Allstate Insurance Co. v. Lumbermens Mutual Casualty Co.
| Decision Date | 06 April 1962 |
| Docket Number | Civ. No. 8843. |
| Citation | 204 F. Supp. 83 |
| Court | U.S. District Court — District of Connecticut |
| Parties | ALLSTATE INSURANCE COMPANY and National Cash Register Company v. LUMBERMENS MUTUAL CASUALTY COMPANY and Leo A. and Mary P. T. Archambault. |
Howard, Kohn, Sprague & FitzGerald, by John R. FitzGerald, Hartford, Conn., for plaintiff.
Schatz, Weinstein & Seltzer, by Edward Seltzer, Hartford, Conn., for defendant.
RULING ON
(1) MOTION OF NATIONAL CASH FOR PERMISSION TO AMEND
(2) MOTION OF ALLSTATE TO WITHDRAW
(3) MOTION OF LUMBERMENS TO DISMISS
(4) MOTION FOR SUMMARY JUDGMENT
In this action for a declaratory judgment, brought originally by Allstate Insurance Company Allstate and National Cash Register Company National Cash, as parties plaintiff, against Lumbermens Mutual Casualty Company Lumbermens and Leo A. and Mary P. T. Archambault Archambaults, deficiencies in the allegations relating to the citizenship of the corporate parties presented a jurisdictional obstacle to consideration of the plaintiff's motion for summary judgment, which the court called to the attention of counsel, and thereby precipitated a series of procedural maneuvers which has already necessitated rulings on four contested motions. Three more motions must be disposed of before we get back to the motion for summary judgment which first brought this case before the court. In the course of subsequent efforts to supply the omitted allegations, it appeared that both Allstate and Lumbermens were citizens of the State of Illinois. The more serious defects of lack of diversity jurisdiction which this created provoked a motion by Lumbermens to dismiss for lack of jurisdiction. A day later, the plaintiff Allstate was joined by National Cash in a motion to permit the withdrawal of Allstate as a party plaintiff, in order to cure the lack of diversity of citizenship.
An orderly approach to the determination of the question of this court's jurisdiction requires that the motion of National Cash for permission to amend be considered first. The object of that amendment is to supply the allegations previously omitted, setting forth the principal place of business of Lumbermens. At the argument upon this motion, the defendants admitted the truth of these new allegations. 28 U.S.C. § 1653, provides: "Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts." See also: Niagara Fire Ins. Co. v. Dyess Furniture Co., 5 Cir., 1961, 292 F.2d 232, 233.
This motion is granted.
The next question is presented by Allstate's motion for permission to withdraw as a party plaintiff. It was pointed out in this court's prior Order on the Question of Jurisdiction Preliminary to Ruling on Plaintiff's Motion for Summary Judgment, filed December 12, 1961, that, if the citizenship of the parties were to be as the pleadings disclosed it to exist, there would not be diversity of citizenship between Allstate and Lumbermens (because both are citizens of Illinois) and jurisdiction of the court would fail. Eastman Kodak Company v. Velveray, S.D.N.Y., 1959, 175 F.Supp. 646; 28 U.S.C. § 1332. Where, because of a joinder of proper though not indispensable parties, there is no jurisdiction over the controversy as a whole, the court may permit dismissal of a party and thereby establish jurisdiction over the separate controversy remaining with retroactive effect. Cf. States v. John F. Daly, Inc., D.C.E.D.Pa., 1951, 96 F.Supp. 479; Kerr v. Compagnie De Ultramar, 2 Cir., 1958, 250 F.2d 860, 864; Rule 21, F.R.Civ.P. 28 U.S.C.1 Insofar as this is a suit by Allstate as a party plaintiff, the action of Allstate only is dismissed for lack of jurisdiction. This disposes of Allstate's motion for permission to withdraw.
