United States District Court, M.D. Pennsylvania
HERNDON BOROUGH JACKSON TOWNSHIP JOINT MUNICIPAL AUTHORITY, Plaintiff,
PENTAIR PUMP GROUP, INC. t/d/b/a MYERS PUMP COMPANY and MID ATLANTIC PUMP AND EQUIPMENT COMPANY, Defendants,
LARSON DESIGN GROUP, INC., Third Party Defendant.
MATTHEW W. BRANN, District Judge.
Third Party Defendant Larson Design Group, Inc. ("Larson") has filed a Motion to Strike Defendant Pentair Pump Group, Inc. t/d/b/a/ Myer Pump Company's ("Pentair") Third Party Complaint pursuant to Rule 14(a)(4) of the Federal Rules of Civil Procedure or, in the alternative, to Dismiss the Third Party Complaint for failure to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 49). Pentair's Third Party Complaint, as amended on September 8, 2014, alleges a single count for contribution and/or indemnification against Larson for Negligent Misrepresentation of a Professional Design. (ECF No. 46).
Larson seeks to strike or dismiss Pentair's Third Party Complaint in its entirety. (ECF No. 49). This Court retains diversity jurisdiction pursuant to 28 U.S.C. § 1332. Consequently, Pennsylvania substantive law applies. E.g., Erie R.R. Co. v. Tompkins, 304 U.S. 64, 91-92 (1938). For the reasons discussed below, Larson's Motions will be denied.
On February 22, 2012, Plaintiff Herndon Borough Jackson Township Joint Municipal Authority ("Herndon Borough") filed a complaint against Defendants in the Court of Common Pleas of Northumberland County, Pennsylvania. See (ECF No. 1). Herndon Borough moves wastewater through various pump-stations, including Pump-Station Number 2 (the "Pump-Station"). Id. The Defendants supplied parts for the Pump-Station, and Pentair provided the water pump used in the Pump-Station. Id. Herndon Borough alleges, inter alia, that Pentair installed inferior parts in the water pump, resulting in Herndon Borough incurring significant damages. Id. On June 12, 2012, Defendants removed the action to this Court based on diversity of citizenship. Id.
On July 16, 2014, Pentair filed a Third Party Complaint against Larson, which was subsequently amended on September 8, 2014. (ECF Nos. 35, 46). Pentair alleges that "the design of the sewage treatment plant... and not any alleged defects in the pumps, caused the alleged defects in the grinder pumps[.]" (ECF No. 46 ¶ 8). Specifically Pentair alleges that Larson, the design firm employed by Herndon Borough, negligently designed the Pump-Station. Id. at ¶¶ 11, 17. This negligent design led the pumps to fail. Id. at ¶¶ 13-17. Furthermore, Larson allegedly failed to communicate these design flaws to third parties that relied on Larson's representations. Id. at ¶¶ 23-24. As a result, Pentair alleges that, if judgment is entered against it, then Larson is "liable over to Pentair by way of contribution and indemnity." Id. at ¶ 18.
Larson has filed its Motion to Strike, claiming that Pentair essentially argues Larson is solely liable to Herndon Borough, and therefore has failed to state a proper claim under Rule 14. (ECF No. 49). Furthermore, Larson argues that Pentair has failed to set forth viable claims for contribution or indemnification. Id. In the alternative, Larson seeks dismissal of the third-party complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Id.
A. Motion to Strike Under Rule 14(a)(4)
Rule 14 of the Federal Rules of Civil Procedure broadly provides that "a defending party may, as a 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." Conversely, where a third party complaint is improperly brought, any party may move to strike it. Fed.R.Civ.P. 14(a)(4). "In general, whether a particular third-party defendant may be impleaded is a question which rests with the sound discretion of the trial court.'" State Coll. Area Sch. Dist. v. Royal Bank of Can., 825 F.Supp.2d 573, 379 (M.D. Pa. 2011) (quoting Hartford Casualty Ins. Co. v. ACC Meat Co., 2011 WL 398087, at *1 (M.D. Pa. Feb. 2, 2011)).
"Where... state substantive law recognizes a right of contribution and/or indemnity, impleader under Rule 14 is the proper procedure by which to assert such claims." In re One Meridian Plaza Litig., 820 F.Supp. 1492, 1496 (E.D. Pa. 1993) (citing Smith v. Whitmore, 270 F.2d 741 (3d Cir.1959); Pennine Res., Inc. v. Dorwart Andrew & Co., 639 F.Supp. 1071 (E.D. Pa. 1986)). However, a "third-party complaint may not set forth a claim that the third party defendant is directly liable to the original plaintiff; it is limited to claims of secondary or derivative liability." Id. Rule 14 is procedural in nature, and a party's substantive rights must derive from state law. Garcia v. Cummings, 1:07-cv-1886, 2009 WL 136785, at *2 (M.D. Pa. Jan. 20, 2009).
Larson first argues that Pentair alleges sole liability from Larson to Herndon Borough, rather than secondarily liable to Pentair. (ECF No. 52, pp. 7-9). While Pentair's Third Party Complaint can be read as arguing primary liability on the part of Larson, this is not the only permissible reading of the Third Party Complaint. Although it is not a model of clarity, Pentair's complaint does allege that Larson is secondarily liable to Pentair. Reading Pentair's Third Party Complaint liberally, it alleges that, in the event that Pentair is found to have created a defective product, Larson's negligent design contributed significantly to the pump's failure and, ultimately, to Herndon Borough's damages. This would constitute a joint tort, and therefore Larson would be liable to Pentair because Pentair would have paid in excess of its fair share of the total losses.
Thus, as Pentair plainly states, "[i]f judgment... is entered against Pentair, then Larson is liable over to Pentair by way of contribution and indemnity." Id. at ¶ 18. Based on the Court's reading of Pentair's Third Party Complaint, Pentair has sufficiently alleged liability from Larson to Pentair, ...