Civil Procedure II, Pages 805–806

Price v. CTB, Inc.

United States District Court for the Middle District of Alabama, 2001

Facts:

Plaintiff Price, a chicken farmer, hired defendant Latco to build a new chicken house. Alleging that the structure was defective, plaintiff sued multiple defendants, including Latco. Latco filed a third-party complaint against ITW, alleging that ITW defectively designed the nails used in the construction.

Issue:

Was Latco allowed to file a third-party claim against ITW?

Third-Party Plaintiff's Argument:

ITW is the prototypical third-party defendant, as it can be found liable for the warranty surrounding its products if Latco is found liable for faulty construction.

Derivative liability is just a shift in the overall responsibility of the alleged defects.

Third-Party Defendant's Argument:

As Rule 14 is a procedural law, it can only be applied when there is a substantive right to indemnity.

Rule:

FRCP 14(a)(1)

A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it. . . .

Explanation:

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Even though it may arise out of the same general set of facts as the main claim, a third party claim will not be permitted when it is based upon a separate and independent claim. Rather, the third party liability must in some way be derivative of the original claim; a third party may be impleaded only when the original defendant is trying to pass all or part of the liability onto that third party.

Reasoning:

ITW accurately states the law, and Alabama does not recognize a right to contribution. However, It does recognize that a manufacturer of a product has impliedly agreed to indemnify the seller when he has to pay a judgment but the manufacturer is responsible instead of him.

Alabama law has not clarified the specifics of this law, but it is similar to Illinois's, which would permit a claim in this case should Latco be found liable. Therefore, Alabama law will. This is a legal basis upon which to implead ITW.

Holding:

Latco had a valid basis to implead ITW. ITW's motion to dismiss denied.

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