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Target Interact U.S. v. McBride

United States District Court, D. Utah, Central Division

April 10, 2017

TARGET INTERACT US, et al., Plaintiffs,
v.
MICHAEL JARED McBRIDE, Defendant.

          Jill N. Parrish District Judge.

          MEMORANDUM DECISION

          BUSTIN B. PEAD UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This matter was referred to the Court under 28 U.S.C. § 636(b)(1)(A). (ECF No. 5.) This case involves allegations of breach of contract and various business torts related to Defendant Michael Jared McBride's separation from employment with Plaintiff Target Interact US. (See ECF No. 2.) The matter is presently before the court on Defendant's “Motion for Leave to File Counterclaim Against Roger LeFevre and Consolidated Leasing Company.” (ECF No. 12.)

         II. PARTIES' ARGUMENTS

         Defendant argues that Roger LeFevre and Consolidated Leasing Company should be joined as parties to the present matter. Defendant argues Mr. LeFevre must be joined under Rule 19 as a plaintiff for purposes of Count XI, or at least as a counterclaim defendant, because Mr. LeFevre claims to own the stock at issue in Count XI of the Complaint. (ECF No. 12 at 4.) Alternatively, Defendant requests the court permit Defendant to join Mr. LeFevre under Rule 20. (Id. at 5.) Defendant argues Consolidated Leasing should be joined as a counterclaim defendant because it held title to a vehicle that is the subject of Defendant's wrongful repossession claim. Defendant argues joinder is proper under Rules 19 and 20 because “Consolidated Leasing was a party to the financing arrangement as the security holder.” (Id. at 6.)

         Plaintiffs argue Mr. LeFevre should not be joined as a plaintiff because he is not necessary as defined by Rule 19 and because Rule 20 does not allow for involuntary joinder of plaintiffs. (ECF No. 17 at 7.) Plaintiffs next argue Mr. LeFevre should not be joined as a necessary counterclaim defendant because he acted merely as an officer of Plaintiffs, not in a personal capacity. (Id. at 8-9.) Plaintiffs contend Mr. LeFevre should not be permissively joined as a counterclaim defendant because his joinder will cause delay and prejudice to the existing parties. Plaintiffs also argue that Consolidated Leasing should not be joined under Rules 19 and 20 because Consolidated Leasing was not a party to the contract governing the lease, is not needed to afford complete relief, and its joinder needlessly complicates the case. (ECF No. 17 at 4-6.)

         III. ANALYSIS

         a. Mr. LeFevre is a necessary party

         “A person . . . must be joined as a party if . . . that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may . . . as a practical matter impair or impede the person's ability to protect the interest. Fed.R.Civ.P. 19(a)(1).[1] Here, Count XI of Plaintiffs' Complaint seeks a declaration that Defendant does not own certain equity in “the VITAL BGS companies.” (ECF No. 2 at 27.) Mr. LeFevre claims to own this equity, or at least claimed at one time to own it. (See ECF No. 2, Ex. 5) (“I am hereby granting you 25% of the value of my Net Equity . . . .”) (emphasis added).[2] Thus, the court concludes that Mr. LeFevre claims an interest in the subject equity and disposing of this action may impair his ability to protect that interest.

         Plaintiffs' arguments reflect a misunderstanding similar to one held by the plaintiffs in Davis v. U.S.: “Plaintiffs' narrow interpretation of the term ‘legally protected interest' inappropriately presupposes Plaintiffs' success on the merits.” 192 F.3d 951, 958 (10th Cir. 1999). Here, Plaintiffs believe that Mr. LeFevre has no interest in this matter because they ask the court only to declare Defendant has no right to the equity. They appear to conclude that this means only Defendant's rights are at issue. Plaintiffs fail to consider the implication of losing this claim. If the court sides with Defendant and concludes that he has some right to the equity, this decision will impair Mr. LeFevre's claimed interest in the equity. Additionally, any doubt of Mr. LeFevre's necessity is resolved by Defendant's counterclaim seeking a declaration that he owns Mr. LeFevre's shares. (ECF No. 12, Ex. 1 at 6.) This will affect the interest Mr. LeFevre asserted in his email. Thus, Mr. LeFevre must be joined as a plaintiff and counterclaim defendant. Given the court's conclusion, it does not address the parties' Rule 20 arguments related to Mr. LeFevre.

         b. Consolidated Leasing

         Defendant's reply focuses on Consolidated Leasing's joinder under Rule 20 rather than Rule 19. Accordingly, the court will begin with an analysis under Rule 20.

         Defendants may be joined under Rule 20 if a claim “is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and . . . any question of law or fact common to all defendants will arise in the action.” Fed.R.Civ.P. 20(a)(2). Here, Defendant alleges that Consolidated Leasing, with Plaintiff Target Interact, and Mr. LeFevre wrongfully repossessed the vehicle at issue. This single claim will have questions of law and fact common to Plaintiff Target Interact, Mr. LeFevre, and Consolidated Leasing. Primarily, there appears to be a ...


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