County of Todd, Minn. v. Loegering

• Decision Date: 20 December 1961
• Docket Number: No. 16619.,16619.
• Citation: 297 F.2d 470
• Parties: The COUNTY OF TODD, MINN., a Municipal Corporation; Earl Steuck; Jay Bain; and Lyle Pantzke, Appellants, v. Louise M. LOEGERING, as Trustee for the Heirs of Arthur Simonson, Decedent, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

297 F.2d 470 (1961)

The COUNTY OF TODD, MINN., a Municipal Corporation; Earl Steuck; Jay Bain; and Lyle Pantzke, Appellants, v. Louise M. LOEGERING, as Trustee for the Heirs of Arthur Simonson, Decedent, Appellee.

No. 16619.

United States Court of Appeals Eighth Circuit.

December 20, 1961.

K. L. Wallace, Alexandria, Minn., and Frank Claybourne, St. Paul, Minn., for appellants, Doherty, Rumble & Butler, St. Paul, Minn., on the brief.

Charles W. Kennedy, Wadena, Minn., for appellee, Bradford & Kennedy, Wadena, Minn., on the brief.

Before VOGEL and BLACKMUN, Circuit Judges, and BECK, District Judge.

BECK, District Judge.

This appeal is from a Judgment in favor of Louise M. Loegering as trustee for the heirs of Arthur Simonson, decedent, and against Todd County, Minnesota, a municipal corporation, and three of its employees, Earl Steuck, Jay Bain and Lyle Pantzke, Loegering hereinafter being referred to as appellee and the others as appellants.

The case, the trial thereof, the $15,000 verdict and the Judgment entered accordingly, arose out of a collision between a 1953 model Nash car driven by the plaintiff's decedent and a Todd County owned highway grader, operated by one of its employees, the said Earl Steuck. Arthur Simonson, as a result, was killed at the time of the impact or a few minutes later. The statutory basis for the suit is Minnesota's Wrongful Death Statute M.S.A. § 573.02.

Plaintiff's appointment as trustee for the heirs of Arthur Simonson, deceased, under that Act, factually not disputed, makes her a "trustee of an express trust * * *." and as such, empowered to bring the action in her own name, without joining with her the party or parties for whose benefit the action was brought. Rule 17 F.R.Civ.P., 28 U.S. C.A. and Beck v. Groe, 245 Minn. 28, 70 N.W.2d 886, 52 A.L.R.2d 875 (1955).

Though the rights of such a trustee under the language of that rule appears as an exception to the general rule that "every action shall be prosecuted in the name of the real party in interest", 17(a) F.R.Civ.P., it is held that such a trustee, in diversity cases, is in fact the real party in interest. As said in Mecom, Administrator v. Fitzsimmons Drilling Co., Inc. et al., 284 U.S. 183, 52 S.Ct. 84, 86, 76 L.Ed. 233:

"The petitioner insists that, where an administrator is required to bring the suit under a statute giving a right to recover for death by wrongful act, and is, as here, charged with the responsibility for the conduct or settlement of such suit and the distribution of its proceeds to the persons entitled under the statute, and is liable upon his official bond for failure to act with diligence and fidelity, he is the real party in interest, and his citizenship, rather than that of the beneficiaries, is determinative of federal jurisdiction. This we think is the correct view. The applicable statutes make the administrator the trustee of an express trust and require the suit to be brought and controlled by him." (Emphasis supplied.)

That viewpoint is in the pronouncement, by this court, in Minnehaha County, S. D. v. Kelley, 8 Cir., 150 F.2d 356, 358 (1945):

"Plaintiff sued in a representative capacity; she was a resident and citizen of the State of California; she was the only necessary or proper party plaintiff. Parties acting in a representative capacity, if jurisdictional requirements are otherwise satisfied, have the right to maintain a civil action in a Federal court, and the citizenship of the representative party controls irrespective of the citizenship of the persons for whose benefit the action may be brought. In other words, the Federal courts have jurisdiction of actions by or against executors and administrators, if their citizenship is diverse from that of the opposing party. Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 52 S.Ct. 84, 76 L.Ed. 233, 77 A.L.R. 904; Mexican C. R. Co. v. Eckman, 187 U.S. 429, 23 S.Ct. 211, 47 L.Ed. 245."

Again, on this point it is said in Mecom 284 U.S. 183, 52 S.Ct. 85.:

"It is settled that the federal courts have jurisdiction of suits by and against executors and administrators if their citizenship be diverse from that of the opposing party, although their testators or intestates might not have been entitled to sue or been liable to suit in those courts for want of diversity of citizenship. Childress v. Emory, 8 Wheat. 642, 5 L.Ed. 705; Coal Co. v. Blatchford, 11 Wall. 172, 20 L.Ed. 179; Rice v. Houston, 13 Wall. 66, 20 L.Ed. 484; Amory v. Amory, 95 U.S. 186, 24 L.Ed. 428; Blake v. McKim, 103 U.S. 336, 26 L.Ed. 563; American Bible Society v. Price, 110 U.S. 61, 3 S.Ct. 440, 28 L.Ed. 70; Continental Insurance Co. v. Rhoads, 119 U.S. 237, 7 S.Ct. 193, 30 L.Ed. 380."

