FRANCISCO A. BESOSA, District Judge.
This case began when Integrand Assurance Co. ("Integrand"), an insurer, filed suit against Puma Energy Caribe, LLC ("Puma"), its insured.
Puma also filed a document, styled as a third-party complaint pursuant to Federal Rule of Civil Procedure 14(a), against a group of reinsurers. (Docket No. 24.) These reinsurers are Everest Reinsurance Co. ("Everest"), Odyssey Reinsurance Co. ("Odyssey"), Swiss Reinsurance America Corp. Armonk ("Swiss"), Catlin (XL Catlin) Underwriting Inc., Miami on behalf of Lloyd's Syndicate 2003, London ("Catlin"), Allied World Reinsurance Management Co. for and on behalf of Lloyd's Syndicate 2232, London ("Allied World"), MS Amlin P/C ("Amlin"), Aspen Insurance UK Limited Trading as Aspen Re London, England ("Aspen"), and Liberty Specialty Services Ltd. LIB 4472, Paris Office Underwriting for and on behalf of Lloyd's Syndicate No. 4472 ("Liberty").
For the reasons discussed below, the reinsurers' motions to dismiss are
In its complaint, Integrand generally alleges that Puma committed fraud and misrepresentations in an insurance claim submitted to Integrand.
Puma counterclaims. (Docket No. 12 at p. 9.) According to Puma, Integrand has improperly refused to pay Puma's claim.
In addition, Puma filed a motion for judgment on the pleadings. (Docket No. 43.) In the motion, Puma seeks dismissal of Integrand's complaint based on an asserted failure to plead fraud with specificity.
Puma further moves to dismiss Integrand's complaint because of a failure to comply with this Court's order. (Docket No. 64.) Puma notes that, on September 3, 2019, the Court gave Puma until September 30, 2019 to appoint new counsel or risk dismissal of its complaint without prejudice. (Docket No. 45.)
Puma also brings what it terms a third-party complaint against the reinsurers pursuant to Federal Rule of Civil Procedure 14(a). (Docket No. 24 at p. 2.) According to Puma, the reinsurers have collusively breached their reinsurance agreements with Integrand and failed to pay Integrand.
The reinsurers seek dismissal. (Docket Nos. 50, 60, 66, 67, 78.) They raise powerful points in favor of dismissal, including that: (i) generally, a reinsurance agreement involves no privity between the reinsurer and the original insured absent a special undertaking to assume a direct liability to the original insured; (ii) there was no such undertaking in this case; (iii) Puma does not have standing to assert the rights of a third party (Integrand); (iv) the reinsurance agreements mandate any disputes arising thereunder must be arbitrated; (v) Federal Rule of Civil Procedure 14(a) is not a proper means for Puma to assert its claims; and (vi) Puma did not comply with the requirements of Rule 14(a).
Puma erroneously seeks to implead the reinsurers pursuant to Federal Rule of Civil Procedure 14(a).
Puma's mislabeling of its claim is not, on its own, a basis for dismissal. "If a pleading states a claim upon which relief may be granted and puts the party against which it is asserted on notice of the claim, the fact that the pleading may be incorrectly labeled is not fatal to the claim."
According to Rule 13(h), "Rules 19 and 20 govern the addition of a person as a party to a counterclaim or crossclaim." Fed. R. Civ. P. 13(h). But,
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Additionally, Puma cannot simply join the reinsurers pursuant to Rule 20. Defendants cannot invoke Rule 20 outside the context of a counterclaim or crossclaim.
Finally, Rule 19 provides that a person must be joined as a party if certain conditions are met. Fed. R. Civ. P. 19. But these conditions are not met here. The Court can accord complete relief among Integrand and Puma on the claims in the main action in the absence of the reinsurers, and the reinsurers do not claim an interest relating to the subject of the main action.
Thus, there is no procedural vehicle by which Puma can join the reinsurers to assert its claims against them. Puma's self-styled third-party complaint, (Docket No. 24,) is
Catlin, Amlin, Aspen, and Liberty argue they are entitled to attorney fees. (Docket No. 50 at pp. 17-19.) They note that, before filing their motion to dismiss, they told Puma of their arguments for dismissal, invited a discussion and an exchange of information or documents, and asked Puma to voluntarily dismiss its self-styled third-party complaint.
Puma's self-styled third-party complaint and filings in opposition to the reinsurers' motions to dismiss come close to obstinance or frivolity.
The Court does not believe, however, that Puma's actions rise to the level of being "unreasonably adamant or stubbornly litigious, beyond the acceptable demands of the litigation."
This case was stayed until August 29, 2019 pursuant to the Rehabilitation Order entered by the Commonwealth Court in case number SJ2019CV05526(504) styled
On September 3, 2019, Integrand moved to withdraw attorneys José Antonio Fusté and Eduardo Cobián-Roig. (Docket No. 44.) Integrand noted that its attorneys are "impeded to continue representing Integrand . . . in any matter related to the insurance policy subscribed by said insured, such as the case at hand" because of a rehabilitation procedure ordered against Integrand.
The Court granted the motion to withdraw on the same day. (Docket No. 45.) The Court further stated, "Counsel will inform the rehabilitator that if new counsel is not appointed by September 30, 2019, this case will be dismissed without prejudice."
New counsel did not appear for Integrand by September 30, 2019. Even to date, new counsel has not yet appeared.
On October 1, 2019, Puma moved to dismiss Integrand's complaint for failure to comply with the September 3 order. (Docket No. 64.) Puma stated, "While we are aware that Integrand's management and ownership is in the midst of a bitter dispute with the Insurance Commissioner, we are also aware that the rehabilitator has appointed counsel in other cases and has appeared. But not in this case."
The Court extends the deadline for new counsel to appear for Integrand to January 17, 2020. No further extensions will be allowed. If counsel for Integrand does not appear by that date, its complaint shall be dismissed without prejudice. Accordingly, Puma's motion to dismiss, (Docket No. 64,) is
Puma moves for judgment on the pleadings on the grounds that Integrand failed to satisfy the pleading requirements for alleging fraud pursuant to Federal Rule of Civil Procedure 9(b). (Docket No. 43 at p. 10.) According to Puma, "Integrand has failed to specify matters such as the time, place, and contents of the allegedly false representations or omissions, as well as the identity of the person making the misrepresentation or failing to make a complete disclosure and what that defendant obtained thereby."
Integrand has not responded to Puma's motion. Puma's motion was filed three days before attorneys Fusté and Roig withdrew.
Because the Court extends the time for new counsel for Integrand to appear, the Court will not at this time consider Puma's motion for judgment on the pleadings. Should new counsel for Integrand appear by January 17, 2020, Integrand will have fourteen days from the date of such appearance to respond to Puma's motion for judgment on the pleadings.
Puma's self-styled third-party complaint against the reinsurers, (Docket No. 24,) is
Judgment shall be entered dismissing Puma's third-party complaint without prejudice.