Friday, February 24, 2012

Co-Defendant’s Cross-Claim for Indemnification/Contribution Denied Due to Failure to Plead Sufficient Factual Basis to Support the Claim

Gillermo Arguetta (the “Plaintiff”) brought a products liability suit after sustaining injures while using a tool called a Leak Detective Testing Kit (“Leak Detective”).  The Plaintiff filed suit against McGill Airflow, LLC, McGill Airsilence, LLC, United McGill Corporation (hereinafter, collectively “McGill Defendants”) and the Cincinnati Fan. Co. (“CFC”), claiming the Leak Detective was negligently designed and/or manufactured.  The Complaint alleged that while the Plaintiff was using the Leak Detective to locate and seal leaks at a bio-medical facility, his hand was sucked through the machine’s air inlet and into its unguarded fan housing.  The blade of the fan struck the Plaintiff’s hand, and crushed the bones in three (3) of his fingers, which then had to be amputated.

Initially, the Plaintiff filed suit in the Circuit Court for Frederick County against only the McGill Defendants, whom he alleged designed, manufactured and distributed the Leak Detective.  The McGill Defendant’s removed this case to federal court on April 27, 2011. Subsequently, during a joint physical inspection of the Leak Detective, the parties discovered labels under the machine’s fan indicating that the fan was actually manufactured by CFC.  Soon thereafter, the Plaintiff filed an Amended Complaint, adding CFC as a Defendant.  The McGill Defendants then moved for leave to file a Cross-Claim against CFC for indemnification and contribution.

CFC attacked the McGill Defendants’ motion and underlying Cross-Claim on three (3) grounds: (1) that the motion was untimely; (2) that the Cross-Claim would be more appropriately adjudicated in state court; and (3) that the Cross-Claim failed to allege a sufficient factual basis to properly support a claim for indemnification or contribution.  The Court found the first two arguments to be without merit and did not consider them; however, the Court agreed with CFC that the McGill Defendants’ proposed Cross-Claim was factually deficient and therefore failed to state a claim upon which relief could be granted.

The Court held that the Cross-Claim alleged no facts supporting even an inference that McGill was entitled to the relief that it sought.  To the contrary, the Court found that the Cross-Claim did little more than describe the parties and subject matter of the underlying action, and make conclusory declarations that it was entitled to indemnification and contribution from CFC if it was found liable to the Plaintiff.

Essentially, because the McGill Defendants’ Cross-Claim failed to meet the basic pleading standards of Fed. R. Civ. P. 8(c), the Cross-Claim could not survive a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6) (failure to state a claim upon which relief can be granted, or, in more archaic legalese, a “demurrer”).  The McGill Defendants’ Motion for Leave to File the Cross-Claim was therefore denied without prejudice.  The Court stated that the McGill Defendants were free to renew their motion to set out a plausible legal theory, with adequate factual support, under which CFC would be liable to them for indemnity and contribution.

In retrospect, in order to set forth an adequate factual basis to support the Cross-Claim, the McGill Defendants might have pled that CFC failed to install the requisite safety mechanisms or failed to warn of the possibility of the machine’s hazardous and un-guarded fan housing.  This would likely have been a sufficient factual basis to support the McGill Defendants’ claim for entitlement to indemnity or contribution.  Had they done this, reasonable inferences could have been drawn that CFC might be found liable to the McGill Defendants for indemnification and contribution, and the Court could very well have granted their Motion for Leave to File the Cross-Claim.  

The rules relating to pleading in both state and federal courts have been greatly relaxed over the course of the past several decades.  Relaxed though they might be, a party must still plead sufficient facts to support any claim for entitlement to relief.  Bald assertions and conclusory allegations by the pleader will not suffice.  

Article contributed by James Buck

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