Opinion ID: 672864
Heading Depth: 2
Heading Rank: 3

Heading: The Motion For Leave To Amend the Third-Party Claims

Text: 101 On September 3, 1992, the Bathgate defendants filed a third-party complaint against the individual directors and officers of the Bank (the Bank directors) pursuant to Fed.R.Civ.P. 14(a), which the district court dismissed by oral order on March 1, 1993. See Bathgate defendants' App. III at 1007-36 (transcript of proceedings). While the Bathgate defendants have not attempted to appeal from this order, they did file a motion for leave to file an amended third-party complaint. The district court denied that motion, holding that their proposed amendments would be futile. FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 5, 1993 WL 661958 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1041). 102 The Bank directors argue that we lack subject matter jurisdiction over the Bathgate defendants' third-party complaint because it is prohibited by Rules 14(a) and 13(h). See Bank directors' Br. at 25-28. In its March 1, 1993 order dismissing the third-party complaint, the district court cited 28 U.S.C. Sec. 1367 as the basis for subject matter jurisdiction over the third-party complaint, and stated that [a]lthough it appears that the Directors are more properly aligned as counterclaim-defendants [pursuant to Rule 13(h) ], [than as third-party defendants pursuant to Rule 14(a),] the Court is not persuaded that Bathgate's claims should be dismissed on this ground. See Bathgate defendants' App. III at 1028. 103 Rule 14(a) provides in pertinent part that 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. 104 A third-party claim may be asserted under Rule 14(a) only when the third party's liability is in some way dependent on the outcome of the main claim or when the third party is secondarily liable to defendant. If the claim is separate or independent from the main action, impleader will be denied. 105 C.A. Wright, A. Miller, M.K. Kane, Federal Practice and Procedure, Vol. 6, Sec. 1446, at 355-58 (1990). Thus, we conclude that the Bathgate defendants' pleading against the Bank directors does not qualify as a third-party complaint under Rule 14(a), because the Bank directors' liability is not derivative of the Bathgate defendants' liability on the notes for which the FDIC is seeking payment. 106 The Bank directors also maintain that joinder of the Bathgate defendants' claims against them was prohibited by Rule 13(h). 13 Rule 13(h) provides that persons other than those made parties to the original action may be made parties to a counterclaim or cross-claim in accordance with the provisions of Rules 19 and 20. 107 Rule 13(h) only authorizes the court to join additional persons in order to adjudicate a counterclaim or cross-claim that already is before the court or one that is being asserted at the same time the addition of a nonparty is sought. This means that a counterclaim or cross-claim may not be directed solely against persons who are not already parties to the original action, but must involve at least one existing party. 108 C.A. Wright, A. Miller, M.K. Kane, Federal Practice and Procedure, Vol. 6, Sec. 1435, at 270-71. The counterclaims against the FDIC have been dismissed. Moreover, at the time the district court denied the Bathgate defendants' motion for leave to amend their third-party complaint against the Bank directors, the district court already had granted summary judgment in favor of the FDIC on the FDIC's claims against the Bathgate defendants and on the Bathgate defendants' counterclaims against the FDIC. However, at the time that the pleading against the Bank directors was filed, the Bathgate defendants' counterclaims against the FDIC remained before the district court. Thus, the Bathgate defendants properly joined the Bank directors as additional parties to the counterclaim pursuant to Rule 13(h), which the district court cited in its order dismissing the counterclaims. 14 109 Moreover, in In re Texas Eastern Transmission Corp. PCB Contamination Ins. Coverage Litig., 15 F.3d 1230, 1236-37 (3d Cir.1994), we held that the district court had [a]ncillary subject matter jurisdiction ... over additional party defendants to a compulsory counterclaim, or over third party defendants, and that Congress confirmed the principle of ancillary jurisdiction over counterclaim defendants in the enactment of the Judicial Improvements Act of 1990, 28 U.S.C. Sec. 1367. Section 1367 provides in pertinent part that district courts shall have supplemental jurisdiction over all ... claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. 28 U.S.C. Sec. 1367(a). 15 Thus, we conclude that the district court had subject matter jurisdiction over the Bathgate defendants' claims against the Bank directors. 