Allen v. Barulich, Dugoni, and Suttmann Law Group, Inc.

Background

Four current or former employees of Barulich, Dugoni, and Suttmann Law Group, Inc. (BDS)—Janelle Allen, Sara Burton, Christie Orozco, and Royall Walters—sued BDS under the Americans with Disabilities Act and the California Fair Employment and Housing Act. They alleged that construction work on the floor above BDS’s offices caused dust, debris, smoke odors, and unsafe air conditions. They claimed that the resulting health problems included asthma attacks, ear infections, and upper-respiratory infections, and that BDS refused requested accommodations, including working from home or wearing respiratory masks. Allen also alleged that BDS failed to pay all wages owed when she resigned.

BDS filed a complaint against D.A. Pope, the company performing the construction work. BDS asserted claims for negligence, nuisance, and implied indemnity, alleging that D.A. Pope allowed construction dust and debris to migrate into BDS’s offices and did not take steps to prevent it.

Rule 14 and Third-Party Claims

Federal Rule of Civil Procedure 14 allows a defending party to bring in a nonparty that is or may be liable to the defending party for all or part of the original plaintiff’s claim. The court explained that this requires derivative or secondary liability: the third-party claim must seek to transfer to the third party the liability asserted by the original plaintiff. A claim that merely arises from the same events is not enough.

Although BDS called its filing a “cross-complaint,” the court treated it as a third-party complaint because BDS did not assert claims against any original defendant. The court rejected BDS’s argument that the construction activities and the employees’ workplace injuries made its claims proper under Rule 14. The employees’ claims against BDS concerned BDS’s alleged failure to provide reasonable accommodations and, for Allen, unpaid wages. BDS’s negligence and nuisance claims against D.A. Pope did not seek to transfer those employment-related liabilities to D.A. Pope.

The court also ruled that BDS’s implied-indemnity claim did not support a third-party complaint at that stage. Under the law discussed in the opinion, implied indemnity does not arise until the party seeking indemnity has suffered an actual loss through payment. BDS had not paid the plaintiffs for their claims.

The court also rejected BDS’s argument that Federal Rule of Civil Procedure 20 allowed joinder. That rule permits certain parties to be joined when relief is sought against them jointly, separately, or alternatively based on related events. The court found that the plaintiffs did not seek relief against BDS and D.A. Pope jointly, separately, or alternatively.

Disposition

The court granted D.A. Pope’s motion to dismiss. The dismissal was without prejudice to BDS asserting any claims it might have against D.A. Pope in another proceeding. The court also stated that, if BDS believed it could plead a valid Rule 14 third-party complaint, it could file a motion for leave to amend within 14 days, with a marked comparison showing the proposed changes.