Young C. Park, et al., Appellants, v. George A. Didden, Jr., Individually and As Trustee for Annacarry, Minna Carry, Joseph Carry (deceased), Antoinettecarry, Charles A. Carry, Jr., Jean C. Miller, Albert J.didden, Joseph R. Didden, Robert J. Carry, Marie W.knighton, Elizabeth A. Tate, Clement A. Didden, Louise C.becke, Fannie N. Smith, Albert J. Carry, 695 F.2d 626 (D.C. Cir. 1982)

This is an appeal from a judgment of the district court dismissing a civil action with prejudice at the pleading stage. To support the dismissal the district judge cited Rule 19 of the Federal Rules of Civil Procedure. We conclude that the district court misunderstood and therefore misapplied the Rule.

Rule 19, titled "Joinder of Persons Needed for Just Adjudication," was revised in 1966 to steer judges away from "a jurisprudence of labels."¹  The Rule does not characterize parties as "necessary," and it uses the word "indispensable" only in a conclusory sense:

To say that a court "must" dismiss in the absence of an indispensable party and that it "cannot proceed" without him puts the matter the wrong way around: a court does not know whether a particular person is "indispensable" until it has examined the situation to determine whether it can proceed without him.

Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 119, 88 S. Ct. 733, 743, 19 L. Ed. 2d 936 (1968).²  On defendant's motion, and without an examination of the quality Rule 19 demands, the district court dismissed this action "for failure to join necessary and indispensable parties." Considerations that should attend a court's response to a motion invoking Rule 19 reveal that the action should not have been dismissed. Accordingly, we reverse the district court's judgment and remand the case for further proceedings.

An "Assignment of Lease"³  to business premises gave rise to this action, commenced in federal court on the basis of the named parties' diverse citizenship. 28 U.S.C. § 1332. Plaintiff-appellants Young C. Park and Young W. Park were assignees of a leasehold interest in real property located at 419 Eleventh Street, N.W., Washington, D.C., when the property was condemned by the Pennsylvania Avenue Development Corporation (PADC).⁴  Alleging their Maryland residence, the Parks sued George A. Didden, Jr., a District of Columbia resident and one of several co-owners of the property.⁵ 

The complaint states that Munch Time, Inc., a District of Columbia corporation, leased the premises in question from Didden and others on April 14, 1973, and that two years later, on April 25, 1975, the Parks purchased Munch Time's food service business, obtaining, in conjunction with the purchase, an assignment of the lease. The assignment, annexed to the complaint, refers to Didden as "Landlord" and is signed by Didden "For Landlord." App. 15. The Parks further allege that on June 14, 1978, they contracted to sell their business for $80,000 plus inventory at cost. App. 22. This agreement, they assert, was conditioned upon an assignment of the lease to the purchasers. Didden, the complaint charges, unreasonably withheld consent to the proposed assignment. Two years thereafter, PADC condemned the property and notified the Parks to vacate the premises by June 30, 1981. App. 16.

Based upon these facts, the complaint presents three claims for breach of contract and unjust enrichment. Two demand compensation for leasehold improvements, the first in the amount of $18,225, the second in the amount of $100,000. Recovery on these claims apparently is sought out of sums paid or payable to the former property owners by PADC. The third claim seeks damages in the amount of $100,000 for Didden's alleged refusal to consent to a further assignment of the lease in 1978, and the consequent inability of plaintiff-appellants to consummate the sale of their business.

The Parks filed their complaint on June 10, 1981. Didden answered on July 29 and moved to dismiss on September 24. On October 29, before discovery commenced and following a brief hearing, the district court signed and filed a "Final Judgment of Dismissal." The fifteen-line Judgment, unaccompanied by any fact findings or memorandum, summarily states two reasons for dismissing "the entire action" against Didden "with prejudice": "failure to join necessary and indispensable parties," and "forum non conveniens."⁶  Neither reason withstands analysis.

