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Miesen v. Henderson
United States District Court, D. Idaho
August 8, 2018
DALE L. MIESEN, an individual who is a shareholder and who is also bringing this action on behalf of and/or in the right of AIA Services Corporation and its wholly owned subsidiary AIA Insurance, Inc.; Plaintiff,
CONNIE TAYLOR HENDERSON, an individual; JOLEE K. DUCLOS, an individual; HAWLEY TROXELL ENNIS & HAWLEY LLP, an Idaho limited liability partnership; GARY D. BABBITT, an individual; D. JOHN ASHBY, an individual; RICHARD A. RILEY, an individual; MICHAEL W. CASHMAN SR., an individual; JAMES BECK, an individual; R. JOHN TAYLOR, an individual; CROP USA INSURANCE AGENCY, INC., an Idaho corporation; AIA SERVICES CORPORATION, an Idaho corporation; AIA INSURANCE, INC.; an Idaho corporation; CROP USA INSURANCE SERVICES, LLC; an Idaho limited liability company; and GEMCAP LENDING I, LLC, a Delaware limited liability company, Defendants. CROP USA INSURANCE AGENCY, INC., an Idaho corporation; CONNIE TAYLOR HENDERSON, an individual; JOLEE DUCLOS, an individual; R. JOHN TAYLOR, an individual; MICHAEL W. CASHMAN SR., an individual; JAMES BECK, an individual, Defendants/Third-Party Plaintiffs,
REED TAYLOR, an individual, Third-Party Defendant REED TAYLOR, an individual, Third-Party Defendant/ Counterclaimant,
CONNIE TAYLOR HENDERSON, an individual; R. JOHN TAYLOR, an individual; JAMES BECK, an individual, and UNKNOWN BONDING COMPANY, an unknown entity that issued the unknown fidelity ERISA Bond, Counterdefendants. GEMCAP LENDING I, LLC, a Delaware limited liability company, Defendant/Third-Party Plaintiff,
QUARLES & BRADY, LLP, a Wisconsin limited legal partnership; and CRUMB & MUNDING, P.S., a Washington professional service corporation, Third-Party Defendants.
MEMORANDUM DECISION AND ORDER
C. NYE U.S. DISTRICT COURT JUDGE
Defendant Crumb & Munding P.S. filed a Motion for
Attorney Fees (Dkt. 399) and Third-Party Plaintiff GemCap
Lending I, LLC (“GemCap”) filed a Status Report
regarding its Amended Third-Party Complaint (Dkt. 402).
Having reviewed the record and briefs, the Court finds that
the facts and legal arguments are adequately presented.
Accordingly, in the interest of avoiding further delay, and
because the Court finds that the decisional process would not
be significantly aided by oral argument, the Court will
address the Motion for Attorney Fees without oral argument.
Dist. Idaho Loc. Civ. R. 7.1(d)(2)(ii). For the reasons
outlined below, the Court finds good cause to refrain from
ruling on the motion for attorney fees at this time and
permit GemCap to reserve a contribution and/or indemnity
claim until after a judgment, if any, is entered against
Plaintiff GemCap filed a Third-Party Complaint against the
law firm of Crumb & Munding and the law firm of Quarles
& Brady on November 21, 2017. The factual background of
the Third-Party Complaint is set forth in the Court's
previous Decision. Dkt. 391. The Court incorporates that
background in full by reference.
December 21, 2017, Crumb & Munding filed a Motion to
Dismiss. Dkt. 303. Shortly thereafter, Crumb & Munding
filed a Motion for Rule 11 Sanctions. Dkt. 362. After the
Motions were fully briefed, the Court held oral argument on
the Motions. The Court ultimately granted the Motion to
Dismiss, finding GemCap had failed to state a claim for
indemnity/contribution under either Idaho statutory law or
Idaho common law. Dkt. 391. However, the Court also found it
conceivable that GemCap could allege additional facts to cure
the deficiencies the Court identified. Therefore, the Court
dismissed the Third-Party Complaint without prejudice, but
required GemCap if it wanted to file an amended
complaint⸺to seek leave to amend and submit a copy of
its proposed amended complaint within 30 days. Id.
The Court also denied the Motion for Rule 11 Sanctions.
29, 2018, GemCap notified the Court that it was not
“seek[ing] leave to amend its Third-Party Complaint at
th[at] time.” Dkt. 402, at 3. Rather, GemCap stated
that “in the unlikely event a judgment is entered
against [it] in this action, [it] reserve[d] the right, at
that [future] time, to pursue contribution and/or indemnity
claims against Crumb & Munding, Quarles & Brady,
and/or any other proper party.” Id. Crumbing
& Munding objects to this reservation of rights and asks
the Court to dismiss the Third-Party Complaint with prejudice
and enter judgment against GemCap. Dkt. 409.
Crumb & Munding argues the Court should dismiss the
Third-Party Complaint with prejudice and not allow GemCap to
assert claims against it later for two main reasons. First,
it argues GemCap seeks to “hold Crumb & Munding
hostage in this litigation.” The Court disagrees with
this argument. Crumb & Munding is no longer involved in
this litigation and GemCap cannot amend its Third-Party
Complaint to bring them back in to this case since it did not
do so within the required thirty days. Any claim by GemCap
against Crumb & Munding for contribution or
indemnification will now need to be asserted, if at all, in a
separate action filed after judgment is entered in this case.
The validity of the contribution or indemnification claim
will be decided in that separate action. Accordingly, Crumb
& Munding will not need to monitor this case or incur
legal fees in the meantime.
Crumb & Munding argues dismissal is required because
GemCap failed to comply with the Court's orders to file
an amended complaint within 30 days. Crumb & Munding
notes that dismissals are presumptively with prejudice and
courts regularly convert dismissals without prejudice to
dismissals with prejudice after a plaintiff fails to comply
with a court's amendment deadline. It is true that GemCap
failed to strictly comply with the Court's instructions
and deadline. However, in effect, GemCap's Status Report
is simply a notice to Crumb & Munding that GemCap may
file an indemnification action after judgment in this case.
That indemnification or contribution action will not exist
unless and until after GemCap pays on a judgment.
explained in the previous Memorandum Decision and Order (Dkt.
391), GemCap's only claim against Crumb & Munding is
for contribution/implied indemnity, which can be actionable
under either common law or Idaho Code section 6-803. This
Code section provides in relevant part:
(5) A party shall be jointly and severally liable for the
fault of another person or entity or for payment of the
proportionate share of another party where they were acting
in concert or when a person was acting as an agent or servant
of another party. As used in this section, “acting in
concert” means pursuing a common plan or ...