Erickson v. Erickson

• Decision Date: 14 April 1994
• Docket Number: Civ. A. No. 6:94-0089.
• Parties: Ethel G. ERICKSON, Plaintiff, v. Charles F. ERICKSON, Individually and as Executor of the Estate of Charles O. Erickson, deceased, Defendant and Third-Party Plaintiff, v. James M. CAGLE, Nicholas W. Johnson and Robert J. Smith, Third-Party Defendants.
• Court: U.S. District Court — Southern District of West Virginia

849 F. Supp. 453

Ethel G. ERICKSON, Plaintiff, v. Charles F. ERICKSON, Individually and as Executor of the Estate of Charles O. Erickson, deceased, Defendant and Third-Party Plaintiff, v. James M. CAGLE, Nicholas W. Johnson and Robert J. Smith, Third-Party Defendants.

Civ. A. No. 6:94-0089.

United States District Court, S.D. West Virginia, Parkersburg Division.

April 14, 1994.

James M. Cagle, Charleston, WV, for plaintiff.

Richard A. Hayhurst, Parkersburg, WV, for defendant and third-party plaintiff Erickson.

Timothy N. Barber, Charleston, WV, for third-party defendants Cagle and Smith.

Stephen R. Crislip, Jackson & Kelly, Charleston, WV, for third-party defendant Johnson.

MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending are the motions to dismiss filed by third-party Defendants James M. Cagle, Nicholas W. Johnson, and Robert J. Smith. In the third-party complaint, Defendant and third-party Plaintiff Charles F. Erickson asserted the third-party Defendants, lawyers for the Plaintiff, may be liable to him for contribution or indemnity if he is liable to the Plaintiff. This Court disagrees and GRANTS the motions to dismiss.

I.

As an initial matter, the Court notes the standard of review of a motion to dismiss filed pursuant to Rule 12(b)(6) of the Fed. R.Civ.P. As stated by our Court of Appeals,

"In general, a motion to dismiss for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief. In considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. See, e.g., De Sole v. United States, 947 F.2d 1169, 1171 (4th Cir.1991)." Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.1993), cert. denied, sub nom, American Home Products Corp. v. Mylan Laboratories, Inc., ___ U.S. ___, 114 S.Ct. 1307, 127 L.Ed.2d 658 (1994 WL 54215) (1994).

See Ridgeway Coal Co., Inc. v. FMC Corp., 616 F.Supp. 404, 406-07 (S.D.W.Va.1985) (Haden, C.J.) citing, Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

II.

This action was initially filed in the Circuit Court of Wood County, West Virginia, but was thereafter removed to this Court by the Defendant pursuant to this Court's diversity jurisdiction. Title 28 U.S.C. § 1332 (1988)¹. The Plaintiff was the wife of the decedent, Charles O. Erickson. The Defendant is the decedent's son and the executor of the decedent's estate.

Prior to the filing of the Plaintiff's complaint, and prior to the decedent's passing, the Plaintiff and decedent became involved in divorce proceedings in the Circuit Court of Wood County. The Plaintiff's complaint seeks an accounting of the marital properties or proceeds derived therefrom that were in the possession of the Defendant's decedent at the time of his death.² The Plaintiff alternatively seeks "punitive or exemplary damages ... together with ... costs and fees," if it is determined that the Defendant "has purposefully and wilfully conveyed such real and personal property which is determined to be part of the marital estate in order to defraud the plaintiff and otherwise to hinder or delay her in receiving her interest in the marital estate." Plaintiff's complaint at 4.

The Defendant has filed a third-party complaint against three present or former lawyers for the Plaintiff involved in the divorce action. Defendant appears to make the novel argument that if he has made any fraudulent conveyances of marital property, then he may be entitled to contribution or indemnity from the Plaintiff's lawyers. He argues,

"The third party action is brought ... on a theory of contribution, since they, as attorneys for Mrs. Erickson, undoubtedly had a duty to her to take steps available to them under West Virginia law to preserve the marital estate, if there was reasonable grounds to believe that the marital estate was being dissipated, and if it was the true desire of Mrs. Erickson to prevent any such dissipation." Defendant's memorandum at 2 (emphasis in original).

Defendant does not argue the Plaintiff owed any duty to him; rather, Defendant asserts the Plaintiff's lawyers, because of their duty to the Plaintiff, should have taken steps to prevent the consequences of his alleged wrongdoing.

III.

Rule 14(a) of the Federal Rules of Civil Procedure states, in pertinent part:

"At any time after commencement of the action a defending party, as a third-party plaintiff, may cause a summons and a complaint to be served upon a person not a party to the action 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." (emphasis added).

The question to be decided upon these motions to dismiss is whether the Plaintiff's lawyers may be found liable "for all or part of the Plaintiff's claim" against the Defendant.