16 110 As noted above, the district court denied the Bathgate defendants' motion for leave to amend their third-party complaint against the Bank directors because it concluded that their proposed amendments would be futile. FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 5, 1993 WL 661958 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1041). Rule 15(a) of the Federal Rules of Civil Procedure authorizes a party to amend its pleadings as a matter of course at any time before a responsive pleading is served. In this case, although no responsive pleading had been filed, the district court concluded that [r]ather than incur the added expense, delay, and inefficiency of permitting the amendment and then considering a motion to dismiss at a later date, the Court [would] focus[ ] on the ultimate issue of whether the motion to amend should be denied as futile. FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 2, 1993 WL 661961 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1038). The futility of amendment is one of the factors that a trial court may consider in denying a motion to amend. See Averbach v. Rival Mfg. Co., 879 F.2d 1196, 1203 (3d Cir.1989), cert. denied, 493 U.S. 1023, 110 S.Ct. 726, 107 L.Ed.2d 745 (1990). We review the district court's denial of a motion to amend for abuse of discretion. Id. 111 The Bathgate defendants argue that the district court erred in denying their motion for leave to amend their third-party complaint because the amended complaint stated causes of action for intentional interference with contractual relations and prospective economic advantage, slander of credit and title, violation of the New Jersey Consumer Fraud Act, misrepresentation, and tortious breach of the duty of good faith. See Bathgate defendants' Br. at 34-41. 17 112 The district court held that the Bathgate defendants' claims for slander of credit and slander of title failed because they rested on the allegation that the Bank directors published false statements indicating that the Bathgate defendants were in default when it already had held that the Bathgate defendants in fact, were in default. FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 3, 1993 WL 661961 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1039). We agree that in light of the district court's holding and our decision to affirm that holding, the motion to amend the slander claims remains futile. Moreover, the Bathgate defendants' allegations, see Bathgate defendants' App. III at 1198-99, do not satisfy the pleading requirements for defamation claims because they do not identify the alleged defamatory statements or the source of the defamatory statements with sufficient specificity. See Nanavati v. Burdette Tomlin Memorial Hosp., 857 F.2d 96, 109 (3d Cir.1988) (a plaintiff must be required to set forth actionable statements with particularity), cert. denied, 489 U.S. 1078, 109 S.Ct. 1528, 103 L.Ed.2d 834 (1989); Zoneraich v. Overlook Hosp., 212 N.J.Super. 83, 514 A.2d 53, 63 (App.Div.) (In the case of a complaint charging defamation, plaintiff must plead facts sufficient to identify the defamatory words, their utterer and the fact of their publication.... A plaintiff may be permitted to bolster a defamation cause of action through discovery, but not to file a conclusory complaint to find out if one exists.), certif. denied, 107 N.J. 32, 526 A.2d 126 (1986). 113 The district court held that the Bank directors could not be liable on the Bathgate defendants' claims of intentional interference with contractual relations and prospective economic advantage, because the court in Sammon v. Watchung Hills Bank for Sav., 259 N.J.Super. 124, 611 A.2d 674 (Law Div.1992), held that an employee cannot be held liable for an act that is otherwise a tort when the employee is exercising a privilege of the principal. FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 3-4, 1993 WL 661958 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1039-40). The district court also based its holding on Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 563 A.2d 31, in which the court declined to decide whether employees [ever] can be answerable for interfering with their employer's prospective contractual relationship, id. at 761, 563 A.2d 31, and stated that [u]ltimate resolution of the question of whether an employee of a party to a prospective economic relationship can be held liable for tortious interference may require the Court to create a special cause of action against the employee, id. at 763, 563 A.2d 31. FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 4, 1993 WL 661961 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1040). 