                                                                                                                           Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-2-2005

Durabla Mfg Co v. Goodyear Tire
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-1818




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"Durabla Mfg Co v. Goodyear Tire" (2005). 2005 Decisions. Paper 1487.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1487


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                                                      NOT PRECEDENTIAL

             UNITED STATES COURT OF APPEALS
                  FOR THE THIRD CIRCUIT
                       ____________

                            No. 04-1818
                           ____________

           DURABLA MANUFACTURING COMPANY,

                                   Appellant

           GOODYEAR TIRE & RUBBER COMPANY;
         GOODYEAR CANADA INC., a/k/a GOODYEAR
      TIRE & RUBBER COMPANY OF CANADA, LIMITED,

                       Defendants/Third-Party Plaintiffs

                                 v.

                   DURABLA CANADA LTD.,

                            Third-Party Defendant
                           ____________

           On Appeal from the United States District Court
                    for the District of New Jersey
                       (D.C. No. 98-cv-03221)
             District Judge: Honorable John C. Lifland
                            ____________

                      Argued January 26, 2005

Before: SCIRICA, Chief Judge, RENDELL and FISHER, Circuit Judges.

                       (Filed March 2, 2005 )
William F. Mueller (Argued)
Clemente, M ueller & Tobia
218 Ridgedale Avenue
P.O. Box 1296
Morristown, NJ 07962
      Attorney for Appellant

David J. Novack
Budd, Larner, Gross, Rosenbaum,
 Greenberg & Sade
150 John F. Kennedy Boulevard, 3 rd Floor
Short Hills, NJ 07078-0999

Robert C. Mitchell
Vorys, Sater, Seymour & Pease
52 East Gay Street
P.O. Box 1008
Columbus, OH 43216

Diane F. Bosse (Argued)
Volgenau & Bosse
237 Main Street
750 Main Seneca Building
Buffalo, NY 14203
      Attorneys for Appellees, Goodyear Tire
      & Rubber Company and Goodyear
      Canada Inc.

Jeffrey S. Lipkin
Drinker, Biddle & Reath
500 Campus Drive
Florham Park, NJ 07932
       Attorney for Appellee, Durabla Canada Ltd.

                                    ____________

                               OPINION OF THE COURT
                                    ____________




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FISHER, Circuit Judge.

       Appellant Durabla Manufacturing Company (“Durabla”) appeals from the District

Court’s grant of summary judgment in favor of Appellees Goodyear Tire & Rubber

Company and Goodyear Canada Inc. (collectively “Goodyear”) and denial of Durabla’s

Motion for Reconsideration of the summary judgment order. The District Court granted

summary judgment primarily on grounds that Durabla was not the real party in interest to

the indemnity and contribution claims in this action. See Fed. R. Civ. P. 17(a). Rather,

the District Court determined that Durabla’s three insurance carriers who had paid all

asbestos settlement and defense costs to date were the real parties in interest. Upon

reconsideration, the District Court determined that Durabla had exceeded the reasonable

time period after objection for the filing of its insurers’ ratifications as provide for in Rule

17(a) and declined to accept the ratifications that would permit Durabla to maintain the

suit on its insurers behalf.

       Because we write only for the parties who are familiar with the factual and legal

contentions, this opinion discusses only those issues related to the real party in interest

analysis and Rule 17(a) ratification. We will remand for further proceedings because we

determine that Durabla should have been permitted an opportunity to provide ratifications

from its insurers upon the District Court’s determination that Durabla was not a real party

in interest for purposes of maintaining suit. 1 We have carefully considered and will


       1
      Although our standard of review is plenary in relation to our review of summary
judgment determinations, we apply an abuse of discretion standard in reviewing the

                                               3
affirm the District Court’s conclusions as to all remaining claims including the res

judicata effect of the New York Action as to Counts One, Seven, Eight and Nine; the

requirement of a “judgment” for purposes of maintaining a contribution claim under the

New Jersey Joint Tortfeasors Contribution Act N.J.S.A. 2A:53A-1 through 29; and the

finding that the declaratory judgment claim does not concern an actual controversy ripe

for judicial determination.

       Rule 17(a) of the Federal Rules of Civil Procedure provides that

       [e]very action shall be prosecuted in the name of the real party in interest.
       An executor, administrator, guardian, bailee, trustee of an express trust, a
       party with whom or in whose name a contract has been made for the benefit
       of another, or a party authorized by statute may sue in that person’s own
       name without joining the party for whose benefit the action is brought....
       No action shall be dismissed on the ground that it is not prosecuted in the
       name of the real party in interest until a reasonable time has been allowed
       after objection for ratification of commencement of the action by, or joinder
       or substitution of, the real party in interest....

