Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_04-cv-02110/USCOURTS-azd-2_04-cv-02110-1/pdf.json

Nature of Suit Code: 720
Nature of Suit: Labor Management Relations Act
Cause of Action: 29:185 Labor/Mgt. Relations (Contracts)

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Dale Jacks, as trustee of the Plaintiff TaftHartley trust funds; Debra Margraf, as

trustee of the Plaintiff Taft-Hartley trust

funds; Local 640 Int'l Bhd. of Elec.

Workers, a Taft-Hartley Trust; Nat'l Elec.

Benefit Fund, a Taft-Hartley trust; and

Phoenix Elec. Benefit Fund, a Taft-Hartley

Trust, 

Plaintiffs, 

vs.

JBJ Electric Co., LLC., 

Defendant. 

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No. CIV 04-2110-PHX-MHM

ORDER

Currently before the Court is Defendant JBJ Electric Company, LLC's ("Defendant"

or "Defendant JBJ") Motion to Amend Complaint to Join Third Party Defendant and Motion

for Leave to File Motion for Reconsideration for Good Cause. (Dkt.#71). After reviewing

the pleadings and determining oral argument to be unnecessary, the Court issues the

following Order. 

I. Motion to Amend

On March 25, 2006, the Court granted then Counter-Defendant International

Brotherhood of Electrical Workers Local Union 640's ("IBEW") motion to dismiss

Defendant's counterclaim against IBEW as well as granted the Plaintiff Trustees' motion to

Case 2:04-cv-02110-MHM Document 74 Filed 11/15/06 Page 1 of 5
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dismiss Defendant's counterclaim (Dkt.#49). The Court held that Defendant failed to comply

with Rule 13(h) of the Federal Rules of Civil Procedure in asserting its counterclaim against

Plaintiffs and IBEW because the claim against Plaintiffs was made in name only and did not

state a claim against Plaintiffs. (Dkt.#49, p. 4-5). As a result, Defendant could not assert a

counterclaim against IBEW because to do so would violate Rule 13(h)'s requirement that any

counterclaim against a new party also be asserted against an existing party. See Architectural

Coatings Assoc. Ltd. Partnership v. Applied Coatings Intern., Inc., 103 F.R.D. 442, 446

(D.C. Pa. 1984) (stating that additional party may not be brought in where counterclaim is

directed solely against the new party and not against existing party). Moreover, the Court

denied Defendant's motion to join IBEW as a party to the litigation because to do so would

again violate Rule 13(h). In addition, the Court denied Defendant's motion for leave to

amend its counterclaim against IBEW because of futility and potential prejudice to Plaintiffs'

ability to obtain a streamlined resolution regarding Plaintiffs' claim for contributions.

(Dkt.#49, pp,6-7). Upon denying Defendants' request to amend, the Court noted that

Defendant possessed "the ability to assert a Third-Party Complaint in this action pursuant to

Rule 14, Fed.R.Civ.Pro., which likely would have been the proper procedural remedy,

subject to the Court's discretion, or bring a separate action against IBEW..." (Dkt.#49, p.7).

On June 8, 2006, the Court conducted a Rule 16 hearing in this case at which time the

applicable deadlines were imposed. Notably, the Court imposed a deadline for July 7, 2006

regarding the time to amend and to join additional parties. (Dkt.#64). 

On July 7, 2006, Defendant filed its instant Motion to Amend to assert a third-party

claim against IBEW pursuant to Rule 14 of the Federal Rules of Civil Procedure. Rule 14

provides in pertinent part:

At any time after the commencement of the action a defending party, as a

third-party plaintiff, may cause a summons and complaint to be served upon

a person not a party to the action who is or may be liable to the third-party

plaintiff for all or part of the plaintiff's claim against the third-party plaintiff.

 Defendant argues that leave to amend is proper because the proposed declaratory

complaint against IBEW is interrelated with Plaintiffs' claims against Defendant.

Case 2:04-cv-02110-MHM Document 74 Filed 11/15/06 Page 2 of 5
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Specifically, should the Court find in favor of Defendant on its declaratory third-party claim

regarding the validity of the collective bargaining agreement, then Plaintiffs' claim for

contributions based upon the validity of the collective bargaining agreement would fail also.

Moreover, Defendant relates that its claim against IBEW arises out of the same set of

operative fact as Plaintiffs' claims against Defendant.

