Commercial Litigation and Arbitration

Defendant May Implead Contractual Indemnitor as Third-Party Defendant without Awaiting Determination of Its Liability vis-à-vis Plaintiff

From Frontier Commc’ns Corp. v. Barrett Paving Materials, Inc., 2010 U.S. Dist. LEXIS 87990 (D. Me. June 25, 2010):

In something of a false-start, the City argues that the Railroad's third-party complaint can be dismissed as premature because, assuming an indemnification agreement exists, it has not yet been breached. In the City's view, no justiciable controversy exists until such time as Frontier obtains judgment against the Railroad, thereby "triggering" the indemnification agreement. (Mot. at 4-5, citing Safeco Ins. Co. v. Barcom, 773 P.2d 56, 60 (Wash. 1990) ("No justiciable controversy exists under a contract until a breach actually occurs."), as cited in Palmero v. Aetna Cas. & Ins. Co., 606 A.2d 797, 798 (Me. 1992) (addressing, as a matter of first impression, when a breach of contract claim accrues under a contract of insurance).) This argument is off the mark and the cases are not on point. The simple answer to this issue is that Rule 14(a)(1) expressly authorizes a defending party to "serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it." Fed. R. Civ. P. 14(a)(1) (emphasis added). The defendant has an option and may either wait to bring a second action or else implead the indemnitor in a third-party action even though the contract indemnification claim has not "accrued" as of the filing. *** The Railroad's claims fall within Rule 14(a)(1).

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