United States District Court, D. Utah, Central Division
N. Parrish District Judge.
B. PEAD UNITED STATES DISTRICT JUDGE.
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.)
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.)
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.)
Mr. LeFevre is a necessary party
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). 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). 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.
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.
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.
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 ...