Menendez Rodriguez v. Pan American Life Insurance Co.

• Decision Date: 20 December 1962
• Docket Number: No. 19130.,19130.
• Citation: 311 F.2d 429
• Parties: Pedro MENENDEZ RODRIGUEZ, Appellant, v. PAN AMERICAN LIFE INSURANCE COMPANY, Appellee. Maria Cristina VENTO JAIME, Appellant, v. PAN AMERICAN LIFE INSURANCE COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

311 F.2d 429 (1962)

Pedro MENENDEZ RODRIGUEZ, Appellant, v. PAN AMERICAN LIFE INSURANCE COMPANY, Appellee.

Maria Cristina VENTO JAIME, Appellant, v. PAN AMERICAN LIFE INSURANCE COMPANY, Appellee.

No. 19130.

United States Court of Appeals Fifth Circuit.

October 17, 1962.

Rehearing Denied December 20, 1962.

John P. Corcoran, Jr., and William E. Henson, Jr., Tampa, Fla., for appellants Pedro Menendez Rodriguez and Maria Cristina Vento Jaime.

Morris E. White, William A. Gillen, and Fowler, White, Gillen, Humkey & Trenam, Tampa, Fla., for appellee.

Before CAMERON and BELL, Circuit Judges, and CARSWELL, District Judge.

CARSWELL, District Judge.

This case is companionable with two others also decided this date: Pedro Menendez v. Aetna Insurance Company, 311 F.2d 437, Tabacalera Severiano Jorge, S. A. v. Standard Cigar Company, 311 F.2d 438.

Their component parts are identical in many respects, and the ultimate determination made here rests upon the same foundation. All three cases were originated by Cuban nationals who have fled from the regime of Fidel Castro and seek redress in the courts of the United States for monies claimed due them under contracts with the respective original defendants. All of the named defendants are corporations organized and existing under the laws of one or another State of the United States. The jurisdictional power of the United States District Court to try these cases is not questioned. There is diversity of citizenship between the parties and all essentials of Title 28 United States Code § 1332, are met in each case. All three of the complaints were dismissed by the District Court on the classic doctrine of forum non conveniens in virtually identical orders granting virtually identical motions filed by the respective defendants.

We conclude that the dismissal of each of these complaints on this ground was erroneous. Our review cannot there end but must encompass other grounds asserted in support of the motions to dismiss.

In this particular appeal we have consolidated the separate cases of Pedro Menendez Rodriguez and Maria Cristina Vento Jaime, appellants, against Pan American Life Insurance Company, appellee.

These suits were originally commenced in the Circuit Court of Hillsborough County, Florida, and defendant, a Louisiana corporation, removed this action to the United States District Court on the basis of diversity of citizenship. The plaintiffs sought declaratory decree that they were entitled to receive the cash surrender value of certain insurance policies issued by Pan American Life Insurance Company, appellee.

The complaints allege that on January 5, 1945 Pan American insured the lives of the plaintiffs in the amount of $20,000 each. The policies provided for an annual premium of $1,523.40 to be paid by each of the plaintiffs for twenty years. The policies were accepted by the defendant in New Orleans, Louisiana, and contained, among other provisions, the following: "All the payments relative to this policy be they on the part of the company or the insured will be verified in the City of New Orleans in the legal money of the United States." Another provision: "This policy is exempt from any restrictions as to residence, travel, or occupation." The policies contained provisions for automatic premium loans in the event of failure to make premium payments, and provisions for the surrender of the policy for its cash value.

The premiums were paid each year from January 5, 1945 through January 1958. The January 5, 1959 premiums were not paid and the automatic loan provisions came into effect. On September 23, 1959 Rodriguez paid to Neal Harrison, an agent for defendant in Tampa, Florida, $2,941.47 to apply against the premium loans which were due on January 5, 1959. Harrison accepted the check, and forwarded it to the defendant in Louisiana. On October 6, 1959 the check was returned by the defendant, and payment refused. In July, 1960 plaintiffs demanded the cash value of the policies in Tampa and were refused. Plaintiffs were advised to make the premium payment in Cuba, and apply for their cash surrender value there. From January 5, 1945 until January 5, 1952 payments had been made in currency of the United States, in accordance with the terms and conditions of the policies. In April, 1951 the Cuban government under Batista decreed that all obligations due citizens of Cuba be paid in Cuban pesos, and all obligations incurred by Cubans were likewise to be paid in Cuban pesos. The policies contain a provision that the contract cannot be changed or modified except with the written consent of the defendant, and signed by the president, vice president, secretary or actuary. Neither the president, vice president, secretary or actuary ever executed written consent to any change or modification of the insuring agreement. Nevertheless, from January 1952 until January 1958 plaintiffs paid, and defendants accepted, payment of premiums in Cuban pesos.

