## Facts

- Laralen Corporation owned Manatee Creek, a real-estate development.
- Nicholas Raich, Sr. purchased Laralen from Lennart E. Lindahl.
- As part of the sale, Lindahl and Raich signed a Letter of Understanding allocating responsibility for certain amenity projects that had been represented to Manatee Creek homeowners before the sale.
- After the purchase, Manatee Creek homeowners sued Raich, Laralen, Bannock Shoals, Inc. (which operated the sales office), and others, asserting fraud and related claims based on promised amenities that were not constructed.
- Laralen and Raich sought to shift responsibility and/or recover costs connected to the amenities and the homeowners’ claims.
- Laralen first filed a third-party complaint against Lindahl for breach of the Letter of Understanding.
- Lindahl moved to dismiss the third-party complaint on the ground that impleader was improper because the claim was not based on derivative liability (such as indemnity, contribution, or subrogation) tied to the homeowners’ claims.
- The trial court dismissed the third-party complaint.
- Laralen then filed a cross-complaint against Lindahl again seeking damages for breach of the Letter of Understanding; the trial court dismissed that attempt because Lindahl was not an original party to the homeowners’ action.
- Laralen later amended its answer to assert a two-count cross-claim: (1) indemnification against Bannock Shoals based on alleged sales-office misrepresentations, and (2) breach of the Letter of Understanding against Lindahl (and related individuals Jan Browning and Kenneth Ferrari).
- The trial court denied Lindahl’s motion to dismiss the amended pleading and ultimately entered a final judgment in favor of Laralen and Raich on the cross-claim against Lindahl, Browning, and Ferrari.
- Lindahl, Browning, and Ferrari appealed, challenging their joinder as cross-claim defendants.

## Issues

1. Whether a defendant may use a cross-claim to add a nonparty as an additional cross-claim defendant to litigate an independent breach-of-contract dispute, when that nonparty’s participation is not required to resolve the cross-claim against an existing co-party.
2. Whether the trial court erred by allowing Lindahl, Browning, and Ferrari—who were not parties to the homeowners’ action—to be joined and subjected to judgment as cross-claim defendants.

## Decision

- The Fourth District Court of Appeal reversed the final judgment entered in favor of Laralen and Raich against Lindahl, Browning, and Ferrari.
- The court held that Lindahl, Browning, and Ferrari were impermissibly joined as cross-claim defendants.
- Because the joinder was improper, the judgment based on the cross-claim could not stand.

## Legal Principles

- A cross-claim under Florida Rule of Civil Procedure 1.170(g) is a claim by one party against a co-party arising out of the same transaction or occurrence as the subject matter of the original action (or a counterclaim).
- Rule 1.170 does not allow a litigant to add a nonparty as a cross-claim defendant merely by labeling the demand a cross-claim; adding parties must be authorized by the joinder rules incorporated by the civil rules.
- Additional parties may be joined in connection with cross-claim litigation only when the rules governing party joinder permit it and the added party’s involvement is tied to resolution of the cross-claim between existing parties.
- A breach-of-contract dispute arising from a separate agreement between a defendant and an outsider to the lawsuit is not properly injected into the action through cross-claim practice where the outsider is not a co-party and is not needed to decide the cross-claim among existing parties.
- When an impleader attempt is dismissed because the claim is not derivative of the plaintiff’s claim, a party may not reintroduce the same independent contract claim by attempting to add the contract counterparty as an extra cross-claim defendant.

## Conclusion

Lindahl v. Laralen Corp. reverses a judgment where defendants attempted to litigate a separate breach-of-contract dispute inside the homeowners’ lawsuit by adding nonparties as cross-claim defendants; the court held that cross-claims are for disputes among co-parties and cannot be used to bring in outsiders whose presence is not required to resolve claims between existing parties.


Lindahl v. Laralen Corp., 661 So. 2d 412 (1995)