## Facts

- Atlantis operated commercial submarine tours off Waikiki and contracted with Rainbow Management Group, Ltd. (RMG) to transport passengers using RMG’s vessel, the *Elua*.
- During an at-sea passenger transfer involving the *Elua* and the submarine *Atlantis X*, the *Elua* collided with a nearby Boston Whaler owned by George A. Haydu.
- The Boston Whaler was destroyed; multiple passengers were injured; the *Elua* was damaged and later repaired.
- In an earlier federal action by an injured passenger (the Berry litigation), the plaintiff sued Atlantis, RMG, and Haydu for negligence arising from the collision.
- In that earlier action, Atlantis asserted claims against RMG (including breach of contract and contribution/indemnity), and RMG asserted claims against Atlantis for contribution/indemnity, but RMG did not assert its own claim for damage to and loss of use of the *Elua*.
- About a year later, RMG filed this separate suit against Atlantis (and Haydu) seeking recovery for damage to and loss of use of the *Elua*.
- Atlantis moved for summary judgment, arguing RMG’s property-damage and loss-of-use claims were barred because they should have been pleaded as compulsory counterclaims in the earlier Berry litigation once Atlantis asserted claims against RMG.

## Issues

1. Whether co-parties become “opposing parties” for purposes of Federal Rule of Civil Procedure 13(a) when one co-party asserts a claim against the other in the same action.
2. Whether RMG’s later claim for damage to and loss of use of the *Elua* arose from the same transaction or occurrence as Atlantis’s earlier claims, making it a compulsory counterclaim in the Berry litigation.
3. Whether failure to plead that compulsory counterclaim in the earlier action barred RMG from bringing it in a later, separate lawsuit.

## Decision

- The court granted Atlantis’s motion for summary judgment.
- The court held that once Atlantis asserted claims against RMG in the Berry litigation, Atlantis and RMG became “opposing parties” within the meaning of Rule 13(a).
- The court found RMG’s vessel-damage and loss-of-use claims arose from the same collision that formed the basis of the claims litigated between Atlantis and RMG in the Berry action.
- Because RMG did not assert those claims as compulsory counterclaims in the earlier action, the court ruled they were barred in this later suit and dismissed them.

## Legal Principles

- Under Federal Rule of Civil Procedure 13(a), a claim arising out of the same transaction or occurrence as an opposing party’s claim must be pleaded as a compulsory counterclaim or it is barred in later litigation.
- Co-parties become “opposing parties” for Rule 13(a) when one asserts a claim against the other during the action, regardless of their initial alignment as co-defendants.
- Federal Rule of Civil Procedure 13(g) permits cross-claims between co-parties arising from the same transaction or occurrence, and the filing of such claims can create an adversarial posture that triggers Rule 13(a)’s compulsory-counterclaim requirement for other transactionally related claims.

## Conclusion

The court entered summary judgment for Atlantis, holding that Atlantis’s assertion of claims against RMG in the earlier collision lawsuit made the parties “opposing” under Rule 13(a), requiring RMG to plead its related vessel-damage and loss-of-use claims then; because RMG failed to do so, its later standalone suit was barred.


Rainbow Mgmt. Grp., Ltd. v. Atlantis Submarines Haw., L.P., 158 F.R.D. 656 (D. Haw. 1994)