Colman v. Shimer

• Decision Date: 23 June 1958
• Docket Number: Civ. A. No. 3227.
• Citation: 163 F. Supp. 347
• Parties: Robert D. COLMAN, Ancillary Administrator of the Estate of Thomas Webb, Deceased, Plaintiff, v. Uyleau SHIMER, Executor of the Estate of Elizabeth Kehlman, Deceased, Elsie Hunt, Margaret Krumer and David Anderson, Defendants.
• Court: U.S. District Court — Western District of Michigan

163 F. Supp. 347

Robert D. COLMAN, Ancillary Administrator of the Estate of Thomas Webb, Deceased, Plaintiff, v. Uyleau SHIMER, Executor of the Estate of Elizabeth Kehlman, Deceased, Elsie Hunt, Margaret Krumer and David Anderson, Defendants.

Civ. A. No. 3227.

United States District Court W. D. Michigan, S. D.

June 23, 1958.

Eric V. Brown, Kalamazoo, Mich., for plaintiff.

Dorothy M. Hunt, Chicago, Ill., and Schmidt, Smith, Howlett & Halliday and Walter K. Schmidt, Grand Rapids, Mich., for defendants.

STARR, Chief Judge.

This action was begun in the circuit court of Van Buren county, Michigan, by plaintiff Robert D. Colman as ancillary administrator of the estate of Thomas Webb, deceased, against Uyleau Shimer, executor of the estate of Elizabeth Kehlman, deceased, and David Anderson, Elsie Hunt, and Margaret Krumer as defendants. Plaintiff Colman and defendants Shimer and Anderson are citizens of Michigan, defendant Hunt is a citizen of Illinois, and defendant Krumer is a citizen of Ohio. In his complaint plaintiff alleged that Thomas Webb prior to his death was aged, senile, and mentally incompetent and that he was induced by the false and fraudulent statements and representations of his sister, defendant Elsie Hunt, and her attorney, to execute and enter into an inequitable and fraudulent agreement dated October 21, 1955, with defendant Elsie Hunt and his sister Margaret Krumer for the division of certain property which the three of them were to share equally as legatees under the will of their mother, Elizabeth Kehlman, deceased. In his complaint plaintiff asked that the agreement of October 21, 1955, be declared null and void and that defendants Hunt, Shimer, and Anderson be restrained from distributing or otherwise disposing of certain property in the estate of Elizabeth Kehlman described in the complaint, pending the further order of the court.

Defendant Hunt has removed this action from the circuit court of Van Buren county to this Federal district court on the ground of diversity of citizenship. 28 U.S.C.A. § 1441. It appears from the record that the action has been discontinued as to defendant Anderson and that defendant Krumer has not been served with process or entered her appearance. Plaintiff Colman has filed a motion to dismiss the petition for removal and to remand the action to the circuit court on the ground that defendant Shimer is an indispensable party to the action and that, as plaintiff and Shimer are both citizens of Michigan, there is no diversity of citizenship and, therefore, no Federal jurisdiction. On the other hand, defendant Hunt contends that defendant Shimer is not an indispensable party to this action but is only a nominal party, or a stakeholder, whose citizenship should not be considered in determining this court's jurisdiction.

Counsel for plaintiff and defendant Hunt have filed a stipulation of the facts to be considered by the court in its determination of the plaintiff's motion to remand, and have also agreed that the motion may be determined on briefs filed, without further hearing or oral argument. It is clear that under the facts and circumstances involved this court would have had original jurisdiction of this action. 28 U.S.C.A. § 1332. The Federal statute relating to removal of actions, 28 U.S.C.A. § 1441, provides:

"(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

"(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other action shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

"(c) 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 law is well established that in determining whether or not the requisite diversity of citizenship exists for the removal of an action to a Federal court, the courts will consider only the citizenship of the real parties in interest and not that of merely formal or nominal parties. As stated in 2 Cyclopedia of Federal Procedure, 3d Ed., § 3.57:

"Since the present statute provides for removability `only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought,' it is, presently as formerly, the citizenship or residence of the real, as distinguished from the nominal parties, that governs the matter of removability; and the right to take the case from a state to a federal court cannot be defeated by the presence of a resident defendant who is a merely formal or nominal party. This excludes from consideration a resident defendant who has no interest in the subject matter litigated, or whose relation to the suit is merely incidental and to whom it is of no moment whether the one or the other side of the controversy succeeds."

In Spalding v. Southern Pacific Company, D.C., 19 F.R.D. 413, 414, the court said: "The authorities are legion that it is the duty of the District Court in ascertaining its jurisdiction to realign and disregard defendants who are dispensable in order to fix its jurisdiction on the ground of diversity of citizenship."

See also Lee v. Lehigh Valley Coal Co., 267 U.S. 542, 45 S.Ct. 385, 69 L.Ed. 782; General Accident Fire and Life Assurance Corporation v. Smith & Oby Company, D.C., 148 F.Supp. 126; Kopitko v. J. T. Flagg Knitting Co., D.C., 111 F. Supp. 549; Leadman v. Fidelity & Casualty Co. of New York, D.C., 92 F.Supp. 782.

Under the Federal law a party whose role in a law suit is that of a depositary or stakeholder is a formal or nominal party and not an indispensable party. In Salem Trust Company v. Manufacturers' Finance Company, 264 U.S. 182, 189, 44 S.Ct. 266, 267, 68 L.Ed. 628, the Supreme Court said:

"District Courts have jurisdiction if all the parties on the one side are of citizenship diverse to those on the other side. Jurisdiction cannot be defeated by joining formal or unnecessary parties. The right of removal depends upon the case disclosed by the pleadings when the petition therefor is filed (Barney v. Latham, 103 U.S. 205, 215, 26 L.Ed. 514; Ex parte State of Nebraska, 209 U.S. 436, 444, 28 S.Ct. 581, 52 L.Ed. 876) and is not affected by the fact that one of the defendants is a citizen of the same State as the plaintiff, if that defendant is not an indispensable party to the controversy between plaintiff and defendant who are citizens of different States. Barney v. Latham, supra 103 U.S. 213 26 L.Ed. 514). The facts set forth in the present bill are substantially those already stated. This suit involves a controversy between the petitioner, a citizen of Massachusetts, and the respondent, the Finance Company, a citizen of Delaware, which can be determined without affecting any interest of the other respondent, the International Trust Company, a citizen of Massachusetts. The latter is not an indispensable party. See Niles-Bement-Pond Co. v. Iron Moulders Union, 254 U.S. 77, 80, 41 S.Ct. 39, 65 L.Ed. 145. It has no interest in the controversy between the petitioner and the other respondent. Its only obligation is to pay over the amount deposited with it when it is ascertained which of the other parties is entitled to it. On the question of jurisdiction, an unnecessary and dispensable party, will not be considered. Walden v. Skinner, 101 U.S. 577, 589, 25 L.Ed. 963; Bacon v. Rives, 106 U.S. 99, 104, 1 S.Ct. 3, 27 L.Ed. 69; Ex parte State of Nebraska, supra."

In Farmers' Bank v. Hayes, 6 Cir., 58 F.2d 34, 36, the court said: "A garnishee or stakeholder is a merely nominal party whose citizenship will not affect the question of jurisdiction." In Cothren v. Evans, ...