Logue v. Patient First Corporation et al

REPLY BRIEF re MOTION to Dismiss Pursuant to Rule 12

M.D. Pa.June 22, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA MATTHEW S. LOGUE, individually and as Administrator of the THE ESTATE OF SHELBY ANN LOGUE, Plaintiff v. PATIENT FIRST CORPORATION, individually and/or doing business as PATIENT FIRST URGENT CARE, EAST YORK; PATIENT FIRST URGENT CARE, EAST YORK; ESMERALDA DEL ROSARIO, M.D., c/o PATIENT FIRST URGENT CARE, EAST YORK, Defendants. Civil Action No. 1:16-cv-01823 JUDGE JOHN E. JONES, III ELECTRONICALLY FILED DEFENDANTS’ REPLY IN SUPPORT OF THIER MOTION TO DISMISS THE COMPLAINT PURSUANT TO RULE 12(b)(7) Defendants, Patient First Corporation and Patient First Pennsylvania Medical Group, PLLC1 (together, the “Patient First Defendants”), and Esmeralda Del Rosario, M.D. (collectively, the “Defendants”) respectfully submit this reply in further support of their motion to dismiss Plaintiff’s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(7) for failure to join necessary and indispensable parties. 1 The Complaint incorrectly identifies this entity as “Patient First Urgent Care, East York.” See Defs.’ Br. in Supp. of Mot. to Dismiss 1, n.2, ECF No. 22 (hereinafter “Defs.’ Br.” ). Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 1 of 11 2 PRELIMINARY STATEMENT Plaintiff seeks to litigate his medical malpractice claims in two different federal courts. The absent parties that Plaintiff has sued in the Maryland action- including the Surgeon, the Anesthesiologist, and the Surgery Center-are indispensable because this Court cannot afford complete relief in this action without them, and because allowing this case to proceed without them creates a substantial risk that Plaintiff will reap a windfall by imposing double liability on the Patient First Defendants for the same claims based on the same alleged conduct. Because Plaintiff can, after dismissal of this action, continue to pursue his substantially identical claims in the Maryland Action, dismissal would not deny him adequate relief. Plaintiff’s brief in opposition to Defendants’ motion fails to demonstrate why this action should not be dismissed. ARGUMENT IN REPLY I. JOINT TORTFEASOR STATUS DOES NOT PRECLUDE THE ABSENT PARTIES FROM BEING NECESSARY AND INDISPENSIBLE UNDER RULE 19. Plaintiff correctly notes that, as a general rule, joint tortfeasors are not necessary or indispensable under Rule 19 merely by virtue of the fact that they are joint tortfeasors. Plaintiff is wrong, however, that joint tortfeasors therefore can never be necessary or indispensable under the rule. While joint tortfeasor status is not, by itself, sufficient to render a party necessary and indispensable, nothing in Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 2 of 11 3 Rule 19 precludes an absent party from being necessary or indispensable merely because it is a joint tortfeasor, and none of the authorities cited in Plaintiff’s brief support that conclusion. And, on the contrary, federal courts have repeatedly recognized that, in states like Pennsylvania that have enacted statutes curtailing traditional joint and several liability, joint tortfeasors can be necessary and indispensable under Rule 19 because, without them, the Court may be unable to afford complete relief to the parties, as discussed below. II. WITHOUT THE ABSENT PARTIES, THE COURT CANNOT AFFORD “COMPLETE” RELIEF. Plaintiff contends that the absent parties are not necessary or indispensable because the Court can afford complete relief without them. Plaintiff is incorrect. Under Pennsylvania’s comparative negligence statute restricting joint and several liability, this Court is unlikely to be able to afford complete relief, so this factor too weighs in favor of dismissal. In Pennsylvania, a defendant in a negligence action is joint and severally liable for all of plaintiff’s damages only if the jury assigns that defendant at least 60% liability for those damages. 42 Pa. C.S. § 7102(a.1)(3)(iii). Thus, the Patient First Defendants and Dr. Del Rosario would only be joint and severally liable for all of Plaintiff’s damages here if a jury finds them more than 60% liable for causing Mrs. Logue’s death. If, on the other hand, a jury finds Defendants less than 60% liable, then Defendants will not be required to compensate Plaintiff for Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 3 of 11 4 the full amount of his damages as determined by the jury. Id. In this case Defendants would, instead, only be liable for a share of the damages equal to their percentage of liability. As such, this case presents a strong possibility that the Court will be unable to afford the parties complete relief. If the jury determined, for example, that the Defendants were less than 60% liable for Plaintiff’s injuries, and that the Surgeon, Anesthesiologist, and Surgery Center were primarily liable, this Court would be unable to afford complete relief as determined by the jury because the existing Defendants would not be required to compensate Plaintiff for all of their damages. The Third Circuit has held that this possibility-that a defendant would not be liable for all of a plaintiff’s damages under a substantially identical comparative negligence statute-renders a district court unable to afford “complete relief” under Rule 19 where the other potentially-liable parties are absent. See Amboy Bancorporation v. Bank Advisory Group, Inc., No. 10-1638, 2011 U.S. App. LEXIS 8494, at *22 (3d Cir. Apr. 25, 2011). There, plaintiff asserted professional liability claims under New Jersey law against two defendants, a law firm and a consultant. The law firm defendant sought a ruling that the consultant defendant could not properly be severed or dismissed because complete relief could not be afforded without it, since, under New Jersey’s comparative negligence statute, the law firm defendant would not be liable for all of plaintiff’s damages if the jury Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 4 of 11 5 found the law firm defendant less than 60% liable. The district court agreed. Affirming that ruling, the Third Circuit explained: In light of New Jersey law, we are unable to conclude that complete relief would necessarily be accorded to [plaintiff] in [the consultant defendant]'s absence. New Jersey's Comparative Negligence Act imposes joint and several liability only on tortfeasors who are “60% or more responsible for the total damages.” Thus, a tortfeasor who is found to be “less than 60% responsible for the total damages” is only responsible for the “damages directly attributable” to that tortfeasor. We are consequently unable to see how it could be argued that complete relief would necessarily be accorded to [plaintiff] in [the consultant defendant]'s absence in light of the possibility that [the law firm defendant] could be found to be less than 60% responsible for [plaintiff]’s total damages. We will therefore affirm the District Court's order determining that [the consultant defendant] should remain a party to the action on the ground that complete relief may not be accorded to [plaintiff] and [the law firm defendant] in [the consultant defendant]'s absence. Id.; accord Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Civ. No. 4-11 - 00177, 2011 WL 3584783, at *10 (M.D. Pa. July 25, 2011) (citing Amboy for the proposition that a joint tortfeasor may be a necessary party under Rule 19), report and recommendation adopted, Civ. No. 4:11- 177, 2011 WL 3584784 (M.D. Pa. Aug. 15, 2011); Abuhouran v. KaiserKane, Inc., Civ. No. 10-6609 NLH/KMW, Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 5 of 11 6 2012 WL 4027416, at *7 (D.N.J. Sept. 12, 2012) (applying New Jersey law, dismissing alleged joint-tortfeasors as indispensable under Rule 19).2 The Third Circuit’s reasoning in Amboy applies with even greater force here. That is because it is unlikely here that a jury would assign any of the Defendants more 60% liability. All of Plaintiff’s alleged damages arise from Mrs. Logue’s death on the day after she underwent surgery. Plaintiff contends, in his Maryland action, that Mrs. Logue’s death resulted from negligence and medical malpractice by several different parties, including the Surgeon, the Anesthesiologist, and the Surgery Center where the operation was performed. Defendants here, by contrast, are alleged to have been minor players in the medical care provided to Mrs. Logue before her death. Unlike the absent parties, Defendants did not assist in the surgery on April 19 that allegedly caused Logue’s death. Indeed, by the time of the surgery, Defendants had not provided any medical care to Mrs. Logue for more than a month. Thus, even assuming for purposes of argument that a jury would assign Defendants any liability here, that liability would likely fall below the 60% threshold required for traditional joint and several liability. Accordingly, this 2 Copies of the unpublished opinions cited herein are attached pursuant to Local Rule 7.8(a). Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 6 of 11 7 Court would likely be unable to afford the parties complete relief. None of the authorities cited in Plaintiff’s brief contradicts this conclusion.3 III. THE ABSENT PARTIES NEED NOT SEEK TO INTERVENE IN THIS ACTION TO BE NECESSARY AND INDISPENSIBLE UNDER RULE 19. Plaintiff asserts that “[u]nder the first clause of Rule 19(a)(1)(B), the absent party must” claim an interest relating to the subject matter of this litigation. Plaintiff therefore contends that the absent parties are not necessary and indispensable because they have not moved to intervene or otherwise “claimed an interest” in this action. (Pl.’s Br. 12.) This argument misapprehends Defendants’ motion. Defendants do not seek to rely on the first subsection, and they have no obligation to satisfy that subsection’s requirements. The prongs under Rule19(a)(1)(B) are disjunctive, providing that an absent party is necessary if proceeding without them could either (i) impair the absentee’s ability to protect an interest, “or” (ii) leave an existing party subject to multiple or inconsistent liability. Fed. R. Civ. P. 19(a)(1)(B) (emphasis added). Defendants rely, in part, on the 3 In at least one instance, Plaintiff appears to mischaracterize Third Circuit precedent, stating: “The completeness of relief inquiry under Rule 19(a)(1)(A) focuses on the ‘completeness of relief between the current parties, not potential claims between a current party and an absentee.’ Angst v. Royal Maccabee Lift Ins. Co., 77 F.3d 701, 705 (3rd Cir. 1996) (emphasis added).” (Pl.’s Br. 11.) But the Angst opinion does not appear to contain that purportedly quoted passage. Nor does the holding of Angst stand for the proposition that this Court should ignore Plaintiff’s potential claims against the absent defendants when determining whether those defendants are necessary and indispensable under Rule 19. Angst does not undermine the principle articulated in Amboy or its application here. Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 7 of 11 8 second sub-section, Rule 19(a)(1)(B)(ii), not the first subsection. Under the second subsection, absent parties are necessary if disposing of the action without them may leave Defendants subject to a substantial risk of multiple or inconsistent liability. Defendants have argued that subsection (ii) is satisfied, but have not raised any argument under subsection (i). Therefore, Plaintiff’s argument regarding subsection (i) is irrelevant.4 IV. PLAINTIFF’S VIRTUALLY IDENTICAL CLAIMS IN THE VIRGINIA ACTION CREATE A SUBSTANTIAL RISK OF DOUBLE OR MULTIPLE LIABILITY. Plaintiff argues that neither the risk of litigating multiple related or similar actions nor the risk that Defendants will be held solely responsible amounts to a risk of double or multiple liability to the Defendants under Rule 19(a)(1)(B)(ii). (Pl.’s Br. 13.) But, as Defendants argued in their opening brief, Plaintiff’s Maryland Action asserts a substantially identical “negligence/survival” claim against Patient First Corporation (Count II), one of the same Defendants named in this action. (Compare, e.g., Compl. ¶ 82(a) with Maryland Compl. ¶ 92(a).) Because the Maryland Action seeks to recover money damages from Patient First for identical conduct that Plaintiff seeks to recover for in this litigation, allowing both cases to proceed simultaneously creates a valid risk that the Patient First 4 Even if Defendants had sought to rely on subsection (i), the requirement that the absent party seek to intervene appears only to apply where the absentee’s interest in dispute is an interest against potential issue preclusion. See Kuhn Const. Co. v. Ocean & Coastal Consultants, Inc., 723 F. Supp. 2d 676, 692 (D. Del. 2010). Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 8 of 11 9 Defendants will incur double liability (and that Plaintiff will receive a windfall). This risk properly supports dismissal under Rule 12(b)(7). V. PROCEEDING WITHOUT THE ABSENT PARTIES WOULD PREJUDICE THE EXISTING DEFENDANTS AND WOULD NOT DENY PLAINTIFF AN ADEQUATE REMEDY. Plaintiff contends that proceeding without the absent parties would not prejudice Defendants because Defendants can simply argue in Pennsylvania that the absent parties are solely liable and/or can seek to implead those defendants. But simply arguing in Pennsylvania that the absent parties are solely responsible would do nothing to eliminate the substantial risk that Plaintiff could obtain a double recovery against Patient First, which would obviously be prejudicial to the existing Patient First Defendants. (See Defs’ Br. Part I.A.) Moreover, even assuming Defendants successfully established in this action that the absent defendants are solely liable, that does not resolve the issue, because, in that case, the Court would still be unable to afford complete relief, as discussed in Part II, supra. Additionally, Defendants cannot simply implead the absent parties, as Plaintiff suggests, because joinder of those parties is not feasible here because those parties are not subject to service within the Commonwealth and are not subject to personal jurisdiction in this Court. (See Defs.’ Br. 13.) Finally, granting Defendants’ motion and dismissing this action would do nothing to Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 9 of 11 10 prejudice Plaintiff because Plaintiff will remain free to pursue the substantially- identical claims that he is already pursuing in the Maryland Action. CONCLUSION For the foregoing reasons and those set forth in Defendants’ opening brief in support of its motion to dismiss pursuant to Rule 12(b)(7), Defendants respectfully request that their motion be granted and that the Court enter an order dismissing the Complaint pursuant to Rule 12(b)(7) for failure to join the Surgeon, Anesthesiologist, and Surgery Center as necessary and indispensable parties. Respectfully submitted, Dated: June 22, 2017 /s/ Kenneth L. Racowski___________ Kenneth L. Racowski (ID No. 90514) BUCHANAN INGERSOLL & ROONEY PC Two Liberty Place 50 S. 16th St., Suite 3200 Philadelphia, PA 19102 (215) 665-8700 Attorney for Defendants Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 10 of 11 CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing Defendants’ Reply In Support of Their Motion to Dismiss the Complaint Pursuant to Rule 12(b)(7) was served upon the following counsel of record via electronic filing via the Court’s ECF System on June 22, 2017: Peter M. Villari, Esquire Paul D. Brandes, Esquire Nicole T. Matteo, Esquire 8 Tower Bridge, Suite 400 161 Washington Street Conshohocken, PA 19428 Attorneys for Plaintiff BUCHANAN INGERSOLL & ROONEY PC By: /s/ Kenneth L. Racowski Kenneth L. Racowski (ID No. 90514) Two Liberty Place 50 South 16th Street, Suite 3200 Philadelphia, PA 19102 215-665-8700 215-665-8760 (Facsimile) Attorney for Defendants Case 1:16-cv-01823-JEJ Document 25 Filed 06/22/17 Page 11 of 11 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by Margulis v. Hertz Corp., D.N.J., April 30, 2015 2012 WL 4027416 Only the Westlaw citation is currently available. United States District Court, D. New Jersey. Hitham ABUHOURAN, Plaintiff, v. KAISERKANE, INC., et al., Defendants. Civil No. 10-6609 (NLH/KMW). | Sept. 12, 2012. Attorneys and Law Firms Hitham Abuhouran, Minersville, PA, pro se. Robert L Ritter, Esquire, Schiffman, Berger, Abraham, Kaufman & Ritter, P.C., Hackensack, NJ, for Defendants KaiserKane, Inc. and KaiserKane. Paul Joseph Smyth, Esquire, Sean X. Kelly, Esquire, Sebastian A. Goldstein, Esquire, Marks, O'Neill, O'Brien & Courtney PC, Pennsauken, NJ, for Defendants North American Roofing and David Donaldson. OPINION HILLMAN, District Judge. *1 This motion comes before the Court by way of Defendants North American Roofing's (“NAR”) and David Donaldson's motion [Doc. No. 82] seeking dismissal of Plaintiff's second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(7) for failure to join an indispensable party pursuant to Rule 19, in which Defendant KaiserKane, Inc. (“KaiserKane”) joins. 