Lehman v. Revolution Portfolio LLC

166 F.3d 389



A defendant, acting as a third-party plaintiff, may implead any non-party who is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff. Fed. R. Civ. P. 14(a). If the defendant acts within 10 days of submitting his answer, he may bring a third party into the suit without leave of court. Otherwise, the court's permission must be obtained. In that event, the determination is left to the informed discretion of the district court, which should allow impleader on any colorable claim of derivative liability that will not unduly delay or otherwise prejudice the ongoing proceedings. 


Third-party defendant appealed from a ruling of the United States District Court for the District of Massachusetts, reopening a portion of a case, reinstating a third-party complaint, granting summary judgment on a portion of the third-party complaint, and permitting substitution of parties. Third-party defendant was a beneficiary of a triangular financial transaction. The transaction imploded, litigation commenced, and the case was closed and partially reopened. In the end, only a third-party complaint proved ripe for adjudication. The district court dismissed two of its three counts, and entered summary judgment on the remaining count. Third-party defendant appealed, challenging reinstatement of the of the claim, joinder of an independent claim against him, the grant of summary judgment, and substitution of parties.


Was the 3rd party defendant was properly impleaded?




The court affirmed. Third-party defendant waived the reinstatement issue by failing to raise it in the lower court. In any event, the case was administratively closed, and the court had authority to reinstate if it concluded the administrative closing was improvident or circumstances sparking the closing abated, notwithstanding Fed. R. Civ. P. 60(b)'s time parameters. Third-party defendant also failed to raise the joinder issue in the lower court. Nevertheless, third-party defendant was properly impleaded, and the guaranty and indemnification claims against him were properly joined. The substitution of parties issue was not properly before the court.

The court affirmed the ruling to reopen and reinstate a case, as the case was only administratively closed, to permit a third-party complaint and join an independent claim within the contours of that complaint, and to grant summary judgment on an independent claim, as the third-party complaint was properly before the court, but the court did not consider the substitution of parties as it was not properly before it.

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