4.8 Aggressive Pleadings by Defendant and Third Party Practice

• Library: Virginia Law and Practice: A Handbook for Attorneys (Virginia CLE) (2020 Ed.)

4.8 AGGRESSIVE PLEADINGS BY DEFENDANT AND THIRD PARTY PRACTICE

4.801 Overview: What We Are Dealing With.

1.	Claims by defendant v. plaintiff asserted in the context of the action/suit brought by plaintiff v. defendant.
	a.	May be defensive: "I don't owe you anything because . . ."

[Page 384]

	b.	Or offensive: "Even if I owe you $X, I don't have to pay, because you owe me $Y."
	c.	Terminology. 852
	d.	There is no compulsory counterclaim, but beware of issue of collateral estoppel.
	e.	Set off. 853
2.	Claims by Defendant 1 v. Defendant 2 854
	a.	A "pass the buck" procedure.
	b.	May be against another existing defendant.
	c.	Or a defendant may bring in another new defendant ("third-party practice"). 855
	d.	Terminology. 856
3.	Third-Party Intervention. 857
	a.	Party not already involved in the litigation.
	b.	Voluntarily joins in.
4.	Note Nonsuits. Usually within sole power of plaintiff. But if a counterclaim, cross-claim or third party claim is filed, defendant's consent is necessary, unless such claims can be tried separately. 858

[Page 385]

4.802 Defendant Versus Plaintiff: Counterclaims and Cross-Claims.

1.	Counterclaim. 859
	a.	For circuit court, rules govern. 860
	b.	For general district court, see Va. Code § 16.1-88.01.
	c.	Need not grow out of the same transaction.
	d.	Permissive (Optional)
		(1)	So, the failure of defendant to raise does not result in res judicata bar. 861
		(2)	But collateral estoppel might bar later action by defendant.
	e.	Timing
		(1)	Defendant must file within 21 days of service of complaint or within an extended time granted defendant under Rule 1:9.
		(2)	statute of limitations tolled by plaintiff's filing if defendant's claim arises from same transaction. 862
		(3)	Defendant may assert any claim versus plaintiff acquired up to time of filing of defendant's pleading.
	f.	How to Plead:
		(1)	Separate paper, or

[Page 386]

	(2)	In answer, separately identified.
g.	Amount: may exceed amount sued for by plaintiff in complaint. 863
h.	Subject Matter
	(1)	Need not be liquidated damages
	(2)	Tort or contract. Quaere: can the counterclaim itself mix tort and contract claims? 864 Answer: yes.
i.	Court has discretion to order a separate trial. 865
j.	Filing counterclaim waives defendant's right to remove to federal court (as in effect, defendant becomes a plaintiff). 866
k.	Plaintiff's response: same as defendant's to complaint. 867 Don't forget to do so by confusing with replication.
l.	Materiality.
	(1)	Counterclaim must be against plaintiff, in same capacity as plaintiff's claim against defendant, for example:
		(a)	Surety. If plaintiff sues principal and surety, surety may set out principal's claims against the plaintiff, but not debt owed to surety personally by the plaintiff. 868

[Page 387]

	(b)	Spouses. Defendant may not set off debts owed by one spouse alone in action by spouses jointly as plaintiffs. 869
	(c)	Assignor and Assignee. Because of materiality rule, defendant can counterclaim v. assignee plaintiff amount due to defendant from assignee only (and not also due from assignor). But statute allows defendant to bring in assignor so excess can be set off against him. 870
(2)	Common Law
	(a)	"Set-off" unknown—extrinsic to plaintiff's demand.
	(b)	Common law "recoupment" was known and survives Rule 3:9. 871
		i. Same transaction.
		ii. Break-even at best; no excess can be recovered.
		iii. Not against a sealed instrument.
		iv. statute of limitations: tolled by plaintiff's filing since same transaction, defendant has no statute of limitations problem.
(3)	Statutory
	(a)	Recoupment. 872

[Page 388]

i. Contract actions only.

ii. Must arise from contract sued on. 873

iii. Allows recovery in excess of plaintiff's claim. 874

iv. Allows assertion of equitable defenses.

