Opinion
Civil No. 03-4245 (JRT/RLE)
March 31, 2004
Jeffrey C. Brown, MERCHANT GOULD, Minneapolis, MN, for defendant and third-party Plaintiff
Mara H. Cohara, LATHROP GAGE, Kansas City, MO, for third-party defendant Cummins Engine Co.
ORDER DENYING THIRD-PARTY DEFENDANT CUMMINS ENGINE COMPANY'S MOTION TO DISMISS
BACKGROUND
Plaintiffs Jeffery and Camilla Perrella ("plaintiffs") purchased a motor home from defendant Shorewood RV Center ("Shorewood"). The motor home was manufactured by defendant National RV Holdings, Inc. d/b/a Country Coach ("Country Coach") and primarily warrantied by defendant Lyndon DFS Warranty Services, Inc. ("Lyndon"). The motor home apparently had numerous problems and, despite numerous repairs, could not be made to "conform . . . to its express warranties by repairing or correcting alleged defects." Plaintiffs returned the motor home to Shorewood, and then sued Shorewood, Country Coach, and Lyndon (collectively "defendants") alleging breach of contract, breach of express warranties, breach of implied warranties of merchantability and fitness, breach of duty to refund or replace under Minnesota Statute § 325 F.665 (the Lemon Law), violation of the Minnesota Consumer Fraud Act, and intentional infliction of emotional distress.
Country Coach filed a third-party complaint against third-party defendants Cummins Engine Co. ("Cummins") and Allison Transmission ("Allison"). Cummins manufactured the engine, and Allison manufactured the transmission installed in the motor home. The warranty provided by Country Coach explicitly excluded the engine and related parts and transmission. Cummins and Allison provided separate warranties for the engine and transmission, respectively. In light of these separate warranties, Country Coach alleges that Cummins and Allison "are or may be liable to Country Coach for all or part of the plaintiffs' claims against Country Coach." Following mediation, plaintiffs and defendants reached a settlement including a new motor home. As part of the settlement, plaintiffs assigned all of their claims to Country Coach. Cummins and Allison were involved in the mediation, but did not agree to the settlement.
The Court has not been provided with all of the details of the settlement.
Cummins moves to dismiss the third-party complaint in its entirety, asserting that (a) neither the third-party complaint or original complaint put it on notice of the claims against it, (b) Country Coach improperly incorporates the original complaint into the third-party complaint, (c) Country Coach improperly introduces new facts with its opposition to this motion, (d) Cummins and Country Coach do not share a common liability, and (e) Country Coach's claim is an improper third-party action because Country Coach cannot and does not demonstrate a substantive link between plaintiffs' original claims and its third-party contribution claim. For the following reasons, the Court denies the motion.
Cummins initially argued that toe third-party complaint was untimely, but has since withdrawn that argument.
ANALYSIS
I. Motion to Dismiss Standard of Review
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) should be granted "only if it is clear that no relief can be granted under any set of circumstances that could be proved consistent with the allegations." Alexander v. Peffer, 993 F.2d 1348, 1239 (8th Cir. 1993) (quoting Hishun v. King Spalding, 467 U.S. 69, 73 (1984)). The Court construes the complaint liberally, affording the plaintiff all reasonable inferences. Turner v. Holbrook, 278 F.3d 754, 757 (8th Cir. 2002).
Country Coach submitted an affidavit and attachments in support of its position. The Court declines to consider this additional evidence, as to do so would require the Court to convert this motion in to one for summary judgment. See Fed.R.Civ.P. 12(b) ("If, on a motion asserting the defense numbered (6) . . . matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment."); BJC Health System v. Columbia Cas. Co., 348 F.3d 685, 687-88 (8th Cir. 2003).
II. Rule 14(a)
Rule 14(a), Federal Rules of Civil Procedure, provides the procedural mechanism by which a party may assert a third-party claim, but does not itself provide a substantive theory of recovery. U.S. v. J D Enterprises of Duluth, 955 F. Supp. 1153, 1156 (D. Minn. 1997). Rather, Rule 14 impleader is available "only if there is an underlying substantive right to pursue a claim for relief against the third-party defendant." Id. (citations omitted).
Cummins appears to misunderstand the requirement of an underlying substantive theory to mean that in order to seek contribution, Country Coach must demonstrate that the claims in the initial complaint also apply to Cummins. This is not the case. In Minnesota, contribution is an independent cause of action, City of Willmar v. Short-Elliott-Hendrickson, Inc., 512 N.W.2d 872, 874 (Minn. 1994), "based on equitable principles to secure restitution to one who has paid more than his just share of a liability." Hermeling v. Minnesota Fire Cas. Co., 548 N.W.2d 270, 273 n. 1 (Minn. 1996) (internal quotation and citation omitted).
