Opinion
1:02-CV-01515-SEB-JPG
November 7, 2003
ENTRY ON THIRD-PARTY DEFENDANT WOOD COMPANY EVC.'S MOTION TO DISMISS THIRD-PARTY COMPLAINT, PLAINTIFF'S MOTION FOR LEAVE TO FILE CROSS CLAIM AGAINST WOOD COMPANY EVC. AND WOOD COMPANY EVC.'S MOTION FOR EXTENSION OF TIME
Several motions are currently before the Court: (1) a Motion to Dismiss Third-Party Complaint filed by Wood Company Inc. ("Wood") on April 21, 2003; (2) a Motion For Leave To File Cross Claim Against Wood Company Inc., filed by Plaintiff, Walsh Construction Company of Illinois ("Walsh") on September 25, 2003; and (3) Wood also requests an extension of time to answer the cross claim until after the ruling on Walsh's motion for leave to file it. We address them in this order: number 2, number 1, number 3.
BACKGROUND
Walsh filed suit against Janssen Spaans Engineering ("JSE"), alleging professional negligence and breach of contract in connection with JSE's allegedly inaccurate quantity estimates given to Walsh for use in submitting a successful bid to construct an interstate highway project. In response to Walsh's claims, JSE filed a third-party complaint against AON Risk Services of Illinois, Inc. ("AON"), claiming that AON, which was retained by Walsh to procure insurance for the project to cover all members of Walsh's bidding team against the type of professional negligence claims being asserted against JSE, was negligent and breached its contract under which JSE was a third-party beneficiary. Walsh filed its own cross claim against AON, prompting AON to file a third-party claim against Wood, who, it says, was responsible for procuring insurance bids for AON to present to Walsh. AON claims that if it is found to be negligent to Walsh, its negligence was caused by Wood who did not procure the type of insurance it was asked to and thus breached its duty to AON.
Wood moves to dismiss AON's third-party complaint, alleging it is a common law claim of indemnity which is not available under the circumstances. Walsh seeks leave to file its own cross claim against Wood, asserting that Wood owed a duty to Walsh to procure the type of insurance Walsh had requested from AON to cover all the bid team members, including JSE.
RULING ON WALSH'S MOTION FOR LEAVE TO FILE CROSS CLAIM
Normally, Walsh's motion would be viewed as routine. However, Wood has objected strenuously to Walsh's request for leave to file a cross claim, because the request came more than 60 days after the deadline for amending pleadings contained in the Case Management Plan. The Plan was agreed to by the parties and approved by the court in June 2003. Wood claims it would be unfair if at this late date it were required to defend against a newly-asserted $4.9 million professional malpractice claim. In addition, Wood cites Local Rule 16.1(i), which provides that deadlines contained in a Case Management Plan approved by the Court shall not be modified except for good cause shown.
Walsh counters, explaining that it was unaware of Wood's involvement in the procurement of insurance coverage until well after its initial complaint was filed. Further, Walsh claims that it didn't have sufficient knowledge to frame a cross claim until after it received discovery responses from Wood after the deadline for amending pleadings or adding parties had passed. Walsh also points out that Wood is already a party to this suit as a third-party defendant to AON's claim for indemnity. Finally, Walsh reminds the Court of the language contained in Fed.R.Civ.P. 15(a) which indicates that leave to amend the pleadings should be freely granted when justice requires the same.
We believe Walsh could and probably should have acted more quickly to assert its claims against Wood. After all, Wood was named by AON as a non-party whose fault may have contributed to any damages as far back as January of this year. Even though this litigation has been pursued fairly rigorously, Walsh says it did not have what it believes to be a crucial piece of evidence in support of its claim until after the deadline and as a result of the third-party complaint filed against it by AON. Wood, on the other hand, has been aware of its potential liability for quite some time. AON's third-party complaint exposes Wood to essentially the same liability as it would face if Walsh were allowed to file a cross claim. This can't be a surprise to Wood. Accordingly, we hold that the interests of justice are served by granting Walsh's motion to file a cross claim against Wood. And so we do.
The fact that Wood is "already a party" is not as important as the fact that it was on notice of the effort to assign fault to it in the negligence action. This is particularly true in light of the second portion of this entry which holds that the third-party claim against Wood should be dismissed.
RULING ON WOOD'S MOTION TO DISMISS
In response to the claims brought against it by JES and Walsh, AON filed a third-party complaint against Wood. After reciting the various claims by Walsh and JES which brought AON into this case as a party, the third-party complaint claims that Wood owed a duty both to AON and to Walsh to inform the insurer, Lexington Insurance Company, of the type of coverage being sought by the bid team and a duty to inform AON and Walsh if Lexington's policy did not provide that type of coverage, which duties Wood breached. The third-party complaint seeks payment of any amount AON might suffer as damages as a result of the claims of JSE and Walsh. In short, it is plainly a claim for indemnity.
Lexington is a third-party defendant to a claim by JES and a cross claim defendant to a claim brought by Walsh — both seeking coverage under the policy that was purchased for the bid team. Lexington has denied coverage for a number of reasons, the foremost being that the policy purchased did not provide the type of coverage Walsh and JES contends were in place.
There was apparently no written contract between AON and Wood and no indemnity agreement of any sort. Therefore, any claim for indemnity would be based on a common law theory. The Indiana Supreme Court has recently reaffirmed the rule that a party may not prevail on such a claim for indemnity unless that party is wholly without fault. Mini-Mart v. Cast Fueland Services, 783 N.E.2d 253, 257 (Ind. 2003). It is also a well established principle of Indiana law that there can be no indemnity between joint tort-feasors. Mulloy v. Cincinnati Gas Elec. Co., 820 F. Supp. 1121 (S.D. Ind. 1992).
AON has not alleged that Wood breached a duty owed to AON. Were Wood not the defendant in a cross claim by Walsh, which squarely challenges Wood's actions along with those of the others involved in this litigation, we might be inclined to view AON's third-party complaint as being something other than a mere claim for indemnity. However, Walsh's cross claim against Wood brings every party potentially at fault with respect to the insurance coverage issues into the case. Because Indiana is a comparative fault state, which permits the allocation of fault among all the parties in negligence actions, if AON were to be found negligent, it has no indemnity rights against Wood Conversely, if AON were found not to be negligent, it has no need for indemnity relief. We hold, accordingly, that Wood's motion is well-taken, and AON's third-party indemnity claim brought against Wood should be dismissed.
CONCLUSION
Walsh's Motion For Leave To File Cross Claim Against Wood Company, Inc. is GRANTED. Wood's Motion to Dismiss Third-Party Complaint by AON is GRANTED. Because Walsh's cross claim was erroneously filed on the Court's docket prior to this order being entered, the Clerk of the Court shall note on the docket that Walsh's cross claim shall be deemed filed as of the date of this entry. Wood's Motion For Extension of Time to answer Walsh's cross claim is GRANTED; Wood is allowed thirty (30) days from the date of this entry for that purpose.
IT IS SO ORDERED.