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Longview Fund, L.P. v. Costello

October 29, 2010

LONGVIEW FUND, L.P., PLAINTIFF,
v.
STANLEY J. COSTELLO AND ANGELA L. COSTELLO, DEFENDANTS,
v.
ALL STAFFING, INC., THIRD-PARTY DEFENDANTS



The opinion of the court was delivered by: William T. Prince United States Magistrate Judge

(JUDGE JONES)

(MAGISTRATE JUDGE BLEWITT)

(MAGISTRATE JUDGE PRINCE)

MEMORANDUM AND ORDER

Pursuant to an Order entered on September 22, 2010 (Doc. 23), Honorable Magistrate Judge Thomas M. Blewitt referred plaintiff's motion (Doc. 14) to strike, or alternatively to dismiss, the third-party complaint to the undersigned Magistrate Judge for disposition.

I. Background

Plaintiff Longview Fund, L.P, has claimed against defendants Stanley J. and Angela L. Costello jointly and severally as guarantors of a loan that Longview made to All Staffing, Inc. In their answer, the Costellos included a third-party complaint against All Staffing; it is Longview's motion to strike or sever the third-party complaint that is now before the Court. Although Longview's motion also included alternative arguments for dismissal of the third-party complaint, Longview has acknowledged (Doc. 18) that completion of service upon All Staffing has mooted those portions of the motion.

(A) Facts of the case

Around November 20, 2007, Longview loaned $800,000 to All Staffing, evidenced by a promissory note. (Doc. 1, ¶ 8.) Shortly thereafter, the Costellos each signed and delivered to Longview separate personal guaranties of the loan, which contained provisions stating that any disputes regarding the guaranties would be adjudged under the laws of the State of New York. (Id. ¶¶ 10--11.) By July 14, 2008, the note had become due in its entirety, but Longview arranged a weekly payment plan with All Staffing that called for the balance to be paid by June 30, 2010. (Id. ¶ 14.) All Staffing ceased to make payments on the note after August 11, 2009, and went into default on the note. (Id. ¶ 17.) Although the Costellos were guarantors of the note, neither of them made any payments on the debt. (Id. ¶¶ 19--22.)

As of the filing of the complaint, roughly $750,000 in principal and interest remained due. (Id. ¶ 18.)

(B) Procedural History

Longview filed its complaint on February 18, 2010. (Doc. 1.) After Longview sought and obtained an entry of default against the Costellos, the Costellos filed an answer (Doc. 6) on April 1 and successfully moved the Court to set aside the entry of default (Docs. 7, 10). The Costellos' answer contained a third-party complaint against All Staffing, the principal debtor, seeking indemnification on Longview's claim. On October 9, amid some delays in effecting service on All Staffing (Docs. 12, 13, 17, 19), Longview filed a motion (Doc. 14) that, in relevant part, sought to strike the third-party complaint. Briefs in support, in opposition, and in reply having been filed (Docs. 14-5, 20, 22), the motion is now ripe for adjudication.

II. Standard of Review

Federal Rule of Civil Procedure 14 governs when a defendant may bring in a ...


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