1 The Court has considered the parties' submissions and decides this matter pursuant to Federal Rule of Civil Procedure 78. 1 Defendant KaiserKane indicated that it was joining Defendants NAR and Donaldson's motion to dismiss the second amended complaint for failure to join an indispensable party by way of a supplemental affidavit of Robert L. Ritter, Esquire, counsel for KaiserKane filed in support of KaiserKane's motion for summary judgment [Doc. No. 83] against Defendants NAR and Donaldson. (See Supplemental Aff. of Robert L. Ritter, Esq. in Further Supp. of KaiserKane's Mot. for Summ. J. Against North American Roofing [Doc. No. 91] ¶ 7.) For the reasons expressed below, Defendants' motion to dismiss is granted. I. JURISDICTION The Court exercises subject matter jurisdiction over this action asserting New Jersey state law claims based on the diversity of citizenship of the parties and an amount in controversy in excess of $75,000 pursuant to 28 U.S.C. § 1332. (See Pl.'s Second Am. Compl. [Doc. No. 78] 1-3, 9-11.) II. BACKGROUND A. Plaintiff's Second Amended Complaint Plaintiff, formerly an inmate at the Federal Correctional Camp at Schuylkill (“FCC- Schuylkill”), 2 generally alleges that while previously incarcerated at the Federal Correctional Institution in Fort Dix, New Jersey (“FCI- Fort Dix”), he was exposed to asbestos when Defendants performed a re-roofing and asbestos abatement project on building 5703 at FCI-Fort Dix. (Pl.'s Second Am. Compl. ¶ 1.) Plaintiff names the following Defendants in the second amended complaint: (1) KaiserKane, the general contractor for the re-roofing project; (2) NAR, the subcontractor on the project which KaiserKane hired to perform the re-roofing and asbestos abatement work; and (3) David Donaldson (“Donaldson”), an officer of NAR. 3 Based on a number of alleged violations committed by Defendants during the reroofing and asbestos abatement project, Plaintiff asserts the following three counts against all Defendants: (1) Count One -Gross Negligence; (2) Count Two-Common Law Fraud; (3) Count Three-Negligence. (Id. ¶¶ 35-41.) Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 1 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 2 Plaintiff was released from prison on approximately April 3, 2012. (Pl.'s Second Am. Compl. 2.) 3 In Plaintiff's original complaint he also named as Defendants: (1) Briggs Contracting Services, Inc., the sub-subcontractor on the project, hired by NAR, which conducted the asbestos abatement at FCI-Fort Dix; (2) Rod Richardson, the project manager for Briggs; (3) American Safety Indemnity Company, an insurance company listed on an insurance binder for KaiserKane; and (4) Companion Property and Casualty Insurance. B. Procedural Background As the Court previously set forth in its December 19, 2011 Opinion, Plaintiff filed his original complaint in the United States District Court for the Middle District of Pennsylvania (“the Middle District”) on November 3, 2010. By Order dated December 20, 2010, the Honorable A. Richard Caputo, United States District Judge, adopted the November 29, 2010 Report and Recommendation of the Honorable Thomas M. Blewitt, United States Magistrate Judge, recommending that Plaintiff's case be transferred to the District of New Jersey pursuant to 28 U.S.C. § 1404. (Order [Doc. No. 15] 1, Dec. 20, 2010.) The November 29, 2010 Report and Recommendation adopted by the Middle District found that Plaintiff failed to meet “his burden of proving [that] diversity of citizenship exists in this case” because Plaintiff failed to allege his own citizenship, or that of Defendants. (Report and Recommendation [Doc. No. 9] 6, 10-11, Nov. 29, 2010.) The Middle District recognized that it did not appear from the complaint that the “citizenship of all Defendants [was] diverse from that of Plaintiff [.]” (Id.) *2 After Plaintiff's case was transferred from the Middle District, this Court issued an Opinion and Order on December 19, 2011 with respect to the claims and allegations set forth in Plaintiff's original complaint [Doc. No. 1]. In addition to the same three counts alleged in the second amended complaint, Plaintiff's original complaint also set forth a count for violations of the Clean Air Act. Based on his claim under the Clean Air Act, Plaintiff asserted that the Court could exercise jurisdiction over his federal law claim pursuant to 28 U.S.C. § 1331, and could exercise supplemental jurisdiction over Plaintiff's state law claims pursuant to 28 U.S.C. § 1367. 4 4 Plaintiff's original complaint simultaneously asserted that the Court also had jurisdiction over his state law claims based on diversity of citizenship pursuant to 28 U.S.C. § 1332. Recognizing that federal courts have an independent obligation to address issues of subject matter jurisdiction sua sponte and may do so at any stage of the litigation, the Court dismissed Plaintiff's Clean Air Act claim with prejudice finding that the claim “impermissibly [sought] compensatory and punitive damages under the Clean Air Act and thus fail[ed] to state a claim for which federal question jurisdiction exists.” 5 Abuhouran v. Kaiserkane, Inc., No. 10-6609, 2011 WL 6372208, at *3, 5 (D.N.J. Dec. 19, 2011) (citations omitted). After concluding that federal question jurisdiction was lacking based on the allegations of Plaintiff's original complaint, the Court went on to examine Plaintiff's assertion that the Court could properly exercise original jurisdiction over his state law claims based on diversity of citizenship jurisdiction. Id. at *5-6. Upon a thorough review of the original complaint, the Court found that “Plaintiff's complaint [was] essentially silent as to the citizenship of the parties, and ... [was] subject to dismissal for lack of jurisdiction.” However, rather than dismissing Plaintiff's original complaint outright, the Court, considering Plaintiff's pro se status, ordered Plaintiff to show cause why his remaining state law claims should not be dismissed for lack of subject matter jurisdiction and directed Plaintiff to file an amended complaint within thirty days properly alleging diversity of citizenship. Id . at *6. 5 Specifically, the Court found that the Clean Air Act does not allow for a private right of action for damages based on personal injuries. Abuhouran v. Kaiserkane, Inc., No. 10-6609, 2011 WL 6372208, at *4 (D.N.J. Dec. 19, 2011) (citations omitted). Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 2 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 Pursuant to the Court's December 19, 2011 Opinion and Order to Show Cause, Plaintiff filed an amended complaint [Doc. No. 76] on January 3, 2012. In his amended complaint, Plaintiff asserted that jurisdiction was proper based on diversity of citizenship under Section 1332 and named the following Defendants: KaiserKane, NAR, David Donaldson, Briggs Contracting Services, Inc. (“Briggs”), and Rod Richardson (“Richardson”). (See Pl.'s Am. Compl. [Doc. No. 76] 1, ¶¶ 2-6.) Upon reviewing Plaintiff's amended complaint for compliance with the Order to Show Cause, the Court concluded that “based on the allegations of the amended complaint, complete diversity of citizenship between the parties [was] lacking, because both Plaintiff and Defendant Briggs Contracting Services, Inc. [were] citizens of the state of New Jersey [.]” (Order [Doc. No. 77] 2, Jan. 6, 2012.) Accordingly, the Court found that Plaintiff's amended complaint was also subject to dismissal for lack of jurisdiction. 6 (Id. at 2-3.) However, out of an abundance of caution, the Court permitted Plaintiff “an additional opportunity to amend his complaint to properly plead a cause of action within the Court's subject matter jurisdiction prior to dismissing Plaintiff's complaint.” (Id. at 3.) Thus, the Court ordered Plaintiff to file a second amended complaint within thirty days. (Id.) 6 In so noting, the Court specifically recognized that Plaintiff had not “brought forth a federal claim arising from a violation of his constitutional rights or any other federal statute, nor ha[d] Plaintiff named or served any federal agency, entity, or employee, as a defendant in this action” and that “subject matter jurisdiction pursuant to either 28 U.S.C. §§ 1331, 1332[was] lacking in this case[.]” (Id. at 3.) *3 In response to the Court's January 6, 2012 Order, Plaintiff filed a second amended complaint [Doc. No. 78] on January 19, 2012. Plaintiff's second amended complaint properly alleged diversity of citizenship jurisdiction between Plaintiff, a citizen of New Jersey, and the named Defendants: KaiserKane, a citizen of Virginia, NAR, a citizen of North Carolina, and Donaldson, a citizen of North Carolina. 7 Plaintiff indicates, however, that he “drop[ped] defendants Briggs Contracting Services Inc., and Rod Richardson, from this complaint to comply with complete diversity of [c]itizenship in accordance with 28 U.S.C. § 1332.” (Pl.'s Second Am. Compl. 1.) 7 Plaintiff's second amended complaint does not specifically allege the citizenship of Defendant David Donaldson. However, in light of the Plaintiff's pro se status, the Court construes the complaint liberally, and for purposes of this motion will assume that Defendant Donaldson, an officer of Defendant NAR, is similarly a citizen of North Carolina. III. DISCUSSION Based on Plaintiff's failure to name Briggs and Richardson as defendants in the second amended complaint, Defendants NAR and Donaldson filed the present motion to dismiss the second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(7) for failure to join an indispensable party pursuant to Rule 19, in which Defendant KaiserKane joins. Federal Rule of Civil Procedure 12(b) (7) provides that defendants may move to dismiss a plaintiff's complaint for “failure to join a party under Rule 19.” FED. R. CIV. P. 12(b)(7). “Federal Rule of Civil Procedure 19 specifies the circumstances in which the joinder of a particular party is compulsory.” Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 312 (3d Cir.2007). As the Third Circuit recently reiterated, “Rule 19 mandates a two-step process: (1) the court first must determine whether the absent party is ‘necessary’ under Rule 19(a); and (2) if the party is ‘necessary’ and joinder is not feasible, then the court must decide whether the party is ‘indispensable’ under Rule 19(b).” Tullett Prebon PLC v. BGC Partners, Inc., 427 F. App'x 236, 239 (3d Cir.2011) (citing Gen. Refractories, 500 F.3d at 312). If the Court determines that a party is “necessary” under Rule 19(a), that joinder of the party is not feasible 8 because it will defeat subject-matter jurisdiction, and that the party is “indispensable” under Rule 19(b), the action cannot proceed. Gen. Refractories, 500 F.3d at 312; see alsoBachner Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 3 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 Co., v.. White Rose Food, Inc., No. 09-2640, 2010 WL 1049847, at *2 (D.N.J. Mar. 17, 2010) (noting that “[d]ismissal under Rule 19 generally requires a three step analysis. First, a court must determine whether it is necessary that the absent party be joined. Second, a court must see whether it is [feasible] for the absent necessary party to be joined. Third, if joinder of the absent party is not feasible, a court must evaluate whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable.”) (citations, internal quotations, and footnotes omitted); Develcom Funding, LLC v. Am. Atl. Co., No 09-1839, 2009 WL 2923064, at *2 (D.N.J. Sept. 9, 2009) (recognizing that “[u]nder Rule 19, if joinder of an unnamed party would defeat federal subject-matter jurisdiction, and if the party is deemed both necessary and indispensable to the action, the complaint must be dismissed.”) (citing Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 404 (3d Cir.1993)). 8 In circumstances where joinder of a party would defeat diversity of citizenship joinder of that party is considered not feasible. Gen. Refractories, 500 F.3d at 312. *4 In making the determination under Rule 19, the Court may properly consider evidence outside the pleadings. YSM Realty, Inc. v. Grossbard, No. 10-5987, 2011 WL 735717, at *2 (D.N.J. Feb. 23, 2011) (citing Jurimex Kommerz Transit G.m.b.H. v. Case Corp., 201 F.R.D. 337, 340 (D.Del.2001), aff'd in relevant part, 65 F. App'x 803 (3d Cir.2003)); see also 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1359 (3d ed.2012) (noting that in resolving motions brought under Rule 12(b)(7) “[t]he district judge is not limited to the pleadings” and may properly consider affidavits submitted in support of the motion or other “relevant extra-pleading evidence”). IV. ANALYSIS A. Whether Briggs and Richardson are Necessary Parties Rule 19(a)(1) sets forth the standard employed to determine whether it is necessary that an absent party be joined. The Rule provides in pertinent part that: [a] person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party 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 obligations because of the interest. FED. R. CIV. P. 19(a)(1). As the Third Circuit has previously explained, the subsections of Rule 19(a) are stated in the disjunctive, and thus, if either subsection is satisfied, the absent party is a necessary party that should be joined if feasible. Gen. Refractories, 500 F.3d at 312 (citation omitted). In the present motion, Defendants NAR, Donaldson, and KaiserKane argue that Plaintiff's second amended complaint “must be dismissed because non-parties Briggs Contracting Services, Inc. and Rod Richardson ..., who[ ] performed the asbestos abatement work that is cause for this litigation, are indispensable parties to this action and [in] the absence of [Briggs and Richardson], complete relief cannot be accorded among the existing parties due to entangled questions of [Briggs' and Richardson's] liability.” 9 (Defs.' Br. [Doc. No. 82-3] 4.) According to Defendants, non- parties Briggs and Richardson, “as the parties that performed the actual asbestos abatement with which Plaintiff associates his alleged harm in this action, ... are indispensable parties to this claim.” (Id. at 5-6.) In support of their argument that Briggs and Richardson are both Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 4 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 necessary and indispensable, Defendants point to a cross motion for summary judgment that Briggs and Richardson filed in relation to the allegations of Plaintiff's original complaint 10 wherein Briggs and Richardson “acknowledged that they were the parties that performed the asbestos abatement work.” (Id. at 6) (citing Cross Mot. for Summ. J. [Doc. No. 67-1] 5). Based on their substantial role in conducting the asbestos abatement project, Defendants argue that Briggs' and Richardson's “perceived liability is a key issue to this action.” (Defs.' Br. [Doc. No. 82-3] 6.) 