaintiffs have asserted against Triangle Tube in this civil matter." Doc. 13, at 1. Defendant has attached its proposed third party complaint as Exhibit A to its motion. Id., Ex. A.

         In support of the motion, Triangle Tube argues that Hoffman will suffer no prejudice or surprise by being brought into the action at this time. In particular, Triangle Tube points out that "[t]he parties have not yet engaged in formal discovery, and no depositions have been taken to date." Doc. 13, at 1. Moreover, Hoffman is already aware of the existence of the action in that it has "previously received notice from [Triangle Tube's] attorneys of the potential claim against it." Id. Neither of the two Plaintiffs in this action has responded or objected to Triangle Tube's motion to implead Hoffman. The time to file such a response has expired, and the motion is ripe for decision.

         B. Standard to Grant or Deny Motion for Leave to File Third Party Complaint

         Pursuant to Rule 14(a)(1) of the Federal Rules of Civil Procedure, "[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." By design, Rule 14(a) "promote[s] judicial economy by eliminating the need for a defendant to bring a separate action against a third-party who may be secondarily or derivatively liable to the defendant for all or part of the plaintiff's claim." Hines v. Citibank, N.A., 96-CV-2565(RJW), 1999 WL 440616, *2 (S.D.N.Y. June 28, 1999) (citing Gross v. Hanover Ins. Co., 138 F.R.D. 53, 54 (S.D.N.Y.1991)). Nonetheless, "the right to implead third parties is not automatic, " Consolidated Rail Corp. v. Metz, 115 F.R.D. 216, 218 (S.D.N.Y.1987). The decision whether to permit a defendant to implead a third-party defendant rests in the trial court's discretion. Kenneth Leventhal & Co. v. Joyner Wholesale Co., 736 F.2d 29, 31 (2d Cir. 1984) (per curiam); Laffey v. Northwest Airlines, Inc., 567 F.2d 429, 477 (D.C. Cir.1976), cert. denied, 434 U.S. 1086 (1978).

         In general, "[a] third-party claim may be asserted under Rule 14(a)(1) only when the third party's liability is in some way dependent on the outcome of the main claim or when the third party is secondarily liable to the defending party." 6 Charles Alan Wright & Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1446, at 377 (3d ed. Westlaw April 2016). See, e.g., Bank of India v. Trendi Sportswear, Inc., 239 F.3d 428, 438 (2d Cir. 2000) ("To sustain an impleader action, the third-party . . . must be liable secondarily to the original defendant . . . for all or part of the plaintiff's recovery, or . . . the defendant must attempt to pass on to the third party all or part of the liability asserted against the defendant. This means that the impleader action must be dependent on, or derivative of, the main . . . claim.") (citations, internal quotation marks, and bracketed material omitted); Siemens Westinghouse Power Corp. v. Dick Corp, 299 F.Supp.2d 242, 248 (S.D.N.Y. 2004) ("The crucial characteristic of a Rule 14 claim is that [the] defendant is attempting to transfer to the third-party defendant the liability asserted against him by the original plaintiff. In other words, the outcome of the third-party claim must be contingent on the outcome of the main claim[.]") (emphasis in original; citations and internal quotation marks omitted).

         Put simply, "[t]he secondary or derivative liability notion is central, " such that impleader is often "successfully utilized when the basis of the third-party claim is indemnity." Federal Practice and Procedure § 1446, supra; see also, e.g., United States v. Farr & Co., 342 F.2d 383, 386-87 (2d Cir. 1965). In general, under Connecticut law, "[i]ndemnity involves a claim for reimbursement in full from one on whom a primary liability is claimed to rest." Smith v. New Haven, 258 Conn. 56, 67 n.7 (2001) (quoting Crotta v. Home Depot, Inc., 249 Conn. 634, 641 (1999)). See also Skuzinski v. Bouchard Fuels, Inc., 240 Conn. 694, 697-98 n. 3 (1997); Kaplan v. Merberg Wrecking Corp., 152 Conn. 405, 412 (1965).

