Insurance Lawsuits, like many other claims, result in other persons or entity’s being added to the lawsuit. The relevance here is that often times an adjuster or the agent who sold the policy may need to be part of the lawsuit.
A 2021, opinion from the Northern District of Texas, Dallas Division, analysis how this is done. The opinion is styled, Nova Casualty Company v. Jose E. Guzman and Rito Sosa.
For the facts that occurred in this case, the opinion should be read. Here is the legal aspect of the case.
Under Federal Rule of Civil Procedure 13(h), “Rules 19 and 20 govern the addition of a person as a party to a counterclaim or cross claim.” Rule 20, in relevant part, states that parties “may be joined in one action as defendants” provided that: (1) “any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction,occurrence, or series of transactions or occurrences;” and (2) “any question of law or fact common to all defendants will arise in the action.”
Plaintiff contends that Defendants’ motion should be denied because the Federal Rules of Civil Procedure do not permit the assertion of a new claim against a new counter-defendant. In response, Defendants assert that Federal Rule of Civil Procedure 13(h) “specifically addresses this situation” and permits the joinder of new parties to a counterclaim.
The Court agrees with Defendants. Rule 13(h) states that “Rules 19 and 20 govern the addition of a person as a party to a counterclaim . . . .” Nothing in Rule 13 suggests that the situation here—the addition of a new party by way of a new counterclaim—is prohibited. Indeed, the Fifth Circuit appeared to recognize this use of Rule 13(h) in a 2004, opinion. In that opinion, the Fifth Circuit explained that the defendant–insured counterclaimed against the plaintiff–insurer and then brought distinct claims “against an additional party”—the defendant’s insurance agency. The court thereafter clarified in a footnote that Rule 13(h) “permits joinder of additional parties to a counterclaim ‘in accordance with the provisions of Rules 19 and 20.’” Although dicta, this foot note suggests that Rule 13(h) allows for joinder of a new counter-defendant even if the claims against the counter-defendant are not alleged against the current counter-defendants.
The Court recognizes that courts disagree about whether Rule 13(h) allows the assertion of new counterclaims against a new counter-defendant.
But the Court is not convinced that Rule 13(h) should be construed so strictly, particularly given the Fifth Circuit’s language in the 2004 opinion. As the Western District of Texas has noted, courts typically construe Rule 13(h) liberally in an effect to avoid multiplicity of litigation and foster judicial economy. Accordingly, the Court concludes that Rule 13(h) is the proper vehicle for Defendants’ motion.