MONCION v. INFRA-METALS CORP., (S.D.N.Y. 2002)

RONALD L. ELLIS, United States Magistrate Judge

I. INTRODUCTION

Before this Court is a motion by plaintiffs Arsenio Moncion and Arquire Moncion ("Moncion") pursuant to Rules 15 and 19 of the Federal Rules of Civil Procedure to amend their complaint and add a defendant. Hunterspoint Steel Company ("Hunterspoint"). a non-diverse party. The addition of Hunterspoint will destroy diversity, and thus Moncion further moves that the case be remanded to state court. Because this case was removed to this Court on diversity grounds, this motion should have been made pursuant to 28 U.S.C. § 1447(e) and Rules 15 and 20 of the Federal Rules of Civil Procedure. Therefore, for the foregoing reasons, Moncion's motion is GRANTED.

II. BACKGROUND

On October 2, 2001, Moncion filed a verified complaint in the Supreme Court of the State of New York, County of the Bronx. See Affirmation in Support of Motion ("Moncion Aff.") at ¶ 5. On December 11, 2001, defendants Angel Figuero and Patrick Fenton (jointly the "Fenton defendants") removed this action to this Court pursuant to 28 U.S.C. § 1441 and 1332. Id. at ¶ 7. On September 27, 2002, the parties consented to trial before this Court.

This negligence action arises from an accident which occurred on July 25. 2001, at Koenig Iron Works, Inc. ("Koenig") in Long Island City. New York. Id. at ¶ 3. Moncion, an employee at Koenig, was crushed as he was unloading a delivery of steel beams when a stack of beams fell from a delivery truck which the Fenton defendants were driving. Id. at ¶ 4. The steel on the delivery truck was sold by defendant Infra-Metals Corp., Division Preussag International Co. ("infra-Metals"), and delivered on a truck owned by the Fenton defendants. Id. Before the delivery to Koenig, the Fenton defendants stopped to deliver steel beams to Hunterspoint. Id. at ¶ 6. During that delivery, employees at Hunterspoint removed the steel beams from the truck as their order was on the bottom of the pile, and then reloaded the truck. Id. However, at the time the action was originally filed. Moncion was unaware that Hunterspoint either unloaded or reloaded the steel beams onto the truck. Id.

On October 24, 2002. the Fenton defendants Filed a motion for summary judgment. Among other things, the Fenton defendants alleged that there was no evidence that they loaded or unloaded the truck, or that they breached any duty to Moncion. On November 4, 2002, Moncion filed the current motion to amend the complaint. Moncion alleged that Hunterspoint's role in the accident was not known until October 16, 2002. Id. at ¶ 12. Additionally, Moncion alleged that discovery was still incomplete, and without the addition of Hunterspoint and the continuation of Hunterspoint depositions, it remains unclear whether or not the Fenton defendants took part in any loading of the truck, or if they breached a duty to inspect their load. Following a telephone conference on November 8, 2002, this Court informed the parties that the Moncion motion would be decided first, and the Fenton defendant's motion held in abeyance.

III. DISCUSSION

Rule 15(a) of the Federal Rules of Civil Procedure requires that leave to amend be freely given if justice so requires." FED.R.Civ.P. 15(a). The parties mistakenly argued this motion under Rules 15 and 19, focusing on whether or not Hunterspoint is an indispensable party. However, "[a]s the motion has been brought post-removal, it is governed by section 1447(e) of Title 28 of the United States Code." Briarpateh Limited L.P. v. Geisler Roberdeau, Inc., 48 F. Supp.2d 321, 327 (S.D.N.Y. 2001). Section 1447(e) provides:

If after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joined and remand the action to the State court.

Therefore, the decision to join new parties, even if those parties destroy diversity and require a remand, is within the sound discretion of the trial court. See Id Wyant v. National Railroad Passenger Corporation, 881 F. Supp. 919. 923 (S.D.N.Y. 1995).

