The opinion of the court was delivered by: Foreman, Chief Judge:
This matter is before the Court on third-party defendant
Insulating & Materials Corporation's ("I & M") Motion to
Dismiss Marathon Oil Company's ("Marathon") Third-Party
Complaint; Marathon's Motion to Dismiss the Amended Complaint
for lack of subject matter jurisdiction; Marathon's Motion for
Set-off; and plaintiff Danny Stifle's Motion to Drop a
1. Plaintiff's Motion to Drop a Misjoined Party and
Marathon's Motion to Dismiss the Amended Complaint.
On January 4, 1988, plaintiff filed an Amended Complaint
that added I & M, which has its principal place of business in
Illinois, as a defendant. Under the original complaint, this
Court had subject matter jurisdiction by virtue of 28 U.S.C. § 1332.
Because plaintiff is a citizen of Illinois, adding I &
M as a defendant destroyed the diversity of citizenship between
the plaintiff and defendants. Subsequently, defendant Marathon
moved to dismiss the Amended Complaint for lack of subject
matter jurisdiction and plaintiff responded with a Motion to
Drop the Misjoined Party, I & M, pursuant to Rule 21 of the
Federal Rules of Civil Procedure.
Misjoinder of parties is not grounds for
dismissal of an action. Parties may be dropped or
added by order of the court on motion of any
party or of its own initiative at any stage of
the action and on such terms as are just. Any
claim against a party may be severed and
proceeded with separately.
Fed.R.Civ.P. 21. It is well-settled that courts may properly
avoid dismissing an action where joinder has destroyed
diversity by eliminating the party whose presence causes the
jurisdictional defect under Rule 21. Nevertheless, a court may
not drop a party under Rule 21 if his presence is needed for
just adjudication under Rule 19. Filippini v. Ford Motor Co.,
110 F.R.D. 131, 133-34 (N.D.Ill. 1986); Erie Mach. Prods., Inc.
v. Mazak Yamazuki Mach. Corp., 574 F. Supp. 1056, 1058 (E.D.Wis.
1983); C. Wright, A. Miller & M. Kane, Federal Practice and
Procedure § 1658 (1986).
Subdivision (b) of Fed.R.Civ. 19 provides that if joinder of
a party is not feasible because, among other considerations,
it will destroy subject matter jurisdiction, the court
shall determine whether in equity and good
conscience the action should proceed among the
parties before it, or should be dismissed, the
absent person being thus regarded as
indispensable. The factors to be considered by
the court include: first, to what extent a
judgment rendered in the person's absence might
be prejudicial to the person or those already
parties; second, the extent to which, by
protective provisions in the judgment, by the
shaping of relief, or other measures, the
prejudice can be lessened or avoided; third,
whether a judgment rendered in the person's
absence will be adequate; fourth, whether the
plaintiff will have an adequate remedy if the
action is dismissed for nonjoinder.
Marathon's memorandum opposing plaintiff's motion alleges that
once plaintiff added I & M as a defendant, I & M became a
necessary and indispensable party under Rule 19. (Document No.
82). Marathon cites no authority for this proposition and
characterizes plaintiff's motion as simply "a further
illustration of the lack of good faith on the part of
plaintiff and Insulating
on the purported settlement between them." (Document No. 82,
Disregarding plaintiff's motives, it is apparent to this
Court "in equity and good conscience" that I & M is not
indispensable within the meaning of Rule 19(b). Marathon
initially protected its interests by impleading I & M as a
third-party defendant pursuant to Fed.R.Civ.P. 14. That
plaintiff and I & M have reached a settlement, thereby
releasing I & M from any liability in this action, does not
prejudice Marathon. Section 302(c) of the Contribution Among
Joint Tortfeasors Act provides:
(c) When a release or covenant not to sue or
not to enforce judgment is given in good faith to
one or more persons liable in tort arising out of
the same injury or the same wrongful death, it
does not discharge any of the other tortfeasors
from liability for the injury or wrongful death
unless its terms so provide but it reduces the
recovery on any claim against the others to the
extent of any amount stated in the release or the
covenant, or in the amount of the consideration
actually paid for it, whichever is greater.
Ill.Rev.Stat. ch. 70, ¶ 302(c) (1985).
Thus, any judgment rendered against Marathon will be reduced
to the extent of the amount stated in the release. Marathon's
complaint that the settlement between plaintiff and I & M was
not entered in good faith is not supported ...