The Court, in the exercise of its discretion, will not grant Defendant leave to assert a

third-party complaint against IBEW. The Court finds the holding in Southwestern

Administrators, Inc. v. Rozay's Transfer, 791 F.2d 769, 777 (9th Cir. 1986), cert denied, 479

U.S. 1065 (1987) is instructive in this regard. In Southwestern Administrators, which

involved a claim for contributions by an employee benefit trust fund against the defendant

employer pursuant to the terms of a collective bargaining agreement, the Ninth Circuit

affirmed the district court's denial of the defendant employer's request for leave to file a thirdparty complaint against the union. Id. Specifically, the Ninth Circuit held it was reasonable

for the district court to find that allowing such a pleading "would be inconsistent with the

purposes of ERISA in providing a streamlined and simplified procedure for employee benefit

trust funds to collect delinquent contributions." Id. The Court finds the same situation is

presented here. To allow the third-party complaint against IBEW at this stage of the

litigation would hinder the Plaintiffs' ability to obtain a "streamlined" resolution of their

claim for contributions. As such, Defendant's Motion to Amend is denied. 

II. Motion for Leave to File Motion for Reconsideration 

Defendant also seeks leave to file a motion for reconsideration regarding the Court's

ruling striking Defendant's affirmative defense of fraud in the execution to Plaintiffs' claims.

Defendant seeks leave because the applicable ten-day period to assert such a motion has long

past. See LRCiv. 7.2(g). The Court issued its order on March 25, 2006. (Dkt.#49).

Defendant did not file his instant Motion for leave to assert the motion for reconsideration

until July 11, 2006. (Dkt.#71). 

Motions for reconsideration are disfavored and only appropriate if the court "(1) is

presented with newly discovered evidence, (2) committed clear error or the initial decision

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was manifestly unjust, or (3) if there is an intervening change in controlling law." School

Sist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993), cert.

denied, 114 S.Ct. 2742 (1994). Here, Defendant contends that the possibility that the Court

committed clear error in its March 25, 2006 order, justifies leave to file the instant motion

out of time. Defendant contends that the Court erred with its determination that Defendant's

fraud in the execution affirmative defense was deficient because of Defendant's failure to

detail the alleged role of Plaintiffs in the alleged fraud. (Dkt.#49, p.5); see also Sun Co., Inc.,

(R&M) v. Badger Design & Const. Inc., 939 F. Supp 365, 369 (E.D. Pa. 1996) (holding that

Rule 9(b) is applicable to both fraud in the execution defenses and counterclaims). Rather,

it is Defendant's position, that to adequately plead this affirmative defense, it is not necessary

to plead any active fraud on the part of the pension or trust funds, such as the Plaintiffs in this

case. In other words, the Defendant contends that it was only necessary to plead with

particularity its fraud in the execution defense involving IBEW, not Plaintiffs as well. 

Upon reviewing Defendant's position and cited authority, the Court finds that there

is sufficient good cause to grant Defendant leave to file a motion for reconsideration on the

issue discussed above. It is directed that Defendant shall file any such motion for

reconsideration within seven (7) business days from the date this Order is filed. Should

Defendant not file any such motion by this time, the Court will consider this issue waived.

In addition, should Defendant file such a motion for reconsideration, any response by

Plaintiffs will be due no later than five (5) business days thereafter. No Reply brief is to be

filed absent an order from the Court. See LRCiv 7.2(g) 

Accordingly,

IT IS HEREBY ORDERED granting in part and denying in part Defendant's Motion

to Amend Complaint to Join Third Party Defendant and Motion for Leave to File Motion for

Reconsideration for Good Cause. (Dkt.#71). Defendant's Motion is denied to the extent that

Defendant seeks to amend to assert a third-party complaint. Defendant's Motion is granted

to the extent Defendant seeks leave to file a motion for reconsideration regarding the Court's

March 25, 2006 order. 

Case 2:04-cv-02110-MHM Document 74 Filed 11/15/06 Page 4 of 5
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IT IS FURTHER ORDERED that Defendant shall file any such motion for

reconsideration within seven (7) business days from the date this Order is filed. Should

Defendant not file any such motion by this time, the Court will consider this issue waived.

In addition, should Defendant file such a motion for reconsideration, any response by

Plaintiffs will be due no later than five (5) business days thereafter. No Reply shall be filed,

absent an order from the Court. 

DATED this 13th day of November, 2006.

Case 2:04-cv-02110-MHM Document 74 Filed 11/15/06 Page 5 of 5