After Pan American caused this action to be removed, it filed its answer and a motion to dismiss. In support of its motion, defendant urged that since the applications of insurance were executed in Cuba, and since the policies were delivered in Cuba, and the premiums paid in Cuba, therefore, all rights which plaintiffs claim are governed by the laws of Cuba. The argument concludes, therefore, that the United States District Court should abstain from exercising its jurisdiction.

In its answer, defendant denied that the subject matter of this suit was within the jurisdiction of the federal court, and claimed that this controversy is justiciable solely under the laws of Cuba and in the courts of Cuba. Defendant claims that the laws of Cuba prohibited it from accepting the premium in Tampa, Florida, in the currency of the United States, and that it was prohibited by Cuban law from paying the cash value of the policies to plaintiffs. In addition, defendant claimed that due to the decree of confiscation plaintiffs were no longer the owners of the policies, and were no longer entitled to receive the cash surrender value of the policies. The decree of confiscation was issued on April 7, 1959 by the government of Cuba, by mere publication of the names of those persons whose property was declared to be confiscated.

The attorney for defendant, by affidavit, averred that demand for payment was made by the Cuban government on defendant on September 20, 1960.

The District Court dismissed plaintiffs' complaints under the doctrine of forum non conveniens stating: The plaintiffs are citizens of Cuba, defendant is a United States corporation incorporated in Louisiana, and doing business in Florida; all the transactions took place in Cuba, and are, therefore, governed by Cuban law; the claim did not accrue within the jurisdiction of the court; the docket is crowded, and it would be a burden on the court to litigate the difficult legal questions which arise; for the convenience of the witnesses, and parties, and in the interest of justice; and for other reasons (not mentioned) the action was dismissed on the grounds of forum non conveniens.

It is noted that all events and declarations of the Cuban government occurred after plaintiffs had established residence in Tampa, Florida.

The dismissal of these complaints on the ground of forum non conveniens cannot be upheld.

It is perhaps well at the outset to note that we are not dealing here with the transfer of an action from one federal court to another. The Judicial Code (Title 28 United States Code) in Section 1404(a) has set up standards and procedures whereby one federal court may properly transfer an action to a more convenient federal forum where the action "might have been brought."

We are not here concerned with the delineation given by the courts to Section 1404(a), but we are concerned with the remnants of that statute's historical progenitor, the equitable tradition of forum non conveniens. The applicability of the doctrine in our court system has been greatly restricted. As Professor Wright has recently commented,

"The doctrine of forum non conveniens has only a limited continuing vitality in federal courts. Section 1404(a) of the Judicial Code has replaced the doctrine whenever the more convenient tribunal is another federal court where the action `might have been brought.\' Where, however, there is no alternative federal forum, dismissal on the grounds of forum non conveniens is still permissible. In admiralty cases in particular it frequently happens that the more convenient forum is in a foreign country, and dismissal will then be ordered." 1 Barron & Holtzoff, Federal Practice and Procedure § 87, pp. 442-443 (Wright ed. 1960).

Forum non conveniens, as an equitable proposition, is still available to the federal courts, despite its clear limitation, where the state court or the court of a foreign country is the alternative forum. See Venue in the Federal Courts — The Problem of the Inconvenient Forum, 15 U.Miami L.Rev. 237, 239 (1961); Glicken v. Bradford, 204 F.Supp. 300, 304 (S.D.N.Y.1962).

In the instant case the District Court thus applied the doctrine under the theory that the courts of Cuba were open as an alternative. This we must reject, not upon grounds of abuse of discretion by the court in the employment of a traditionally equitable doctrine, but because we see it as an erroneous application of law to the established facts. There is a clear distinction between the review of transfer orders under 28 U.S.C. § 1404(a), which are interlocutory, and, therefore, reviewable rarely, if at all, and orders of dismissal which being final, are appealable as of right.¹

The facts here are that Pan American removed, as a matter of right under the diversity statute, cause of action from the initial forum chosen by plaintiffs. The plaintiffs have vigorously sought hearing in the jurisdiction invoked by defendants themselves. The burden to establish good cause for dismissal is...