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Assignee May Not Pursue Third-Party Claim

A plaintiff who, as part of its settlement of contract and warranty claims against defendant KBS Inc., was assigned KBS’ rights against third-party defendant The Phoenix Corporation, cannot amend its complaint to assert those derivative third-party claims against TPC, but may file an independent action to assert those claims, says a Norfolk Circuit Court.

The court finds plaintiff may not maintain the third-party complaint as an assignee of KBS because plaintiff is not a “defending party” under S.Ct. Rule 3:13 and because the prosecution of a third party claim by the original plaintiff to the action is inconsistent with the nature of third-party practice. Consequently, permitting plaintiff to enforce claims raised in a third-party complaint would be inconsistent with Rule 3:13.

First, Rule 3:13 expressly provides that only a “defending party” may initiate third-party complaints. Plaintiff here is not a “defending party” because it is not defending against any claim for which it seeks to hold the third-party defendant liable.

Second, while the language of the Rule only refers to the filing and serving of a third-party complaint, allowing a party who is not defending against any claim to maintain a third-party claim initiated by a defendant who has since been dismissed from the action would be inconsistent with the nature and function of third-party practice. Third-party claims may be brought under Rule 3:13 only for the purpose of passing through to the third-party defendant all or part of the liability which might be imposed on the defendant by the plaintiff as a result of the conduct of the third-party defendant. In other words, an essential attribute of any claim raised in a third-party complaint is that it be secondary or derivative to some principal claim that forms the basis of the original action.

Derivative claim

The Supreme Court of Virginia noted in Gilbreath v. Brewster, 250 Va. 436 (1995), that, because they are derivative in nature, true third party claims cannot be adjudicated independently of the principal claim on which the action is based. This case illustrates that claims that may properly be raised by a third-party complaint are derivative in nature to some principal claim, and thus, cannot be resolved in a separate action. In this case, the claims plaintiff seeks to enforce in the third-party action could be adjudicated independently of plaintiff’s principal claim against Quaker Windows. Therefore, plaintiff’s claims against TPC are not true third-party claims, but are principal claims in their own rights. Plaintiff’s effort to pursue these claims in action styled as a third party claim is improper.

In sum, plaintiff’s pursuit of the claims against TPC assigned to it by KBS are not proper third-party claims under Rule 3:13. As assignee of KBS’s rights and claims against TPC, plaintiff may attempt to enforce those rights and claims against TPC and seek any relief to which it is entitled, but plaintiff cannot do so by maintaining a third-party action filed by its assignor in an action commenced by plaintiff.

Motion to file amended complaint is denied.

139 Riverview LLC v. Quaker Window Products Co. (Jones) No. CL 13-5877-03, Aug. 31, 2015; Norfolk Cir.Ct.; K. Reed Mayo, Brian M. Casey, John D. McGavin for the parties. VLW 015-8-103, 4 pp.


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