       Durabla challenges the District Court’s determination that it was not the real party

in interest pursuant to Rule 17(a) because its entire loss to date had been paid for by its

insurers. Durabla argues that there was only partial subrogation given the continuing

nature of the claims that would ultimately lead to the exhaustion of insurance coverage.

But, Durabla admitted that its three insurance carriers covered all defense and settlement

costs incurred to date. The proper analytical framework therefore is that of a fully-


denial of the motion for reconsideration to permit a reasonable time for ratification by the
insurers. See Curley v. Klem, 298 F.3d 271, 276-77 (3d Cir. 2002); ICON Group, Inc. v.
Mahogany Run Development Corp., 829 F.2d 473 (3d Cir. 1987); Federal Kemper Ins.
Co. v. Rauscher, 807 F.2d 345, 348-49 (3d Cir. 1987).

                                              4
subrogated claim, where an insurer who pays the entire loss incurred is the only real party

in interest. United States v. Aetna Casualty & Surety Co., 338 U.S. 366 (1949). As the

District Court correctly determined, Durabla is not a real party in interest to these fully-

subrogated claims.

       Durabla is correct in its assertion that under the circumstances presented here, the

District Court should have provided an opportunity for Durabla to provide its insurers’

ratifications within a reasonable time from the District Court’s determination that Durabla

was not a real party in interest. Rule 17(a) requires that no action be dismissed upon a

finding that it was not brought by the real party in interest absent allowance of a

reasonable period following objection for ratification by the real party in interest. Fed. R.

Civ. P. 17(a).

       After the District Court entered summary judgment, Durabla sought

reconsideration of that order asserting inter alia that Durabla should have been given an

opportunity to obtain ratification. In support of its argument, Durabla pointed to the fact

that prior to the entry of summary judgment, Durabla had provided an informal

ratification in the form of a letter from counsel indicating that the insurers would consent

to maintenance of the action on their behalf. This “informal ratification” was insufficient

as a matter of law given that it did not come from Durabla’s insurers and failed to

communicate an agreement to be bound by its result. ICON Group v. Mahogany Run

Development Corp., 829 F.2d 473, 478 (3d Cir. 1987) (proper ratification under Rule



                                              5
17(a) requires that the ratifying party (1) authorize continuation of the action and

(2) agree to be bound by its result).

       The District Court discounted Durabla’s submission of ratifications from its

insurance carriers in conjunction with its motion for reconsideration finding that they

were provided beyond a reasonable time from Goodyear’s real party in interest objection

as provided for in Rule 17(a). While it is true that Durabla had ample opportunity since

the filing of Goodyear’s objection in 2000 in which to file such ratifications, it also is

apparent from the hotly-contested real party in interest issues before this Court that

Durabla was pursuing other avenues, whether by necessity in order to obtain ratifications

from its insurers or as part of its litigation strategy. Regardless of the reason Durabla

persisted in maintaining the suit on its own behalf, under the circumstances presented

here, we find it was an abuse of discretion to deny Durabla a reasonable time from the

determination that it was not a real party in interest to obtain ratifications from its

insurers. See ICON, 829 F.2d at 477-78 (Court provided ICON repeated opportunities to

ratify where prior ratifications were not effective, given complexity of litigation, and

ICON’s good faith attempt to comply with a prior district court order requiring

ratification). However, we do not hold generally that an order of court is required to

trigger the obligation to provide ratification. Rather, our holding is premised upon the

facts presented in this case, which as in ICON, evidence Durabla’s good faith in

advancing its position given the complexity of the asbestos litigation it faces nationally.



                                               6
       We have considered all of the arguments of the parties and conclude that no

further discussion is necessary. We will affirm the judgment of the District Court

granting summary judgment to Goodyear including the Orders of Court dated April 16,

1999 and December 31, 2002. We will reverse the District Court’s August 6, 2003 Order

denying Durabla’s Motion for Reconsideration of the December 31, 2002 determination

only to the extent that the District Court should have permitted Durabla an opportunity to

provide ratifications from its insurers. We will remand the case to permit Durabla to

proceed with the action pursuant to the ratifications previously provided to the District

Court. Consequently, we vacate the final judgment entered March 2, 2004.




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