Country Coach alleges that Cummins "[is] or may be liable to Country Coach for all or part of the plaintiffs' claims against Country Coach." Although not explicitly identified as such, Country Coach's substantive claim is thus a claim for contribution, see White v. Johnson, 137 N.W.2d 674, 847 (Minn. 1965) (defining and distinguishing contribution and indemnity), and is properly before the Court.
III. Contribution
In Minnesota, a party suing for contribution must satisfy two threshold requirements: "the parties must share a common liability or burden and the [party suing for contribution] must have discharged more than his fair share of the common liability or burden." City of Willmar, 512 N.W.2d at 874; In re Westerhoff, 688 F.2d 62, 63 (8th Cir. 1982). Cummins asserts that neither requirement is met. According to Cummins, it and Country Coach do not share a common liability or burden because plaintiffs have chosen to sue Country Coach and not Cummins, and Country Coach has not identified or put Cummins on notice as to how they share liability for plaintiffs' claims. Further, Country Coach has not discharged more than its fair share of the liability burden because, according to Cummins, Country Coach has not paid any amount of damages to any party.
Contribution applies "when the parties are under a common burden with respect to the same transaction." Merrimac Mining Co. v. Gross, 12 N.W.2d 506, 509 (1943). Put another way, common liability arises when both parties are liable to the injured party for part or all of the same damages. Nuessmeier Electric, Inc. v. Weiss Manufacturing Co., 632 N.W.2d 248, 251 (Minn.Ct.App. 2001) (citing Milbank Mut. Ins. Co. v. Village of Rose Creek, 225 N.W.2d 6, 8-9 (Minn. 1974)). Liability thus arises from the fact of the tortious event, and "an injured party's failure to bring an action against a tortfeasor . . .[will not] relieve a tortfeasor of his liability to a joint tortfeasor for contribution." Spitzack v. Schumacher, 241 N.W.2d 641, 643 (Minn. 1976) (citation omitted); see also 3 J. Moore, Moore's Federal Practice 14.10 at 14-62 ("It is not relevant to the defendant's right to bring in a third-party defendant, that the plaintiff . . . declines to assert a claim against him."). Common liability may exist even where each party's liability is based on a different theory. Nuessmeier Electric, 632 N.W.2d at 251 (citing City of Willmar, 512 N.W.2d at 874).
"The right to seek contribution is not equivalent to the right to recover contribution. Neussmeier Electric, 632 N.W.2d at 253 (citation omitted). Where a defendant seeks contribution from a third-party defendant for settlement payments, it is the defendant's burden to demonstrate that the settlement was reasonable, Samuelson v. Chicago, Rock Island and Pacific Railroad Co., 178 N.W.2d 620, 622 (Minn. 1970), and that it paid more than its "fair share" of the liability burden. Nuessmeier Electric, 632 N.W.2d at 253. That is, defendant must demonstrate that some portion of the liability it incurred is properly assigned to the third-party defendant. However, it is not necessary that a court determine either party's liability prior to a claim for contribution being made. Samuelson, 178 N.W.2d at 623-24.
The third-party complaint clearly alleges that Cummins provided the engine of the motor home in question, and that the motor home had a number of engine problems that Cummins or its agents attempted to repair. These engine problems are, at least in part, the basis for plaintiffs' broader claims that defendants failed to provide them with a functioning motor home. Consistent with these allegations, Country Coach could prove that it and Cummins are jointly liable to plaintiffs for the failure of their motor home. Further, consistent with the allegations in the third-party complaint and complaint that the motor home required numerous repairs, was out of service for more than 30 days due to those repairs, and that Country Coach is liable to plaintiffs under multiple legal theories, Country Coach could conceivably prove that it has discharged more than its fair share of the liability burden. These allegations provide more than sufficient notice to Cummins to satisfy the requirements of Federal Rule of Civil Procedure 8(a).
Fed.R.Civ.P. 10(c) authorizes adoption by reference in third-party complaint of matter contained in the original complaint. The third-party complaint alleges that "third-party defendants are or may be liable to Country Coach for all or part of the plaintiffs' claims against Country Coach" relating to defendants' inability to "conform the subject motor vehicle to any applicable express warranties by repairing or correcting any defect or condition." As all claims in the complaint stem from this failure, it is apparent to the Court that the third-party complaint incorporates by reference all of the claims in the complaint.
Any further information that Cummins requires regarding the specifics of Country Coach's third-party claim is properly acquired through the use of interrogatories pursuant to Fed.R.Civ.P. 33.
In order to ultimately prevail on this action for contribution, Country Coach will have to prove that this settlement reached with plaintiffs was reasonable, the amount of liability it incurred under the settlement, and that this amount was more than its "fair share" in that some portion of the liability is properly assigned to Cummins. That Country Coach has not done so already is not, however, a reason to dismiss its claim for contribution.
ORDER
Based on the foregoing, all the records, files, and proceedings herein, IT IS HEREBY ORDERED that third-party defendant Cummins Engine Company's Motion to Dismiss [Docket No. 13] is DENIED.