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Re: Louis Diodato Iii v. Connecticut General Life Insurance Co.

January 5, 2011

RE: LOUIS DIODATO III
v.
CONNECTICUT GENERAL LIFE INSURANCE CO., ET AL.



The opinion of the court was delivered by: Tonianne J. Bongiovanni United States Magistrate Judge

(609) 989-2040 CHAMBERS OF U.S. COURTHOUSE TONIANNE J. BONGIOVANNI 402 E. STATE STREET, RM 6052 TRENTON, NJ 08608 UNITED STATES MAGISTRATE JUDGE

LETTER OPINION AND ORDER

Dear Counsel: Pending before the Court is Plaintiff's motion for leave to file a Second Amended Complaint. In the motion, Plaintiff seeks leave to join his former attorneys, Thomas DiChiara, Esq., and Drazin and Warshaw, a Professional Corporation, as defendants in this matter. This is Plaintiff's second attempt to name his former attorneys as defendants. Plaintiff's first attempt failed with the Court finding that the joinder of Plaintiff's former attorney's was neither warranted under New Jersey's Entire Controversy Doctrine nor under FED.R.CIV.P. 20. (See 7/13/10 Order; Docket Entry No. 36). In the instant motion, Plaintiff again argues that joinder of his former attorneys is necessary under New Jersey's Entire Controversy Doctrine. Plaintiff also argues that permissive joinder is now warranted under Rule 20(a)(2), given Defendants SMA Services, Inc. and Standard Insurance Company's (collectively, "Defendants") newly added failure to mitigate defenses. Defendants oppose Plaintiff's motion for leave to file a Second Amended Complaint. The Court has reviewed all arguments made in support of and in opposition to Plaintiff's motion and considers same without oral argument pursuant to FED.R.CIV.P. 78. For the reasons set forth more fully below, Plaintiff's motion is GRANTED.

I. Facts and Procedural History

The relevant facts and procedural history are set forth in the Court's July 13, 2010 Order and are not repeated herein. The Court does add that on the same day it entered the July 13, 2010 Order granting in part and denying in part Plaintiff's motion to amend the Complaint, the Court also entered Orders permitting Defendants to amend their Answers in order to assert additional defenses including a failure to mitigate defense. (See 7/13/10 Orders, Docket Entry Nos. 34 & 35).

II. Argument

Plaintiff argues that he should be permitted to join his former attorneys both because their joinder is necessary under New Jersey's Entire Controversy Doctrine and because their joinder is now warranted under the permissive joinder standard set forth in Rule 20. With respect to New Jersey's Entire Controversy Doctrine, Plaintiff claims that the holding in Keltic Financial Partners, LP v. Krovatin, Civ. No. 05-4324 (JAP), 2007 WL 1038496 (D.N.J. March 30, 2007), suggests that Plaintiff's malpractice claim against his former attorneys may be barred if they are not joined in this litigation.

Further, Plaintiff contends that joinder of his former attorneys is now appropriate under Rule 20 given Defendants' new failure to mitigate defenses, which, as made clear by Defendants' responses to Plaintiff's Third Set of Interrogatories, are based on Plaintiff's failure to file a complaint against Connecticut General Life Insurance Company ("CGLIC") within the statute of limitations. In this regard, Plaintiff argues that Defendants' new failure to mitigate defenses bring "the same occurrence into issue as that sought to be asserted by plaintiff in his proposed malpractice claims, i.e., the failure to file a complaint against CGLIC within the statue of limitations period." (Pl. Br. at 4). Likewise, Plaintiff argues that the Defendants' addition of their new failure to mitigate defenses also creates a question of fact common to said defenses and Plaintiff's proposed malpractice claim against his former attorneys, "i.e., whether plaintiff's action against CGLIC would have been successful." (Id. at 5). In addition, Plaintiff argues that it would have been premature to have argued that the failure to mitigate defense established the "same . . . occurrence" required for permissive joinder under Rule 20(a), i.e., the failure to timely file an action against CGLIC, before Defendants were granted permission to and in fact filed their Amended Answers including this defense. Indeed, Plaintiff claims that "[u]ntil the court granted defendants leave to amend their Answers and the Amended Answers were filed, responsibility for the failure to bring an action against CGLIC within the statutory limitations period was not at issue between plaintiff and defendants." (Pl. Reply at 1). Plaintiff also argues that he is not at fault for any delay or additional expense caused by the joinder of his former attorneys, including the need to reopen discovery or remand the case back to state court, because it was not until Defendants added their failure to mitigate defenses that Plaintiff's failure to timely file an action against CGLIC was brought into issue, making permissive joinder under Rule 20 appropriate.