9 Although not articulated in great detail, it appears Defendants are arguing that Plaintiff's second amended complaint must be dismissed under Rule 12(b)(7) because: (1) Briggs and Richardson are necessary parties who must be joined in this action because without them complete relief cannot be accorded among the existing parties; (2) joinder of Briggs and Richardson, citizens of New Jersey, is not feasible because it would destroy complete diversity and defeat subject matter jurisdiction since Plaintiff is also a citizen of New Jersey, and (3) Briggs and Richardson are indispensable parties to this action. 10 The Court reiterates that at the time this cross motion for summary judgment was filed, Briggs and Richardson were named as Defendants in Plaintiff's original complaint. *5 In opposition, Plaintiff argues that Briggs 11 is not a necessary party to this action. (Pl.'s Reply and Opp'n to Def.'s Mot. to Dismiss Pl.'s Second Am. Compl. Under Rule 12(b)(7) [Doc. No. 87] (hereinafter, “Pl.'s Opp'n”), 1.) Initially, Plaintiff contends that Briggs is “not necessary under the laws of this Circuit” and that Defendants will not suffer any prejudice as a result of the absence of Briggs being named as a Defendant in the second amended complaint because Defendants already cross-claimed against Briggs in their responses. (Pl.'s Opp'n 2.) Plaintiff asserts that “[t]he fact that Plaintiff did not include Briggs to sue joint tortfeasors is not a reason to dismiss this action.” (Id. at 3.) Plaintiff appears to argue that the absence of Briggs in this case is irrelevant because “the possibility that contribution and indemnification lawsuits may be looming does not” prevent the case from proceeding, particularly where Defendants filed cross claims against Briggs. (Id. at 4.) According to Plaintiff, “the real responsible parties in this action” are KaiserKane, the general contractor, and NAR, their subcontractor, and “the fact that NAR sub-subcontracted their work to Briggs does not make Briggs [an] essential party to the case[.]” (Id.) Finally, Plaintiff argues that in light of the fact that Briggs was “joined as a third party through NAR's answers to Plaintiff's complaint[,] [Defendants'] motion must be dismissed and sanctions imposed[.]” (Id. at 5.) 11 The Court notes that Plaintiff does not make any arguments specifically directed at whether or not Richardson is a necessary party. However, in light of Plaintiff's pro se status, the Court construes Plaintiff's references to Briggs to also include Richardson as well. To determine whether Briggs and Richardson are necessary parties, the Court must review the allegations of Plaintiff's second amended complaint. A careful review of the second amended complaint compared to the first amended complaint demonstrates that Plaintiff's factual allegations in support of his claims against Defendants KaiserKane, NAR, and Donaldson are virtually identical to the factual allegations made in the first amended complaint against Defendants KaiserKane, NAR, Donaldson, Briggs, and Richardson. (Compare Pl.'s First Am. Compl. ¶¶ 7-36, with Pl.'s Second Am. Compl. ¶¶ 5- 34.) The only substantive difference between the two versions of the complaint, is contained within paragraph thirty-four of the second amended complaint and its corresponding footnote, as compared to paragraph thirty-six of the first amended complaint. In paragraph thirty-four of the second amended complaint, Plaintiff alleges that “[t]he defendants collectively failed to follow their own contractual obligations in removing and abatement of asbestos at these sites, and further failed to [enforce] the appropriate methods in the removal process.” (Pl.'s Second Am. Compl. ¶ 34.) In a footnote, Plaintiff goes on to assert that: Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 5 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 [e]ven though the defendant [KaiserKane] subcontracted the re-roofing and asbestos abatement to North American Roofing Inc., [KaiserKane was] still responsible to ensure compliance with Federal and State Laws governing the asbestos removal. The same appl[ies] to North American Roofing when they sub-contracted the asbestos removal to the local contractor Briggs Contracting Services[.] Both KaiserKane Inc., and North American Roofing are responsible for their failure to supervise[ ] and ensure compliance with Federal and State laws. *6 (Id. ¶ 34 n. 1.) By comparison, paragraph thirty- six of the first amended complaint alleges that “[t]he defendants failed to follow their contractual obligations in removing and abatement of asbestos. It was part of their contracts to follow the Federal and State regulations while the[y] removed asbestos material from an occupied building.” (Pl.'s First Am. Compl. ¶ 36.) This review of Plaintiff's factual allegations makes clear that the large majority directly challenge the propriety of the actions undertaken by non- parties Briggs and Richardson in allegedly violating asbestos removal regulations thereby purportedly exposing Plaintiff to asbestos. For example, Plaintiff asserts that “all of the violation[s] [of Federal and State laws] occurred during [the] time” when Briggs, as a subcontractor, performed the asbestos abatement project. (Pl.'s Second Am. Compl. ¶ 7.) Plaintiff also alleges that “the defendants failed to utilize the standards of asbestos abatement” by not abiding by general isolation methods, by failing to posit signs, by not performing HEPA vacuuming, and by not disposing of the asbestos related materials within polyethylene dumpsters. (Id. ¶ 10.) Plaintiff further asserts that defendants failed to cordon off each work area with caution tape and dangers signs to inform occupants and workers of the removal project. (Id. ¶ 11.) These allegations continue, asserting that “the defendants” failed to: provide polyethylene drop clothes; utilize the “wet method” and vacuum cleaners to control dust and debris while the work was performed; provide workers conducting the removal with respirators and protective clothing; erect temporary screens or reinforced plastic sheets to prevent the wind from spreading byproducts of the removal to other parts of the building; construct containment areas or set up negative air ventilation and filtration systems; set up a containment unit, as well as a laundry list of other specific failures which allegedly occurred during the asbestos abatement and removal process itself. (See, e.g., id. ¶¶ 12-15, 17-24, 29.) Although Plaintiff generalizes that “the defendants” engaged in the conduct set forth above, the second amended complaint demonstrates that nearly all the alleged conduct Plaintiff contends resulted in asbestos exposure relates directly to the actual process of physically removing the asbestos-a function that was, as all parties admit, performed by Briggs and Richardson. All of the alleged violations of state and federal law purportedly occurred during the removal and abatement process as conducted by Briggs and Richardson. To the extent Plaintiff alleges that Defendants KaiserKane, NAR, and Donaldson are liable for injuries resulting from his alleged asbestos exposure, the only theory of liability set forth in the second amended complaint is a claim against these Defendants for their alleged negligence in failing to properly supervise the manner and method in which Briggs and Richardson completed the actual asbestos abatement project. *7 Here, Plaintiff essentially seeks to recover for the alleged negligence of both the named Defendants and non-parties Briggs and Richardson. However, with respect to Defendants KaiserKane, NAR, and Donaldson, the second amended complaint asserts negligence only for these Defendants' purported failure to properly Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 6 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 supervise the conduct of the non-parties. The second amended complaint clearly demonstrates, and the parties do not dispute, that it was the non-parties, Briggs and Richardson-not the named Defendants-who engaged in the allegedly negligent actions that Plaintiff claims resulted in his exposure to asbestos by performing the abatement and removal. Under these circumstances, any finding of negligence on the part of the named Defendants for their failure to supervise the work of Briggs and Richardson would necessarily be predicated upon an initial determination of negligence on the part of these non-parties. Under Rule 19(a)(1), parties are considered necessary if the Court cannot accord complete relief among existing parties in their absence or the absent party's interest in the subject of the action may be impaired or impeded if the action is disposed of in their absence. In this case, the Court finds that Briggs and Richardson are necessary parties because in their absence the Court cannot accord complete relief among the existing parties. With regard to awarding complete relief to the parties presently before the Court, New Jersey's Comparative Negligence Act 12 “imposes joint and several liability only on tortfeasors who are ′60% or more responsible for the total damages.' ... Thus, a tortfeasor who is found to be ‘less than 60% responsible for the total damages' is only responsible for the ‘damages directly attributable’ to that tortfeasor.” Amboy Bancorporation v. Bank Advisory Group, Inc., 432 F. App'x 102, 112 (3d Cir.2011) (citing N.J. STAT. ANN.. § 2A:15-5.3). In environmental tort actions such as this, 13 the Act further provides that “the party so recovering [ ] may recover the full amount of the compensatory damage award from any party determined to be liable, except in cases where the extent of negligence or fault can be apportioned.” N.J. STAT. ANN.. § 2A:15-5.3(d)(1) (emphasis added). 12 The parties do not dispute that New Jersey law governs the claims alleged in this case to the extent the exercise of diversity of citizenship jurisdiction is proper. 13 The Appellate Division of the New Jersey Superior Court previously held that asbestos related litigation seeking damages for personal injury or death qualify as environmental tort actions within the meaning of the Comparative Negligence Act. See Stevenson v. Keene Corp., 603 A.2d 521, 527- 28 (N.J.Super.Ct.App.Div.1992) (recognizing that “exposure to asbestos caused by negligent manufacture, use, disposal, handling, storage and treatment with resulting injury is a ‘tort against the environment,’ ... involving a hazardous and toxic substance” such that “asbestos tort litigation [is excepted] from the joint and several liability modifications” to the Comparative Negligence Act) (citation omitted). Although in some environmental tort cases it may prove difficult to apportion the extent of negligence or fault between parties, that is not the circumstance here. Based on the allegations of the second amended complaint, because it was non-parties Briggs and Richardson who actually engaged in physically removing the asbestos at FCI-Fort Dix, the potential exists that negligence or fault could be apportioned between those involved. For example, even assuming a jury concluded that the named Defendants were negligent in supervising the work of Briggs and Richardson, a jury could also conclude that any purported negligence by Defendants KaiserKane, NAR, and Donaldson resulted in less than sixty percent (60%) of Plaintiff's total damages as compared to the alleged negligence by Briggs and Richardson. In these particular circumstances then, Plaintiff might not be able to recover the full extent of his alleged damages from the parties presently named as Defendants. Thus, there exists a very distinct likelihood that complete relief cannot be accorded among those already party to this action in the absence of Briggs and Richardson. 14 Accordingly, Briggs and Richardson are necessary parties to this action. 15 14 Plaintiff seemingly acknowledges the necessity of Briggs and Richardson as parties to this action, and it should be noted again that Plaintiff specifically concedes that Briggs and Richardson were intentionally dropped as named Defendants from the first amended complaint to the second amended complaint Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 7 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 in order to ensure that diversity of citizenship existed in this case. 15 Additionally, the Court also finds that Briggs and Richardson are necessary parties to this action because their interests may be impaired or impeded if the action is disposed of in their absence. As the Court previously recognized, any finding of negligence on the part of the named Defendants for their failure to supervise the work of Briggs and Richardson would necessarily be predicated upon an initial determination of negligence on the part of these non-parties. If Briggs and Richardson are absent from this suit, they will be unable to defend against Plaintiff's claims while the named Defendants are likely to argue that all of Plaintiff's alleged injuries and damages stem solely and directly from the actions of these nonparties. Thus, these non-parties are necessary to this action as proceeding without them could impede or impair their interests. B. Whether Joinder of Briggs and Richardson is Feasible *8 Having determined that Briggs and Richardson are necessary parties under Rule 19(a), the Court must now consider whether the joinder of these non-parties is feasible in this case. Here, the Court's exercise of jurisdiction is founded upon diversity of citizenship jurisdiction pursuant to 28 U.S.C. § 1332. “In order for a federal court to have jurisdiction in a diversity suit, complete diversity of citizenship must exist.” Dickson v. Murphy, 202 F. App'x 578, 581 (3d Cir.2006). Moreover, “[c]omplete diversity requires that, in cases with multiple plaintiffs or multiple defendants, no plaintiff be a citizen of the same state as any defendant.” Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 419 (3d Cir.2010). As alleged in the second amended complaint, Plaintiff is a citizen of the state of New Jersey. (Pl.'s Second Am. Compl. 2.) As alleged in the first amended complaint, Briggs and Richardson are also citizens of the state of New Jersey. (Pl.'s Am. Compl. 4.) Complete diversity between Plaintiff and these necessary parties is thus lacking. Therefore, the joinder of Briggs and Richardson as necessary parties to this action would destroy complete diversity between the parties and thus deprive the Court of subject matter jurisdiction. Accordingly, the Court finds that joinder of these non-parties is not feasible in this case. See Gen. Refractories, 500 F.3d at 312 (noting that “joinder is not feasible [where] ... it would defeat diversity of citizenship”). C. Whether Briggs and Richardson are Indispensable Parties Because the joinder of these necessary parties is not feasible, the Court must now determine whether the absent parties, Briggs and Richardson, are indispensable under Rule 19(b). Rule 19(b) provides in pertinent part: If a person who is required to be joined if feasible cannot be joined, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. The factors for the court to consider include: (1) the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties; (2) the extent to which any prejudice could be lessened or avoided by: (A) protective provisions in the judgment; (B) shaping the relief; or (C) other measures; (3) whether a judgment rendered in the person's absence would be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder. As the Third Circuit has noted, “[t]his is not an exhaustive list of factors that can be considered, but they are the most important factors.” Dickson, 202 F. App'x at 581 (citing Gardiner v. V.I. Water & Power Auth., 145 F.3d 635, 640-41 (3d Cir.1998)). If an analysis of the factors outlined in Rule 19(b) results in a determination that the absent party must be considered indispensable, “the action cannot go forward.” Tullett Prebon, 427 F. App'x at 239 (citing Gen. Refractories, 500 F.3d at 312). *9 In considering the extent to which a judgment rendered in the non-party's absence might prejudice Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 8 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 that person or the existing parties, the Third Circuit has concluded that “the analysis under this factor ‘overlaps considerably with the Rule 19(a) analysis.’ “ Dickson, 202 F. App'x at 582 (citing Gardiner, 145 F.3d at 641 n. 4 (3d Cir.1998)). Here, the first factor favors dismissal of Plaintiff's second amended complaint because, as the Court set forth above, a judgment rendered in this action could prejudice Briggs and Richardson because any finding of negligence on the part of the named Defendants for their failure to supervise the work of Briggs and Richardson would necessarily be predicated upon an initial determination of negligence on the part of these non-parties. This case necessarily calls for a determination of the propriety of the work conducted by Briggs and Richardson and whether it violated any state or federal laws or regulations, and a disposition of this case in their absence could prejudice their rights to defend such claims. The second and third factors similarly weigh in favor of dismissal. Taking these factors in reverse order, as the Court noted supra, a very real likelihood exists here that under New Jersey's Comparative Negligence Act any judgment obtained by Plaintiff in the absence of Briggs and Richardson may result in an award that is inadequate for Plaintiff. If a jury were to conclude that the named Defendants were less than sixty-percent responsible for Plaintiff's alleged injuries, those Defendants would only be required to pay that portion of damages for which they were responsible. To the extent that Briggs and Richardson were responsible for any remaining portion of Plaintiff's alleged damages, such an award could not be made unless Briggs and Richardson were parties in the case. Moreover, the Court is not convinced that protective provisions in the judgment or any other measures for shaping the relief in this case could sufficiently protect Briggs' and Richardson's interests if the case proceeds in their absence. This is particularly true where a finding of negligence against the named Defendants requires an initial finding of negligence against these non-parties regarding the nature of the worked they conducted at FCI-Fort Dix. Finally, as to the fourth factor, Plaintiff has not asserted an adequate reason why his state law claims cannot be fully vindicated in state court in New Jersey now that his federal claim has been dismissed and where the joinder of these necessary parties will destroy this Court's subject matter jurisdiction. 16 As a result, the factors outlined in Rule 19(b) demonstrate that Briggs and Richardson are indispensable in this case. 16 None of the parties have addressed the issue of whether Plaintiff could timely bring his claims in New Jersey state court under the applicable statutes of limitations and the Court expresses no opinion in that regard. However, New Jersey case law suggests that even if Plaintiff files an untimely complaint asserting the same claims in state court after dismissal of this federal action and Defendants attempt to raise the statute of limitations as a defense, a New Jersey court may likely consider the doctrines of equitable tolling and substantial compliance to determine whether the statute of limitations should be tolled based on the filing of a claim against the defendants in another jurisdiction. See Schmidt v. Celgene Corp., 42 A.3d 892, 897 (N.J.Super.Ct.App.Div.2012). As the Appellate Division succinctly explained in Schmidt, New Jersey “courts have applied these doctrines to excuse an untimely filing in New Jersey where the plaintiff has filed a timely claim in a federal court ... that was dismissed by that court for lack of jurisdiction and followed by a prompt filing in New Jersey.” 42 A.3d at 897-98 (citing cases). Accordingly, the Court finds, in short, that the non- joined parties, Briggs and Richardson, are both necessary and indispensable in this case. As their non-diverse citizenship renders it impossible for them to be joined, the Court must grant Defendants' motion and dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(7). However, this dismissal is without prejudice. See, e.g., Guthrie Clinic, Ltd. v. Travelers Indem. Co., 104 F. App'x 218, 221 (3d Cir.2004) (“Accordingly, a finding of indispensability under Rule 19(b) necessitates dismissal for lack of subject matter jurisdiction.”); Haagensen v. Supreme Court of Pa., 390 F. App'x 94, 97 n. 7 (3d Cir.2010) ( “A dismissal, ‘except Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 9 of 10 Abuhouran v. KaiserKane, Inc., Not Reported in F.Supp.2d (2012) 2012 WL 4027416 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19’ constitutes an ‘adjudication on the merits.’ ”) (citations omitted). D. KaiserKane's Motion for Summary Judgment *10 Also pending before the Court is a motion [Doc. No. 83] for summary judgment by KaiserKane against Defendant NAR for approximately $14,728.18 in legal fees and expenses incurred by KaiserKane based upon NAR's alleged failure and refusal to assume KaiserKane's defense against Plaintiff's claims and to indemnify KaiserKane for its attorneys' fees pursuant to the subcontract between KaiserKane and NAR. In opposing this motion, Defendant NAR argues that: (1) KaiserKane cannot bring a cause of action for indemnity in this jurisdiction pursuant to the plain language of the parties' subcontract; (2) the motion for summary judgment is premature because open questions remain as to KaiserKane's role in supervising the asbestos abatement project and whether KaiserKane was negligent; (3) KaiserKane has not yet asserted any cross-claims against NAR because KaiserKane failed to file an answer and cross-claims in response to Plaintiff's second amended complaint, which supersedes both Plaintiff's original and first amended complaints, nor did KaiserKane indicate their intent to adopt their original Answer and cross-claims in response to the amended pleadings; and (4) the motion is premature because the Court has not made any findings regarding whether Plaintiff suffered “bodily injury” based on NAR “negligence” as defined by the parties' subcontract. Here, because Plaintiff's second amended complaint has been dismissed for lack of subject matter jurisdiction based on a finding of indispensability under Rule 19(b), the Court similarly lacks jurisdiction to decide KaiserKane's motion for summary judgment as to NAR on the merits. Accordingly, KaiserKane's motion is dismissed without prejudice. V. CONCLUSION For the foregoing reasons, Defendants' motion [Doc. No. 82] to dismiss Plaintiff's second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(7) for failure to join a party under Rule 19 is granted, and Plaintiff's second amended complaint is dismissed without prejudice in its entirety. Similarly, Defendant KaiserKane's motion [Doc. No. 83] seeking summary judgment against Defendant NAR is dismissed without prejudice. An Order consistent with this Opinion will be entered. All Citations Not Reported in F.Supp.2d, 2012 WL 4027416 End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01823-JEJ Document 25-1 Filed 06/22/17 Page 10 of 10 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________ Nos. 10-1638 and 10-1870 _____________ AMBOY BANCORPORATION, A New Jersey Corporation v. THE BANK ADVISORY GROUP, INC., a Texas Corporation; JENKENS & GILCHRIST, a Professional Coporation Amboy Bancorporation, Appellant in No. 10-1638 The Bank Advisory Group, Inc., Appellant in No. 10-1870 _____________ On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 2-02-cv-05410) District Judge: Hon. Dennis M. Cavanaugh _____________ Argued March 7, 2011 Before: SCIRICA, AMBRO and VANASKIE, Circuit Judges (Filed April 25, 2011) ____________ Dennis T. Kearney, Esq. (Argued) Day Pitney LLP One Jefferson Road Parsippany, NJ 07054 Counsel for Appellant/Cross-Appellee Amboy Bancorporation Case: 10-1638 Document: 003110510901 Page: 1 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 1 of 20 2 Mitchell B. Seidman, Esq. (Argued) Seidman & Pincus, LLC 777 Terrace Ave. Fifth Floor Hasbrouck Heights, NJ 07604 Counsel for Appellee/Cross-Appellant The Bank Advisory Group, Inc. Edward B. Deutsch, Esq. (Argued) James G. Gardner, Esq. McElroy, Deutsch, Mulvaney & Carpenter, LLP 1300 Mount Kemble Ave. P.O. Box 2075 Morristown, NJ 07962 Counsel for Appellee Jenkens & Gilchrist _____________ OPINION _____________ VANASKIE, Circuit Judge. At issue on this appeal is whether misrepresentations in a proxy statement attributable to a law firm (Appellee Jenkens & Gilchrist (“Jenkens”)) and a consultant (Appellee The Bank Advisory Group, Inc. (“BAG”)) can be regarded as a proximate cause of the damages incurred by their client, Appellant Amboy Bancorporation (“Amboy”), as a result of a successful minority shareholder action in which it was determined that Amboy‟s minority shareholders received substantially less than fair value for their shares in a cash-out corporate reorganization. The District Court interpreted the opinion of the Appellate Division of the New Jersey Superior Court in the minority shareholder action, Casey v. Brennan, 780 A.2d 553 (N.J. Super. Ct. App. Div. 2001), as holding that the misleading proxy statement was not material to the determination that minority shareholders were entitled to an award of damages measured by the difference Case: 10-1638 Document: 003110510901 Page: 2 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 2 of 20 3 between the price offered for their shares and the actual fair value of those shares. Based upon this interpretation, the District Court concluded that the misleading proxy statement could not have been a proximate cause of the damages Amboy incurred in the minority shareholder action. Contrary to the District Court‟s interpretation, we find that the existence of misrepresentations in the proxy statement was regarded by the New Jersey state court as a material factor in its liability determination. Accordingly, we will vacate, in part, the District Court‟s judgment in favor of Amboy and remand for further proceedings. I. As we write only for the parties, who are familiar with the facts and procedural history of this case, we relate only the information essential to our analysis. In 1997, Amboy retained Jenkens and BAG to assist Amboy with its reorganization into a Subchapter S corporation under the Internal Revenue Code. To qualify for Subchapter S status, Amboy had to reduce the number of its shareholders from 420 to no more than 75. See 26 U.S.C. § 1361(b)(1)(A) (1996). To that end, Amboy‟s board of directors, who were also majority shareholders of Amboy, planned a cash-out merger of the minority shareholders. Amboy retained Jenkens to advise it in connection with the merger plan and retained BAG to render an opinion as to the “fair market value” of Amboy‟s common stock. BAG determined that the “cash fair market value” of Amboy stock was $69.50 per share. BAG‟s valuation included marketability and minority discounts. Amboy‟s board of directors voted to pursue a Subchapter S election and, relying on BAG‟s valuation, approved an offer price of $73 per share. Case: 10-1638 Document: 003110510901 Page: 3 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 3 of 20 4 Jenkens prepared the proxy statement issued in connection with the merger. The proxy statement explained that if the merger plan is approved, shareholders who own 15,000 shares of Amboy or who purchase Amboy shares to increase their holdings to 15,000 shares would continue to be shareholders. All other shareholders, except for those who “perfect their dissenters‟ rights” in accordance with the provisions of the New Jersey Business Corporation Act, would receive $73 per share. (J.A. 418.) The proxy statement further provided that shareholders who receive cash for their shares pursuant to the merger would have no right to dissent from the merger. Additionally, the proxy statement related the board‟s belief that the $73 per share price “represents a fair value.” (J.A. 407.) The proxy statement referenced BAG‟s fairness opinion, which concluded that the $73 per share price was “fair, from a financial standpoint,” to the shareholders. (J.A. 408-10, 493.) The directors who had initiated the transaction controlled sufficient shares to guarantee the merger‟s approval, and on November 19, 1997, the merger was approved by the affirmative vote of more than the required two-thirds majority of the votes cast. The merger was completed on December 2, 1997, and the shareholders received their checks on or about January 7, 1998. All shareholders except six accepted the $73 per share consideration. Three separate actions were subsequently initiated against Amboy and its board of directors in New Jersey state court alleging that the defendants failed to offer the selling shareholders a price that represented the fair value for their shares. The actions were consolidated for trial in the Superior Court of New Jersey, Chancery Division, Union Case: 10-1638 Document: 003110510901 Page: 4 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 4 of 20 5 County, under the caption Casey v. Brennan. A class was certified consisting of all persons owning less than 15,000 shares of Amboy on November 19, 1997, whose shares were cashed out under the approved merger plan. Although Jenkens initially represented Amboy in the action, because the shareholders‟ allegations concerning inadequate proxy statement disclosures necessarily implicated Jenkens as the preparer of the proxy statement, it withdrew as counsel to avoid a conflict of interest. The trial judge rendered an oral opinion in April 1999. He found that the proxy statement “contained . . . misleading statements of material facts and failed to disclose all material facts . . . regarding the true fair value and future prospects of Amboy and the true fair value of Amboy‟s common stock.” (J.A. 603-04.) In finding the proxy statement materially deficient, the trial judge particularly relied on the fact that the proxy statement failed to disclose that the $73 per share offer price was derived first with the application of a 25% minority discount and then a 15% marketability discount. The trial judge, however, refused to impose liability on the individual directors because he found that they relied in good faith on BAG and Jenkens in arriving at the $73 share price. Concluding that the fair value was $90 per share, the trial court entered judgment in favor of all plaintiffs, with the exception of the shareholders who voted against the plan but then surrendered their shares in exchange for the offer price. 