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DESIGN FOR BUS. INTERIORS, INC. v. HERSON'S

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA


December 2, 1986

Design For Business Interiors, Inc., Plaintiff,
v.
Herson's, Inc., Defendant

The opinion of the court was delivered by: FLANNERY

MEMORANDUM

 Thomas A. Flannery, United States District Judge

 This matter came before the court on a variety of motions. Plaintiff and defendant have filed cross-motions for partial summary judgment, and third-party defendants Park Rug Co. and Roesel-Heck Co. have filed motions to strike or sever the claims filed against them by defendant Herson's, Inc.

 I. Facts

 This case began as an action on a series of contracts for furniture and other supplies between plaintiff, Design for Business Interiors, Inc. ("DBI") and defendant, Herson's Inc. ("Herson's"). Herson's had entered into these and other contracts in the process of decorating its new automobile showroom in Rockville, Maryland. Herson's filed an answer, counterclaim, and a cross-claim against an interior design consultant named Phyllis Pinchuck with whom Herson's had contracted to decorate the showroom. Herson's alleged that Pinchuck failed to fulfill her contract's specifications as to the furnishings and floor tiles that Herson's wanted installed in its showroom. Pinchuck counterclaimed against Herson's and also filed a third-party complaint against Park Rug Co., Inc. ("Park Rug"), the supplier of the floor tiles, alleging that any dissatisfaction that Herson's had with Pinchuck due to the floor tiles was a result of Park Rug's misrepresentations and breaches of warranty.

 Under a stipulation between Pinchuck and Herson's, Herson's counterclaim against Pinchuck was dismissed, as was Pinchuck's claim against Park Rug. However, Herson's had by this time filed its own cross-claim against Park Rug, alleging the same causes of action as Pinchuck had raised in her third-party complaint. Park Rug in turn impleaded Roesel-Heck Co., Inc. ("Roesel-Heck"), a distributor of floor tiles, alleging that Herson's dissatisfaction with the floor tile installed in its showroom was due to the conduct not of Park Rug but of Roesel-Heck.

 Thus, at this point, the court is presented with two essentially distinct sets of facts: the first concerns the contractual relationship between the original plaintiff, DBI, and the original defendant, Herson's, and includes warranty and payment issues as to those goods (furniture, cabinets, and partitions). The second set of facts concerns the relationship between Herson's and those companies who engaged to order, supply, and install floor tile in the new Herson's showroom, namely Park Rug and Roesel-Heck. The only apparent connection between these two sets of facts is that both are related to Herson's decoration of its Rockville showroom. The claim from which the tile related claims arose, which was Herson's claim against Pinchuck, has now been dismissed, and the tile actions are now wholly unrelated to the facts and legal issues surrounding the initial action between DBI and Herson's.

 II. The Motions to Strike or Sever

 Both Roesel-Heck and Park Rug seek to have Herson's claims against them severed to be tried separately from the 'main action' -- that between DBI and Herson's. Roesel-Heck moves to strike the claims against it, or in the alternative to sever these claims from the main action. In support of these motions, Park Rug and Roesel-Heck assert that the facts in the two sets of actions are unrelated, save for the common element of the Herson's showroom. In addition, Roesel-Heck states that discovery was scheduled to be completed by September 15, 1986, and that this did not give the third-party defendants ample time, since they were not served until July, 1986. Roesel-Heck contends that if Herson's cross-claim against it is not stricken, Roesel-Heck will implead still another party, AMITCO, which Roesel-Heck contends is the manufacturer of the allegedly defective tile. This would further complicate the case. Accordingly, Park Rug and Roesel-Heck urge the court to exercise its discretion either to strike the Park Rug claim against Roesel-Heck, or to sever the Park Rug/Roesel-Heck actions to be tried separately, after completion of the DBI/Herson's action.