The parties in their briefs focused their attention on Rule 19. arguing over the indispensability of Hunterspoint. However, "[d]istrict courts in this circuit have generally agreed that in exercising the discretion whether to admit new parties, courts First consider whether joinder would be appropriate under Rule 20." Briarpatch, 148 F. Supp.2d at 327 (citations omitted). Courts within this district have noted that requiring the new party to be indispensable overemphasizes the need to protect the removal right and, as a result, precludes joinder in situations where joinder is warranted." Amon v. Nelson, 1992 WL 8337 *3 (S.D.N.Y. 1992). Thus, courts in this district use the fundamental fairness test, which "protects defendants' removal right, yet gives the court the flexibility to permit joinder in situations where it promotes efficiency and fairness." Id.

Rule 20 allows permissive joinder "if there is asserted against [the defendants] jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences, and if any question of law or fact common to all defendants will arise in the action." FED.R.CIV.P. 20. under this rule, "the impulse is toward the broadest possible scope of action consistent with fairness to the parties: joinder of claims, parties and remedies is strongly encouraged." United Mine Workers of America v. Gibbs, 383 U.S. 715, 724 (1966). Applying these broad principles, it is evident that Hunterspoint should be joined. Hunterspoint unloaded and then reloaded the steel beams which led to plaintiffs injury. Under New York law, there is a question as to whether or not Hunterspoint is a joint tortfeasor or an intervening tortfeasor. Moncion's claims, therefore, all arise out of one single transaction or occurrence. Therefore, the elements of Rule 20 are satisfied

"The Court must next weigh certain relevant considerations to determine whether joinder will comport with the principles of fundamental fairness the Federal Rules were designed to promote." Gursky v. Northwestern Mutual Life Insurance Company. 139 F.R.D. 279, 282 (E.D.N.Y. 1991) (citation omitted). The courts within this circuit have adopted a four-pronged test to consider whether joinder of non-diverse parties would be fundamentally fair: "(1) any delay, and its reasons, in moving to amend, (2) any resulting prejudice to the defendants, (3) the likelihood of multiple litigation, and (4) the plaintiffs motivation in moving to amend." Id. (citations omitted).

In the case before this Court, Moncion contends that he was unaware of Hunterspoint's involvement in unloading and reloading the steel beams until an October 16, 2002 deposition of a Hunterspoint employee. See Moncion Aff. at ¶ 12. The Fenton defendants, however, argue that Moncion knew of Hunterspoint's involvement as early as December 20, 2001, when Infra-Metals turned over a delivery receipt which indicated that a delivery was made at Hunterspoint. See Memorandum of Law in Opposition of Motion for an Order (i) Granting Leave to Amend Complaint, (ii) Dismissing Action for Lack of Diversity Jurisdiction, (iii) Remanding this Action to State Court, and (iiii) (sic) Referring the Pending Motion for Summary Judgment to the State Court for Adjudication ("Def. Mem.") at 9. Although the receipt indicated the stop at Hunterspoint, nothing indicated Hunterspoint's unloading and reloading of the steel beams until the deposition. Therefore, the first prong of the test favors Moncion.

Further, there is no prejudice to the Fenton defendants, even though they have a motion pending before this Court. The state court can adequately decide the Fenton defendant's motion. Also, "joinder will not force defendant[s] to change a litigation strategy in pursuit of which resources have already been expended." Amon, 1992 WL 8337 at *4 [here is also a likelihood of multiple litigation in this matter if Hunterspoint is not joined. Finally. there is no evidence that Moncion's motive for amending the complaint is elimination of diversity. Although the Fenton defendants allege that this is Moncion's motive, "[w]here there is no evidence that joinder would be fraudulent or improper, this assertion, standing alone, is insufficient to defeat the joinder." Soto v. Barnitt, 2000 WL 1206603 *3 (S.D.N.Y. 2000).

Accordingly, Moncion's motion for leave to file an amended complaint is granted. Because joinder of Hunterspoint destroys diversity, this Court lacks subject matter jurisdiction to continue to hear this action, and orders that the case be remanded to the Supreme Court of the State of New York, Bronx County.

IV. CONCLUSION

For the foregoing reasons, Moncion's motion to amend the complaint to joint Hunterspoint is GRANTED. Moncion is ordered to file the amended complaint within two weeks of the date of this Opinion. Immediately upon filing of the Amended Complaint, the Clerk of the Court is directed to remand the case to the New York State Supreme Court. Bronx County.