Defendants oppose Plaintiff's motion, arguing that joinder of Plaintiff's former attorneys is not warranted. Defendants claim that nothing has changed since the Court entered its July 13, 2010 Order denying Plaintiff's request to join his former attorneys as defendants in this action. In this regard, Defendants note that the Court has already dispelled Plaintiff's claim that New Jersey's Entire Controversy Doctrine might bar a separate legal malpractice lawsuit brought against his former attorneys.*fn1 Similarly, Defendants argue that the Court has already dispensed with Plaintiff's claim that his former attorneys should be joined under Rule 20. Defendants claim that their responses to Plaintiff's interrogatories regarding the factual basis for Defendants' failure to mitigate defenses, which were served on September 3, 2010, add nothing new because in their motions to file amended answers, which were filed on June 11, 2010, Defendants clearly disclosed that the factual basis for said defenses was Plaintiff's "failure to timely appeal the denial of coverage from CGLIC[.]" (Def. Opp. Br. at 5 (quoting Defendant Standard Insurance Company's Motion For Leave To File An Amended Answer [Docket # 29-1], filed June 11, 2010)). Defendants claim that when the Court issued its July 13, 2010 Order denying Plaintiff's request to join his former attorneys as defendants in this action, the Court and all of the parties knew the factual basis for Defendants' failure to mitigate defenses and, consequently, "[n]othing has changed . . . to warrant [the Court] reversing itself on the question of plaintiff adding legal malpractice claims to his case." (Id.)

Further, Defendants argue that "[t]here are no common issues of fact or law between the plaintiff's negligence claims against his former counsel . . . and his negligence claims against the current defendants[.]" (Id.) Indeed, Defendants claim that the former raises "questions of whether there was a duty to advise plaintiff of the statute of limitations and whether that advice was in fact given" while the latter raises "questions of whether plaintiff had proper notice of the change in insurers of his group disability coverage[.]" (Id.) In addition, Defendants argue that the facts supporting their failure to mitigate defenses are undisputed and consist of (1) Plaintiff's claim that he was continuously disabled under the CGLIC policy and (2) the fact that his claims against CGLIC were dismissed for failure to timely prosecute them.

Defendants also claim that permitting Plaintiff to join his former attorneys at this juncture would result in undue delay. In this regard, Defendants note that Plaintiff filed the instant motion to amend well outside of the deadline for filing such motions set in the Court's Pretrial Scheduling Order and that discovery was set to close in a matter of weeks. Further, Defendants note that the Court in its July 13, 2010 Order already determined that "'permitting Plaintiff to amend the Complaint to add additional defendants at this point in Discovery will create undue prejudice to Defendants by burdening Defendants with additional expenses.'" (Id. at 6 (quoting 7/13/10 Order at 6)).

III. Analysis

A. Permissive Joinder

Pursuant to Rule 20(a)(2), "[p]ersons . . . may be joined in one action as defendants if: (A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action." The terms transaction and occurrence are "construed generously to promote judicial economy." Schindler Elevator Corp. v. Otis Elevator Co., Civil Action No. 09-560 (DMC), 2009 WL 1351578, *2 (D.N.J. May 14, 2009). Indeed, "[t]he Supreme Court has expressed a policy that strongly encourages joinder consistent with fairness to the parties." Bell v. Lockheed Martin Corp., Civil No. 08-6292 (RBK/AMD), 2010 WL 3724271, *12 (D.N.J. Sept. 15, 2010) (citing United Mine Workers of America v. Gibbs, 383 U.S. 715, 724, 86 ...


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