IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

BARNSCO, INC. §

Plaintiff, §

 §

§

VS. § CIVIL ACTION 3-04-CV-2017-R

§

CONTINENTAL CASUALTY CO. §

Defendants. §

MEMORANDUM OPINION AND ORDER

Now before the Court is Defendant Continental Casualty Co.’s Motion to Dismiss Pursuant

to Rules 12(b)(7) for Failure to Joint a Party Under Rule 19. For the reasons discussed below,

Defendant’s Motion is DENIED.

I. BACKGROUND

The undisputed background facts as set forth in Defendant’s motion are as follows. Barnsco,

Inc. (“Barnsco” or Plaintiff) entered into multiple contract with Clifton Concrete Company

(“Clifton”) to supply materials to multiple projects in and around the Dallas area. Ratcliff

Constructors, L.P. (“Ratcliff”) was the general contractors on the projects. On each such project,

Ratcliff entered into a contract with Clifton, for Clifton to perform as a subcontractor. The

substance of those contracts is not in dispute. Clifton entered into a contract with Plaintiff, as a

supplier to a first-tier subcontractor, to supply materials to each of the projects. Since the Projects

were public work projects, Ratcliff, as the principal, executed payment bonds for the projects.

Defendant Continental Casualty Company (“Continental Casualty” or Defendant) is the surety on

the bonds. Plaintiff was not completely paid for the work it performed. Plaintiff alleges a balance

of $72, 456.79 is owned to it. Plaintiff sued Defendant, and not Ratcliff or Clifton. Ratcliff, Clifton

and Plaintiff are Texas citizens. Defendant argues that Ratcliff and Clifton are necessary and

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION

FILED

August 8, 2005

CLERK, U.S. DISTRICT COURT

 

 Case 3:04-cv-02017-R Document 17 Filed 08/08/05 Page 1 of 4 PageID 113
indispensable parties upon whom the court cannot join without destroying its jurisdiction. 

II. RULE 19 ANALYSIS

Rule 19 of the Federal Rules of Civil Procedure explains when a court should join a party.

“The purpose of Rule 19 is ‘to permit joinder of all materially interested parties to a single lawsuit

so as to protect the interested parties and avoid waste of judicial resources.’” Cross Timbers Oil Co.

v. Rosel Energy, 167 F.R.D. 457, 459 (D.Kan.1996) (citation omitted). Under Rule 19(a), a party

should be joined, when feasible, if: (1) in the person's absence complete relief cannot be accorded

among those already parties, or (2) the person claims an interest relating to the subject of the action

and is so situated that the disposition of the action in the person's absence may (I) as a practical

matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons

already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent

obligations by reason of the claimed interest. Fed.R.Civ.P. 19(a). If the court determines that such

a party should be joined, but that joinder is not feasible because it would deprive the court of

jurisdiction over the suit, the court must determine if “the action should proceed among the parties

before it, or should be dismissed, the absent person being thus regarded as indispensable.”

Fed.R.Civ.P. 19(b). The Rule sets out a list of factors the court must consider in deciding whether

a party is indispensable. They are: first, to what extent a judgment rendered in the person's absence

might be prejudicial to the person or those already parties; second, the extent to which, by protective

provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened

or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth,

whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.

Fed.R.Civ.P. 19(b).

Defendant argues that without the joinder of Clifton, complete relief is not possible among

 

 Case 3:04-cv-02017-R Document 17 Filed 08/08/05 Page 2 of 4 PageID 114
the existing parties. Specifically, Defendant argues that without Clifton in the lawsuit Defendant

will be unable to determine whether Clifton had legitimate reasons for allegedly failing to pay

Plaintiff the monies it is due under the contract. Defendant also argues that without the joinder of

Clifton it will be forced to initiate a second lawsuit against Clifton to recover the amount of a

judgment, in any, in this suit. This argument is incorrect. Under Rule 19, only if “complete relief

cannot be accorded among those already parties” will the non-party be necessary. See James v.

Valvoline, Inc., 159 F.Supp.2d 544, 554 (S.D.Tex. 2001) (emphasis added). This is so because

under Texas law, Defendant is potentially jointly and severally liable to the Plaintiff. See R.P.

Farnsworth & Co., Inc., v. Globe Marble & Granite Corp., 250 F.2d 636, 637 (5th Cir. 1958). Texas

Government Code, section 2253.073 expressly states that “[a] payment bond beneficiary who has

provided public work labor or material under a public work contract for which a payment bond is

furnished...may sue the principal or surety, jointly or severally ,on the payment bond...” 

Defendant also argues that Clifton is a necessary party because Clifton has a legally

protected interest in the outcome of the litigation. Defendant states that there is potential for

inconsistent obligations if Clifton is not added as a party. But this argument also fails. 

[Rule 19] focuses upon subjecting a present party, here [Barnsco or Continental

Casualty], to inconsistent obligations because a party is missing. However, because

[Continental Casualty] and the non-parties who could also be liable to [Continental

Casualty] or the Plaintiff [are potentially jointly and severally liable] they need not

be joined in a single lawsuit...Indeed, a defendant who may be entitled to

contribution or indemnity cannot be subjected to double or multiple obligations since

his liability is several for the entire amount. 

James, 159 F.Supp.2d at 551-552 (quotes and internal citations omitted). 

 

 Case 3:04-cv-02017-R Document 17 Filed 08/08/05 Page 3 of 4 PageID 115
Because the Court concludes that Clifton and Ratcliff are not necessary parties under Rule

19, it does not consider whether their joinder is feasible or whether they are indispensable parties

under Rule 19(b). 

III. CONCLUSION

As set forth in detail above, the Court ORDERS that Defendant’s Motion to Dismiss is

DENIED. An amended scheduling order shall be issued. 

It is so ORDERED.

Signed: August 8 , 2005.

_________________________________

JUDGE JERRY BUCHMEYER

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

 

 Case 3:04-cv-02017-R Document 17 Filed 08/08/05 Page 4 of 4 PageID 116