Morse/Diesel, Inc. v. Trinity Industries, Inc.
| Decision Date | 07 March 1987 |
| Docket Number | 84 Civ. 6103 (SWK).,No. 84 Civ. 5791 (SWK),84 Civ. 5791 (SWK) |
| Parties | MORSE/DIESEL, INC., Plaintiff, v. TRINITY INDUSTRIES, INC. and Mosher Steel Co., Defendants. TRINITY INDUSTRIES, INC., Counterclaimant, v. MORSE/DIESEL, INC., Counterclaim-Defendant. TRINITY INDUSTRIES, INC., Third-party Plaintiff, v. JOHN PORTMAN ASSOCIATES, INC., Weidlinger Associates, Inc., Helena Erectors, Inc., St. Lawrence Cement Co., A.J. McNulty & Co., Inc. and Blakeslee Prestress, Inc., Third-party Defendants. HELENA ERECTORS, INC., Third-party Defendant, v. TRINITY INDUSTRIES, INC., Third-party Plaintiff. HELENA ERECTORS, INC., Third-party Defendant, v. MORSE/DIESEL, INC., Plaintiff. HELENA ERECTORS, INC., Cross-claimant, v. BLAKESLEE PRESTRESS, INC., John Portman Associates, Inc., Weidlinger Associates, Inc., St. Lawrence Cement Co., Inc., and A.J. McNulty, Inc., Cross-claim Defendants. JOHN PORTMAN ASSOCIATES, INC., Third-party Defendant, v. TRINITY INDUSTRIES, INC., Third-party Defendant. JOHN PORTMAN ASSOCIATES, INC., Cross-Claimant, v. HELENA ERECTORS, INC., Cross-claim Defendant. HELENA ERECTORS, INC., Plaintiff, [VV] v. TRINITY INDUSTRIES, INC. and Aetna Insurance Co., Defendants. TRINITY INDUSTRIES, INC., Counterclaimant, v. HELENA ERECTORS, INC., Counterclaim-Defendant. TRINITY INDUSTRIES, INC., Third-party Plaintiff, v. MORSE/DIESEL, INC., John Portman Associates, Inc., Weidlinger Associates, Inc., St. Lawrence Cement Co., A.J. McNulty, Inc. and Blakeslee Prestress, Inc., Third-party Defendants. HELENA ERECTORS, INCORPORATED, Counterclaim-Defendant, v. MORSE/DIESEL, INC., Blakeslee Prestress, Inc., John Portman Associates, Inc., Weidlinger Associates, Inc., St. Lawrence Cement Co., Inc. and A.J. McNulty & Co., Inc., Third-party Defendants. |
| Court | U.S. District Court — Southern District of New York |
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Hynes, Diamond & Reidy, P.C., New York City by James H. Reidy, for Morse/Diesel, Inc.
Skadden, Arps, Slate, Meagher & Flom, New York City by Henry P. Wasserstein, Steven J. Kolleeny, for Trinity Industries, Inc.
Hart & Hume, New York City by Cecil Holland, Jr., Thomas Fenerty, for Helena Erectors, Inc. Peckar & Abramson, New York City by Robert A. Drucker, for A.J. McNulty & Co., Inc. and Blakeslee Prestress, Inc.
McGuire & Tiernan, New York City by Harold F. McGuire, Jr., Heron Burchette, Ruckert & Rothwell, Washington, D.C., for St. Lawrence Cement Co.
Shea & Gould, New York City by Kenneth H. Lazaruk, for Weidlinger Associates, Inc.
Milbank, Tweed, Hadley & McCloy, New York City by Adlai S. Hardin, Jr., for John Portman Associates, Inc.
These cases arise out of the construction of the Times Square Hotel in New York City. Pursuant to a subcontract with Morse/Diesel ("Morse"), the general contractor, Mosher Steel Company (which later merged with Trinity Industries, Inc. and which will hereafter be referred to as Trinity) was the structural steel fabricator and erector subcontractor and installed concrete plank and metal deck. Pursuant to a sub-subcontract with Trinity, Helena Erectors, Inc. ("Helena") was the steel erector subcontractor. John Portman Associates, Inc. ("Portman") was hired by the owner of the property to be the architect. Weidlinger Associates, Inc. ("Weidlinger") was in turn hired by Portman as the structural engineer. Pursuant to separate subcontracts with Morse, Blakeslee Prestress, Inc. ("Blakeslee") manufactured and shipped prestressed concrete planks, St. Lawrence Cement Co. ("St. Lawrence") fabricated precast concrete panels and designed steel connector clips used to attach the panels, and A.J. McNulty and Co., Inc. ("McNulty") installed the concrete panels.
