Breslerman v. American Liberty Ins. Co.

• Decision Date: 13 March 1959
• Citation: 187 N.Y.S.2d 221,18 Misc.2d 1056
• Parties: Louis A. BRESLERMAN v. AMERICAN LIBERTY INSURANCE COMPANY et al.
• Court: New York Supreme Court

Page 221

187 N.Y.S.2d 221

18 Misc.2d 1056

Louis A. BRESLERMAN v. AMERICAN LIBERTY INSURANCE COMPANY et al.

Supreme Court, Special Term, Kings County, Part I.

March 13, 1959.

Harvey L. Strelzin, New York City, for plaintiff.

Rein, Mound & Cotton, New York City, for defendants Commercial Union and American Liberty Insurance Co.

CONE, Justice.

In this action seeking an injunction restraining the defendants from proceeding with their actions against the plaintiff in the Circuit Court of the City of Norfolk, Va., plaintiff moves for an injunction pendente lite pursuant to section 878 of the Civil Practice Act restraining the defendants during the pendency of this action from proceeding with their actions in Virginia.

Defendant, Commercial Union Fire Insurance Company of New York, cross-moves for an order dismissing the action on the ground that the same causes of action have already been removed to the United States District Court and cannot again be brought in this court which no longer has jurisdiction by reason of Title 28 U.S.Code, § 1446(e). Defendant, American Liberty Insurance Company, appearing specially, cross-moves for an order vacating the service of the summons and complaint upon it by the service upon the Superintendent of Insurance of the State of New York.

To properly focus the issues involved, a chronological statement of the facts is required. Briefly, the controversy between the plaintiff and defendants arises out of fire damage to four dwellings constructed by the plaintiff presently a resident of this State, in Virginia. All of the policies were apparently issued in Virginia on its statutory form. During the course of negotiations plaintiff was requested by defendants' agent to appear in Virginia for the purpose of adjusting his claims. While there the defendants instituted actions against the plaintiff in the Circuit Court of the City of Norfolk, Va., by serving the plaintiff with summonses and complaints. Plaintiff disputed the validity of the service upon him claiming that the service of the summonses and complaints in said actions were procured through enticement, fraud and deceit in requesting him to appear in Virginia, but took no affirmative action in Virginia to adjudicate that question. Instead, and ten days later, he brought suit in the United States District Court for the Southern District, seeking recovery for the fire losses and by two additional causes of action seeking to enjoin the defendants from prosecuting the Virginia cases. At the same time plaintiff applied to the United States District Court, Southern District, for a temporary injunction which was denied.

Upon such denial plaintiff brought a proceeding in the Virginia actions contesting the validity of the service upon him. After the hearing the Virginia court upheld the service. A renewal of plaintiff's motion for a stay was made again in the action pending in the Federal Court, Southern District, which again was denied. Following this decision plaintiff filed a petition in the Federal Court in Virginia requesting a removal of the actions of the Circuit Court of the City of Norfolk to that Court. Prior to any determination in the Federal Court of Virginia, plaintiff instituted new proceedings in this Court identical in nature to that brought in the Southern District, including the two additional causes for the injunction. Defendants filed a petition removing this action to the United States District Court for the Eastern District of New York. Plaintiff immediately moved to remand the action back to this Court which was denied, and upon reargument the original decision was adhered to. During this period the Federal Court in Virginia denied plaintiff's application to remove defendants' actions pending in the Norfolk court, because of laches.

Plaintiff then instituted the present action seeking the same injunctive relief which he sought against the defendants in the Southern and Eastern District Courts, omitting the causes of action to recover on the policies. This action was commenced by the service of a summons and complaint upon the defendant, Commercial Union Fire Insurance Co., a resident corporation, and upon the Superintendent of Insurance as process agent for the defendant, American Liberty Insurance Company under section 59 of the Insurance Law, the validity of which service is contested by the defendants' cross motion. After all three of the instant motions were argued the plaintiff filed in the action pending in the Eastern District, a self-executed stipulation, discontinuing the two causes of action seeking injunctive relief.

As the existence of the action itself depends upon the determination to be made relative to the cross motions, the court will pass upon them in the first instance. Title 28 U.S.Code, § 1446(e) provides that where an action instituted in a state court has been removed to a federal court, 'the State court shall proceed no further unless and until the case is remanded' (emphasis supplied). As the plaintiff's application for remand had been denied there is no question that the court cannot proceed with the action removed to the Federal Court. The issue is then presented whether or not a new action may be mantained in the State court after a prior action has been removed to the Federal court. In an analogous situation, the Court of Appeals in Fire Association of Philadelphia v. General Handkerchief Corp., 304 N.Y. 382, 107 N.E.2d 499, 500, held that where a party's action has been properly removed to a Federal court pursuant to section 1446(e), that party may not plead the same cause of action as a counter-claim in an action subsequently brought against him in a court of this State by the defendant in the Federal action. The court further stated: 'On the removal thereof, the New York Supreme Court lost jurisdiction of that cause of action * * *.' (Emphasis supplied.) Under the circumstances, the plaintiff was barred from instituting this action in this Court as the Court lost jurisdiction by the removal of the identical cause of action in the prior lawsuit. The institution of this action is an attempt to flout the authority of the Federal court after the removal of the case.

The...