114 In this case, the Bathgate defendants allege that the Bank directors were exercising the Bank's authority with regard to the disposition of Bathgate's notes. See, e.g., Bathgate defendants' App. III at 1170, 1196. Thus, the Bank directors were exercising a privilege of the principal. Since the Bank cannot be liable on a cause of action grounded in unlawful interference with prospective economic advantage, fairness would require that [the directors with the authority to act on the Bank's behalf] ... be similarly insulated from liability on such a cause of action. Sammon v. Watchung Hills Bank for Sav., 611 A.2d at 676. Moreover, as the Bank directors point out, the Bathgate defendants have not cited any authority indicating that the New Jersey Supreme Court has created a special cause of action for tortious interference by employees of a party to an economic relationship. See Bank directors' Br. at 15. We think it would not recognize such an action, at least not in the circumstances here. Thus, we will affirm the district court's denial of the motion to amend the Bathgate defendants' tortious interference claims against the Bank directors. 115 The district court denied the motion to amend the New Jersey Consumer Fraud Act claim and common law fraud claim because the amended claims failed to satisfy the particularity requirement of Fed.R.Civ.P. 9(b). FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 5, 1993 WL 661961 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1041). Although the Bathgate defendants asserted that a fraudulent statement was made to Bathgate that the closing on the February Commitment would be deferred beyond April 1, [1991], they did not assert the identity of the speaker or speakers. Id. at 4-5 (see Bathgate defendants' App. III at 1040-41); see Saporito v. Combustion Eng'g Inc., 843 F.2d 666, 675 (3d Cir.1988) ([a]lthough the appellants' complaint does indicate the general content of the [allegedly fraudulent] representations ..., it does not indicate who the speakers were ... or who received the information), vacated on other grounds, 489 U.S. 1049, 109 S.Ct. 1306, 103 L.Ed.2d 576 (1989). Moreover, there is no reason to believe that additional information is in the exclusive control of [the third-party defendants]. Saporito v. Combustion Eng'g Inc., 843 F.2d at 675. 116 It is true that in the case of corporate fraud, plaintiffs cannot be expected to have personal knowledge of the details of corporate internal affairs. Craftmatic Sec. Litig. v. Kraftsow, 890 F.2d 628, 645 (3d Cir.1989). However, the Bathgate defendants assert individual fraud by the Bank directors. Furthermore, in Craftmatic, we stated that even under a non-restrictive application of the rule [9(b) ], pleaders must allege that the necessary information lies within defendants' control, and their allegations must be accompanied by a statement of facts upon which the allegations are based. Craftmatic, 890 F.2d at 645. In other words, plaintiffs must accompany their allegations with facts indicating why the charges against defendants are not baseless and why additional information lies exclusively within defendants' control. Id. at 646. The Bathgate defendants did not allege expressly that the necessary information lies within the third-party defendants' control nor did they provide a statement of facts indicating why the charges against the Bank directors are not baseless and why additional information lies exclusively within the Bank directors' control. See Bathgate defendants' App. III at 1201-03. Thus, we will affirm the district court's decision to deny the motion to amend the claims alleging fraud. 117 Finally, the district court held that the Bathgate defendants' amendment to its claim for breach of the duty of good faith would be futile because in a lender-borrower relationship, there is no independent duty beyond [the] parties' contractual duties, FDIC v. Bathgate et al., Civ. No. 91-2779 (consolidated), Memorandum and Order at 5, 1993 WL 661961 (D.N.J. July 19, 1993) (see Bathgate defendants' App. III at 1041) (citing Washington Steel Corp. v. TW Corp., 602 F.2d 594, 599-601 (3d Cir.1979), overruled on other grounds by Clark v. K-Mart Corp., 979 F.2d 965, 967 n. 4 (3d Cir.1992)), and  'remedies in tort relating to a breach of contract may not be maintained in addition to those established under the contract itself in the absence of any independent duty owed by the breaching party to the plaintiff,'  id. (quoting International Minerals & Mining Corp. v. Citicorp North America, Inc., 736 F.Supp. 587, 597 (D.N.J.1990)). We do not reach these issues because, as the Bank directors point out, [e]ven assuming [the Bank] did owe Bathgate some added duty of good faith, [the Bathgate defendants] fail to cite a single case for the proposition that non-parties to a contract can be held liable for a breach of a contractual duty of good faith and fair dealing, and we believe that the New Jersey Supreme Court would not recognize such a claim, at least in the circumstances of this case. See Bank directors' Br. at 25. 18 We will affirm the district court's holding with regard to the breach of duty of good faith claim on this basis. Thus, we will affirm in its entirety the district court's order denying the Bathgate defendants' motion for leave to amend their complaint against the Bank directors.