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TDC Lending LLC v. Private Capital Group Inc.

United States District Court, D. Utah, Central Division

October 20, 2017

TDC LENDING, LLC., a Utah limited liability company, Plaintiff,
v.
PRIVATE CAPITAL GROUP, INC., a Utah Corporation, et al., Defendants.

          Robert J. Shelby, District Judge.

          MEMORANDUM DECISION & ORDER

          Dustin B. Pead, United States Magistrate Judge.

         INTRODUCTION

         This matter was referred to the court under 28 U.S.C. § 636(b)(1)(A). (ECF No. 3). This matter is presently before the court on Defendant Private Capital Group's (“Private Capital”) Motion for Mandatory Joinder. (ECF No. 29). The motion is fully briefed. (See ECF Nos. 31, 33). The court did not hear oral argument. The court will deny Private Capital's motion because it finds the persons Private Capital seeks to bring into this lawsuit are not required parties under Rule 19, as discussed below.

         PARTIES' ARGUMENTS

         Private Capital argues that JT Johnson, Jr., Derrick Robinson, and Jabar Langford (collectively “Proposed Defendants”) must be joined in this suit under Rule 19(a)(1). (ECF No. 29). Private Capital contends the Proposed Defendants committed identity theft and intercepted loan proceeds related to a loan Private Capital “service[d]” for TDC. (Id. at 2-3). Private Capital contends complete relief cannot be afforded in the absence of Proposed Defendants because TDC's case is “premised on the Loan Agreement and the harm caused by” Proposed Defendants. (Id. at 6). Next, Private Capital argues the Proposed Defendants have an interest in this lawsuit because the only manner in which TDC can prove it suffered damages is by establishing breach of a Loan Agreement involving Proposed Defendants. (Id. at 7). Private Capital also argues the Proposed Defendants' conduct is “inseparable” from the alleged fraud. (Id. at 8). Finally, Private Capital argues there is a risk that it or TDC might obtain “inconsistent judgments” if they complete this lawsuit and later pursue the Proposed Defendants. (Id. at 9).

         TDC argues the court should deny the motion because Proposed Defendants are not required parties. (ECF No. 31). TDC contends this lawsuit is about Private Capital's marketing and sale of securities to TDC and Private Capital's breach of a contract or contracts related to the same transaction. (Id. at 2). While TDC concedes the Proposed Defendants' conduct is related to its claims, TDC argues Private Capital's alleged misconduct can be addressed without joining the Proposed Defendants. (Id. at 2). TDC contends the court can afford complete relief amongst the existing parties because TDC seeks only money damages for Defendants' proportional fault arising from their alleged conduct. (Id. at 4-5). Next, TDC argues the Proposed Defendants have no legally-protected interest in this case because TDC's contract claims against Private Capital relate only to contracts between the existing parties, not the contracts Private Capital may have had with Proposed Defendants. (Id. at 8). Also, TDC contends Private Capital has not described how Proposed Defendants' legally-protected interest will be impaired by this litigation. (Id. at 8- 9). Finally, TDC argues there is no risk of inconsistent obligations because disposing of this action does not expose any existing party to a risk of inconsistent obligations.

         DISCUSSION

         I. The court will deny the motion for joinder because the individuals sought to be joined are not required.

         Private Capital has not persuaded the court that the Proposed Defendants are required parties because it has not satisfied the elements of Rule 19. A person must be joined if:

(A) in that person's absence, the court cannot accord complete relief among existing parties; or
(B) 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:
(i) as a practical matter impair or impede the person's ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent ...

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