Opinion
Civil Action No. 99-2518-KHV.
July 31, 2000
MEMORANDUM AND ORDER
Houston Grain Trading, Inc. brings suit for breach of contract, claiming that Heiman Company, Inc. failed to honor its obligation to pay for grain salvaged from a grain elevator which exploded outside Wichita, Kansas. This matter comes before the Court on theMotion to Dismiss (Doc. #22) which Heiman Company, Inc. ("Heiman") filed April 18, 2000, on the theory that plaintiff had failed to join an indispensable party. For reasons stated below, defendant's motion is overruled.
Motion to Dismiss Standards
The Court will dismiss a case pursuant to Rule 19, Fed.R.Civ.P., only if an individual or entity is necessary and indispensable to the action and the Court cannot join the non-party without depriving itself of jurisdiction. In a two-part analysis prescribed by Rule 19, defendant must first show that plaintiff failed to join a person necessary to adjudicate the pending action. See Rishell v. Phillips Episcopal Mem'l Med. Ctr., 94 F.3d 1407, 1411 (10th Cir. 1996). Defendant has the burden of producing convincing evidence which shows that Lange is a necessary party. See Citizen Band Potowatomi Indian Tribe v. Collier, 17 F.3d 1292, 1293 (10th Cir. 1994). If the Court finds that the non-party is necessary, it must determine whether the non-party is indispensable and whether the case should be dismissed or proceed in the absence of the non-party. See id. Each case is evaluated in light of equity and good-conscience. Associated Dry Goods Corp. v. Towers Fin. Corp., 920 F.2d 1121, 1124 (2d Cir. 1990); 7 Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure § 1608 at 91-2.
Factual Background
Houston Grain Trading, Inc. ("HGT") is in the grain salvage business. In June 1998, it agreed to sell Heiman certain wheat which had been damaged in an explosion at the De Bruce grain elevator near Wichita, Kansas. HGT hired Lange Company L.L.C. to transport the grain to the Lange facility in Conway Springs, Kansas, where it was to be cleaned before Heiman picked it up. HGT and Heiman executed separately numbered contracts which covered various portions of the wheat.
Heiman picked up from Lange the wheat which is involved in this suit, and resold it to others. Heiman did not fully pay HGT for all of the shipments, however, and in this suit HGT seeks compensation for amounts due. See First Amended Complaint (Doc. #14) filed March 23, 2000 ¶¶ 14-16. Heiman claims that HGT failed to deliver a portion of the grain required by the parties' agreements, thereby causing Heiman a loss of profits from the resale of the grain. See Memorandum In Support of Defendant's Motion To Dismiss (Doc. #23) filed April 18, 2000 ¶ 7; Answer To The First Amended Complaint And Counterclaim (Doc. #32) filed June 2, 2000 ¶¶ 23-24.
Lange filed suit against Heiman in the District Court of Sumner County, Kansas, claiming that Heiman breached its duty to pay for transporting the grain from De Bruce, and for cleaning and storage charges. Heiman counterclaimed, alleging that Lange did not properly account for the grain, thereby precluding Heiman from collecting and shipping it to other dealers. Heiman does not claim, however, that the grain which is involved in this federal action is the grain which is the subject of the state court action. See Memorandum In Support Of Defendant's Motion To Dismiss (Doc. #23) filed April 18, 2000 at 7.
Heiman asks the court to dismiss the instant action based on HGT's failure to join Lange as a party to this case.
Analysis
Pursuant to Rule 19, the Court must first determine if Lange is a necessary party. A person or entity is a necessary party 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 persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.
Heiman first argues that Lange is necessary because in Lange's absence, the Court cannot accord it complete relief. More specifically, Heiman reasons that complete relief is not available to it because in order to resolve all claims arising from the "underlying common enterprise between these parties," it must also defend the state court action by Lange. See Fed.R.Civ.P. 19 (a)(1). This argument must fail because on this record it is not clear that the dispute between Heiman and Lange involves the grain, the issues or the contracts that are involved in this case. Rule 19 (a) does not guarantee a single forum for claims which are factually and legally distinct but arise from "an underlying common enterprise." The Court is satisfied that even without Lange's joinder, it can accord complete relief to the existing parties in this case. Lange was not a party to the sales contracts between Heiman and HGT, and HGT only seeks to recover on contracts where Lange delivered the grain to Heiman and Heiman resold the grain to third parties. The Court therefore finds that even in Lange's absence, it can accord complete relief to those already parties.
Lange does not assert an interest in the subject matter of the action, and Heiman does not identify any valid interest which Lange might assert in this case. See Fed.R.Civ.P. 19(a)(2). Heiman does not address whether Lange's absence from the suit would impair or impede Lange's ability to protect its interest, and Heiman does not offer a scenario in which Lange might be prejudiced by its absence from the suit. See Fed.R.Civ.P. 19(a)(2)(i). Heiman argues that Lange must be joined to eliminate the risk of subjecting existing parties to inconsistent judgments. See Fed. It Civ. P. 19(a)(2)(ii). The factual issues in this case do not appear to overlap, however, with issues to be decided in the state court action. The Court need not speculate about the possibility of inconsistent judgments in future lawsuits. The Tenth Circuit requires that district courts evaluate the "practical possibility" of related future lawsuits rather than a "theoretical possibility." State Farm Mut. Auto. Ins. Co. v. Mid-Continent Cas. Co., 518 F.2d 292, 295 (10th Cir. 1975).
In sum, Lange is not a necessary party. Lange therefore is not indispensable and this action will proceed.
IT IS THEREFORE ORDERED that defendant's Motion to Dismiss (Doc. #22) filed April 18, 2000 be and hereby is OVERRULED.