Mirchandani v. BMO/TradeCor (CA1 5/27/14)

The court holds that Rule 13 means what it says. That is necessary in a world where trial judges make rulings like this.

Mirchandani borrowed money from BMO and defaulted. BMO sold and assigned ts rights to TradeCor, which sued him and got summary judgment. Mirchandani then filed suit against BMO and TradeCor, making every allegation that a bright service-station owner (or one with legal counsel behind the scenes) can think of as an alternative to paying his debt. TradeCor moved to dismiss because the allegations were compulsory counterclaims in the first suit. The trail court granted the motion and this opinion affirms. The point of the opinion, though, is that BMO also moved to dismiss, apparently arguing that as its assignee TradeCor stood in its shoes and therefore that it, too, should be treated as a party for Rule 13 purposes. The trial court bought that argument.

The Court of Appeals does not. BMO cited a Third Circuit case holding that a successor-in-interest by virtue of corporate restructuring was the “functional equivalent” of its predecessor, the named party. The court wastes no time on this. “We see no basis here to depart from the plain language of Rule 13 . .. . Even if we chose to follow [the Third Circuit case] in broadening the meaning of “opposing party,” the exceptions recognized therein . . . are very narrow and not applicable here.”

(link to opinion)