United States District Court, W.D. Kentucky, Owensboro Division
CSX TRANSPORTATION, INC. PLAINTIFF
LUSTER EXPRESS, LLC d/b/a Bama Freight, LLC DEFENDANT
MEMORANDUM OPINION AND ORDER
Brent Brennenstuhl United States Magistrate Judge
the Court is the motion of Praetorian Insurance Company (DN
14) to intervene in this action to assert a property damage
subrogation claim against Plaintiff CSX Transportation, Inc.
CSX opposes the motion and has filed a response at ¶ 15,
to which Praetorian has replied at ¶ 16.
of the Case
14, 2015, Jason Sullivan, an employee of Defendant Luster
Express, LLC, was driving a tractor unit pulling a flatbed
drop deck trailer. When Sullivan attempted to cross a set of
railroad tracks, his trailer became stuck. An oncoming CSX
train struck the trailer, pushing it down the track and
destroying a crossing signal and signal house (DN 1). CSX
brings this negligence action against Luster Express for
Motion to Intervene
provided insurance coverage to Luster for the tractor-trailer
involved in the accident. Praetorian alleges it paid for
damage to the truck, trailer and cargo, as well as towing and
storage fees, totaling approximately $119, 000.00, and is
subrogated to Luster for recovery of those payments.
Praetorian seeks to intervene in this action to assert a
claim against CSX pursuant to Fed.R.Civ.P. 24(a) as a matter
of right, as it contends its claims relate to the property or
transaction that is the subject of this action and is so
situated that disposing of the action may impair or impede
its ability to protect its interest. In the alternative,
Praetorian asserts that is should be permitted to intervene
under Rule 24(b).
contends that Fed.R.Civ.P. 13(a) requires that any
counterclaim against it must have been asserted when Luster
filed its answer. As Praetorian is a subrogee of Luster, and
therefore stands in the shoes of its insured with regard to
the assertion of the subrogation claim, CSX argues that the
subrogation claim must have been asserted as a counterclaim,
and Praetorian is estopped from attempting to assert it now.
In support of its position, CSX cites Avemco Ins. Co. v.
Cessna Aircraft Co., 11 F.3d 668 (10th Cir. 1993) and
Cincinnati Ins. Co. v. Cost Co., No. 5:10CV7, 2011
U.S. Dist. LEXIS 3155 (N.D. W.Va. Jan. 12, 2011) for the
proposition that “pleader” as used in Rule 13(a)
includes any subrogation claim and, as such, a subrogation
claim is a mandatory counterclaim which must be asserted at
the outset of the defense.
Civ. P. 13(a) defines a compulsory counterclaim as one which
arises out of the transaction or occurrence that is the
subject matter of the opposing party's claim and does not
require the addition of another party over whom the court
cannot acquire jurisdiction. If both of these factors are
satisfied, then the pleader must state any such claim it
holds at the time of service. The reason for the rule has
been explained as follows:
“The requirement that counterclaims arising out of the
same transaction or occurrence as the opposing party's
claim ‘shall' be stated in the pleadings was
designed to prevent multiplicity of actions and to achieve
resolution in a single lawsuit of all disputes arising out of
common matters. The Rule was particularly directed against
one who failed to assert a counterclaim in one action and
then instituted a second action in which that counterclaim
became the basis of the complaint.”
Kirschbaum v. Wells Fargo, N.A., No.
5:16-CV-136-JHM, 2017 U.S. Dist. LEXIS 47308, *18 (W.D. Ky.
March 30, 2017) (quoting Southern Const. Co. v.
Pickard, 371U.S. 57, 60 (1962).
to CSX's suggestion, Rule 13(a) does not establish a
“speak now or forever hold your peace” doctrine.
“The Court . . . considering the applicability of Rule
15 holds that a compulsory counterclaim not raised in an
answer cannot be raised in subsequent litigation but may be
filed (is not waived) in the instant litigation with the
Court's permission. Accordingly, [defendant] did not
waive the compulsory counterclaim when it failed to raise it
in its answer ...