Case Notes

No Contractual Indemnification for Negligence

The seller of a product that causes injury to an employee cannot maintain a third-party complaint for indemnification against the employer where the contract between the seller and the employer does not provide for indemnification for negligence and the only claims filed against the seller by the employee were for negligence. Baker v. Wayne-Dalton Corp, Civil Action No. 02-1772, U.S. District Court for the Eastern District of Pennsylvania, Jan. 19, 2004.

Keith Baker was injured while operating a press in the course of his employment by Allstar. Baker sued each company believed to be involved in the design and manufacture of the press and its component parts. After motion practice, one of the two final defendants was Wayne-Dalton, which sold the press to Allstar. Wayne-Dalton filed a third- party complaint against Allstar, claiming that Allstar was contractually obligated to indemnify Wayne-Dalton against Baker's claims. The district court dismissed the third-party complaint. It held that the contract between Wayne-Dalton and Allstar did not contemplate negligence claims. Although the contract provided for indemnification in certain circumstances, negligence was not among them. Because Baker only filed negligence claims against Wayne-Dalton, the third-party complaint could not be maintained.

Joinder to Prevent Diversity Jurisdiction Held to be Fraudulent

A court may find fraudulent joinder where the joinder of one defendant is requested by the plaintiff specifically to prevent another defendant from exercising its right to diversity jurisdiction. In re: Diet Drugs Products Liability Litigation, MDL Docket No. 1203, Civil Action No. 03-20362, U.S. District Court for the Eastern District of Pennsylvania, Jan. 12, 2004.

The plaintiff filed her original complaint in the state court of Missouri on March 23, 2003, more than 5 years after Fen-Phen was withdrawn from sale. On April 24, 2003, the defendant Wyeth removed the action to federal court in Missouri. Thereafter, the plaintiff moved to remand the action to state court, claiming that there was not complete diversity jurisdiction because the other defendant, Michael J. Fedak, M.D., was a citizen of Missouri. Wyeth claimed that Dr. Fedak was fraudulently joined merely to support the plaintiff's motion for removal to state court. It argued that the 2-year statute of limitations against Dr. Fedak had long expired and that Dr. Fedak should not be considered when making a determination of diversity of citizenship. The plaintiff argued that her claims against Dr. Fedak were tolled because of fraudulent concealment.

The court held that the plaintiff's claim of fraudulent concealment against Dr. Fedak was not sufficiently pleaded to maintain her burden because she failed to plead all of the necessary elements of fraudulent concealment under Missouri law. The court concluded that the statute of limitations could not be tolled in this case. It concluded that the joinder of Fedak was fraudulent because it was designed specifically to prevent Wyeth from exercising its right to diversity jurisdiction.

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No Contractual Indemnification for Negligence

The seller of a product that causes injury to an employee cannot maintain a third-party complaint for indemnification against the employer where the contract between the seller and the employer does not provide for indemnification for negligence and the only claims filed against the seller by the employee were for negligence. Baker v. Wayne-Dalton Corp, Civil Action No. 02-1772, U.S. District Court for the Eastern District of Pennsylvania, Jan. 19, 2004.

Keith Baker was injured while operating a press in the course of his employment by Allstar. Baker sued each company believed to be involved in the design and manufacture of the press and its component parts. After motion practice, one of the two final defendants was Wayne-Dalton, which sold the press to Allstar. Wayne-Dalton filed a third- party complaint against Allstar, claiming that Allstar was contractually obligated to indemnify Wayne-Dalton against Baker's claims. The district court dismissed the third-party complaint. It held that the contract between Wayne-Dalton and Allstar did not contemplate negligence claims. Although the contract provided for indemnification in certain circumstances, negligence was not among them. Because Baker only filed negligence claims against Wayne-Dalton, the third-party complaint could not be maintained.

Joinder to Prevent Diversity Jurisdiction Held to be Fraudulent

A court may find fraudulent joinder where the joinder of one defendant is requested by the plaintiff specifically to prevent another defendant from exercising its right to diversity jurisdiction. In re: Diet Drugs Products Liability Litigation, MDL Docket No. 1203, Civil Action No. 03-20362, U.S. District Court for the Eastern District of Pennsylvania, Jan. 12, 2004.

The plaintiff filed her original complaint in the state court of Missouri on March 23, 2003, more than 5 years after Fen-Phen was withdrawn from sale. On April 24, 2003, the defendant Wyeth removed the action to federal court in Missouri. Thereafter, the plaintiff moved to remand the action to state court, claiming that there was not complete diversity jurisdiction because the other defendant, Michael J. Fedak, M.D., was a citizen of Missouri. Wyeth claimed that Dr. Fedak was fraudulently joined merely to support the plaintiff's motion for removal to state court. It argued that the 2-year statute of limitations against Dr. Fedak had long expired and that Dr. Fedak should not be considered when making a determination of diversity of citizenship. The plaintiff argued that her claims against Dr. Fedak were tolled because of fraudulent concealment.

The court held that the plaintiff's claim of fraudulent concealment against Dr. Fedak was not sufficiently pleaded to maintain her burden because she failed to plead all of the necessary elements of fraudulent concealment under Missouri law. The court concluded that the statute of limitations could not be tolled in this case. It concluded that the joinder of Fedak was fraudulent because it was designed specifically to prevent Wyeth from exercising its right to diversity jurisdiction.

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