1 According to the trial court, those shareholders who voted against the plan were fully informed as to all 1 Approximately 207,000 shares were held by Amboy shareholders voting against the plan but accepting the $73 offer price. Case: 10-1638 Document: 003110510901 Page: 5 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 5 of 20 6 material facts relating to the merger and, thus, acquiesced in the merger by accepting the merger consideration. On appeal, the Superior Court of New Jersey, Appellate Division, affirmed the trial court‟s finding that the proxy statement was materially misleading and inaccurate. The Appellate Division, however, reversed the trial court‟s ruling that shareholders who voted against the plan but then cashed in their shares were estopped from recovery. Accordingly, all shareholders were found to be entitled to recovery. The Appellate Division also reversed the trial court‟s determination of fair value and remanded the matter. Ultimately, following a second remand, the Appellate Division affirmed the trial court‟s determination that the fair value of Amboy stock was $114 per share. As a result of this finding, Amboy was required to pay approximately $33 million to its minority shareholders. In 2002, Amboy initiated this action in the Superior Court of New Jersey, Law Division, against Jenkens and BAG asserting claims for professional negligence, breach of fiduciary duty, and breach of contract. Jenkens removed the case to the United States District Court for the District of New Jersey. As to the professional negligence claim, Amboy in part alleges that Jenkens and BAG failed to ascertain and advise Amboy that “fair value,” not “fair market value,” was the proper valuation standard in New Jersey. On the premise that it would not and could not have proceeded with the merger at $114 per share, Amboy alleges damages based on the New Jersey judgment requiring it to pay the shareholders the difference between the Case: 10-1638 Document: 003110510901 Page: 6 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 6 of 20 7 $73 merger price and the $114 adjudicated fair value price. Amboy also seeks attorney and expert fees incurred in defending the shareholder action, as well the fees incurred in prosecuting this suit. In 2005, Jenkens moved for summary judgment with respect to Amboy‟s claim of damages resulting from the New Jersey court‟s fair value determination. Jenkens argued that Amboy could not establish that Jenkens‟s alleged negligence was the proximate cause of such damages because Amboy was legally obligated to pay its shareholders fair value for their shares regardless of the accuracy of the proxy statement. The District Court denied Jenkens‟s motion for summary judgment, concluding that material issues of fact existed as to whether Jenkens breached a duty to Amboy and whether the breach was a substantial factor in Amboy‟s damages. In 2007, BAG filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Western District of Texas. Amboy filed a motion to dismiss the Chapter 7 case. The Bankruptcy Court denied Amboy‟s motion, but modified the automatic stay of 11 U.S.C. § 362(a) to permit the District Court to determine whether complete relief could be accorded to Amboy and Jenkens if BAG were either severed or dismissed from the action. Amboy then filed a letter application in the District Court seeking “an order determining that complete relief cannot be accorded as to the remaining parties . . . without BAG remaining a party in this action.” (J.A. 746-47.) On September 12, 2007, the District Court granted Amboy‟s application. In 2008, Jenkens made a number of motions, including, as relevant here, a renewed motion for partial summary judgment on the issue of damages and a motion for Case: 10-1638 Document: 003110510901 Page: 7 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 7 of 20 8 partial summary judgment on the breach of fiduciary duty and breach of contract claims. In an order entered on August 13, 2008, the District Court granted both motions. On January 23, 2009, following the denial of Amboy‟s motion for reconsideration of the August 13, 2008 Order, BAG filed a motion for summary judgment. In support, BAG argued in part that the law of the case doctrine precluded review of issues resolved by the District Court in its partial summary judgment rulings in favor of Jenkens. The District Court denied BAG‟s motion on the ground that the March 5, 2008 Final Pretrial Order listed all pending and contemplated motions, that BAG failed to inform the District Court that it contemplated filing any motions, that the case was scheduled to be tried in the coming month, and that BAG had failed to participate in the action in any meaningful way prior to moving for summary judgment. On February 9, 2009, the District Court conducted a status conference to address whether any viable claims remained against Jenkens in the wake of the August 13, 2008 Order granting its motions for partial summary judgment. On August 18, 2009, following briefing on the issue, and a second status conference on August 5, 2009, the District Court concluded that “its Order and Opinion of August 13, 2008, granting [Jenkens‟s] motions for partial summary judgment have disposed of all claims raised by [Amboy] against [Jenkens], and that [Amboy] has no viable claim remaining against [Jenkens].” (J.A. 5.) Accordingly, the District Court entered judgment dismissing all claims against Jenkens with prejudice. On February 24, 2010, the District Court entered a Consent Order that made the August 13, 2008 Order and Opinion equally applicable to BAG and dismissed all of Amboy‟s claims against BAG. Case: 10-1638 Document: 003110510901 Page: 8 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 8 of 20 9 Amboy appeals from the District Court‟s August 18, 2009 Order granting judgment in favor of Jenkens, the August 13, 2008 Order granting Jenkens‟s motions for partial summary judgment, as well as the November 25, 2008 Order denying Amboy‟s motion for reconsideration of the August 13, 2008 Order. BAG cross-appeals from the September 12, 2007 Order determining that BAG should remain a party to the action, and from the January 30, 2009 Order denying its motion for summary judgment. II. The District Court had jurisdiction pursuant to 28 U.S.C § 1332, and we have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review over the District Court‟s partial summary judgment rulings. Packard v. Pittsburgh Transp. Co., 418 F.3d 246, 250 (3d Cir. 2005). We will review the District Court‟s determination that BAG should remain a party to the action for clear error as to the underlying findings of fact and exercise plenary review over the District Court‟s conclusions of law. See Huber v. Taylor, 532 F.3d 237, 247 (3d Cir. 2008). Finally, we will review for abuse of discretion the District Court‟s decision to deny BAG‟s motion for summary judgment essentially on the ground that it was untimely. See In re Fine Paper Antitrust Litig., 685 F.2d 810, 817 (3d Cir. 1982); see also Bailey v. United Airlines, 279 F.3d 194, 202-03 (3d Cir. 2002). III. In granting Jenkens‟s motion for partial summary judgment with respect to Amboy‟s damages claim, the District Court determined that Jenkens‟s role in preparing the proxy statement could not have been a proximate cause of Amboy‟s damages because the Appellate Division in Casey v. Brennan, 780 A.2d 553 (N.J. Super. Ct. App. Div. Case: 10-1638 Document: 003110510901 Page: 9 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 9 of 20 10 2001), held that Amboy had an independent duty to compensate all of its shareholders at fair value. Thus, under the District Court‟s reading of Casey, the misleading proxy statement was not a material factor in finding Amboy liable. Because we disagree with the District Court‟s reading, we will vacate the grant of partial summary judgment. Under the New Jersey Business Corporation Act, a shareholder of a New Jersey corporation who objects to the offer price has the right to dissent from the plan of merger and, following the plan‟s approval, to make a written demand for the payment of the “fair value” of his shares. N.J.S.A. 14A:11-1(1)(a) & 14A:11-2(3). Shareholders who receive cash in exchange for their shares, however, have no statutory right to dissent. Id. 14A:11-1(1)(a)(i)(B)(x). The New Jersey trial court had concluded that dissenting shareholders who accepted the Amboy offer price were estopped from challenging its fairness. The Appellate Division, however, determined that those shareholders still had the right to claim the fair value of their shares. 780 A.2d at 567-69. The parties dispute the basis for the Appellate Division‟s holding. Amboy contends that the Appellate Division held that it was the misleading proxy statement that entitled Amboy shareholders to claim fair value. Jenkens and BAG, on the other hand, contend that the Appellate Division held that all Amboy shareholders were entitled to claim fair value because shareholders are always entitled to fair value, regardless of the completeness and accuracy of a proxy statement‟s disclosures. The District Court agreed with the interpretation advanced by Jenkens and BAG. Although we acknowledge that Case: 10-1638 Document: 003110510901 Page: 10 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 1 of 20 11 certain broad language in Casey could be read to support the District Court‟s conclusion, 2 a careful review of Casey and the precedents on which it relied makes clear that the misleading proxy statement was indeed material to the Appellate Division‟s decision. Our disagreement with the District Court‟s reading of a less than pellucid Appellate Division opinion is based upon the following statement: In our view, the dissemination of an inaccurate or misleading proxy statement in conjunction with a cash-out merger that sets forth an inadequate cash-out price is sufficient to allow non-statutory dissenters to challenge the merger, or claim fair compensation for their shares, unless otherwise precluded by some other statute, doctrine, rule or law. Id. at 568 (emphasis added). “In conjunction with” plainly signifies that the misleading proxy statement must be considered in combination with an inadequate cash-out price. See Webster‟s Third New International Dictionary 480 (1993). Thus, the misleading proxy statement is essentially the key that opens the courthouse door to non-statutory dissenters who seek to recover fair value. Buttressing this reading of Casey is the Appellate Division‟s treatment of the Delaware Supreme Court‟s decision in Weinberger v. UOP, Inc., 457 A.2d 701 (Del. 1983). In Weinberger, the Delaware Supreme Court established that controlling shareholders standing on both sides of a transaction have the burden of proving the transaction‟s “entire fairness.” 457 A.2d at 710. The Casey court explained that under 2 Appellees in particular emphasize the following language from Casey: “[E]ven those shareholders who do not qualify as statutory dissenters still have the right to claim fair compensation for their shares in the context of a cash-out merger, as an incident of the fiduciary duty of the majority to treat the minority fairly.” 780 A.2d at 567. Case: 10-1638 Document: 003110510901 Page: 11 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 11 of 20 12 Weinberger, even though the ultimate burden of proof is on the majority shareholders to show by a preponderance of the evidence that the transaction is fair, the initial burden of proof is on the “plaintiff attacking the merger to demonstrate some basis for invoking the fairness obligation.” 780 A.2d at 568 (quoting Weinberger, 457 A.2d at 703) (internal quotation mark omitted). We have previously noted that “[this] rule makes practical sense,” as “[a] party challenging a transaction ought not to be able to invoke the remedial powers of the court without making any showing that the transaction was unfair.” Landy v. Amsterdam, 815 F.2d 925, 930 (3d Cir. 1987) (emphasis in original). Quoting Weinberger, the Appellate Division in Casey observed that “„[t]he concept of fairness has two basic aspects: fair dealing and fair price,‟” and that “[f]air dealing necessarily includes the „obvious duty of candor.‟” Casey, 780 A.2d at 568 (quoting Weinberger, 457 A.2d at 711). The Appellate Division, again citing Weinberger, further observed that “„where corporate action has been approved by an informed vote‟ of the minority shareholders,” the plaintiffs shoulder the burden of proving that the transaction was not fair to the minority. Id. at 569 (emphasis in original) (quoting Weinberger, 457 A.2d at 703). The Appellate Division affirmed the trial court‟s finding that the proxy statement was misleading. Id. If the accuracy or completeness of the proxy statement were immaterial to the Appellate Division‟s ultimate determination, there would have been no need for the appellate court to address the trial court‟s finding on that issue. In our view, it is for this reason that all the shareholders were permitted to claim fair value for their shares. Stated otherwise, but for the misrepresentations in the proxy statement, Case: 10-1638 Document: 003110510901 Page: 12 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 12 of 20 13 shareholders who accepted the tender price would not have been entitled to recover. It necessarily follows that the misleading proxy statement could be a proximate cause of the alleged harm. Because the District Court interpreted Casey to hold that all shareholders are always entitled to claim fair value, without regard to whether the directors had breached their fiduciary duty to the minority shareholders in disseminating a misleading proxy statement, the District Court determined that Amboy could not establish that any breach of the professional duty of care on Jenkens‟s part was a proximate cause of Amboy having to pay the shareholders the difference between the $73 per share offer price and the $114 per share judicially-determined fair value price. As we read Casey to have held that Amboy shareholders were entitled to claim the fair value of their shares because of the misleading proxy statement, we conclude that if Amboy could establish that Jenkens breached a professional duty of care that resulted in the dissemination of a misleading proxy statement, Amboy could also establish that such a breach was the proximate cause of Amboy‟s damages. Significantly, the Appellate Division in Casey indicated that, in the absence of the misleading proxy statement, those shareholders who voted in favor of the merger, as well as those who voted against the merger but then accepted the merger consideration, would have been barred from recovery on a theory of estoppel or acquiescence. See id. at 573- 75. Consequently, even if we read Casey to hold that all shareholders have a cause of action to claim fair value, irrespective of a breach of fiduciary duty, we would nonetheless be compelled to vacate the grant of partial summary judgment. Case: 10-1638 Document: 003110510901 Page: 13 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 13 of 20 14 The trial judge held that shareholders who collectively owned approximately 207,000 shares and who voted against the merger but then accepted the $73 per share offer price were estopped from recovery. The Appellate Division disagreed. It acknowledged the Delaware Supreme Court‟s holding in Bershad v. Curtiss-Wright Corp., 535 A.2d 840 (Del. 1987), that “when an informed minority shareholder either votes in favor of the merger, or . . . accepts the benefits of the transaction, he or she cannot thereafter attack its fairness.” Id. at 848. The court, however, found Bershad inapposite because the proxy statement was misleading and inaccurate. It accordingly concluded that the minority shareholders were not informed and that “neither Bershad nor the doctrine of estoppel compels a conclusion that the shareholders were not entitled to recover.” Casey, 780 A.2d at 574. It is clear that, in the absence of the misleading proxy statement, the Appellate Division, under Bershad, would have affirmed the trial judge‟s determination that these shareholders were precluded from recovery, and that Amboy would therefore be able to establish damages with respect to the 207,000 shares for which it had to pay fair value. Furthermore, we think that in the absence of the misleading proxy statement, the Casey court, also under Bershad, would have considered those minority shareholders who voted in favor of the merger, accounting for approximately 400,000 shares, as also having acquiesced in the merger. Jenkens‟s argument that Bershad has been undermined by subsequent Delaware case law is unpersuasive. Indeed, the Delaware Supreme Court case, Kahn v. Lynch