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DOW CORNING CORP. v. CHEMICAL DESIGN

April 28, 1998

DOW CORNING CORPORATION, Plaintiff,
v.
CHEMICAL DESIGN, INC., Defendant and Third-Party Plaintiff, -v- CERTIFIED FABRICATIONS, INC., Third-Party Defendant.



The opinion of the court was delivered by: FOSCHIO

DECISION and ORDER

 JURISDICTION

 This matter was referred to the undersigned by the Hon. William M. Skretny on July 31, 1997 for determination of any non-dispositive motions. The matter is presently before the court on Plaintiff's motion to amend the complaint, filed January 2, 1998.

 BACKGROUND and FACTS

 The complaint in this diversity action was filed on May 8, 1997 alleging twelve causes of action against Defendant for negligent design, negligent manufacture, negligent supervision, negligent entrustment, breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness, fraudulent inducement, fraudulent execution, breach of contract, fraudulent concealment, and punitive damages. The claims arise out of a contract between Dow Corning Limited, a wholly owned subsidiary of Plaintiff, and Defendant whereas Defendant was to build a skid mounted shop fabricated hydrogen purification plant for use in Dow Corning Limited's factory in Barry, Wales, United Kingdom. The hydrogen purification plant was delivered to the factory, however, Plaintiff alleges that the plant was unable to function as warranted, and that Dow Corning Limited was forced to replace the plant incurring replacement costs and consequential damages in down time and lost production.

 On May 21, 1997, Plaintiff filed a First Amended Complaint as of right, adding two additional causes of action for product liability and punitive damages based on product liability. Defendant answered the complaint on July 21, 1997.

 On December 23, 1997, Plaintiff filed a motion to further amend its complaint to add its wholly owned subsidiary, Dow Corning Limited, as an additional Plaintiff, to add Dow Corning as a third party beneficiary on the cause of action based on negligent design, and withdrawing the claim based on negligent entrustment. Plaintiff also filed a brief in support of its motion to amend.

 On January 2, 1998, Defendant filed a motion for leave to file a third-party complaint against Certified Fabrications, Inc., as the manufacturer of specific component parts used in the hydrogen purification plant at issue in the action. Defendant's motion was granted without objection by Plaintiff on January 20, 1998.

 Thereafter, on January 30, 1998, Defendant and Third-Party Plaintiff filed an affidavit and memorandum of law in opposition to Plaintiff's motion to amend the first amended complaint. On February 6, 1998, Plaintiff filed a brief in reply to Defendant's opposition, along with an affidavit from Paul A. Marcela, Assistant Secretary of Dow Corning Corporation.

 Oral argument was not deemed necessary.

 For the reasons as set forth below, Plaintiff's motion to amend the first amended complaint is GRANTED in part and DENIED in part.

 DISCUSSION

 Plaintiff seeks leave to file a second amended complaint adding Dow Corning Ltd. as a named plaintiff, and naming Dow Corning Corporation as a third party beneficiary to the contract between Dow Corning Ltd. and Chemical Design. Plaintiff asserts that this amendment is necessary as the contract at issue in this action was between Dow Corning Ltd. and Chemical Design, and that Dow Corning Ltd. is thus the proper plaintiff in this action. Plaintiff further seeks to characterize Dow Corning Corporation as a third-party beneficiary to this contract based on Dow Corning Corp.'s stock ownership of Dow Corning Ltd.

 Defendant objects to the amendment. Defendant asserts that Dow Corning Corporation, the named plaintiff, was never a party to the contract at issue in this case and, as such, is an improper plaintiff. Accordingly, Defendant believes that it can obtain a favorable judgment against Dow Corning Corporation under any theory of recovery as Dow Corning Corp. does not have a viable claim against Defendant. If Plaintiff is allowed to amend its complaint at this date to add Dow Corning Ltd. as a named plaintiff, Defendant contends that it will be unduly prejudiced because such an amendment would relate back to the date of the original complaint even though the claims, if asserted now for the first time by Dow Corning Ltd., would, as to it, be time-barred. Defendant asserts that it would be precluded from raising defenses based on applicable statutes of limitation against Dow Corning Ltd. by such an amendment relating back to the time of the filing of the original complaint. Arguing ...


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