Before dismissing an action under the aegis of Rule 19, the district court must be positioned to say, with the security afforded by careful, practically-oriented exploration and evaluation of the facts and circumstances of the particular case: 1) one or more persons not joined as a party is indeed "needed for just adjudication," 2) joinder of such person(s) is not feasible, and 3) dismissal is preferable to adjudication without the unjoined person(s). The district court rushed to judgment in this case without following the instructions Rule 19 supplies. Those instructions indicate that the case can be fairly and effectively decided between the Parks and Didden without joining other parties.

Didden points out that four assignees are named in the April 25, 1975, Assignment of Lease and that two of the four have not joined this action.⁷  Since the citizenship of the two absent assignees does not appear, Didden assumes that their joinder would destroy the court's diversity jurisdiction. He suggests that, absent joinder of all four assignees, he will be exposed to multiple suits and that the precedential force of a judgment here could, as a practical matter, prejudice his position or that of the absent assignees. See Rule 19(a) (2). On this reasoning, he types the absent assignees "indispensable." See Rule 19(b).

The Parks suggest in their reply brief that the absent assignees are not even "proper" parties to this action,⁸  because they terminated their interest in the Parks' business prior to the events in suit and, contemporaneously, surrendered their interest in the leasehold.⁹  Moreover, at the argument of this appeal, counsel for plaintiff-appellants represented that the two absent assignees are Maryland residents whose joinder would not destroy the court's diversity jurisdiction.

We need not dwell on this matter, for it appears that the district court perceived the party line-up on the defendant's side as the impediment to adjudication.¹⁰  Had the district court focused on the absent assignees, it likely would have afforded the named plaintiffs an opportunity to establish that the absentees had no interest in the controversy. Alternatively, if the plaintiffs failed to establish that the absentees had no interest in the dispute, the court likely would have granted plaintiffs leave to amend their complaint to join the absent assignees as parties. See Fed. R. Civ. P. 15(a) (leave to amend pleading "shall be freely given when justice so requires").

We set out first an account of the district court's reasoning, as revealed in the transcript of the October 29, 1981, hearing on the motion to dismiss. Next we explain why we conclude that no lessor other than Didden was even arguably "needed for just adjudication" of the Parks' third claim, which concerned Didden's alleged unreasonable refusal to consent to reassignment of the lease. We turn finally to the claims apparently directed to the condemnation award and explain why we conclude that those claims also should be entertained even if Didden remains the sole defendant.

In opposition to the motion to dismiss, counsel for the Parks emphasized Didden's signature on the lease assignment "For Landlord," and contended that Didden was appropriately sued both "individually and as trustee." Tr. 4. Didden had acknowledged that he was trustee of the estate of co-lessor Joseph Carry, App. 23, 30, but maintained that, as to the other co-lessors, he was not a trustee. Instead, he acted under a power of attorney.¹¹  Upon inspecting the power, which Didden had held since 1954, the district judge commented: "It certainly appears to be a very general power to do anything in connection with the real estate." Tr. 5.

The district judge then inquired whether any co-lessor, other than Joseph Carry, had died. Didden's counsel replied that "in the last year and a half," co-lessor Anna Carry had "passed away"; Didden, counsel reported, was an executor of Anna Carry's estate. Tr. 7. The recent death of a co-lessor settled the case for the district court. The district judge apparently reasoned in this sequence: 1) death terminates a power of attorney; 2) the death Didden's counsel reported made it necessary to join all co-lessors; 3) like the Parks, some of the co-lessors were Maryland citizens; 4) therefore, the case had to be dismissed "for no jurisdiction." Tr. 7-11.

The district judge correctly noticed that joinder of all co-lessors would destroy the federal court's diversity jurisdiction. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L. Ed. 435 (1806) (Chief Justice Marshall's declaration of the "complete diversity" rule). But the district judge accurately perceived only one step, the second, in the three-step analysis Rule 19 requires. First, Rule 19(a) calls for a determination whether the co-lessors were persons needed for just adjudication who should be joined as defendants if feasible. As to the Parks' claim tied to their 1978 attempt to reassign the lease, the answer should have been no. Second, was joinder of absent co-lessors feasible? Here, as the district court recognized, joinder of all co-lessors (or their executors) was not feasible because it would strip the court of subject matter competence based on diversity. See Provident Tradesmens Bank & Trust Co., supra, 390 U.S. at 108-09, 88 S. Ct. at 737. Third, in Rule 19(b) language, did "equity and good conscience" point to dismissal or to adjudication limited to the parties before the court? As to the claims tied to the condemnation award, the latter answer should have been supplied.

