Pallazola v. Rucker

Decision Date01 August 1986
Docket Number85-1935,85-1893,Nos. 85-1888,85-1973 and 85-1974,85-1936,85-1938,85-1937,s. 85-1888
Citation797 F.2d 1116
PartiesCarol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellee, v. Carolyn RUCKER, R.N., et al., Defendants, Appellees. Appeal of Eugene SMITH, M.D. Carol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellee, v. Carolyn RUCKER, R.N., Defendant, Appellant. Carol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellee, v. Carolyn RUCKER, R.N., et al., Defendants, Appellees. Appeal of June PICKERING. Carol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellee, v. Carolyn RUCKER, R.N., et al., Defendants, Appellees. Appeal of Michael SCHWARTZ, M.D. Carol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellee, v. Carolyn RUCKER, R.N., et al., Defendants, Appellees. Appeal of Guenther HERPFER, M.D. Carol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellee, v. Carolyn RUCKER, R.N., et al., Defendants, Appellees. Appeal of LYNN HOSPITAL. Carol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellee, v. Carolyn RUCKER, R.N., et al., Defendants, Appellees. Appeal of Charles PETERS, M.D. Carol PALLAZOLA, Administratrix of the Estate of Betty Ann Michaud, Plaintiff, Appellant, v. Carolyn RUCKER, R.N., et al., Defendants, Appellees.
CourtU.S. Court of Appeals — First Circuit

Ann Marie Maguire with whom Andrew C. Meyer, Jr. and Lubin & Meyer, P.C., Boston, Mass., were on brief, for Carol Pallazola.

Joan Eldridge, Cambridge, Mass., and Steven R. Kruczynski, Boston, Mass., with whom Edward D. McCarthy, McCarthy, Foster & Eldridge, Cambridge, Mass., John E. Bowman, Jr., Raymond J. Kenney, Jr. and Martin, Magnuson, McCarthy & Kenney, Boston, Mass., were on briefs, for Eugene Smith, M.D., Guenther Herpfer, M.D., Carolyn Rucker, R.N. and Lynn Hospital.

Craig M. Brown with whom Robert P. Powers, Melick & Porter, Boston, Mass., Marc J. Gervais, Barbara Hayes Buell, Bloom & Buell, Somerville, Mass., John C. Kane, Jr., John C. Bartenstein and Ropes & Gray, Boston, Mass., were on briefs, for Charles Peters, M.D., Michael Schwartz, M.D. and June Pickering.

Before COFFIN and TORRUELLA, Circuit Judges, and MALETZ, * Senior Judge.

MALETZ, Senior Judge.

The appeal and cross-appeals before us raise two major questions: (1) Did the district court err when it found that the plaintiff below was chosen as administratrix of a decedent's estate for the purpose of creating diversity jurisdiction? (2) Having made that finding, did the district court err when it referred the action to a state court rather than immediately entering a judgment of dismissal? We hold that the district court was correct in finding that diversity jurisdiction had been manufactured improperly or collusively. We do not reach the propriety of the referral to the state court, because the question is moot. Accordingly, the judgment of the district court is affirmed, and the cross-appeals challenging the referral are dismissed.

I. Background 1

Betty Ann Michaud (Mrs. Michaud) died intestate on December 31, 1977 at age 39, leaving only one heir, her 17-year-old son, Donald Michaud (Donald). At the time, Mrs. Michaud was unmarried; her father was deceased and her mother was in poor health. Her sister, Dorothy Waselchuk, had been out of work as an airline stewardess for approximately one year, because of a back problem. At the time of her death, Mrs. Michaud, her mother, her sister, and her son were all citizens of Massachusetts. 2

On October 28, 1980, Carol Pallazola, a stewardess friend of Waselchuk who resided in California, was appointed administratrix of Mrs. Michaud's estate. Relying on diversity jurisdiction, 28 U.S.C. Sec. 1332(a) (1982), 3 Pallazola in November 1980 commenced a medical malpractice and wrongful death action against a nurse, Carolyn Rucker, and the June Pickering Nurses Registry, with other defendants added in an amended complaint.

At a pretrial conference held on April 1, 1985, Pallazola's attorney advised the district court that the Massachusetts probate court had substituted Donald for Pallazola as administrator of Mrs. Michaud's estate. Counsel for defendant Dr. Guenther Herpfer raised the question of diversity jurisdiction, because Donald resided in Massachusetts. He added his belief that Pallazola "was not really an interested party in the case but an administratrix, for whatever purposes" and indicated that he had "started to do some digging on that issue" but never "finalized that." He concluded that he had "a question at least in my own head where that leaves us now with the parties on both sides of the case really all being Massachusetts domiciliaries." When counsel for plaintiff responded that the test of jurisdiction is whether diversity existed when the suit is filed, the court observed that, nevertheless, if the administratrix had been appointed "for the purpose of conferring jurisdiction, that raises problems."

The court was referring to 28 U.S.C. Sec. 1359 (1982), which provides:

A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.

To determine whether jurisdiction was improperly manufactured, the district court held a hearing at which Pallazola, Waselchuk, and Donald testified. After summarizing the evidence adduced at the hearing, the district court concluded:

In light of these facts I find that the choice of Carol Pallazola as administratrix was made for the purpose of creating diversity. Thus, under 28 U.S.C. Sec. 1359, federal jurisdiction is barred.