In Morse/Diesel v. Trinity, 84 Civ. 5791 (), Morse claims that Trinity breached its subcontract by failing to complete its work in a timely manner, completing other work in a defective manner, and failing to pay for work performed by others. In Helena Erectors v. Trinity, 84 Civ. 6103 (), Helena claims that Trinity failed to perform its obligations by, inter alia, failing to deliver structural steel in a timely manner, delivering nonconforming structural steel, failing to coordinate Helena's work with that of other subcontractors, and failing to provide Helena with accurate drawings and specifications.
Trinity, in turn, filed counterclaims against Morse in Morse/Diesel and Helena in Helena Erectors for contract damages and contribution or indemnification for such portions of any recovery by Morse as was caused by Helena and vice versa. Trinity also asserted claims for unjust enrichment against Helena in both actions. Trinity also filed a third-party action in Morse/Diesel against Portman, Weidlinger, Helena, St. Lawrence, McNulty, and Blakeslee (the "third-party defendants") and in Helena against the same parties with the exception of Helena, which was exchanged for Morse. Trinity asserts negligence claims against all the third-party defendants, and seeks indemnity or contribution from them for any liability it has to Morse or Helena that was due to their negligence.
Finally, in Morse/Diesel, Helena filed counterclaims against Trinity, a claim against Morse for negligence and contribution, and cross-claims against Blakeslee, Portman, and Weidlinger for negligence and contribution and against St. Lawrence and McNulty for negligence. In Helena, Helena brings the same claim against the same third-parties with the exception of Trinity, who is the defendant. This case is presently before the Court on various parties' motions to dismiss.
All the claims in Morse/Diesel and Helena are predicated on New York State law. Thus, diversity of citizenship is the only basis for federal court jurisdiction. Diversity of citizenship exists between parties asserting claims against each other with two exceptions in each case. In Morse/Diesel, third-party defendant Helena, a New York corporation with its principal place of business in New York, brings a cross-claim against third-party defendant McNulty (New York/New York) and three claims against plaintiff Morse/Diesel (Delaware/New York). In Helena, plaintiff Helena, in its answer to Trinity's counterclaims, brings claims against third-party defendants Morse and McNulty. The Court, on its own initiative, asked the implicated parties to brief the issue of the Court's ancillary jurisdiction to adjudicate these claims.
Ancillary jurisdiction allows a federal court to hear claims asserted after the complaint is filed which lack an independent basis of federal jurisdiction provided the court has jurisdiction over the complaint. See Harris v. Steinem, 571 F.2d 119, 122 n. 7 (2d Cir.1978). Thus, a court has ancillary jurisdiction over a cross-claim asserted by a defendant against a co-defendant already properly before the court even if there is no independent jurisdictional basis for the cross-claim. Shields v. Consolidated Rail Corp., 530 F.Supp. 400, 401-02 (S.D.N.Y.1981). Ancillary jurisdiction does not, however, empower a federal court to create jurisdiction for a plaintiff's principal claim against a non-diverse defendant. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978); Shields, 530 F.Supp. at 402. Furthermore, ancillary jurisdiction exists only when the claim arises out of a common nucleus of operative facts of and bears a logical relationship to the allegations of the complaint, and the assumption of jurisdictions would further the policies of judicial economy, convenience, and fairness to litigants. Stamford Board of Education v. Stamford Education Association, 697 F.2d 70, 72 (2d Cir.1982). See The Travelers Insurance Co. v. The First National Bank of Shreveport, 675 F.2d 633 (5th Cir.1982).
All the claims involved arise from and are logically related to the same transaction or occurrence in the relevant complaints —the delays in the construction of the Hotel. Judicial efficiency and convenience to the parties will be served by hearing the claims in one forum. The only issue is thus whether the claims are raised in the proper procedural posture.
A third-party defendant's cross-claims against a third-party defendant are within a court's ancillary jurisdiction. Thus, the Court has jurisdiction over third-party defendant Helena's cross-claim against third-party defendant McNulty.
Third-party defendant Helena brings claims against plaintiff Morse for negligence and for contribution for any liability Helena owes to Trinity. Even though Helena is bringing claims not against a co-defendant or third-party defendant but against the plaintiff, the principles underlying ancillary jurisdiction allow the Court to take jurisdiction over this claim. Helena was brought into court against its own will, and seeks to have its rights adjudicated consistently, in one forum. There is no danger of collusively created jurisdiction, as Helena is a third-party defendant far distant from plaintiff Morse. Finally, the claim that Helena brings against Morse is essentially a third-party complaint. See Fed.R.Civ.P. 14(a). Such actions are subject to ancillary jurisdiction. Owen, 437 U.S. at 376, n. 18, 98 S.Ct. at 2403, n. 18.
Plaintiff Helena, in answering Trinity's counterclaims, brings claims against non-diverse third-party defendants Morse and McNulty. Although Owen prevents a plaintiff from raising a new claim against a third-party defendant, Helena's claims against Morse and McNulty arise out of counterclaims brought against it by Trinity. Helena is thus essentially bringing a third-party complaint against Morse and McNulty, and ancillary jurisdiction exists over such claims. Brown Caldwell v. Institute for Energy...
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