Communication Systems, Inc., 638 A.2d 1110 (Del. 1994), which has been recognized as having “implicitly overruled the holding in Bershad,” Gesoff v. IIC Case: 10-1638 Document: 003110510901 Page: 14 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 14 of 20 15 Indus. Inc., 902 A.2d 1130, 1143 n.89 (Del. Ch. 2006), was decided well before the Appellate Division‟s decision in Casey. We will therefore vacate the orders granting partial summary judgment on the issue of damages and final judgment in favor of Jenkens and remand to the District Court for further proceedings. Furthermore, in light of our holding, we will vacate the denial of Jenkens‟s in limine motions that were denied as moot in light of the grant of partial summary judgment and vacate that portion of the February 24, 2010 Consent Order dismissing the professional negligence claim against BAG. 3 IV. The District Court granted partial summary judgment in favor of Jenkens dismissing Amboy‟s claims for breach of contract and breach of fiduciary duty on the ground that Amboy failed to allege “a specific contractual or fiduciary duty separate and distinct from the duty of care owed by an attorney to a client under the negligence standard.” (J.A. 15.) We agree and will affirm the order granting partial summary judgment on those claims. Amboy argues that “Jenkens breached an explicit term in its retainer agreement with Amboy.” (Appellant‟s Br. at 52.) According to Amboy, because Jenkens agreed to “prepare the Proxy Statement in connection with the merger” (J.A. 208-09), Jenkens “breached its contract with Amboy by failing to adequately and properly prepare the 3 On remand, the District Court should address Amboy‟s additional damages claims, which include claims for the fees incurred in connection with the Subchapter S conversion, defending the shareholder litigation, and prosecuting the instant litigation. Case: 10-1638 Document: 003110510901 Page: 15 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 15 of 20 16 Proxy Statement” (J.A. 65). As Jenkens obviously prepared the proxy statement, we are unable to understand how the “explicit term” to “prepare the Proxy Statement in connection with the merger” was breached. Thus, contrary to its assertions, Amboy has not alleged the breach of an express contractual promise and, as the District Court recognized, has only recast its professional negligence claim in the guise of a breach of contract claim. Accordingly, the breach of contract claim was properly dismissed. Cf. Levinson v. D’Alfonso & Stein, 727 A.2d 87, 89 (N.J. Super. Ct. App. Div. 1999) (finding that plaintiff had alleged a “classic contract claim” against attorneys where retainer agreement between plaintiff and attorneys provided that a settlement in plaintiff‟s personal injury action would require plaintiff‟s authorization and where plaintiff alleged that attorneys settled the action without his authorization). Amboy‟s breach of fiduciary duty claim was also properly dismissed as redundant to the professional negligence claim. The breach of fiduciary duty count alleged that “Jenkens . . . failed to carry out its obligations because a New Jersey trial court and the appellate court concluded that the Proxy Statement was materially misleading” and that “[d]espite a direct request by BAG for guidance, Jenkens failed to instruct BAG as to the legally required standard of value in New Jersey.” (J.A. 66.) We agree with the District Court that these allegations fail to articulate the breach of any duty “separate and distinct” from the duty of care. Moreover, we decline to entertain Amboy‟s argument, made in opposition to Jenkens‟s motion for partial summary judgment, that Jenkens breached its fiduciary duty to Amboy by “misrepresent[ing] the extent of its knowledge with respect to Subchapter S conversions generally, and New Jersey law specifically.” (Appellant‟s Case: 10-1638 Document: 003110510901 Page: 16 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 0 /22/17 Page 16 of 20 17 Br. at 54.) See Shanahan v. City of Chicago, 82 F.3d 776, 781 (7th Cir. 1996) (“A plaintiff may not amend his complaint through arguments in his brief in opposition to a motion for summary judgment.”). We will accordingly affirm the order granting partial summary judgment in favor of Jenkens on the breach of fiduciary duty and breach of contract claims. V. BAG argues that the District Court erred in determining that it should remain a party to the action. As discussed above, following BAG‟s bankruptcy filing, the Bankruptcy Court modified the automatic stay of 11 U.S.C. § 362(a) to permit the District Court to determine whether complete relief could be accorded to Amboy and Jenkens if BAG were either severed or dismissed from the action. Amboy, noting that the Bankruptcy Court‟s Order tracked the language of Federal Rule of Civil Procedure 19(a), argued that BAG was a “necessary” party under Rule 19(a) on the ground that complete relief could not be accorded to Amboy and Jenkens in BAG‟s absence. Fed. R. Civ. P. 19(a). Amboy thus sought “an order determining that complete relief cannot be accorded as to the remaining parties . . . without BAG remaining a party in this action.” (J.A. 746-47.) On September 12, 2007, the District Court granted what it referred to as Amboy‟s “Rule 19 Application,” concluding that “BAG should remain a party and the lawsuit should proceed with BAG as a party.” (J.A. 783.) To the extent a compulsory joinder analysis may be applied to determine whether a party who is already joined in an action should remain a party to the action, it would seem that Rule 19(a), addressing “persons to Case: 10-1638 Document: 003110510901 Page: 17 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 17 of 20 18 be joined if feasible,” would logically apply. Fed. R. Civ. P. 19(a) (2006). At the time of the District Court‟s ruling, Rule 19(a)(1), in relevant part, provided: “A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if . . . in the person‟s absence complete relief cannot be accorded among those already parties . . . .” 4 Id. Consequently, “[u]nder Rule 19(a)(1), the Court must consider whether - in the absence of an un-joined party - complete relief can be granted to the persons already parties to the lawsuit.” Huber, 532 F.3d at 248. In support of its contention that it is not a “necessary” party, BAG cites General Refractories Co. v. First State Insurance Co., 500 F.3d 306 (3d Cir. 2007), where we held that certain absent insurers who were not named as defendants in an insured‟s suit seeking coverage were not “necessary” parties under Rule 19(a)(1) where the court, because of the insurers‟ joint and several liability under Pennsylvania law, could grant complete relief to the insured from any insurer that was a party to the action. Id. at 314. In light of New Jersey law, we are unable to conclude that complete relief would necessarily be accorded to Amboy in BAG‟s absence. New Jersey‟s Comparative Negligence Act imposes joint and several liability only on tortfeasors who are “60% or more responsible for the total damages.” N.J.S.A. 2A:15-5.3(a). Thus, a tortfeasor who 4 The 2007 amendment to Rule 19 did not substantively change the former Rule 19(a)(1). That rule, now codified in Rule 19(a)(1)(A), provides: “A person who is subject to service of process and whose joinder will not deprive the court of subject- matter jurisdiction must be joined as a party if . . . in that person‟s absence, the court cannot accord complete relief among existing parties . . . .” Fed. R. Civ. P. 19(a)(1)(A). The Advisory Committee‟s note on the amendment explains that the revisions to the rule were “intended to be stylistic only.” Id. advisory committee‟s note. Case: 10-1638 Document: 003110510901 Page: 18 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 18 of 20 19 is found to be “less than 60% responsible for the total damages” is only responsible for the “damages directly attributable” to that tortfeasor. Id. 2A:15-5.3(c). We are consequently unable to see how it could be argued that complete relief would necessarily be accorded to Amboy in BAG‟s absence in light of the possibility that Jenkens could be found to be less than 60% responsible for Amboy‟s total damages. We will therefore affirm the District Court‟s order determining that BAG should remain a party to the action on the ground that complete relief may not be accorded to Amboy and Jenkens in BAG‟s absence. VI. BAG further argues that the District Court abused its discretion in denying its motion for summary judgment. The District Court denied the motion as essentially untimely, finding that the Final Pretrial Order listed all pending and contemplated motions, that BAG failed to inform the District Court that it contemplated filing any motions, that the case was scheduled to be tried in the coming month, and that BAG had failed to participate in the action in any meaningful way prior to moving for summary judgment. “We will not interfere with a trial court‟s control of its docket except upon the clearest showing that the procedures have resulted in actual and substantial prejudice to the complaining litigant.” In re Fine Paper, 685 F.2d at 817 (citation and internal quotation marks omitted). BAG has not shown how it was substantially prejudiced by the District Court‟s denial of its motion for summary judgment. We therefore find no abuse of discretion, and will affirm the District Court‟s order. VII. Case: 10-1638 Document: 003110510901 Page: 19 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 19 of 20 20 In sum, we will vacate the portion of the District Court‟s August 13, 2008 Order granting partial summary judgment in favor of Jenkens with respect to Amboy‟s claim of damages, and, accordingly, vacate the denial of Jenkens‟s in limine motions that were denied as moot in light of the grant of partial summary judgment, vacate the District Court‟s August 18, 2009 judgment in favor of Jenkens, and vacate the February 24, 2010 Consent Order to the extent it dismissed the professional negligence claim as to BAG. We will further affirm the August 13, 2008 Order granting partial summary judgment in favor of Jenkens on the claims for breach of fiduciary duty and breach of contract and affirm the February 24, 2010 Consent Order to the extent it dismissed those claims as to BAG. We will also affirm the District Court‟s September 12, 2007 Order determining that BAG should remain a party to the action and affirm the District Court‟s January 30, 2009 Order denying BAG‟s motion for summary judgment. The case will be remanded for further proceedings on Amboy‟s professional negligence claims against Jenkens and BAG. Case: 10-1638 Document: 003110510901 Page: 20 Date Filed: 04/25/2011Case 1:16-cv-01823-JEJ Document 25-2 Filed 06/22/17 Page 2 of 20 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 1 KeyCite Yellow Flag - Negative Treatment Distinguished by In re Tri-State Telecommunications, Inc., Bankr.E.D.Pa., October 15, 2012 2011 WL 3584783 Only the Westlaw citation is currently available. United States District Court, M.D. Pennsylvania. PINEBROOK MINERALS, LLC, Plaintiff v. ANADARKO E & P COMPANY, LP a/k/ a Anadarko Petroleum Corporation, a/k/a Anadarka Petroleum Corporation, Defendant. No. 4-11-CV-00177. | July 25, 2011. Attorneys and Law Firms Joseph Robert Rydzewski, Spall, Rydzewski & Anderson, P.C., Hawley, PA, for Plaintiff. Andrea E. Hammel, Patrick J. O'Connor, Cozen O'Connor, West Chonshohocen, PA, Jared D. Bayer, Cozen O'Connor, Philadelphia, PA, for Defendant. REPORT AND RECOMMENDATION ON DEFENDANT'S MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(6) (Doc. 8) MILDRED E. METHVIN, United States Magistrate Judge. *1 In this diversity action, Pinebrook Minerals, L.L.C. seeks a declaratory judgment that an oil and gas lease held by defendant Anadarko is null and void. Pinebrook recently became the successor in interest to the oil and gas rights on the property in question, subject to the lease. Before the court is defendant's motion to dismiss. 1 The motion has been referred to the undersigned magistrate judge for a report and recommendation 2 and is now ripe for adjudication. 3 For the following reasons, it is recommended that the motion be GRANTED. 1 Doc. 8. 2 On May 9, 2011, Judge Conner referred the motion to the undersigned magistrate judge. (Doc. 20.) The Court has jurisdiction based on diversity of citizenship and an amount in controversy exceeding $75,000. 28 U.S.C. § 1332. 3 Plaintiff initiated this suit on January 26, 2011, with the filing of its complaint. (Doc. 1.) On March 14, 2011, defendant filed a motion to dismiss (Doc. 8) under Federal Rule of Civil Procedure 12(b)(6) and a brief in support (Doc. 9) On March 28, plaintiff filed a brief in opposition (Doc. 12) and supporting exhibits (Doc. 12-1), to which defendant filed a reply brief (Doc. 19) on April 6. FINDINGS AND RECOMMENDATIONS I. Background The facts as recounted here are taken primarily from the complaint and attached exhibits. Allegations in the complaint are assumed to be true. The facts are detailed only as necessary for disposition of the pending motion. Plaintiff Pinebrook is a Pennsylvania limited liability company that primarily conducts business in this state. 4 Defendant Anadarko is a Texas corporation licensed to do business in Pennsylvania. 5 Kenmar Hunting Club is a non- profit Pennsylvania corporation. 6 4 Compl. ¶ 1, Doc. 1. 5 Id. ¶ 2. 6 Articles of Incorporation, Kenmar Hunting Club, Oct. 9, 2002, Doc. 12-1, at 2. Before January 30, 2006, Kenmar held exclusive rights to oil and gas on the 560-acre property it owned in Cogan House Township. 7 On this date, Kenmar leased the oil and gas rights to Jim Bourbeau Land Service, LLC for a five- year term, “and as long thereafter as (1) drilling operations continue with due diligence.” 8 The Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 1 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 2 lease provided for royalties to be paid to Kenmar at the rate of 1/8 “the market value at the well,” (i.e. free of production costs). 9 An order for payment dated a few days later stated that Bourbeau was to pay Kenmar $14,000 for the lease. 10 Both documents were signed by David K. Perthold, Kenmar's secretary, and Marvin Hamstra, Kenmar's treasurer. Hamstra's signature on the lease is notarized. The Order for Payment also contained the signature of Gary Ford, denoted as “Land Agent,” presumably for Bourbeau. 11 7 Def.'s Br. in Supp. of Mot. to Dismiss 2, Doc. 9, at 6. The Court refers to defendant's brief because this brief actually makes the facts clearer than does the complaint itself, which is drafted mostly in dense legalese. 8 Compl. ¶ 6, Doc. 1; Oil and Gas Lease, Kenmar Hunting Club-Jim Bourbeau Land Service LLC (hereinafter “Oil and Gas Lease”), Jan. 30, 2006, Doc. 26-2, at 5. 9 Oil and Gas Lease, Doc. 26-2, at 5. 10 Order for Payment (Feb. 2, 2006), Doc. 26- 2, at 9. Hamstra signed the document on February 2, 2006, and Perthold signed it on February 7, 2006. 11 Id. Some time later, Bourbeau assigned its exploration and production rights under the lease to Anadarko. 12 On June 17, 2010, Kenmar assigned its own interests in the lease-as lessor and royalty recipient-to Pinebrook. 13 Finally, on October 20, 2010, Kenmar executed a Mineral Deed in favor of Pinebrook, conveying all the mineral rights on the same 560-acre property “subject to any rights now existing to any lessee or assigns under any valid and subsisting oil and gas lease of record heretofore executed.” 14 Gerard T. Mascellino, identified as “President” executed the deed under seal and before a notary. 15 12 Compl. ¶ 7, Doc. 1. The date of this document is unknown. 