Applying the rule in those cases, the trial court, Loegering v. County of Todd, D.C.Minn., 185 F.Supp. 134, 136 (1960), observes:

"In both of the above cases the plaintiffs were suing as administrators appointed by the State Courts. In the instant case, the plaintiff is suing as a Trustee, but there is no reason why the same principle of law should not apply regardless of the title of the representative who brings the action for wrongful death.",

and concludes:

"* * * that the purpose of the 1951 amendment was mainly to permit the appointment of a representative by the District Court in which the wrongful death action is instituted, and thus to obviate the necessity of requiring the qualification of an administrator or executor in the Probate Court. As the Trustee appointed to bring the wrongful death action, the plaintiff here is in the same category as the special administrator in Minnehaha County v. Kelley, supra."

But, it is argued, the anti-collusion issue, was not before the courts in those cases, here it is, and those pronouncements, therefore, do not apply. That argument is made under the point that: "The District Court erred in failing to dismiss this action because it was brought by a Montana trustee who was appointed for the purpose of manufacturing diversity jurisdiction". Invoked in this connection is § 1359, 28 U.S.C.A., 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."

Aiding us on that point, is this court's comment in McCoy v. Blakely, 8 Cir., 217 F.2d 227, 230 (1954) that:

"Even if, as contended by the defendant, the appointment of Blakely was for the sole purpose of creating diversity of citizenship in order to invoke the jurisdiction of the Federal Court, that fact, without more, would not establish the alleged violation of the relied-upon statute. As was stated by this Court in Curb and Gutter Dist. No. 37 of City of Fayetteville v. Parrish, 8 Cir., 1940, 110 F.2d 902, 906, a case involving the appointment of a non-resident trustee for the purpose of creating diversity of citizenship in order to establish the jurisdiction of the Federal Court:

"* * *, the motive which may have actuated or induced the bondholders to select a non-resident trustee is immaterial. The appointment and qualification of the plaintiff trustee was real and bona fide. It was not merely colorable or feigned. No wrongful act was perpetrated in invoking the jurisdiction of this Court. In other words, the bondholders simply did that which was lawful and no fraud can be perpetrated thereon. It is not wrongful for parties to prefer to litigate the subject matter of a controversy in federal court if no improper act is done in furtherance thereof."

See also 75 A.L.R.2d at 726 relating to cases where improper or collusive action under this Section have not been shown and Harrison v. Love, 6 Cir., 81 F.2d 115 (1936).

Here, it is true, there can be no illusions as to the motive which prompted the appointment of the plaintiff as trustee and the commencement of the case in the Federal court. Sought, of course, was a federal forum with a jury, not all residents or taxpayers of the defendant county and as such at least indirectly interested in the final outcome.

But with that motive to be excluded in the evaluation of the manufacturing of diversity of jurisdiction charge, as mandated by the aforementioned cited cases, we find no acts of collusion or improprieties, in the mapping of the strategy, designed to avoid risks of jury prejudice and recovery of damages within the permitted legal limits, where as here the daughter, under the Wrongful Death Statute, was duly appointed by the State District Court, and where in the process her qualifications were finally settled and determined, Mecom, 284 U.S. at page 189, 52 S.Ct. at page 87.

Neither do we ascribe impropriety or collusion in the mother's resignation as trustee, in the daughter's agreement to take her place, in her subsequent appointment as trustee, in her commencement of the suit which led to this appeal and in the claim that others, including her counsel, were at the helm of the action and not, she. These are the usual expedients employed by counsel and client in matters of this kind. The evidence as a whole, on this point and as a matter of law, motive being deleted, permits no inference of sham, pretense or fiction or any other factors which enter into collusive or improper joinder to effect federal jurisdiction. Corabi v. Auto Racing, Inc., 3 Cir., 264 F.2d 784, 789 (1959), infra, and Jaffe v. Philadelphia & Western R. Co., 3 Cir., 180 F.2d 1010 (1950).

Moreover, injecting of such factors, as inferences from the state court proceedings where the appointment was made, constitutes a collateral attack on that court's order, which Mecom does not permit.

Martineau v. City of St. Paul et al., 8 Cir., 172 F.2d 777, 780 (1949), mainly relied on by the appellants, is not in point. This court affirmed the District Court's judgment of dismissal, 78 F. Supp. 892, for want of diversity of citizenship and no jurisdiction, not on the basis of violation of § 1359, but on the ground...