Chason Bros. v. Insurance Co. of North America

• Decision Date: 15 February 1952
• Citation: 102 F. Supp. 803
• Parties: CHASON BROS., Inc. v. INSURANCE CO. OF NORTH AMERICA et al.
• Court: U.S. District Court — Southern District of New York

102 F. Supp. 803

CHASON BROS., Inc. v. INSURANCE CO. OF NORTH AMERICA et al.

United States District Court S. D. New York.

February 15, 1952.

Samuel E. Harwitz, New York City, for plaintiff.

Bigham, Englar, Jones & Houston, New York City, James M. Hughes, Jr., New York City, of counsel, for defendant Ins. Co. of No. America.

WEINFELD, District Judge.

This is a motion by plaintiff to remand an action removed by defendant Insurance Company of North America from the Supreme Court of the State of New York, County of New York.

Plaintiff is a New York corporation. The defendant, Insurance Company of North America, is a Pennsylvania corporation, and the defendant Maritime Service Company is a partnership composed of two citizens of New York.

An action solely between plaintiff and Maritime would be non-removable since both plaintiff and the partners in Maritime are citizens of the same state. If the Insurance Company were the sole defendant, removal would be proper. Since both are joined as defendants, removal was based upon Title 28 U.S.C. § 1441(c), which provides: "Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction."

The issue is whether the "claim or cause of action" of plaintiff against the Insurance Company is "separate and independent" from that asserted against Maritime.

The determination is governed by the allegations of the complaint. American Fire & Casualty Co. v. Finn, 341 U.S. 6, 14, 71 S.Ct. 534, 95 L.Ed. 702. The complaint, in form, pleads one cause of action. But the failure to separately state and number does not control, since the question is whether, as a substantive matter, separate and independent causes of action arise from the facts pleaded.

The complaint asserts that plaintiff requested Maritime, an insurance broker, to place $37,000 of insurance to cover all risks of loss or damage to plaintiff's merchandise while in transit to, or in possession of, a prospective purchaser; that Maritime informed plaintiff that the desired insurance had been obtained from the defendant Insurance Company; that plaintiff, in reliance, delivered the goods and subsequently sustained a loss; and that the Insurance Company denied plaintiff's claim upon the ground that the loss was not covered by the insurance obtained. The complaint seeks alternative recovery, further alleging that either the Insurance Company wrongfully refuses to pay upon the policy, or Maritime wrongfully and negligently failed to effect proper insurance, contrary to plaintiff's instructions, and that both are named as defendants since plaintiff is in doubt as to which is liable for the loss. The prayer for relief demands judgment "against the defendants, or such one of them as may be liable for the sum of $37,000 with interest."

The applicable principles are set forth in American Fire & Casualty Co. v. Finn, supra. The purpose in using the concept "separate and independent claim or cause of action" in Title 28 U.S.C. 1441(c), enacted in 1948, was to restrict the right of removal and "somewhat decrease the volume of Federal litigation."¹

Under its predecessor, Title 28 U.S.C. 71, the criterion was that of a "separable controversy" which was "interpreted as any possible separate suit that a litigant might properly bring in a federal court so long as it was wholly between citizens of different states." American Fire & Casualty Co. v. Finn, supra, 341 U.S. at page 11, 71 S.Ct. 534, 538, 95 L.Ed. 702. As tersely stated by Professor Moore, "the fragment of a cause of action" was formerly sufficient for removal under Section 71. Moore's Commentary on the United States Judicial Code, p. 238.

Under the new concept of "separate and independent claim or cause of action" the test is whether there is a "single wrong to plaintiff, for which relief is sought, arising from an interlocked series of transactions ***." American Fire & Casualty Co. v. Finn, supra, 341 U.S. at page 14, 71 S.Ct. at page 540, 95 L.Ed. 702. If so, there is no...