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Dismissal Based on Sovereign Immunity – Third-Party Claim Not Derivative

Glover v. Hryniewich and the City of Norfolk, Virginia v. Willard Marine, Inc. and SAFE Boats International, LLC (VLW No. 017-8-090, 7 pp.) (Lannetti, J.) CL16-3262-00/01/02/03

Holding: Where the complaint against defendant and third-party plaintiff-city was dismissed based on immunity and the city’s third-party complaint may only be brought against a nonparty who ‘may be liable to the third-party plaintiff for all or part of the plaintiff’s claim against the third-party plaintiff, ‘ the city’s pursuit of any remaining claim after being dismissed as a defendant is improper. The city’s motion to compel third-party defendant-boat manufacturer to answer certain interrogatories and requests for production of documents is denied.

Facts: The city contracted with third-party defendant-Willard to modify and repair a patrol boat owned by the city and manufactured by the third-party defendant-boat manufacturer. During a post-work sea trial, defendant and third-party plaintiff-police officer allegedly conducted a high-speed turn that resulted in the boat capsizing and allegedly injuring plaintiff-Willard employee.

The employee filed suit against the city and the officer alleging injuries. The defendants filed a plea in bar asserting sovereign immunity and requesting the complaint be dismissed. The city filed separate third-party complaints against Willard and the boat manufacturer, alleging and indemnity and—with respect to Willard—breach of contract. Willard filed a counterclaim against the city for breach of contract. After the city filed a motion to compel the boat manufacturer to fully respond to pretrial discovery, the court sustained the plea in bar and dismissed the employee’s claims against the city.

The city argues that it is still a party to the case because the plea in bar did not address its third-party breach of contract claim against Willard and that the city’s remaining claim for reimbursement of its associated attorneys’ fees allows it to remain in the litigation as a third-party plaintiff. The boat manufacturer argues that because the city was dismissed as a defendant, its discovery motion is moot because the city is no longer a party.

Analysis: The city is no longer a defendant facing potential liability for the incident at issue based on the court’s ruling that it is immune from suit. As such, the city is no longer a “defending party” under Rule 3:13 of the Rules of the Supreme Court of Virginia, which states: “a defending party, as a third-party plaintiff, may file and serve a third-party complaint upon a person not a party to the action who is or may be liable to the third-party plaintiff for all or part of the plaintiff’s claim against the third-party plaintiff,” (emphasis added). The only surviving claim of the city’s complaint is for attorneys’ fees related to an alleged breach of contract. The city’s breach of contract claim is not derivative of the employee’s claim against the city and may be “adjudicated independently” by the city against Willard in some separate action. Gilbreath v. Brewster, 250 Va. 436, 463 S.E.2d 836 (1995). We hold that the city’s pursuit of any remaining claim in its third-party complaint after being dismissed as a defendant is improper under Rule 3:13. Although none of the third-party defendants moved to dismiss the city’s third-party complaints in light of our holding that the city is entitled to sovereign immunity, we find that such action is necessary in order to meet the ends of justice.

Whether the city can remain a party to the litigation as a result of Willard’s counterclaim against the city is a closer question. The remainder of the litigation after our ruling on the plea in bar and dismissal of the city’s third-party complaints does not involve the contract between the city and Willard. We therefore find it appropriate to dismiss Willard’s counterclaim of breach of contract.

Defendant-city dismissed; city’s third-party complaint dismissed; Willard’s counterclaim dismissed. Motion to compel denied.

VLW 017-8-090