Apparently anticipating that the court would be required to order the dismissal of Allstate, Lumbermens also attacked the court's jurisdiction by contending that National Cash had been made a party by collusion. This contention emanated only from the brief and argument in support of defendant Lumbermens request for admissions of facts, calculated to import some facts into the record which it assumed had a significant bearing in support of its claim of collusion. When to avoid further prolongation of the determination of this issue the court indicated it would regard the defendant's motion as embracing a claim that National Cash had been made a party collusively to invoke the jurisdiction of this court in violation of 28 U.S.C. § 1359, Lumbermens submitted additional requests for admission of facts related specifically to the issue of lack of control by National Cash over the conduct and prosecution of this case. The court, although it sustained objections to some of these, ruled that the parties might submit affidavits on the question of collusive jurisdiction. This has now been done. From the responses to Lumbermens requests for admission of facts by plaintiff's attorney, it now appears that this action was originally instituted by both plaintiffs through Allstate's attorney; that it was instituted by Allstate through its attorney after consultation with National Cash and with prior authority to bring this action in behalf of National Cash as a plaintiff; and that it was not instituted by Allstate through its attorney solely for the benefit of Allstate. These responses are made by the plaintiff's attorney of record, over his signature, and they are taken by the court as true. From the affidavit of the assistant general counsel of National Cash, it is found that these facts are corroborated and that National Cash is not a "mere dummy" in this litigation, that it authorized the suit, and that it has not surrendered control over it. Nothing to the contrary but argument was submitted.
National Cash seeks a declaration of its own rights to the benefits provided under an auto liability insurance policy issued to Joseph D. Gary. It stands in its own shoes. It has its own interests. Its interest is based upon its claim that it is an insured under that policy. It is a defendant in a state court action which seeks to impose liability upon it for injuries inflicted upon the Archambaults as a result of Gary's operation of his automobile, described in the policy issued to him by Lumbermens. The fact that Allstate may have an interest2 that will be best served by a successful declaration of National Cash's claimed right does not establish collusion. A similar argument was rejected in Wheeler v. City & County of Denver, 229 U.S. 342, 351, 33 S.Ct. 842, 845, 57 L.Ed. 1219 (1913), where the Supreme Court held, to establish collusive jurisdiction "mere unity of interest or differences in its degrees, is not enough, there must be an illegal purpose." Furthermore, the fact that a party plaintiff has been solicited to bring suit and also has been indemnified against liability for costs and fees is not enough to make a case collusive so as to deprive a federal court of jurisdiction. Wheeler v. City & County of Denver (supra); Matthies v. Seymour Mfg. Co., D.C.Conn., 1958, 23 F.R.D. 64, 83-84, rev'd on other grounds 2 Cir., 270 F.2d 365; First Congregational Church & Soc. of Burlington, Iowa v. Evangelical & Reformed Church, S.D.N.Y., 1958, 160 F.Supp. 651, 661-662; compare, American Motorists Ins. Co. v. Weir, 132 Conn. 557-562, 46 A.2d 7 (1946). There is no showing that National Cash "has been improperly or conclusively made" a party "to invoke the jurisdiction of such court." 28 U.S.C. § 1359. Jurisdiction of this court has not been collusively obtained.
The defendant Lumbermens' motion to dismiss for want of jurisdiction is denied.
This case has now become qualified for disposition by summary judgment. The following facts are uncontroverted:
1. The plaintiff National Cash is a corporation organized and existing under the laws of and having its principal place of business in the State of Maryland.
2. The defendant Lumbermens is a corporation organized and existing under the laws of and having its principal place of business in the State of Illinois.
3. The defendants Leo A. and Mary P. T. Archambault are citizens of the State of Connecticut.
4. On December 4, 1959, Joseph D. Gary was insured under an auto liability policy YK 826-203 covering an automobile being operated by him on December 5, 1959 when it was involved in a collision with another automobile resulting in injuries to Leo A. and Mary P. T. Archambault.
5. The Archambaults have filed a suit in the Connecticut Superior Court for New London County against National Cash as sole defendant therein in which it is alleged that Joseph Gary was acting as the agent, servant or employee within the scope of his agency or employment of National Cash at the time of the collision. It also alleges that the Archambaults' injuries were caused by the negligent operation by Gary of his automobile and claims damages for Leo A. Archambault in the amount of $25,000 and for Mary P. T. Archambault in the amount of $10,000.
6. The insurance policy issued to Gary contains the following provisions:
7. The policy also provides that the following among others are "Persons Insured":
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