Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

The Putnam Group, LLC v. First Citizens Bank and Trust Co., Inc.

United States District Court, M.D. Georgia, Macon Division

May 18, 2017

THE PUTNAM GROUP, LLC, Plaintiff,
v.
FIRST CITIZENS BANK AND TRUST COMPANY, INC., assignee and successor in interest to the FDIC as receiver for Georgian Bank, Defendant.

          ORDER

          MARC T. TREADWELL, JUDGE.

         First Citizen's Bank and Trust Company, Inc. has filed a three-part pre-answer motion. Doc. 4. For the reasons that follow, it is DENIED.

         I. MOTION TO DISMISS COMPLAINT FOR FAILURE TO JOIN RULE 19 PARTY

         The Bank moves to dismiss the complaint for failure to join a Rule 19 party-N.D. Horton, Jr.-pursuant to Federal Rule of Civil Procedure 12(b)(7). Doc. 4 at 7-12. The complaint is premised on the Bank making false representations to the U.S. District Court for the Northern District of Georgia that it had The Putnam Group, LLC's consent to sell certain of its assets and apply the proceeds to an outstanding judgment held by the Bank against several related third parties. See generally Doc. 1. The Bank argues that it cannot be liable because Horton purported to consent to the sale on Putnam's behalf. Doc. 4 at 9-10. Accordingly, a key question in this case will be whether Horton had actual or apparent authority to act for Putnam in this matter. If Horton did not, the Bank and/or Putnam almost certainly have claims against him. The Bank accordingly begins with the assumption that Horton is jointly liable for any of its wrongdoing, [1] and concludes that Horton's intimate involvement in the underlying transactions renders him a required party under Rule 19(a).[2]

         Rule 19(a) provides that certain persons are required to be joined where feasible.[3] The rule gives three circumstances in which a person will be a required party:

[I]f (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 obligations because of the interest.

Fed. R. Civ. P. 19(a)(1). The Court “must base its decision on the pleadings as they appear at the time of the proposed joinder; it is only after the party has been joined that claims can be asserted against the party that are unrelated to the issues for which joinder was necessary.” Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 7 Federal Practice and Procedure § 1604 (3d ed. Apr. 2017 update). If Putnam's prosecution of its claims against the Bank in Horton's absence does not implicate these concerns, the Bank's motion fails.

         But the Bank does not rely on any of these reasons. Rather, the Bank puts forward a confusing argument based on an apparent misunderstanding of Eleventh Circuit case law addressing joint tortfeasors. Before diving into the Bank's argument, some background is necessary. There is a bright-line rule that joint tortfeasors are not required parties under Rule 19(a). Temple v. Synthes Corp., 498 U.S. 5, 7 (1990); Fed.R.Civ.P. 19(a) advisory committee notes to 1966 amendments (“[A] tortfeasor with the usual ‘joint-and-several' liability is merely a permissive party to an action against another with like liability.”). But the Eleventh Circuit has made some exceptions to this rule, such as in Laker Airways, Inc. v. British Airways, PLC, 182 F.3d 843, 848 (11th Cir. 1999), relied on by the Bank.

         The Bank, quoting Laker Airways, argues that “‘a joint tortfeasor will be considered a necessary party when the absent party emerges as an active participant in the allegations made in the complaint that are critical to the disposition of important issues in the litigation' and ‘under the circumstances . . . are more significant than those of routine joint tortfeasor.'” Doc. 4 at 8 (quoting Laker Airways, Inc., 182 F.3d at 848). The Bank continues by asserting that the quantum of Horton's factual involvement in the events underlying the complaint makes him an active participant in the critical alleged events within the Laker Airways exception and thus a required party. Id. at 8-10.

         In doing this, the Bank has put the cart before the horse. Without showing a valid Rule 19(a) consideration, there is no need to address the Temple rule.[4] This is confirmed by Laker Airways and the cases it relies on, as well as the subsequent case law cited by the Bank.[5]

         Though Rule 19(a) offers three, and only three, considerations, the Court notes two considerations that are not on that list: (1) the absentee's usefulness as a fact witness (even if the absentee “emerges as an active participant in the allegations made in the complaint that are critical to the disposition of important issues in the litigation”);[6]and (2) considerations stemming from the nature of joint-and-several liability, such as contribution or indemnity rights by the named defendant against the absentee.[7]

         The Bank does not explain why the Court cannot accord complete relief to Putnam on its claims against the Bank if it prevails. The Bank does not offer any competing claims as to any existing property interests. The Bank does not explain how proceeding in Horton's absence could subject it or Horton to inconsistent obligations. The Bank does not demonstrate any practical prejudice to either it or Horton. Rather, the Bank's arguments demonstrate that Horton is a material-perhaps key-fact witness. Docs. 4 at 9-10; 8 at 3-7. Further, the Bank offers many practical reasons why joining Horton could be convenient and otherwise a good idea. Id. But all this has nothing to do with Rule 19(a). The Bank's motion under Rule 12(b)(7) for failure to join Horton as a Rule 19 party is accordingly DENIED.

         II. MOTION TO TRANSFER

         The Bank seeks transfer of the case to the Northern District, citing inconvenience to itself and its witnesses, the Northern District's involvement in several related actions by the Bank against Horton and Horton entities, as well as the Northern District's involvement in the consent orders at issue here. Doc. 4 at 12-17. But, as Putnam notes, it brought the action in this District, its documentary evidence and its witnesses are located in this District, the auction occurred in this District, and it was not a named party in the previous Northern District action. Doc. 7 at 12-14. Putnam does not appear to be named in the other Horton actions noted by the Bank. See Doc. 4 at 5. The Court is accordingly not convinced that ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.