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Essentials and Interlopers

Here’s another example in which Rule 19(a)(1)(B)(ii) might counsel joinder of the absentee to avoid inconsistent obligations.

  • Carena sells a parcel of real estate to Jaquith. The First National Bank holds $20,000 of the proceeds from the sale in escrow. The funds are to be released to Carena if she completes certain repairs to the premises by January 1. Carena sues the First National Bank, alleging that she completed the repairs and is entitled to the funds. However, Jaquith claims the repairs are unsatisfactory, so the funds should be released to her instead.

— If the court in Carena’s action orders the Bank to pay the funds to Carena, the Bank faces the likely prospect of a second action by Jaquith claiming she is entitled to the funds. The court in that action might order the funds paid to Jaquith, subjecting the Bank to inconsistent obligations. Unless the claims are adjudicated together, the Bank may have to violate one court order or pay twice. The wisest course in such a case is to join Jaquith in Carena’s suit. That way, whatever judgment enters will bind all the interested parties.

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