United States District Court, S.D. Florida, Miami Division
ORDER GRANTING MOTION TO JOIN PLAINTIFF
CASTILLO'S LESSOR UNDER RULE 19
FEDERICO A. MORENO, UNITED STATES DISTRICT JUDGE
case presents the following question: whether a Lessor
Liability Endorsement in Plaintiffs' automobile insurance
policies provides insurance at all, or whether they are
illusory. Plaintiffs maintain that the Graves Amendment, 29
U.S.C. § 30106, forecloses the possibility of lessor
liability and therefore, the Endorsement constitutes no
insurance coverage. Defendant vehemently disagrees. The Court
previously denied Defendants' Motion to Dismiss because
Plaintiff Hallums's well-pleaded factual allegations
plausibly stated an entitlement to relief. Defendants now
seek to dismiss the Complaint pursuant to Federal Rule of
Civil Procedure 12(b)(7) or alternatively, to join Plaintiff
Castillo's lessor under Federal Rule of Civil Procedure
19. Plaintiff Castillo's lessor should be joined as a
party pursuant to Federal Rule of Civil Procedure 19 because
they have a legally protected interest in this action and
joining the lessor will not defeat the Court's subject
12(b)(7) Motion to Dismiss
first argue that the Complaint should be dismissed, pursuant
to Federal Rule of Civil Procedure 12(b)(7), for failure to
join an indispensable party-Plaintiff Castillo's
under Rule 12(b)(7) is a "two-step inquiry."
State Farm Mut. Auto Ins. Co. v. Performance Orthopaedics
& Neurosurgery, LLC, No. 17-20028, 2017 WL 4270620,
at * 18 (S.D. Fla. Sep. 25, 2017) (quoting Molinos Valle
Del Cibao, C. por A. v. Lama, 633 F.3d 1330, 1344 (11th
Cir. 2011)). First, Defendants must establish that
Castillo's lessor is a "required" party as
defined by Federal Rule of Civil Procedure 19(a).
Id. An absent party is generally not required
because it would be convenient for the resolution of the
dispute, Clay v. AIG Aerospace Ins. Servs., Inc., 61
F.Supp.3d 1255, 1266 (M.D. Fla. 2014), instead an absent
party is required where (1) the Court cannot accord complete
relief among the existing parties; (2) prejudice would result
to the absent party's ability to protect itself in the
instant action; or (3) the nonparty's absence would
create a substantial risk that the existing parties would
incur consistent or duplicative obligations. Raimbeault
v. Accurate Mach. & Tool, LLC, 302 F.R.D. 675,
682-83 (S.D. Fla. 2014).
if the absent party is required, the Court must order that
party joined if feasible, i.e., if joinder would not
deprive the Court of subject matter jurisdiction.
Id. at 682; see also Fed. R. Civ. P.
19(a)(2). If the nonparty cannot be joined, the Court must
analyze the factors in Rule 19(b) to determine whether
"in equity and good conscience the action should proceed
among the parties before it, or should be dismissed, the
absent person thus regarded as indispensable."
Campania Chilena De Navegacion Interoceanica, S.A. v.
D.H.C. Trucking, Inc., No. 15-22494, 2016 WL 1722425, at
*3 (S.D. Fla. Apr. 29, 2016).
require joinder of Castillo's lessor under Rule 19,
Defendants must establish that the lessor claims an interest
relating to the subject of this action, and is so situated
that disposing of the action in its absence may, (i) impair
or impede its ability to protect its interest or (ii) leave
Defendants subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations because of
the lessor's interest. Fed.R.Civ.P. 19(a)(1)(b). The
Court finds that Defendants have met their burden.
crux of Defendants' argument is that joining
Castillo's lessor is the only way to protect the
lessor's interest in the coverage provided by the
Endorsement in Castillo's insurance policy.
Plaintiffs' counter that the Endorsement is not an
enforceable contract because it is "not insurance,
" and therefore, a lessor should not be joined because
they are not a party to an enforceable contract. See
D.E. 51 at 2 ("Simply, Defendants cannot establish that
there is an insured under the Rider without first showing
that the Rider is insurance, a task in which they already
failed."). Plaintiffs' argument presupposes that the
Court has found the Endorsement to be illusory. To date, the
Court has made no such ruling. In denying Defendants'
Motion to Dismiss, the Court simply ruled that, viewing the
facts in the light most favorable to Plaintiff Hallums, and
taking all well-pleaded factual allegations as true,
Plaintiff had adequately pleaded a plausible entitlement to
maintain that Castillo's lessor is a required party
because they are the named insured in the Endorsement, and
therefore, they have a legally protected interest related to
whether the Endorsement should be enjoined or declared
illusory. In addition, Defendants suggest the lessor has an
interest in maintaining the Endorsement so that: (i) the
lease terms are honored; (ii) they are able to be defended in
any action against them arising out of an accident involving
one of their leased vehicles; (iii) they can be indemnified
against any loss arising from an accident; and (iv) so that
the leased vehicles are protected against property damage
claims. Assuming arguendo that the Endorsement was
deemed illusory, then Castillo's lessor would surely have
a legally protected interest in exercising any contractual
rights afforded to it under the Endorsement, as well as
taking other steps to mitigate its liability.
Castillo's lessor is a party to the Endorsement contract.
See Raimbeault, 302 F.R.D. at 684 ("In cases
challenging the enforceability or validity of a contract,
joinder of all parties to that contract will typically be
required . . . because the absent contract party has a
legally protected interest in the outcome of the
litigation."). The presently absent lessor is a named
insured in the Endorsement, a contract between Plaintiff
Castillo and Defendants. A ruling on the Endorsement's
legality will undoubtedly affect the contract between
Castillo and his lessor, and all other Plaintiffs in this
putative class action, and their lessors.
Plaintiffs suggest, the Court deferred on joining a nonparty
until the merits of the Endorsement's viability were
adjudicated, the Court would ostensibly never join a party
pursuant to Rule 19, because the nonparty's interest
would only ripen once the case had been fully litigated. At
that point, it would be too late and the nonparty's
ability to protect itself would have been substantially
impaired. The question before the Court is whether Defendants
have met their burden of showing that Castillo's lessor
has a legally protected interest in ...