Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-02553/USCOURTS-caed-2_04-cv-02553-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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1 Because oral argument will not be of material

assistance, the court orders this matter submitted on the briefs. 

E.D. Cal. Local Rule 78-230.

1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

QUESTECH FINANCIAL CALIFORNIA,

LLC,

NO. CIV. S-04-2553 FCD GGH

Plaintiff,

v. ORDER

JYM CORPORATION,

Defendant.

_____________________________/

----oo0oo----

This matter is before the court on motion by defendant, JYM

Corporation (“JYM”), for leave to implead as third party

defendants Baskin Robbins USA, Co. (“Baskin-Robbins”), and Togo’s

Eateries, Inc. (“Togo’s”).1 Plaintiff, QuesTech Financial

Case 2:04-cv-02553-FCD-GGH Document 30 Filed 05/24/05 Page 1 of 5
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2 The background facts of this case are described in full

in the court’s memorandum and order denying plaintiff’s

application for writ of possession, issued concurrently with this

order. 

3 All further references to “Rule” are to the Federal

Rules of Civil Procedure unless otherwise noted.

2

California, LLC (“QuesTech”), did not file an opposition or

statement of non-opposition as required by E.D. Cal. Local Rule

78-230(c). The court construes QuesTech’s silence on the matter

as non-opposition to the motion. E.D. Cal. Local Rule 78-230(c). 

STANDARD2

Federal Rule of Civil Procedure 14 permits a defending

party, at any time after commencement of an action, to bring a

new party into the action “who is or may be liable to the thirdparty plaintiff for all or part of the plaintiff’s claim against

the third-party plaintiff.”3 Rule 14(a). A “third-party claim

may be asserted only when the third party’s liability is in some

way dependent on the outcome of the main claim and the third

party’s liability is secondary or derivative.” United States v.

One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir. 1983); FMC

Corp. v. Vendo Co., 196 F. Supp. 2d 1023, 1037 (E.D. Cal. 2002). 

Impleader claims brought under Rule 14(a) must be supported by an

independent basis for federal subject matter jurisdiction. See

Galt G/S v. Hapag-Lloyd A.G., 60 F.3d 1370, 1373 (9th Cir. 1995);

3 James Wm. Moore et al, Moore’s Federal Practice ¶ 14.03[4] (3d

ed. 2004).

Leave of court need not be obtained if a third party

complaint is filed not later than ten days after the defendants

serve their answer to the original complaint. Rule 14(a). When

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3

leave of court is required, the decision to permit impleader of a

third-party defendant is entrusted to the sound discretion of the

trial court. Mercedes Benz, 708 F.2d at 452. When making this

determination, courts consider (1) the prejudice to the original

plaintiff; (2) complication of issues at trial; (3) likelihood of

trial delay; and (4) timeliness of the motion to implead. Irwin

v. Mascott, 94 F. Supp. 2d 1052, 1056 (N.D. Cal. 2000) (citing

Somportex Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435,

439 n. 6 (3d Cir. 1971), cert. denied, 405 U.S. 1017 (1972)). 

ANALYSIS

Here, JYM’s Third-Party Complaint alleges causes of action

for indemnity and equitable indemnity. Specifically, JYM seeks

to implead Togo’s and Baskin Robbins for indemnification in the

event that QuesTech obtains a judgment against JYM. As such, the

impleader claims appear to fall within the ambit of Rule 14

because they are dependent on the determination of JYM’s

liability to QuesTech.

In addition, the court concludes from QuesTech’s failure to

oppose the motion, that QuesTech will not be prejudiced by

impleader. Bringing in Togo’s and Baskin-Robbins will it greatly

complicate the issues for trial, since the sole claims asserted

against them are for indemnification. Moreover, JYM moved

expeditiously to file this motion. The case is still in its

early stages, and it is unlikely impleader will delay trial. The

court also notes that permitting impleader likely will conserve

judicial resources since JYM will not be required to file a

separate lawsuit to recover against Baskin-Robbins and Togo’s in

the event it is held liable in this action. 

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4 28 U.S.C. § 1332(c)(1) provides in pertinent part that

“a corporation shall be deemed to be a citizen of any State by

which it has been incorporated and of the State where it has its

principal place of business . . ..” 

4

However, the complaint as currently drafted does not

sufficiently allege the basis of subject matter jurisdiction over

the third-party action. See 28 U.S.C. § 1332(a); Third Party

Complaint for Indemnification ¶¶ 3-7, Ex. 1 to Motion to Bring

in Third Party Defendant. Specifically, the complaint does not

allege the domiciles of Togo’s and Baskin-Robbins for purposes of

diversity jurisdiction. Rule 8(a); 28 U.S.C. § 1332(c)(1)4;

Mahan v. J.E.N. Jewels, 946 F.2d 898 (9th Cir. 1991)(noting that

failure to include in the complaint a statement indicating the

states of citizenship of the respective parties constitutes a

“fundamental flaw in pleading diversity jurisdiction”). As a

result, JYM’s motion to bring in Togo’s and Baskin-Robbins as

third party defendants is GRANTED on the condition that JYM file

with the court within ten days of this order a Third Party

Complaint properly alleging the prerequisites for diversity

jurisdiction over the claim.

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CONCLUSION

For the foregoing reasons, JYM’s motion to bring in as third

party defendants Baskin-Robbins and Togo’s is GRANTED on

condition that JYM file a complaint within ten (10) days of this

order, which sufficiently alleges the grounds on which the

court’s jurisdiction depends. 

IT IS SO ORDERED.

DATED: May 23, 2005.

/s/Frank C. Damrell Jr. 

FRANK C. DAMRELL, Jr.

UNITED STATES DISTRICT JUDGE

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