13 Assignment of Oil and Gas Lease, June 17, 2010, Doc. 26-2, at 10-13. Although not raised by the parties, it is noted that although the assignment states that Anadarko, the lessee, was a party to the assignment and consented to it, no one for Anadarko signed the document, nor was there a signature line for Anadarko. Furthermore, the assignment was signed by one Arthur MacDonald for both Kenmar and Pinebrook; his title or capacity is not stated. 14 Mineral Deed, Kenmark Hunting Club- Pinebrook Minerals, LLC, Doc. 26-2, at 1. Anadarko characterized the mineral deed as assigning the same rights that were leased to Anadarko. Def.'s Br. in Supp. of Mot. to Dismiss 3, Doc. 9, at 7. 15 Mineral Deed, Doc. 26-2, at 1, 3. Pinebrook filed the instant complaint on January 26, 2011. Plaintiff seeks a declaratory judgment that the 2006 oil and gas lease to Bourbeau (now assigned to Anadarko) was void ab initio on grounds that Kenmar's secretary and treasurer had no authority to sign the lease under Kenmar's by- laws. II. Issues Presented Defendant seeks dismissal based on the following grounds: *2 A. The applicable statute of limitations has run, making plaintiff's claim untimely. B. Plaintiff has failed to state a claim that Kenmar's officers acted ultra vires in executing the 2006 lease. C. Plaintiff ratified the 2006 lease. D. Kenmar is a necessary party under Fed.R.Civ.P. 19(a)(1), requiring Kenmar to be joined as a plaintiff in this action before judgment may be rendered. III. Standard of review Rule 12(b) (6) of the Federal Rules of Civil Procedure provides for dismissal of claims that fail to assert a basis upon which relief can be granted. When considering a motion to dismiss, the court must “accept all [of the plaintiff's] factual Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 2 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 3 allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir.2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d Cir.2002)). See also Matrixx Initiatives, Inc. v. Siracusano, --- U.S. ----, ---- - ----, 131 S.Ct. 1309, 1322-23, 179 L.Ed.2d 398 (2011) (applying the Rule 12(b)(6) standard). The complaint must set forth sufficient facts to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The question is not whether the plaintiff will ultimately prevail, but whether the “complaint [is] sufficient to cross the federal court's threshold.” Skinner v. Switzer, --- U.S. ----, ----, 131 S.Ct. 1289, 1296, 179 L.Ed.2d 233 (2011) (citing Swierkiewicz v. Sorema N. A., 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002)). Although Rule 8(a)(2) requires only a “short and plain statement of the claim showing that the pleader is entitled to relief,” a plaintiff must do more than present “bald assertions” and “legal conclusions.” In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410, 1429-30 (3d Cir.1997) (citing Glassman v. Computervision Corp., 90 F.3d 617, 628 (1st Cir.1996)). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than labels and conclusions, and a formulaic recitation of a cause of action's elements will not do. Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true .... Twombly, 550 U.S. at 555 (alteration in original) (emphasis added) (citations omitted). Plaintiffs must nudge their claims “across the line from conceivable to plausible.” Id. at 570. See also Phillips v. County of Allegheny, 515 F.3d 224, 232 (3d Cir.2008) (reviewing Twombly ). A plaintiff “armed with nothing more than conclusions” is not entitled to discovery. Ashcroft v. Iqbal, --- U.S. ----, ----, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009). Consequently, “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]’-‘that the pleader is entitled to relief,’ ” and the complaint should be dismissed. Id. (quoting Fed.R.Civ.P. 8(a)(2)) (alteration in original). *3 The “plausible grounds” requirement “does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence” supporting the plaintiff's claim for relief. Twombly, 550 U.S. at 556. Determining plausibility is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 129 S.Ct. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir.2007), rev'd on other grounds, 129 S.Ct. at 1937). The Third Circuit has outlined a two-part analysis that courts should use when deciding a motion to dismiss for failure to state a claim. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009). First, the factual and legal elements of a claim should be separated. In other words, while courts must accept all of the complaint's well-pleaded facts as true, they may disregard any legal conclusions. Second, courts then decide whether the facts alleged in the complaint are sufficient to demonstrate that the plaintiff has a “plausible claim for relief.” Id. at 210 (quoting Iqbal, 129 S.Ct. at 1950) (internal quotation marks omitted). That is, a complaint must do more than allege the entitlement to relief; its facts must show such an entitlement. Id. at 211. IV. Discussion Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 3 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 4 (A) Statute of Limitations A federal court applies the substantive law of its forum state in diversity actions, including statutes of limitations. Lafferty v. St. Riel, 495 F.3d 72, 76 (3d Cir.2007) (citing Guaranty Trust Co. v. York, 326 U.S. 99, 110, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945); Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)). Statutes of limitations “provide predictability by specifying a limit beyond which there is an irrebuttable presumption that a defendant's right to a fair trial has been prejudiced.” United States v. Marion, 404 U.S. 307, 322, 92 S.Ct. 455, 30 L.Ed.2d 468 (1971). The limitations period begin to run “as soon as the right to institute and maintain a suit arises.” Fine v. Checcio, 582 Pa. 253, 870 A.2d 850, 857 (Pa.2005) (citing Pocono Int'l Raceway, Inc. v. Pocono Produce, Inc., 503 Pa. 80, 468 A.2d 468, 471 (Pa.1983)). Defendant contends that the mineral lease is governed by the four-year limitations period applicable to contracts in Pennsylvania, citing 42 Pa. Con. Stat. Ann. § 5525. By defendant's argument, this four-year period expired almost a year before plaintiff filed its complaint (on January 26, 2011) because the action accrued on January 30, 2006, when the lease in question was executed. In support of this proposition, defendant cites McGaffic v. City of New Castle, 973 A.2d 1047, 1052 (Pa.Commw.2009). McGaffic is not apposite, however, as it merely repeated the well-established principle that a breachof-contract claim accrues on the date of the breach. Id. In the present case, plaintiff's claim is not that the January 30, 2006, lease was breached, but that it was void ab initio. *4 Plaintiff contends that § 5525 does not apply because a mineral lease conveys real property interests, and is not merely a contract for goods or services. Alternatively, plaintiff argues that even if the four-year statute of limitations applies, the statute was tolled because plaintiff did not discover the defect until the assignment of the lease on June 17, 2010, which makes the filing timely. Section 5525 generally provides the limitations period for oral and written contracts, judgments, and bonds. Although subsection (a)(1) of the statute refers only to contracts “for the sale ... of tangible personal property or fixtures,” subsection (a)(8) provides a catchall provision governing contracts not subject to another limitation period. 16 16 The statute provides: § 5525. Four year limitation (a) General rule. Except as provided for in subsection (b), the following actions and proceedings must be commenced within four years: (1) An action upon a contract, under seal or otherwise, for the sale, construction or furnishing of tangible personal property or fixtures. (2) Any action subject to 13 Pa.C.S. § 2725 (relating to statute of limitations in contracts for sale). (3) An action upon an express contract not founded upon an instrument in writing. (4) An action upon a contract implied in law, except an action subject to another limitation specified in this subchapter. (5) An action upon a judgment or decree of any court of the United States or of any state. (6) An action upon any official bond of a public official, officer or employee. (7) An action upon a negotiable or nonnegotiable bond, note or other similar instrument in writing. Where such an instrument is payable upon demand, the time within which an action on it must be commenced shall be computed from the later of either demand or any payment of principal of or interest on the instrument. (8) An action upon a contract, obligation or liability founded upon a writing not specified in paragraph (7), under seal or otherwise, except an action subject to another limitation specified in this subchapter. (b) Special provisions. An action subject to section 8315 (relating to damages in actions for identity theft) must be commenced within four years of the date of the offense or four years from the date of the discovery of the identity theft by the plaintiff. 42 Pa. Con. Stat. Ann. § 5525. Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 4 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 5 As discussed below, plaintiff's contention that the 2006 Kenmar-Bourbeau lease is not governed by contract law is incorrect. Accordingly, the four-year limitations period for contracts applies here under § 5525. However, the facts show that plaintiff had no interest in or rights affected by the lease until Kenmar's assignment on June 17, 2010. Under the “discovery rule,” the limitations period begins to run for a claim only when “the plaintiff knows or reasonably should know: (1) that he has been injured, and (2) that his injury has been caused by another party's conduct.” Romah v. Hygienic Sanitation Co., 705 A.2d 841, 857- 58 (Pa.Super.1997) (quoting Redenz ex rel. Redenz v. Rosenberg, 360 Pa.Super. 430, 520 A.2d 883, 885 (Pa.Super.1987). Accordingly, the complaint filed in January 2011 is well within the four-year limitations period. (B) Has plaintiff stated a claim that Kenmar's officers acted ultra vires in executing the lease? Defendant argues that plaintiff has failed to state a claim under Pennsylvania law for voiding the 2006 mineral lease. As noted above, two corporate officers signed the mineral lease in 2006, David K. Perthold, Kenmar's secretary, and Marvin Hamstra, Kenmar's treasurer. 17 Plaintiff makes no allegation that Perthold and Hamstra were not in fact officers of Kenmar on the date in question. The relevant allegations in the complaint in toto are as follows: 17 Oil and Gas Lease, Doc. 26-2, at 5, 8; Order for Payment, Doc. 26-2, at 9. 8. The Plaintiff avers that said Oil and Gas Lease, Exhibit “B” herein, is and was null and void, ab initio, for reasons set herein as follows: a) The Secretary and Treasurer of Kenmar executed the Lease by their own signatures and Corporate titles, but without any authorization by the Corporate membership which would allow these two individuals to execute any Leases; or b) The Kenmar Corporate By-Laws specifically state that neither of the two individuals signors (sic) with their respective corporate offices; had any authority to bind the Corporation in executing a Lease, nor was there a Corporate amendment to the By-Laws authorizing these two individuals, as Secretary and Treasurer, to bind the Corporation; or c) No meeting wherein this authority was granted, was held or was called, nor was any Corporate resolution voted upon to approve the same; or *5 d) The transfer of Oil and Gas Lease rights under this Lease, (Exhibit “B”), constituted a conveyance of a significant portion of the Corporate assets and/or land, and before the authorization to enter into this Lease can be given, requires the Non Profit Corporate Membership to approve same, which was never done; or e) The acknowledgment on the Lease itself is defective as the signature of only one of the parties who signed the Lease was acknowledged. 18 18 Complaint, Doc. 1, at 2-3. As is clear from reading the complaint, plaintiff alleges only that the Secretary and Treasurer lacked actual authority to bind the corporation. These allegations are based upon the internal regulations and by-laws of Kenmar concerning what constituted “corporate authorization” at the time of the lease. Defendant points out that under Pennsylvania's Nonprofit Corporation Law, 19 a corporation is bound by a contract when it is “signed by one or more officers or agents having actual or apparent authority to sign it,” regardless of limitations expressed in the corporation's articles or bylaws. 20 19 There is no dispute that Kenmar is a nonprofit corporation and therefore subject to the Nonprofit Corporation Law. 20 Title 15 Pa. Cons.Stat. Ann. § 5506(a) provides: (a) General rule.-Any form of execution provided in the articles or bylaws Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 5 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 6 to the contrary notwithstanding, any note, mortgage, evidence of indebtedness, contract or other document, or any assignment or endorsement thereof, executed or entered into between any nonprofit corporation and any other person, when signed by one or more officers or agents having actual or apparent authority to sign it, or by the president or vice-president and secretary or assistant secretary or treasurer or assistant treasurer of the corporation, shall be held to have been properly executed for and in behalf of the corporation. Plaintiff responds that § 5506 does not apply to conveyances of real property interests such as a mineral lease. Determining if plaintiff has stated a claim for relief comprises two subordinate questions: whether § 5506 applies and, if it does, whether plaintiff has otherwise stated a plausible claim that Kenmar's officers lacked actual or apparent authority to sign the lease. (1) Applicability of § 5506 There is no dispute that Kenmar is a nonprofit corporation subject to Pennsylvania's Nonprofit Corporation Law of 1988. 21 Plaintiff contends, however, that § 5506 of the Code does not apply because, under Pennsylvania law, a mineral lease is not a contract, but a transfer of a property interest requiring a deed or other conveyance of property. 21 15 Pa. Cons.Stat. Ann. § 5501 et seq. Kenmar's articles of incorporation state that it is a nonprofit whose corporate purposes are: “(1) To provide protection for wild game and to promote recreational hunting of wild game through the use of property owned by the Corporation” and “(2) To do and perform any and all things and acts necessary or appropriate to accomplish the foregoing.” Articles of Incorporation, Kenmar Hunting Club, Oct. 9, 2002, Doc. 12-1, at 2. Plaintiff's arguments are unsupported. First, under Pennsylvania law, a mineral lease is a contract that conveys property rights, and accordingly, both contract and property law apply. Hite v. Falcon Partners, 13 A.3d 942, 945 (Pa.Super.2011) (citing Jacobs v. CNG Transmission Corp., 332 F.Supp.2d 759, 772 (W.D.Pa.2004)). Contract law controls whether the instrument purporting to convey property rights does so validly; property law controls what happens to a right conveyed by a valid instrument. Explicit references to leases as contracts in Pennsylvania law date at least as far back as 1886 and continue to the present. Ford v. Buchanan, 111 Pa. 31, 2 A. 339, 340 (Pa.1886) (adjudicating a dispute relating to an oil and gas lease); Firetree, Ltd. v. Dep't of Gen. Servs., 978 A.2d 1067, 1073 (Pa.Commw.2009) (construing Pennsylvania's 1772 Statute of Frauds in the context of a “contract for the lease of property”)). The Pennsylvania legislature enacted § 5506 in 1972 and updated it in 2001; it was surely aware of the treatment of leases as contracts when it chose the wording for § 5506, and if the goal was to except mineral leases from the scope of § 5506, the legislature could have done so explicitly. As it is, § 5506 is written in broad, sweeping terms: it applies to “any note, mortgage, evidence of indebtedness, contract or other document.” Id. § 5506(a). There is no basis to read leases out of the statute when its wording indicates expansive intent. *6 Secondly, even if plaintiff were correct, a separate provision of the Nonprofit Corporation Law addresses conveyances of real estate in a similar fashion. Title 15 Pa. Cons.Stat. Ann. § 5503(b) provides: (b) Conveyances of property by or to a corporation.