## Facts

- A chicken farmer sued a poultry-systems manufacturer and a contractor, alleging defective construction of chicken houses and asserting contract, fraud, negligence, and wantonness claims against the contractor.
- The contractor filed a third-party complaint against a nail manufacturer, alleging the nails used in construction were defectively designed.
- The contractor asserted third-party claims including breach of warranty, liability under the Alabama Extended Manufacturer’s Liability Doctrine, and common-law indemnity.
- The contractor sought leave to file the third-party complaint about six months after removal to federal court, but did not successfully serve the nail manufacturer until several months later due to an initial error in identifying the proper agent for service.
- The nail manufacturer moved to dismiss, arguing improper impleader under Federal Rule of Civil Procedure 14(a) and, alternatively, that laches barred the third-party claims.

## Issues

1. Whether the contractor’s third-party complaint properly invoked Rule 14(a) because the nail manufacturer’s potential liability to the contractor was derivative of, and contingent on, the contractor’s liability to the plaintiff.
2. Whether laches barred the third-party complaint based on the delay between removal and effective service, considering both the reasonableness of the delay and resulting prejudice.

## Decision

- The court denied the motion to dismiss.
- The court held the third-party complaint was a proper Rule 14(a) impleader because it sought to pass through all or part of any liability the contractor might owe the plaintiff, rather than assert a separate, independent claim.
- The court held laches did not apply because the delay was not sufficiently unreasonable in the context of ongoing litigation and the nail manufacturer did not show material prejudice.
- The nail manufacturer remained in the case as a third-party defendant.

## Legal Principles

- Rule 14(a) permits impleader when the proposed third-party defendant’s liability is derivative of the original defendant’s liability to the plaintiff; impleader is improper for separate and independent claims.
- A third-party claim may be maintained when it is contingent on the original defendant being held liable and seeks indemnity or contribution-like relief tied to the plaintiff’s recovery.
- Under Alabama law, implied contractual indemnity may be available when the party seeking indemnity is without fault and is required to pay for harm that another party primarily caused.
- Laches requires both unreasonable delay and prejudice to the opposing party; absent a showing of prejudice, dismissal on laches grounds is not warranted.

## Conclusion

The court allowed impleader of the nail manufacturer because the contractor’s third-party claims were contingent on the contractor’s potential liability to the plaintiff and sought derivative relief, and the court refused to bar the third-party complaint by laches where delay in service did not cause demonstrated prejudice.


Price v. CTB, Inc., 168 F. Supp. 2d 1299 (M.D. Ala. 2001)