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Schroeter v. Crawford & Co.

May 19, 2009


The opinion of the court was delivered by: Schiller, J.


Plaintiffs are German corporations that sued Defendant Crawford & Company ("Crawford"), an American insurance company, in the Philadelphia Court of Common Pleas. They assert negligence and breach of implied contract claims based upon Defendant's allegedly faulty inspection of apple shipments in Venezuela.*fn1 Defendant removed the Complaint to this Court on March 5, 2008.

Currently before the Court is Defendant's motion to dismiss for failure to join an indispensable party or, in the alternative, pursuant to the doctrine of forum non conveniens. Crawford asserts that its wholly-owned Venezuelan subsidiary, Crawford Venezuela Adjustadores de Perdidas CA ("Crawford Venezuela") is an indispensable party to this case because Crawford Venezuela, not Crawford, conducted the inspections. Defendant also asserts that the doctrine of forum non conveniens mandates dismissal because Venezuela provides an adequate alternative forum for this dispute and the relevant interests weigh in favor of trial there. For the following reasons, unless Plaintiffs amend their Complaint to assert an alter-ego and/or agency theory of liability against Crawford, Plaintiffs' Complaint shall be dismissed for failure to join Crawford Venezuela. Defendant's motion to dismiss pursuant to the doctrine of forum non conveniens is denied.


Crawford is a Georgia corporation with its principal place of business in Atlanta, Georgia. (Compl. ¶ 23; Notice of Removal ¶ 6.) Crawford Venezuela, a Venezuelan company, is a wholly-owned subsidiary of Crawford & Company International, Inc., which, in turn, is a wholly-owned subsidiary of Crawford. (Powers Decl. ¶¶ 3-4; Def.'s Mot. to Dismiss [hereinafter Def.'s Mot.] Ex. D [Certifica].) The core dispute stems from two shipments of apples.

On or about September 1, 2005, Copefrut, S.A., shipped eight forty-foot containers of refrigerated apples to Valenfrut from Puerto de Valparaiso, Chile to Puerto de La Guaira, Venezuela. (Compl. ¶ 25; Def.'s Mot. Ex. B [Jan. 16, 2006 Final Report] at 2.) When Valenfrut received the merchandise on September 29, 2005 in Venezuela, it reported that the cargo had been damaged. (See Def.'s Mot. Ex. B at 1.) Accordingly, Grudemann & Wilde Versicherungsmakler retained Crawford Venezuela, presumably on Plaintiffs' behalf, to inspect the damaged cargo. (Id. at 3.) Crawford Venezuela contacted Valenfrut to schedule an inspection, which was conducted on October 3, 2005. (Id.)

Gian Luca De Leonardis, Crawford Venezuela's Managing Director, and Ivan Jose Gil Plaza, a Loss Adjuster for Crawford Venzuela, prepared a final report containing their assessment of the loss. (Def.'s Mot. Ex. B.) The report, dated January 16, 2006, indicated that it was sent to Grudemann & Wilde Versicherungsmakler in Caracas, Venezuela. (Id. at 1.) The report concluded that the ship carrying the apples suffered a power supply failure that increased the temperature inside the containers holding the apples, causing them to rot. (Id. at 7.) The report assessed the damage at $168,256.05. (Id. at 8, 10.)

Copefrut made a second shipment of apples to Valenfrut on September 25, 2005. (Compl. ¶ 26; Def.'s Mot. at Ex. C [Mar. 2, 2006 Final Report].) As with the first shipment, the apples were reportedly damaged when they arrived in Venezuela. (Compl. ¶ 27; Def.'s Mot. Ex. C at 3.) Valenfrut contacted Crawford Venezuela to report the loss, and Crawford Venezuela inspected the merchandise. (Def.'s Mot. Ex. C at 3.) A March 20, 2006 final report prepared by De Leonardis and Plaza of Crawford Venezuela reported that, again, the loss was caused by a power supply failure on the vessel transporting the apples. (Id. at 8.) The report, which was sent to Grudemann & Wilde Versicherungsmakler in Caracas, assessed the total loss at $199,902.34. (Id. at 1, 8, 12.)

Plaintiffs, all of whom are identified by the Complaint as underwriters of the insurance policy covering Copefrut's maritime fruit shipments, initiated this action to recover the monies they paid as a result of Crawford Venezuela's allegedly negligent inspections.*fn2 (Compl. ¶¶ 1-22.) According to the Complaint, Crawford Venezuela acted negligently by: (1) failing to properly identify the apples; (2) treating each shipment as one consignment rather than surveying each container within the shipments; (3) failing to photograph the shipments; (4) condemning the shipments as total losses due to damage from a power failure in the vessels when no such failure occurred; (5) concluding that the apples were all in the same condition when temperature recordings suggested otherwise; (6) improperly advising Valenfrut as to the available insurance coverage; (7) failing to place the shipping line on notice of the loss or damage, so as to permit Plaintiffs to pursue a subrogation claim against the shipping line; (8) failing to timely notify the consignor of the loss; (9) failing to invite the steamship company to conduct a joint survey of the damage; and (10) failing to preserve Plaintiffs' subrogation rights. (Id. ¶¶ 30, 39.) As a result of Crawford Venezuela's alleged negligence, Plaintiffs were required to pay $370,647.78 - the value of the total loss, per Crawford Venezuela's reports, plus costs. (Id. ¶¶ 32, 41.)


A. Failure to Join an Indispensable Party

Crawford asserts that Crawford Venezuela is both a necessary and indispensable party to this litigation because the Complaint is premised on Crawford Venezuela's acts, but Crawford is not liable for its subsidiary's actions. Thus, according to Crawford, this Court cannot afford Plaintiffs any relief in Crawford Venezuela's absence, rendering Crawford Venezuela a necessary party. However, Crawford claims that Crawford Venezuela cannot be joined because this Court lacks personal jurisdiction over Crawford Venezuela and joinder would destroy diversity and, thus, dismissal is required.*fn3 Plaintiffs respond that Crawford may be held liable for its subsidiary's actions based on an alter ego or agency theory. Since both theories necessitate factual inquiries, Plaintiffs assert that dismissal is inappropriate at this time and that discovery should be permitted on the relationship between Crawford and Crawford Venezuela.

Federal Rule of Civil Procedure 19 governs when an absent party must be joined to a lawsuit. Rule 19(a)(1) requires an absentee to be joined, rendering him a "necessary" party, when:

(A) in that person's absence, the court cannot accord complete relief among existing parties; or

(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may:

(i) as a practical matter impair or impede the person's ability to protect the interest; or

(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent ...

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