## Facts

- A homeowner hired Hugh Cole Builder, Inc. (HCB) as general contractor to build a residence.
- After the homeowners moved in, a fire severely damaged the home and contents; the fire was traced to the fireplace area.
- HCB used subcontractors for the fireplace work: Coston Plumbing Company installed a gas fireplace starter, and Jenkins Brick Company constructed the brick fireplace.
- The insurer, Allstate, paid the homeowner more than \$700,000 for the loss and pursued subrogation claims against HCB for negligence and contract/warranty theories.
- HCB filed a third-party complaint against Coston and Jenkins asserting negligence, contract and warranty theories, and related claims aimed at shifting responsibility downstream.
- Jenkins moved to strike or dismiss the third-party complaint (or for judgment on the pleadings), arguing the claims were “separate and independent” and therefore improper under Federal Rule of Civil Procedure 14.
- Coston sought summary judgment arguing HCB could not obtain contribution or indemnity under Alabama law.

## Issues

1. Whether HCB’s third-party claims against the subcontractors were proper under Federal Rule of Civil Procedure 14(a) as derivative claims for all or part of Allstate’s asserted loss.
2. Whether Alabama substantive law on contribution and indemnity foreclosed HCB from asserting any derivative shifting-of-liability theory against the subcontractors at the impleader stage.
3. Whether and how the court should limit third-party pleadings to exclude independent claims not tethered to HCB’s potential liability to Allstate.

## Decision

- The court permitted impleader to proceed to the extent HCB sought to shift all or part of any liability it might owe Allstate to the subcontractors.
- The court rejected the argument that HCB’s labeling of claims as “separate and independent” controlled; it evaluated the substance of the alleged relationship between the main claim and third-party claims.
- The court limited Rule 14 practice to derivative liability theories and indicated that purely independent claims not dependent on HCB’s liability to Allstate could not be maintained through impleader.

## Legal Principles

- Federal Rule of Civil Procedure 14(a) permits impleader only where the third-party defendant “is or may be liable” to the defending party for all or part of the plaintiff’s claim; it does not permit unrelated, standalone claims.
- Whether a claim is proper under Rule 14 turns on the substantive relationship between the plaintiff’s claim and the third-party claim, not on the parties’ labels.
- Rule 14 is procedural; the existence and scope of any right to shift liability (e.g., indemnity) is governed by applicable state substantive law.
- Under Alabama law, general contribution among joint tortfeasors is disfavored, but indemnity may be available in limited circumstances (including where a party’s liability is secondary or passive relative to the party whose conduct caused the loss).
- At the pleading/impleader stage, where allegations support a plausible indemnity-type theory tied to the defendant’s potential liability to the plaintiff, impleader may proceed even if ultimate entitlement to indemnity depends on facts developed later.

## Conclusion

The court allowed the general contractor to implead subcontractors under Rule 14 because the third-party claims, in substance, sought derivative shifting of any liability the contractor might owe the insurer for the fire loss, while restricting impleader from being used to litigate independent claims not dependent on the contractor’s potential liability in the main action.


Allstate Ins. Co. v. Hugh Cole Builder, Inc., 187 F.R.D. 671 (M.D. Ala. 1999)