4.803 Defendant Versus Another Defendant: Cross-Claims.

1.	Cross-claim. 875
	a.	Subject Matter
		(1)	Must grow out of matter pleaded in complaint. 876
		(2)	May be any cause of action against any one or more defendants. 877
	b.	Against another existing defendant only. 878
	c.	Timing
		(1)	21 days after service of complaint on the cross-claiming defendant. Subject to court-allowed extension. 879
		(2)	Defendant's cause of action need not exist at the time of plaintiff's filing.

[Page 389]

	(3)	statute of limitations on defendant's claim arising from same transaction as plaintiff's complaint tolled from date of plaintiff's filing. 880
d.	Treated as new complaint.
	(1)	So service of Notice of cross-claim necessary.
	(2)	But not for purposes of costs; no writ tax or filing fee due.
	(3)	The other defendant pleads to cross-claim as if complaint. 881

4.804 Bringing in Additional Parties at Law.

1.	Rules 3:12 and 3:13.
2.	At law, provisions now in rules:
	a.	Presence necessary for just adjudication. 882
	b.	Third-party practice: party liable to existing defendant. (Rule 3:13).
	c.	Additional defendant on plaintiff's motion. 883
3.	"Presence Necessary." 884
	a.	"May" cf. Fed. R. Civ. P. 19 versus "shall." This difference, together with Rule 3:12, robs the rule of much of its significance.
	b.	Additional party brought in by order of court on motion of

[Page 390]

	(1)	Plaintiff.
	(2)	Defendant.
	(3)	Additional party himself (intervention in Rule 3:14).
c.	An additional party can be brought in as a defendant or an involuntary Plaintiff. 885
d.	Grounds: presence of additional party necessary to
	(1)	Give existing parties complete relief, or
	(2)	Protect additional party's interest in subject matter, or
	(3)	Protect existing parties from multiple liability by reason of the additional party's interest.
	(4)	Note that if such a party exists and is not joined initially, plaintiff must include names and reasons why not joined, in his original pleading. 886
e.	Motion to join:
	(1)	Must be filed with the clerk within 21 days after service of complaint on movant. 887
		(a)	Subject to Rule 1:9 (extension in discretion of court.)
		(b)	No provision for when an additional party may move, although Rule 3:12 contemplates he may come in to protect his interest. 888 Quaere whether a non-party can make a motion.

[Page 391]

		(2)	Must be served as complaint. Subject to Rules except no payment of writ tax and clerk's fees.
	f.	Disposition if the additional party cannot be joined:
		(1)	Action dismissed if the trial Court determines that in equity and good conscience the action should not proceed. Factors to be considered include: 889
			(a)	To what extent judgment without him may be prejudicial to the existing parties
			(b)	How the prejudice can be lessened by
				i.	Protective provisions in the judgment.
				ii.	The shaping of relief.
				iii.	Other measures.
			(c)	Whether judgment without him will be adequate.
			(d)	Whether plaintiff will have an adequate remedy if the action is dismissed.
			(e)	A pleading asserting a claim for relief shall state the name, if known, of any person who are not joined and the reason why not joined. 890
4.	Third-Party Practice. 891
	a.	Fed. R. Civ. P. 14: can get help with construction from authorities discussing it. 892

[Page 392]

b.	Rule applies for circuit courts; for general district court. 893
c.	Purpose:
	(1)	To dispose of all plaintiff's claims among defendants and potential defendants in one setting, namely, judicial economy, for example, indemnity and contribution claims.
	(2)	See Valley Landscape Co. v. Rolland, 218 Va. 257, 237 S.E.2d 120 (1977).
d.	Procedure by defendant:
	(1)	Defendant ("third-party plaintiff", third-party plaintiff) files a third-party complaint and requests service on nonparty ("third-party defendant," third-party defendant). Or, if counterclaim against him or her, plaintiff can also bring in a third-party defendant (as in posture of a defendant).
	(2)	No leave of court necessary (if timely): just like commencing new action third-party plaintiff

...