Opinion ID: 781855
Heading Depth: 4
Heading Rank: 2

Heading: Dropping a Party for Misjoinder

Text: 22 We affirm a district court's decision to drop a misjoined party pursuant to Rule 21 absent an abuse of discretion. See K-B Trucking Co. v. Riss Int'l Corp., 763 F.2d 1148, 1153 (10th Cir.1985); Intercon Research Assocs., Ltd. v. Dresser Indus., Inc., 696 F.2d 53, 56 (7th Cir.1982) ([T]he district court has wide discretion in deciding whether to dismiss a party as a defendant in a civil action.). Therefore, we affirm the dismissal of a party for misjoinder unless this court is left with a definite and firm conviction that the trial court committed a clear error of judgment. Cincinnati Ins. Co. v. Byers, 151 F.3d 574, 578 (6th Cir.1998) (quotation omitted). 23 Courts cannot dismiss actions where there has been misjoinder of parties, but they may drop or add parties under Rule 21: 24 Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately. 25 Fed.R.Civ.P. 21. A misjoinder of parties also frequently is declared because no relief is demanded from one or more of the parties joined as defendants. 7 Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Federal Practice and Procedure § 1683, at 475-76 (3d ed.2001); see American Fid. Fire Ins. Co. v. Construcciones Werl, Inc., 407 F.Supp. 164, 190 (D.C.V.I.1975). Pursuant to Rule 21, a court may exercise its discretion to drop a party from a lawsuit sua sponte whose presence no longer [a]ffects the issues being litigated. Edgar v. City of Chicago, 942 F.Supp. 366, 370 (N.D.Ill.1996), vacated on other grounds, 137 F.3d 474 (7th Cir.1998); see Glendora v. Malone, 917 F.Supp. 224, 227 n. 3 (S.D.N.Y.1996) (Clearly, the court may rely on Rule 21 to delete parties that have no connection to the claims asserted.). 26 The state court added Loewen as a party defendant on April 23, 2001, in an order granting the Letherers' motion to impound income from the sale of the cemetery properties and/or enjoin the continued sale of the properties. The state court explained that Loewen is properly joined as a defendant for the limited purpose of escrowing the proceeds from the sale of the burial plots and for the limited purpose of enforcing the Purchase Agreement obligations with respect to the foreclosure sale. J.A. at 165 (State Ct. Order) (emphasis added). Although the state court previously had found that Loewen had no legal or equitable title to the cemetery properties, it concluded that Loewen was appropriately joined in the action in light of Loewen's entitlement to receive all proceeds from the sale of cemetery plots pursuant to its sales agreement with Alger. On November 5, 2001, Loewen and the Letherers entered a stipulation that purportedly dismissed all claims against Loewen, rendered Loewen an unnecessary party to the action, and dismissed Loewen. The district court characterized the stipulation as a stipulation to dismiss all claims against Loewen. J.A. at 179 (District Ct. Order). Assuming that no party was demanding relief from Loewen after this stipulation, the district court did not abuse its discretion by dismissing Loewen as a party. 27 Alger argues that the district court did abuse its discretion because the Letherers eliminated only one of the two purposes for which Loewen was joined as a defendant: the order dismissing Loewen stated that the Letherers' request to place the cemetery plot proceeds in escrow is WITHDRAWN, J.A. at 179 (District Ct. Order), but did not mention Loewen's involvement in the suit for the limited purpose of enforcing the Purchase Agreement obligations with respect to the foreclosure sale. J.A. at 165 (State Ct. Order). Although the district court's order described the stipulation as dismiss[ing] all claims against Loewen, it did not specifically order all claims against Loewen dismissed. J.A. at 179 (District Ct. Order). Thus, Alger argues that because the foreclosure sale is still an issue pending before this and other courts, the district court erred in dismissing Loewen. 28 We are not persuaded by Alger's argument. Although the state court joined Loewen as a defendant in the suit for the limited purpose of enforcing the Purchase Agreement obligations with respect to the foreclosure sale, the Letherers did not state a claim for relief against Loewen in this regard. [T]he Purchase Agreement obligations referenced in the order joining Loewen do not implicate Loewen's relationship with the Letherers at all. J.A. at 165 (State Ct. Order). Rather, this provision of the order joining Loewen refers to Loewen's interest in ensuring that Alger continued to fulfill its contractual obligations to Loewen as the foreclosure sale proceeded. But Loewen's interests with respect to the foreclosure sale do not render Loewen an appropriate party defendant in the action. The Letherers never stated a claim against Loewen demanding that Alger and Loewen abide by their contractual obligations to each other, and Alger never stated any claim against Loewen. The only relief sought from Loewen was the diversion of Loewen's proceeds from the sale of cemetery plots into an escrow account. Therefore, once the Letherers withdrew their escrow request, Loewen's interest as a defendant was effectively eliminated because the Letherers no longer sought any relief from Loewen. 3 The district court did not abuse its discretion by concluding that Loewen, a party who was neither seeking relief nor having relief sought from it, was not an appropriate party to this action. 29 Alger further objects that the dismissal of Loewen was premature, because Alger intended to file claims against Loewen as soon as the district court announced its jurisdiction over the matter. Because the district court dismissed Loewen and remanded the action to state court immediately after finding a lack of jurisdiction, Alger claims that it did not have an opportunity to file its claims. We note, however, that Alger can still pursue any yet unasserted claims that it may have against Loewen. The district court's dismissal of Loewen did not eliminate any substantive right of Alger to file claims against Loewen in an appropriate court.