United States District Court, D. Arizona
JAMES A. TEILBORG, District Judge.
Before the Court is Defendant's Motion to Dismiss for Failure to Join Indispensable Parties. (Doc. 19). The Court now rules on the motion.
Plaintiff's complaint alleges Defendant's breach of a contract assigned to Plaintiff by Pacific Office Automation, Inc. ("POA"), an Oregon corporation. Under the alleged contract, POA leased office equipment such as copy machines and printers to Defendant for a monthly payment determined by Defendant's usage of the equipment, with a minimum monthly payment Defendant must pay regardless of its usage. POA has assigned all of its rights under the contract to Plaintiff. Defendant has ceased paying its lease obligations to Plaintiff, but has retained the equipment. Plaintiff seeks the total amount due, along with the contracted-for interest.
Defendant's motion to dismiss under Rules 12(b)(7) and 19 asserts that Defendant received the equipment, which did not function as represented by POA's sales representatives, Darin Dumolin and Derek Abert. (Doc. 19 at 2). Defendant further asserts that the equipment "did not fit into designated areas the dimensions of which were known to Dumolin and Abert." (Doc. 19 at 2). Defendant claims that it contacted POA for assistance in resolving these issues, to no avail. (Doc. 19 at 2-3). Defendant also claims that it attempted to return the equipment to POA, again to no avail. (Doc. 19 at 2-3). Accordingly, Defendant states in its motion that it "alleges breach of contract, fraudulent inducement, bad faith and misrepresentation against Pacific Office, Dumolin, and Abert related to the supply of nonfunctioning and poorly [sized] equipment that was known by those potential defendants to [be] inadequate and unable to function as represented." (Doc. 19 at 3).
In light of these allegations, Defendant moves for the Court to dismiss this case for Plaintiff's failure to join POA, Dumolin, and Abert. Defendant alleges that Dumolin and Abert are non-diverse from Plaintiff, and therefore would destroy complete diversity if joined.
"Federal Rule of Civil Procedure 19 governs the question of whether a person not a party to a suit should be joined because he is necessary for a more complete settlement of the dispute." Cutrona v. Sun Health Corp., 2007 WL 4150210, at *1 (D. Ariz. Nov. 19, 2007). Rule 19's "[u]nderlying policies include plaintiff's right to decide whom he shall sue, avoiding multiple litigation, providing the parties with complete and effective relief in a single action, protecting the absentee, and fairness to the other party." Bakia v. County of Los Angeles, 687 F.2d 299, 301 (9th Cir.1982).
Under Rule 19, "the district court must first determine if an absent party is necessary' to the action; then, if that party cannot be joined, the court must determine whether the party is indispensable' so that in equity and good conscience' the action should be dismissed." Confederated Tribes of Chehalis Indian Reservation v. Lujan, 928 F.2d 1496, 1498 (9th Cir. 1991) (citing Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th Cir. 1990)).
The first step in determining whether dismissal under Rule 19 is warranted is to determine whether a party is "necessary." Rule 19(a) provides:
(a) Persons Required to Be Joined if Feasible.
(1) Required Party. A person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party if:
(A) in that person's absence, the court cannot accord complete relief among existing parties; or
(B) that person claims an interest relating to the subject of the action and is so situated that disposing of the ...