         In particular, to assert a Connecticut common law indemnification claim, a defendant must show that: "(1) the party against whom the indemnification is sought was negligent; (2) that party's active negligence, rather than the defendant's own passive negligence, was the direct, immediate cause of the accident and the resulting injuries and death; (3) the other party was in control of the situation to the exclusion of the defendant seeking reimbursement; and (4) the defendant did not know of the other party's negligence, had no reason to anticipate it, and reasonably could rely on the other party not to be negligent." Smith v. New Haven, 258 Conn. at 66 (citing Kaplan, 152 Conn. at 416). See also Smith v. Greenwich, 278 Conn. 428, 463 (2006) (quoting four Kaplan factors) Kyrtatas v. Stop & Shop, Inc., 205 Conn. 694, 698 (1988) (setting forth "four separate elements" necessary to establish common law indemnification); O & G Indus., Inc. v. Aon Risk Servs. Ne., Inc., No. 3:12-CV-723 (JCH), 2013 WL 4737342, at *3 (D. Conn. Aug. 30, 2013) (same). Such "[i]ndemnity shifts the impact of liability from passive joint tortfeasors to active ones." Skuzinski v. Bouchard Fuels, Inc., 240 Conn. 694, 697 (1997) (citations and internal quotation marks omitted).

         C. Triangle Tube's Proposed Indemnification Claim against Hoffman

         In the case at bar, defendant Triangle Tube seeks to implead Hoffman, arguing that it "is or may be liable to Triangle Tube for all or part of the claim that the plaintiffs have asserted against Triangle Tube in this civil matter." Doc. 13, at 1. Triangle Tube states the following alleged facts in its proposed Third Party Complaint. On August 27, 2012, Lofrumento "entered into an 'Equipment Sales Agreement' with Hoffman, regarding the sale and installation of the subject water heater." Doc. 13 (Ex. A, "Third Party Complaint"), at 8 (¶ 3). The following day, Hoffman "installed the subject water heater" at Lofrumento's residence (the Brookfield property), but did so improperly by failing to install a "drain pan" underneath it, "as required by the International Residential Code, " as well as the "installation manual" for the heater. Id., at 8 (¶¶ 4- 5). Moreover, Hoffman allegedly knew or should have known that a "drain pan" was required underneath the water heater. Id., at 8 (¶ 6). Thus, according to Triangle Tube, it was Hoffman, and not Triangle Tube, that negligently installed the water heater, which thereafter failed and resulted in water loss and damages to Lofrumento's Brookfield residence. Id., at 8 (¶¶ 8-10). Moreover, Triangle Tube "did not enter into any contract with Hoffman for the installation of the subject water heater." Id., at 9 (¶ 11).

         Following its recitation of alleged facts, Triangle Tube sets forth one count of "Common Law Indemnification" against Hoffman in the "Third Party Complaint." In that claim, Triangle Tube alleges that Hoffman is the "party that was responsible for installing the subject water heater in Lofrumento's personal residence" and "had exclusive control over the sale and proper installation of the water heater." Id., at 9 (¶ 13). Therefore, "if anyone was negligent" with respect to the installation of the water heater, "it was Hoffman for failing to properly and adequately execute its duties to properly install the subject water heater." Id., at 9 (¶ 14). Such negligence allegedly included, inter alia, "failure to install a drain pan underneath the subject water heater, " which was the "direct and proximate cause of the damages sustained to the real and personal property of Lofrumento, and thus the damages and losses suffered by Homesite." Id., at 9 (¶ 15).

         D. Subject Matter Jurisdiction

         Before considering the substance of a third party claim, it is incumbent on the Court to determine whether there is adequate subject matter jurisdiction over that claim.[2] An impleader claim, as every other claim in federal court, must be assessed individually to confirm the existence of a proper basis for federal subject matter jurisdiction. See Caterpillar, Inc. v. Lewis, 519 U.S. 61, 66 n.1 (1996) ("Once federal subject matter jurisdiction is established over the underlying case between [plaintiff] and [defendant], the jurisdictional propriety of each additional claim is to be assessed individually.") (emphasis added). "[W]hether a court has subject matter jurisdiction over a third-party . . . is distinct from an assessment of the propriety and merits of an impleader action." Bank of India v. Trendi Sportswear, Inc., 239 F.3d 428, 438 (2d Cir. 2000).

         As this Court has previously held, subject matter jurisdiction in the main case at bar is based solely on "diversity of citizenship, " 28 U.S.C. § 1332(a). Plaintiffs' only claim in the main action arises under a Connecticut statute, namely Connecticut's product liability act, codified at Conn. Gen. Stat. § 52-572m, et seq. There are thus no grounds to find that a "federal question" has been implicated, 28 U.S.C. ยง 1331. Similarly, because the proposed impleader claim is a Connecticut common law action for indemnification, there is no "federal question" in that action either. The Court therefore examines whether there is ...

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