 In response, Herson's argues that the facts are sufficiently related to make it judicially economical for the court to hear all the cross-claims together with the original contract action. However, Herson's arguments are not sufficient to outweigh the fact that the floor tile action is wholly unrelated to that between DBI and Herson's. Herson's action against Park Rug, and Park Rug's action against Roesel-Heck, while originally proper cross-claims stemming from Pinchuck's impleading of Park Rug for her liability to Herson's, are now not properly before the court and should be stricken. Neither Park Rug nor Roesel-Heck "is or may be liable" to Herson's for any part of plaintiff DBI's claim against Herson's, and thus defendant Herson's could not have brought them in under Fed. R. Civ. P. 14. Similarly, Herson's claim is not "against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim thereto" under Fed. R. Civ. P. 13(g). See American National Bank and Trust Co. of Chicago v. Bailey, 750 F.2d 577, 581 (7th Cir. 1984)(Rule 13(g) cross-claim must either arise out of the same transaction or occurrence as the main action, or be related to the property that was the subject of the main action). Indeed, Park Rug is not even a co-party of Herson's now that Pinchuck's action against it has been dismissed.

 Further, severing the floor tile actions would necessarily result in a dismissal, since Herson's, Park Rug, and Roesel-Heck are all Maryland residents. The court would lack subject matter jurisdiction over these nondiverse actions if they Were severed from the DBI/Herson's claims. It is only as ancillary claims that they are in federal court. As the Court of Appeals for the District of Columbia Circuit has noted:

 

The rationale which allows federal courts to exercise jurisdiction over such state-law claims is that a sufficiently close nexus exists between those claims and the federal claim properly before the court that effective vindication of the latter requires allowing a party to bring the state and federal claims in one suit.

 U.S. through the Small Business Administration v. Pena, 235 U.S. App. D.C. 161, 731 F.2d 8, 11 (1984). It appears clear that these actions, unrelated to the contract claims between DBI and Herson's, do not meet this test, will only needlessly complicate what should be a two-party case, and are therefore stricken.

 The only party that would benefit from the court's continued jurisdiction over the Park Rug and Roesel-Heck actions is Herson's, which would no doubt find it convenient to litigate all its troubles in a single case. However, ancillary jurisdiction, like the closely-related doctrine of pendent jurisdiction, "is a doctrine of discretion, not of plaintiff's right." United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S. Ct. 1130, 1139, 16 L. Ed. 2d 218. An action is ancillary if it and the federal claim "derive from a common nucleus of operative facts." United Mine Workers v. Gibbs, 383 U.S. at 725, 86 S. Ct. at 1138. Here, that commonality is lacking. There are no compelling reasons for this court to retain jurisdiction. See, e.g., Coleman v. Casey County Board of Education, 686 F.2d 428 (upholding district court's dismissal of defendant's ancillary cross-claim arising out of the same transaction or occurrence); 3 J. Moore, Moore's Federal Practice para. 13.36 at 13-223 (2d ed. 1985)("The question should be considered one of discretionary pendent jurisdiction."). The parties are free to pursue these matters in Maryland state court, utilizing whatever discovery was obtained in this action. See, e.g., Waste Systems, Inc. v. Clean Land Air Water Corp., 683 F.2d 927, 931 (5th Cir. 1982). The actions involving Park Rug and Roesel-Heck are therefore stricken without prejudice.

 As the Seventh Circuit noted, in evaluating the propriety of federal jurisdiction over a nondiverse cross-claim that was "too remote" from the original suit, courts "should be cautious about using elastic and ill-defined notions of ancillary jurisdiction - - a concept not mentioned in Article III -- to expand [federal] jurisdiction." American National Bank and Trust Co. of Chicago v. Bailey, 750 F.2d at 581. Where, as here, the ancillary matters are no longer 'connected' to the original action, the exercise of federal jurisdiction would be not only inefficient but also improper.

 III. The Motions for Summary Judgment DBI's action is based on nine contracts with Herson's; each contract is the basis of one count of the Amended Complaint. Below is a summary of Counts I-IX: Date of Purchase Count Contract Price I 12/19/84 $ 814.00 II 11/29/84 $ 4,109.22 III 11/19/84 $ 9,833.84 IV 11/1/84 $ 12,730.07 V 10/29/84 $ 1,073.10 VI 9/14/84 $ 4,796.33 VII 8/31/84 $ 5,223.52 VIII 8/16/84 $ 80,142.79 IX 8/16/84 $ 17,374.11

19861202

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