621 F.Supp. at 768. The court rejected Pallazola's suggestion that this interpretation of section 1359 should be given only prospective effect, id. at 768-69, and added its finding that Donald, the estate's sole beneficiary, was also a citizen of Massachusetts, id. at 769.

The district court was troubled, however, that defendants had not raised the jurisdictional issue until the Massachusetts statute of limitations had run: "I am thus faced with the distressing and inequitable possibility that, should I dismiss this case, it may never be heard on its merits in any court, unless the state court accepts it or on other grounds holds that an action newly filed in state court is not barred by the statute of limitations." Id. The court postponed entry of judgment to permit "plaintiff an opportunity to obtain a ruling from a state court as to its willingness to accept the case either by transfer of the case now pending in this court or by the filing of a new complaint." Id. at 770. After the Superior Court Department of the Trial Court of the Commonwealth of Massachusetts indicated it would accept the case, the district court entered a judgment (1) directing the federal clerk to forward copies of the docket entries and pleadings to the state court and (2) dismissing the federal action for want of subject matter jurisdiction. Id. at 771.

Pallazola appeals dismissal of the federal action, arguing that the defendants failed to prove there was collusion in her selection as administratrix; that she was appointed only because she was the most suitable candidate to handle the affairs of the estate; and that the district court's finding of collusion was clearly erroneous. In the alternative, Pallazola contends that this court, if it adopts the district court's interpretation of section 1359, should limit application of the rule to prospective effect.

The defendants cross-appeal on the ground that it was improper for the district court to refer the action to the state court. They maintain that, in the absence of subject matter jurisdiction, the court had no alternative to immediate entry of a judgment dismissing the action. Additionally, defendants June Pickering Nurses Registry and Drs. Michael Schwartz and Charles Peters claim that their exoneration by a medical malpractice tribunal, coupled with plaintiff's failure to post requisite bonds, entitled them to entry of judgment on the merits before the diversity question was ever reached. 4

II. Manufactured Diversity Jurisdiction
A. First Principles

Relying on 28 U.S.C. Sec. 1359 (1982), the district court held that jurisdiction was barred because Pallazola was chosen as administratrix for the purpose of creating diversity of citizenship. Although section 1359 does not make it clear that manufactured diversity is inappropriate--indeed, the statute once was read to permit the practice 5--courts now understand section 1359 as barring manufactured diversity, at least in certain circumstances. 6 We shall first explain the origins of this conclusion, which we now join, before describing the various tests that have been used and proposed for applying section 1359 in the context of wrongful death actions.

B. Supreme Court Precedent

The two leading Supreme Court cases do not provide definitive guidance on the problem we face. In Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 52 S.Ct. 84, 76 L.Ed. 233 (1931), a widow from Oklahoma brought three wrongful death actions against a Louisiana defendant and others in Oklahoma state court. Each time she sued, the Louisiana defendant removed the action to federal court on the basis of diversity of citizenship. Id. at 184-85, 52 S.Ct. at 85. The widow dismissed the removed actions and resigned as administratrix in favor of Mecom, who, like the removing defendant, was a citizen of Louisiana. Id. When he sued in state court, the defendant once again filed a petition to remove the action to federal court. Mecom moved to remand the action to state court, but the federal district court denied the motion because it was demonstrated that the motive for Mecom's appointment was the elimination of diversity. Id. at 185, 52 S.Ct....

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  • Riley v. O'Brien
    • United States
    • U.S. District Court — District of Massachusetts
    • 6 September 2016
    ...sua sponte into its subject matter jurisdiction, and to proceed no further if such jurisdiction is wanting."); Pallazola v. Rucker, 797 F.2d 1116, 1128 (1st Cir. 1986) (dismissal warranted where subject-matter jurisdiction is lacking). See also Fafel v. Dipaola, 399 F.3d 403, 410 (1st Cir. ......
  • Barr v. Galvin
    • United States
    • U.S. Court of Appeals — First Circuit
    • 16 November 2010
    ...(1975) (explaining that certification of case as class action "significantly affects the mootness determination"); Pallazola v. Rucker, 797 F.2d 1116, 1129 (1st Cir.1986) (noting that "[i]n the absence of a class action," the exception applies only where the same complaining party is likely......
  • Negron v. Llarena
    • United States
    • New Jersey Supreme Court
    • 23 July 1998
    ...in 1988 in an attempt to resolve a circuit split in dealing with a decedent's estate for diversity purposes. See Pallazola v. Rucker, 797 F.2d 1116 (1st Cir.1986) (reviewing the circuit split). In the context of wrongful death cases, applying § 1332(c)(2) has not produced the resolution Con......
  • Omran v. United States
    • United States
    • U.S. District Court — District of Massachusetts
    • 31 March 2015
    ...sua sponte into its subject matter jurisdiction, and to proceed no further if such jurisdiction is wanting."); Pallazola v. Rucker, 797 F.2d 1116, 1128 (1st Cir. 1986) (dismissal warranted where subject-matter jurisdiction is lacking). See also Fafel v. Dipaola, 399 F.3d 403, 410 (1st Cir. ......
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