Contingent Claims Under 18(b)

Contingent Claims Under 18(b)

Rule 18(b) governs claims that depend on one another. A party "may join two claims even though one of them is contingent on the disposition of the other," but "the court may grant relief only in accordance with the parties' relative substantive rights."¹ A claim is contingent when it can succeed only if another claim is first decided in the claimant's favor. Rule 18(a) already lets a party join, as independent or alternative claims, as many claims as it has against an opposing party.² Rule 18(b) adds express authority to join claims linked by dependence, so a claim's contingent status is no reason to keep it out of the suit.³

The rule's own illustration is the creditor's suit. A lender is owed money, and the borrower transfers to someone else the property that would satisfy the debt. The lender now holds two claims: one for the money, and one to set aside the transfer as fraudulent. The second is contingent, because undoing the transfer matters to the lender only if the debt is established. The rule answers this pairing directly. A plaintiff may state a claim for money and a claim to set aside a conveyance that is fraudulent as to that plaintiff, without first obtaining a judgment for the money.⁴ Commentary identifies this as the situation the provision was particularly meant to reach: a claim for a sum of money joined with a claim to set aside a fraudulent conveyance of property that would be subject to the money judgment except for the conveyance.⁵

Joinder here follows the equity tradition that modern procedure inherited. The common law tied many of its procedural rules to the goal of reducing litigation to the fewest possible issues, and the equity courts accepted no such limit. Procedural reform and the merger of law and equity then extended equity's joinder procedures, especially those that let complex cases be resolved in a single action.⁶ The creditor's two claims are such a case. If the lender had to win the debt first and sue afterward to undo the transfer, the property would sit with a third person in the meantime. Joinder lets one court decide, on one record, whether the debt exists and whether the transfer was a fraud on the creditor. Which persons may be brought in as parties, such as a transferee, is a different question. Rule 18 addresses claims against an opposing party,⁷ and party joinder is treated separately below.

The limiting clause of the rule answers a question the creditor example raises: what happens to the dependent claim when the claim it depends on fails?

Voss's loss shows what each half of the rule does. Joinder decides what may be heard together, and the substantive law governing each claim decides what the winner receives. Rule 18(b) therefore creates no remedy that the substantive law withholds, because the court grants relief only in accordance with the parties' relative substantive rights.⁸ The common exam error is to treat permission to join a contingent claim as though it carried the contingent remedy with it. In Voss's suit the permission to join was complete, and the remedy turned entirely on winning the debt.

The rule's text also invites an application that the courts have not settled. A plaintiff injured by a tortfeasor may want to sue the tortfeasor and the tortfeasor's liability insurer together. The claim against the insurer looks contingent in the way the rule describes, since the insurer's duty to pay depends on the tortfeasor's liability. On its face Rule 18(b) seems to permit the joinder, but the decisions, all of them old, have divided on whether it does.⁹ An answer to the insurer scenario should call the question unsettled. The clearly authorized example remains the creditor's money claim joined with a fraudulent-conveyance claim.