The opinion of the court was delivered by: Judge Flowers Conti
The Defendant Waynesburg College's Motions to compel joinder of an additional party (Doc. 15) and for an extension of discovery (Doc. 17) will be granted to the extent described below.*fn1
In this diversity action, the Cincinnati Insurance Company ("the Insurer") seeks a judicial declaration that it owes no coverage to Waynesburg College ("the Insured" or "the School") for injuries sustained by student Steven E. Hawkins ("the Injured") in an accident involving a compound meter saw ("the Saw"). See generally Def.'s Mot. at ¶ 3 and n.1.
The Injured has filed a separate lawsuit in this District, alleging among other things that the School was negligent in failing to properly train and supervise him in connection with the Saw. See generally case filed at Civil Action No. 07-5. In this case, the Insurer asserts that the claims brought by the Injured sound in professional negligence within the meaning of certain exclusions in the School's policy. Def.'s Mot. at ¶ 3.
The Insured now seeks to compel the joinder of its insurance broker, Baily Insurance Agency, Inc. ("the Broker"), claiming among other things that the Broker "has an interest relating to the subject of the action and is so situated that the disposition of the action in [its] absence may . . . as a practical matter impair or impede [its] ability to protect that interest." Id. at ¶ 18 (quoting Fed. R. Civ. P. 19(a)(2)(i)). The Insured argues that, if the court concludes there is no coverage, this will demonstrate the Broker was negligent and/or breached its contractual obligations with the Insured by failing to secure appropriate coverage. Id. at ¶ 17; see also id. at ¶ 7 (Insured "reasonably relied upon Baily to obtain coverage appropriate for its business, including . . . the risk of injury to students as a result of the negligent acts or omissions of [the School's] staff and faculty").
In response, neither the Insurer nor the Injured objects to the joinder of the Broker. See Docs. 16 and 18. Having not yet been joined, the Broker has not been heard.
Whether the Broker "has an interest" in this action to the extent that its absence may "as a practical matter impair or impede [its] ability to protect that interest" is best answered by the Third Circuit Court's decision in Schulman v. J.P. Morgan Inv. Mgm't, Inc., 35 F.3d 799 (3d Cir. 1994). There, a tenant sued its landlord's mortgagee for intentionally interfering with a lease contract between the tenant and the landlord. Id. at 801. In defense, the mortgagee claimed that it could not be liable for tortious interference because there existed no valid, enforceable lease agreement. Id. at 803. In response, the tenant argued that the landlord was an indispensable party, which implicitly required it to be a "necessary" party, because the landlord's presence "was essential to resolving" the issue of whether an enforceable lease interest was created. Id. at 804.
In addressing whether the landlord was a "necessary" party under Rules 19(a)(2)(i) and (ii), the Schulman Court stated:
We recognize that a decision in this action on the mortgagee's defense to [the tenant's] claim for tortious interference denying the existence of any lease . . . could affect the pending state court action [filed by the landlord seeking eviction of the tenant].
[B]ut whether [the landlord] would be collaterally estopped [from denying a lease existed] is ultimately a matter for the state court to decide when the issue arises. . . . Nevertheless, under general principles of collateral estoppel or issue preclusion, a strong argument can be made that [the landlord] would be bound [by an unfavorable ruling on the existence of a lease]. . . . [The landlord's] interests are the same as the mortgagee [in attempting to show no valid lease existed,] and the mortgagee ...