It is clear that a third-party defendant may not be impleaded under Rule 14(a) merely because he may be liable to the plaintiff. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978); Millard v. Municipal Sewer Authority of Lower Makefield Tp., 442 F.2d 539 (3rd Cir.1971); Independent Liberty Life Ins. Co. v. Fiduciary and Gen. Corp., 91 F.R.D. 535, 537 (W.D.Mich.1981). A third-party claim must be "derivative" of the plaintiff's claim because "derivative liability is central to the operation of Rule 14," Watergate Landmark Condominium Unit Owners' Ass'n v. Wiss, Janey, Elstner Associates, Inc., 117 F.R.D. 576, 578 (E.D.Va.1987). In United States v. One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir.1983), cert. denied, sub nom, Webb v. U.S., 464 U.S. 1071, 104 S.Ct. 981, 79 L.Ed.2d 217 (1984), it was stated, "a third-party claim may be asserted only when the third party's liability is secondary or derivative. It is not sufficient that the third-party claim is a related claim; the claim must be derivatively based on the original plaintiff's claim." (Citations omitted). See also Sears v. Atchison, Topeka & Santa Fe Railway Co., 749 F.2d 1451, 1454 (10th Cir.1984), cert. denied, sub nom, United Transportation Union v. Sears, 471 U.S. 1099, 105 S.Ct. 2322, 85 L.Ed.2d 840 (1985); Collini v. Wean United, Inc., 101 F.R.D. 408, 410-11 (W.D.Pa.1983). "A third-party complaint is not proper under Rule 14 if the defendant cannot show a basis for the third-party defendant's liability to the defendant (also known as the third-party plaintiff)." United States v. Etley, 574 F.2d 850 (5th Cir.), cert. denied, 439 U.S. 967, 99 S.Ct. 458, 58 L.Ed.2d 427 (1978). "Determinations of the propriety of third-party actions are committed to the sound discretion of the court." Frazier v. Harley Davidson Motor Co., Inc., 109 F.R.D. 293, 294 (W.D.Pa.1985), citing United States v. One 1977 Mercedes Benz, supra, at 452.

"In diversity actions the law of the state in which the federal court is sitting governs the question whether a substantive right that can be the basis for a third-party claim exists." 6 Charles A. Wright et al., Federal Practice & Procedure: Civil § 1446, at 369-70 (2d ed. 1990). It is generally recognized, "the ability of the adversary to add the client's attorney as a party will depend upon common-law rules of indemnity and contribution, policy considerations, and the applicability of the jurisdiction's joinder statutes." 1 Ronald E. Mallen, et al., Legal Malpractice, § 7 (3rd ed. 1989 & Supp.1993).³ An examination of whether the third-party defendants may be liable for the allegations in the Plaintiff's complaint must be made pursuant to West Virginia's law of contribution and indemnity.⁴

A.

The Supreme Court of Appeals of West Virginia has defined the doctrine of contribution as follows:

"`The doctrine of contribution has it roots in equitable principles. The right to contribution arises when persons having a common obligation, either in contract or tort, are sued on that obligation and one party is forced to pay more than his pro tanto share of the obligation.' Syllabus Point 4, in part, Sydenstricker v. Unipunch Prods., Inc., 169 W.Va. 440, 288 S.E.2d 511 (1982)." Syllabus Point 1, Board of Education v. Zando, Martin & Milstead, Inc., 182 W.Va. 597, 390 S.E.2d 796 (1990). (emphasis added).

Thus, the right to contribution only arises when parties "having a common obligation ... are sued on that obligation."

Although not addressed in West Virginia caselaw, it is a general rule that non-clients, like the third-party plaintiff, have no cause of action against a lawyer for negligent performance of legal work for the lawyer's client, the non-client's adversary. National Savings Bank v. Ward, 100 U.S. (10 Otto) 195, 25 L.Ed. 621 (1880); Firestone v. Galbreath; 747 F.Supp. 1556 (S.D.Ohio 1990) (applying Ohio law), aff'd, 976 F.2d 279 (6th Cir.1992); York v. Stiefel, 99 Ill.2d 312, 76 Ill.Dec. 88, 458 N.E.2d 488 (1983); Marker v. Greenberg, 313 N.W.2d 4 (Minn.1981); Chicago Title Ins. Co. v. Holt, 36 N.C.App. 284, 244 S.E.2d 177 (1978); Garcia v. Rodey, Dickason, Sloan, Akin & Robb, P.A., 106 N.M. 757, 750 P.2d 118 (1988); Joan Teshima, Annotation, Attorney Liability, to One Other Than Immediate Client, for Negligence in Connection with Legal Duties, 61 A.L.R.4th 615 (1988 & Supp.1993); 1 Ronald E. Mallen et al., Legal Malpractice, supra at § 7. Most courts have disallowed third-party suits for contribution or indemnity filed by non-clients against lawyers based upon the lawyer's negligence or malpractice to the plaintiff.⁵ Prescott Investors, Inc. v. Blum, 762 F.Supp. 1553 (D.Conn.1991) (applying Connecticut law); Bukoskey v. Walter W. Shuman, C.P.A., P.C., 666 F.Supp. 181 (D.Alaska 1987) (applying Alaska law); Wiederkehr Wine Cellars, Inc. v. City Nat'l Bank of Fort Smith, 300 Ark. 537, 780 S.W.2d 551 (1989); Holland v. Thacher, 199 Cal.App.3d 924, 245 Cal.Rptr. 247 (1988); Waldman v....