2. The third claim--Didden's alleged unreasonable refusal to consent to reassignment of the lease

"The determination [whether a person is needed for just adjudication] is a matter of federal procedure, but in diversity cases the standards must be applied to rights and interests that are derived from, and defined by, state law." Jones Knitting Corp. v. A.M. Pullen & Co., 50 F.R.D. 311 (S.D.N.Y. 1970). In this case, we look to District of Columbia law governing the parties' rights and interests. The Parks call our attention to D.C.Code Sec. 16-2101, which broadly provides that, " [f]or the purposes of action thereon, a contract or obligation entered into by two or more persons ... is deemed to be joint and several." Such statutes are common, see 2 S. Williston, A Treatise on the Law of Contracts Sec. 336A (3d ed. 1959), and have been drawn with a view to facilitating the enforcement of multi-party contracts by negating defenses based on jurisdictional impediments to the joinder of all contracting parties. See 3A J. Moore & J. Lucas, Federal Practice p 19.10 at 19-218 to 19-219 (1982); Reed, Compulsory Joinder of Parties in Civil Actions, 55 Mich. L. Rev. 327, 366 (1957).

District of Columbia precedent cites D.C.Code Sec. 16-2101 as conclusive authority for the joint and several liability of co-lessees who fail to pay rent. Ostrow v. Smulkin, 249 A.2d 520 (D.C.1969). We have found no published decision applying D.C.Code Sec. 16-2101 to co-lessors, but the sweeping, general terms of the statute and its apparent purpose strongly suggest that the joint and several liability rule should apply to landlords as it does to tenants. Moreover, we note that in a case related to this one, Segal Realty, Inc. v. Didden, Civ. No. 8831-81 (D.C.Super.Ct. filed June 12, 1981),¹²  Didden filed a motion to dismiss similar to the one he filed here. On May 26, 1982, the Superior Court denied the motion, holding that "the other landlords are not indispensable parties."

An almost unbroken line of federal decisions holds that persons whose liability is joint and several may be sued separately in federal court. Jett v. Phillips & Associates, 439 F.2d 987 (10th Cir. 1971); Broidy v. State Mutual Life Assurance Co., 186 F.2d 490 (2d Cir. 1951); Greenleaf v. Safeway Trails, Inc., 140 F.2d 889 (2d Cir.), cert. denied, 322 U.S. 736, 64 S. Ct. 1048, 88 L. Ed. 1569 (1944); Wolgin v. Atlas United Financial Corp., 397 F. Supp. 1003 (E.D. Pa. 1975), aff'd, Blumenfeld v. Atlas United Financial Corp., 530 F.2d 963 and 530 F.2d 966 (3d Cir. 1976). But see Evergreen Park Nursing & Convalescent Home, Inc. v. American Equitable Assurance Co., 417 F.2d 1113 (7th Cir. 1969) (dismissal of a claim against six insurers because two of the joint obligors not joined). Indeed, a district court is permitted selectively to dismiss joined defendants, for the express purpose of preserving diversity. Horn v. Lockhart, 84 U.S. (17 Wall.) 570, 579, 21 L. Ed. 657 (1873); Conolly v. Taylor, 27 U.S. (2 Pet.) 556, 7 L. Ed. 518 (1829); Ross v. International Brotherhood of Electrical Workers, 634 F.2d 453 (9th Cir. 1980); Publicker Industries v. Roman Ceramics Corp., 603 F.2d 1065 (3d Cir. 1979); Jett, supra, 439 F.2d at 989-90; Reed v. Robilio, 376 F.2d 392 (6th Cir. 1967); Kerr v. Compagnie De Ultramar, 250 F.2d 860 (2d Cir. 1958); Dollar S.S. Lines, Inc. v. Merz, 68 F.2d 594 (9th Cir. 1934).