-A conveyance or transfer by or to a nonprofit corporation of property, real or personal, of any kind or description, shall not be invalid or fail because in making the conveyance or transfer, or in acquiring the property, real or personal, any representative of the corporation acting within the scope of the actual or apparent authority given to him by the corporation has exceeded any of the purposes or powers of the corporation. Under either of these provisions-one governing contracts and the other governing real estate transactions-the sole inquiry is whether the corporate representative was acting with actual or Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 6 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 7 apparent authority. The law is also clear under both of these provisions that the corporation's by- laws, “purposes or powers” are not relevant to this determination. 22 22 Title 15 Pa. Cons.Stat. Ann. § 5503(b). Finally, even if violation of Kenmar's by-laws could serve as the basis of plaintiff's claim, plaintiff lacks standing to make this argument. An additional provision of the Pa. Nonprofit Corporation Law states: § 5505. Persons bound by bylaws Except as otherwise provided by section 5713 (relating to personal liability of directors) or any similar provision of law, bylaws of a nonprofit corporation shall operate only as regulations among the members, directors, members of an other body and officers of the corporation, and shall not affect contracts or other dealings with other persons, unless those persons have actual knowledge of the bylaws. 15 Pa.C.S.A. § 5505 (emphasis supplied). 23 23 See Defendant's Reply Brief, Doc. 19, at 5. For the foregoing reasons, plaintiff cannot rely upon Kenmar's by-laws, corporate policies or regulations as a basis to challenge the lease. The sole inquiry is whether plaintiff has otherwise stated a claim that the corporate representatives were acting without actual or apparent authority. (2) Actual or apparent authority As noted above, plaintiff's complaint alleges only an absence of actual authority, not apparent authority. Furthermore, even if read more broadly, plaintiff's claims are based solely upon Kenmar's by-laws and corporate policies, which is prohibited under Pennsylvania law. 24 24 Defendant further contends that even if plaintiff had standing, and even if the bylaws affected contracts with third parties, Kenmar's bylaws do not limit the authority of the secretary and treasurer to sign contracts for Kenmar. See By-Laws of the Kenmar Hunting Club, Doc. 12-1, at 4, 10. This argument need not be addressed in light of the conclusions regarding relevance of the by- laws. An agent may obtain the power to act on a principal's behalf if the principal grants the agent either actual or apparent authority. Actual, express authority “exists where the principal directly states that an agent has the authority to perform a particular act on the principal's behalf.” Jones v. Van Norman, 513 Pa. 572, 522 A.2d 503, 511 (Pa.1987) (citing Hartley v. Robena Local Union No. 6321, 381 Pa. 430, 113 A.2d 239 (Pa.1955)). An agent has apparent authority to bind the principal when the principal has not actually granted that power, but “leads persons with whom his agent deals to believe that he has.” Revere Press, Inc. v. Blumberg, 431 Pa. 370, 246 A.2d 407, 410 (Pa.1968). *7 While plaintiff contends that Perthold and Hamstra lacked authority to bind Kenmar in the 2006 lease, plaintiff alleges no facts to support these allegations other than Kenmar's own by-laws. When facing a Rule 12(b)(6) motion, a plaintiff must do more than present “bald assertions” and “legal conclusions.” In re Burlington Coat Factory Secs. Litig., 114 F.3d 1410, 1429-30 (3d Cir.1997) (citing Glassman v. Computervision Corp., 90 F.3d 617, 628 (1st Cir.1996)). Plaintiffs must nudge their claims “across the line from conceivable to plausible.” Id. at 570. See also Phillips v. County of Allegheny, 515 F.3d 224, 232 (3d Cir.2008) (reviewing Twombly ). Considering the foregoing, it is recommended that the motion to dismiss be GRANTED. (C) Ratification Defendant alternatively seeks dismissal on grounds that Kenmar ratified the lease. This issue need not be reached if the Court concurs with the Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 7 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 8 recommendation above. It is addressed for the sake of completeness. Defendant argues that Kenmar ratified the 2006 lease: (1) by accepting $14,000 from Bourbeau in consideration for executing the lease; (2) by failing to repudiate the lease within a reasonable time; and 3) by admitting the validity of the lease in the assignment to Pinebrook in 2010. A corporation is estopped from arguing that an officer acted ultra vires in executing a contract when the corporation has received and enjoyed benefits of the contract. Lokay v. Lehigh Valley Coop. Farmers, Inc., 342 Pa.Super. 89, 492 A.2d 405, 409 (Pa.Super.1985); McGuire, 904 A.2d at 978 (concluding that treatment of a bargain as valid may constitute ratification by passive acquiescence). “Ratification has generally been defined as the adoption or confirmation of a prior act performed on the principal's behalf by an agent lacking authority to bind the principal.” CNA Ins. Grp. v. Nationwide Mut. Ins. Co., Nos. 98-1962, 99- 3876, 2000 WL 288241, at *4 (E.D.Pa. Mar.8, 2000) (citing 12 Richard A. Lord, Williston on Contracts § 35:22 (4th ed.1999)). A principal may ratify an unauthorized act of its agent by either formal action or passive acquiescence. McGuire Performance Solutions, Inc. v. Massengill, 904 A.2d 971, 978 (Pa.Super.2006) (quoting Collins v. Parkton Compound Boiler Co., 195 Pa.Super. 364, 171 A.2d 576, 579 (Pa.Super.1961)). In order to ratify an agent's act, a principal “must have full knowledge of the material facts and circumstances attending the act.” Shields v. Hitchman, 251 Pa. 455, 96 A. 1039, 1041 (Pa.1916) (citing Pittsburgh & S.R. Co. v. Gazzam, 32 Pa. 340 (1858)). The documents show that Kenmar was to receive $14,000 from Bourbeau in consideration of the 2006 mineral lease, and royalties payable at the rate of 1/8 “the market value at the well.” 25 However, there is nothing before the court to establish whether Kenmar actually received the $14,000 or any royalties from production under the lease. Plaintiff did not brief this issue. While defendant is currently the lessee with exploration and production rights, and presumably has information regarding any royalties paid to Kenmar, nothing was submitted to the court. Without more conclusive factual information, dismissal on this argument is not supported. 25 Oil and Gas Lease, Doc. 26-2, at 5. *8 Defendant also argues that when Pinebrook accepted Kenmar's interest in the lease in the “Assignment of Oil and Gas Lease” in June 2010, Pinebrook admitted by specific terms of the contract that the 2006 lease to Bourbeau/ Anadarko was valid. The assignment acknowledges that the original lessee, Bourbeau had assigned its rights to Anadarko. 26 The document also states that by entering into that assignment, Pinebrook “assume[d] and agree[d] to be bound by all of [Kenmar's] obligations under the [2006 lease],” and warranted that the 2006 lease “is now in good standing and in full force and effect.” 27 Again, plaintiff does not address this issue in its brief. 26 Assignment of Oil and Gas Lease, Kenmar Hunting Club-Pinebrook Minerals, LLC- Anadarka Petroleum Corporation, Doc. 26-2, at 10. 27 Id. In support of its argument, defendant cites only Federal Rule of Evidence 803(d)(2). The validity of a contract is a question of law, which it is the court's sole province to answer. Accordingly, the statements in the June 2010 assignment do not constitute binding judicial admissions and do not determine the outcome of this case. Parlette v. Palumbo, 68 Pa. D. & C. 374, 378, 1949 WL 3195, at *3 (1949). See also Chatton v. Nat'l Union Fire Ins. Co., 10 Cal.App.4th 846, 13 Cal.Rptr.2d 318, 331 (Cal.App.1992) (evidence that insurer admitted liability was irrelevant in determining liability because liability turned on interpretation of the insurance contract, which was a question of law); Tritsch v. Ayer Tanning Co., 316 Mass. 598, 56 N.E.2d 11, 13 (Mass.1944) (admission in testimony that certain correspondence constituted an entire contract did not bear on the legal question of what the contract was); DeMars v. Carlstrom, 285 Mont. 334, 948 P.2d 246, 249 (Mont.1997) (“For Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 8 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 9 a judicial admission to be binding upon a party, the admission must be one of fact rather than a conclusion of law ....” (citing Larson v. A. T.S.I., 859 P.2d 273, 275-76 (Colo.App.1993))). Accordingly, an order of dismissal is not appropriate on this ground. (D) Kenmar as a necessary party The court need only address this issue if defendant's motion to dismiss is denied. Defendant argues that if its motion to dismiss is denied, Kenmar must be joined as a necessary party in this action because Kenmar was the original party to, and received payments under, the 2006 lease. Defendant asserts that Kenmar has a material interest in this matter: “if the court were to unwind the Lease from its inception, then Kenmar would necessarily be forced to return all consideration received under the Lease ... [and] to the extent that the Lease were to be voided without Kenmar being a party to this case and bound by the decision, defendant Anadarko would face the potential risk of inconsistent determinations if it were forced to pursue the return of this consideration in a separate action.” 28 28 Doc. 9, at 12-13. Plaintiff opposes joinder, suggesting it would destroy diversity, although this would only be true if Kenmar were joined as a defendant. Plaintiff further argues, without elaboration or citation, that the dispute only involves the lease and the parties before the court. 29 29 Doc. 12, at 8. *9 Federal Rule of Civil Procedure 19 governs required joinder of parties. Analysis under Rule 19 is a two-step process: first, “the court must determine if the absent party is ‘necessary’ under Rule 19(a);” and second, “if the party is ‘necessary’ and joinder is not feasible, then the court must decide whether the party is ‘indispensable’ under Rule 19(b).” Tellett Prebon PLC v. BGC Partners, Inc., No. 10-3143, 2011 WL 1831590, at *2 (3d Cir. May 13, 2011) (citing Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 312 (3d Cir.2007)). It is noted that joinder is “feasible” since Kenmar is a Pennsylvania corporation, and directing its joinder as an involuntary plaintiff would not affect the Court's diversity jurisdiction over the case. As discussed below, Kenmar is aligned with plaintiff. Rule 19 states in pertinent part: Rule 19. Required Joinder of Parties (a) Persons Required to Be Joined if Feasible. (1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party 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 obligations because of the interest. (2) Joinder by Court Order. If a person has not been joined as required, the court must order that the person be made a party. A person who refuses to join as a plaintiff may be made either a defendant or, in a proper case, an involuntary plaintiff A this juncture, the only relief requested is a declaratory judgment voiding a mineral lease. The parties include both the lessor and mineral fee owner (Pinebrook), and the lessee (Anadarko). It Case 1:16-cv-01823-JEJ Document 25-3 iled 06/22/17 Page 9 of 10 Pinebrook Minerals, LLC v. Anadarko E & P Co., LP, Not Reported in F.Supp.2d (2011) 2011 WL 3584783 © 2017 Thomson Reuters. No claim to original U.S. Government Works. 10 appears that the court could “accord complete relief” among existing parties under Rule 19(a) (1)(A). However, the issue remains whether non-joinder will result in a “substantial risk of incurring double, multiple, or otherwise inconsistent obligations” as argued by defendant. Kenmar obviously has not joined the suit voluntarily, although the record shows that Kenmar is aligned with plaintiff and has made independent efforts to invalidate the lease. On November 10, 2010 (prior to the mineral deed to Pinebrook), an attorney for the same law firm which represents plaintiff in this matter sent a letter to Anadarko on behalf of Kenmar stating that during a “review of all of the corporate records,” counsel “noticed that the secretary and treasurer of the club executed the [2006 oil and gas] lease,” but that “neither of the two individuals in the corporate office had any authority to bind the corporation.” 30 This letter expounds exactly the same claims as the instant suit. It is noted that Kenmar's letter was dated after its lease/ royalty assignment in favor of Pinebrook but before execution of the mineral deed. Clearly, at this juncture, Pinebrook was not in a position to so challenge the validity of the 2006 lease, because it was then receiving its benefits per the assignment. It was only after execution of the mineral deed in its favor that Pinebrook sought to invalidate the lease. 30 Letter from John F. Spall, Esq., Spall, Rydezwski, Anderson, Lalley & Tunis, P.C., to Christopher Martin, Anadarko Petroleum Corp. (Nov. 10, 2010), Doc. 19, at 16-17. *10 The facts presented confirm the interconnected nature of the dispute. The original lessee, Bourbeau, apparently paid Kenmar $14,000 for the lease. 31 Kenmar may or may not have received royalties under the lease from Bourbeau and/or its assignee, Anadarko. While Kenmar has now deeded all of its oil and gas rights in the 560- acre property to Pinebrook, Kenmar remains the property owner, and recipient of previous benefits of the lease. Furthermore, the mineral deed is “subject to any rights now existing to any lessee ... under any valid and subsisting oil and gas lease.” 32 31 Order for Payment, Kenmar Hunting Club- Jim Bourbeau Land Service LLC, February 2, 2006, Doc. 26-2, at 9 32 Mineral Deed, Kenmark Hunting Club- Pinebrook Minerals, LLC, Doc. 26-2, at 1. Under these circumstances, joinder is both feasible and necessary. Joinder of Kenmar as an involuntary plaintiff would not destroy diversity jurisdiction. Before refusing a feasible joinder in this case, the court must be able to conclude that complete relief could be accorded to the parties in Kenmar's absence. Amboy Bancorporation v. Bank Advisory Grp., Inc., 2011 WL 1533012, at *8 (3d Cir.2011) (distinguishing General Refractories Co. v. First State Insurance Co., 500 F.3d 306 (3d Cir.2007) which denied joinder of absent insurers where there was joint and several liability and the court “could grant complete relief to the insured from any insurer that was a party to the action.” Id.) Should the court invalidate the lease ab initio, there is a substantial risk that Anadarko will incur “double, multiple, or otherwise inconsistent obligations” in pursuing remedies against Kenmar. Accordingly, it is recommended that if dismissal is denied, the court should join Kenmar as an involuntary plaintiff. IV. Conclusion Based on the foregoing discussion, it is recommended that this Court GRANT defendant's motion to dismiss. Alternatively, if dismissal is denied, it is recommended that the court join Kenmar as an involuntary plaintiff. All Citations Not Reported in F.Supp.2d, 2011 WL 3584783 End of Document © 2017 Thomson Reuters. No claim to original U.S. Government Works. Case 1:16-cv-01823-JEJ Document 25-3 Filed 06/22/17 Page 10 of 10