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DRANKWATER v. MILLER

July 30, 1993

WENDY DRANKWATER, Plaintiff,
v.
ARNOLD MILLER and MATRIX ESSENTIALS, INC., Defendants.



The opinion of the court was delivered by: SHIRLEY WOHL KRAM

 SHIRLEY WOHL KRAM, U.S.D.J.

 In this diversity action involving claims of tortious interference with a contract, intentional infliction of emotional distress, negligent infliction of emotional distress and unlawful discrimination under § 296 of the New York Human Rights Law, defendants Arnold Miller ("Miller") *fn1" and Matrix Essentials, Inc., ("Matrix") (collectively "defendants") move, pursuant to Rule 19 of the Federal Rules of Civil Procedure, for an order dismissing the complaint on the ground that plaintiff Wendy Drankwater ("Drankwater") failed to join an indispensable party whose presence divests this court of diversity jurisdiction. Specifically, defendants contend that (1) plaintiff's employer, Emiliani of New York, Inc. ("Emiliani"), *fn2" is a party that should be joined if feasible; (2) Emiliani is a New York Corporation whose joinder would defeat diversity; *fn3" and (3) this court cannot proceed in equity and good conscience pursuant to Rule 19(b) in the employer's absence. Drankwater opposes the motion. For the reasons set forth below, defendants' motion to dismiss the complaint for failure to join an indispensable party is denied.

 BACKGROUND4

 Drankwater entered into an employment contract with Emiliani in January of 1990. At that time, Emiliani had a distribution contract with Matrix whereby Emiliani sold Matrix beauty products to beauty salons in New York. Drankwater was hired as a sales consultant to Emiliani and was responsible for selling Matrix products to various beauty salons throughout the County of New York.

 Drankwater alleges that during her employment at Emiliani, Miller, the majority shareholder and Chief Executive Officer of Matrix, made various sexual advances and suggestions to her beginning with their first meeting in August 1990 and continuing until August 1991. Miller and Drankwater first met at a national sales meeting of Matrix sales representatives in Reno, Nevada. While there, Drankwater won an automobile in a raffle sponsored by Matrix. Complaint at P 8. In November 1990, Miller met Drankwater again at a sales meeting at the Emiliani office in Union, New Jersey, and he asked her to "give him a ride in the car she had won." Id. at P 9. That evening, Miller called Drankwater at home and made "lewd, improper, and unlawful statements to her" that allegedly constituted sexual harassment. Id. at P 10. Drankwater did not consent to the statements and responded negatively to them. Id. In March 1991, Miller met Drankwater again at a trade show at the Jacob Javits Center in New York City. Again, he allegedly made comments to her that constituted sexual harassment, and again, Drankwater did not consent and responded negatively to his remarks. Id. at P 11. Drankwater further alleges that as a result of her refusal to accept these advances, Miller "instructed, advised and/or requested" Drankwater's superiors at Emiliani to terminate her employment. Id. at P 14. On August 20, Drankwater was terminated by Emiliani. Id. at P 15. Drankwater claims that her dismissal was "wrongful and without legitimate cause or justification." Id. at P 16.

 Based on the foregoing facts, Drankwater sues defendants for (1) tortious interference with a contract, alleging that as a result of her refusal to accept Miller's advances, defendants willfully induced Emiliani to terminate Drankwater's employment contract, Id. at P 22; (2) intentional infliction of emotional distress, alleging that defendants abused their position of actual or apparent power and engaged in a course of extreme and outrageous conduct that knowingly caused Drankwater emotional distress, Id. at P 25; (3) negligent infliction of emotional distress, on the ground that defendants breached the special duty owed to Drankwater arising from the special relationship between defendants and Drankwater, Id. at PP 28-29; (4) aiding, abetting, inciting, encouraging, or coercing Emiliani to engage in wrongful discrimination, namely, to terminate Drankwater's employment contract based on her sex and in retaliation for her refusal to accept Miller's advances. Id. at P 32.

 Defendants now move to dismiss the complaint, pursuant to Federal Rule of Civil Procedure 19, for failure to join an indispensable party. Defendants argue that the complaint should be dismissed on the grounds that: (1) Emiliani is a party to be joined if feasible; (2) Emiliani cannot be joined in this action because diversity jurisdiction would be defeated; and (3) the court cannot proceed in equity and good conscience in Emiliani's absence. *fn5"

 In response, Drankwater claims that Emiliani is not a necessary or indispensable party, but rather a permissive party whose joinder is regulated by Federal Rule of Civil Procedure 20. This claim is based on Drankwater's assertion that Emiliani and defendants are joint tortfeasors who need not be joined in a single lawsuit as their liability is joint and several. See Temple v. Synthes Corp., Ltd., 498 U.S. 5 (1990) (error to label joint tortfeasors indispensable). In the alternative, Drankwater argues that defendants fail to satisfy the dictates of Rule 19.

 DISCUSSION

 Rule 19 of the Federal Rules of Civil Procedure *fn6" sets forth a two-step inquiry for determining whether an action must be dismissed for failure to join an indispensable party. See Associated Dry Goods Corp. v. Towers Fin. Corp., 920 F.2d 1121, 1123 (2d Cir. 1990). The first prong focuses on whether the parties should be joined if feasible. Specifically, Rule 19(a) provides, in relevant part:

 
A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.

 Under the second prong, Rule 19(b), a court must determine whether it can proceed in equity and good conscience without that party. Fed. R. Civ. P. 19(b). Unless Rule 19(a)'s threshold standard is met, however, the court need not consider whether dismissal under Rule 19(b) is warranted. Associated Dry Goods Corp. v. Towers Fin. Corp., 920 F.2d 1121, 1123 (2d Cir. 1990).

 As a general rule, in determining whether a party is indispensable, the preference is for non-dismissal. The Second Circuit has stated that, "very few cases should be terminated due to the absence of non-diverse parties unless there has been a reasoned determination that their nonjoinder makes just resolution of the action impossible." Jaser v. New York Property Ins. ...


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