On the facts alleged by the Parks concerning Didden's 1978 refusal to consent to reassignment of the lease, we see no reasoned basis for designating the co-lessors as anything other than "proper" parties, persons whose joinder is permissive, not compulsory. See Fed. R. Civ. P. 20. Nor has Didden offered any ground to justify his invocation of Rule 19 as to this claim. His counsel addressed no response at all to the Parks' contention that D.C.Code Sec. 16-2101 renders Didden separately liable.¹³ 

3. The claims for recovery tied to the condemnation award

Didden's counsel does urge that his "indispensable party" argument, when trained on the claims tied to the condemnation award, is solidly grounded.

First, Didden implies that if the Parks prevail in their suit against Didden alone, and Didden pays a judgment out of the condemnation proceeds, Didden might, in later litigation, be adjudged liable to his co-lessors for the same proceeds. Such a risk of inconsistent adjudication and multiple liability is often accepted as sufficient to make an absentee claimant "indispensable." Williams v. Bankhead, 86 U.S. (19 Wall.) 563, 570-72, 22 L. Ed. 184 (1874); Ducker v. Butler, 104 F.2d 236 (D.C. Cir. 1939); see 7 C. Wright & A. Miller, Federal Practice and Procedure Sec. 1613 at 126-27 (1972) and cases cited therein. We can say, however, even on the spare record before us, that measures may be taken in this case to lessen or avoid prejudice to Didden, see Rule 19(b), and that instant dismissal of the claims was therefore improper. Discovery of the facts relevant to Didden's role in the management of the property and the receipt and distribution of the condemnation proceeds¹⁴  may reveal that he has authority to pay an eventual judgment from the fund,¹⁵  that the share of the proceeds indisputably allocable to Didden is adequate to satisfy the Parks' claims, or that Didden is answerable personally for all or part of the amount sought.¹⁶ 

Second, Didden suggests that proceeding without his co-lessors may undermine his right to contribution from them. These protests lose all force in light of the protection Rule 14 places within his grasp. Under that Rule, Didden may implead the absentees as persons "who [are] or may be liable to him for all or part of the plaintiff [s'] claim [s] against him." The district court would have ancillary jurisdiction over impleaded parties, thus their joinder would not destroy diversity jurisdiction. Cf. Pasco International (London) Ltd. v. Stenograph Corp., 637 F.2d 496, 503, 505 (7th Cir. 1980) (parties who may be impleaded under Rule 14 are never indispensable under Rule 19(b)). See also Challenge Homes, Inc. v. Greater Naples Care Center, Inc., 669 F.2d 667, 671 (11th Cir. 1982).

The laconic dismissal for nonjoinder of parties ordered by the district court is particularly bewildering because it occurred when the court knew very little about the capacity in which Didden in fact acted regarding the property and even less about the relationship of the absent landlords to the case. The Rules Advisory Committee has noted:

A joinder question should be decided with reasonable promptness, but decision may properly be deferred if adequate information is not available at the time. Thus the relationship of an absent person to the action, and the practical effects of an adjudication upon him and others, may not be sufficiently revealed at the pleading stage; in such a case, it would be appropriate to defer decision until the action was further advanced.

Fed. R. Civ. P. 19 advisory committee notes on the 1966 amendments. This is the proverbial case in which haste has made waste. Rule 19 motions should be treated with greater care.

Didden argued in the district court, and the district judge apparently agreed, that

[in] any event, the action should be dismissed because [the district court] is a "forum non conveniens." All the claims of all parties could have been brought in the Superior Court of the District of Columbia ... without any non joinder of parties, or jurisdictional problems.

Memorandum of Points and Authorities in Support of Defendant's Motion to Dismiss 3-4. The inconvenient forum argument has not been repeated here, therefore we treat it with dispatch.

The forum non conveniens doctrine presupposes two or more tribunals open to a plaintiff;¹⁷  it applies when the plaintiff has selected a distant place where trial will inflict undue expense and inconvenience upon the defendant. See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947). A doctrine concerning the locale of adjudication has no application to two tribunals situated in the same place. Forum non conveniens should not have figured in this case.¹⁸ 

CONCLUSION

For the reasons stated, the judgment of the district court is reversed and the case is remanded for proceedings consistent with this opinion.