Eagle Star Insurance Company v. Maltes

• Citation: 313 F.2d 778
• Decision Date: 01 March 1963
• Docket Number: No. 19718.,19718.
• Parties: EAGLE STAR INSURANCE COMPANY, Limited, Appellant, v. Augustin MALTES, Gilberto Perez, and Bernabe Arroyo, Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

313 F.2d 778 (1963)

EAGLE STAR INSURANCE COMPANY, Limited, Appellant, v. Augustin MALTES, Gilberto Perez, and Bernabe Arroyo, Appellees.

No. 19718.

United States Court of Appeals Fifth Circuit.

March 1, 1963.

Henry Burnett, Miami, Fla., Fowler, White, Gillen, Humkey & Trenam, Miami, Fla., of counsel, for appellant.

James A. Franklin, Jr., Henderson, Franklin, Starnes & Holt, Fort Myers, Fla., for appellee.

Before TUTTLE, Chief Judge, and JONES and GEWIN, Circuit Judges.

TUTTLE, Chief Judge.

This appeal presents the threshold inquiry as to the jurisdiction of the trial court. It is a suit filed by three injured parties who allege that they had obtained judgments against the appellant's assured "for the sum of $13,200 damages and costs of $85.80, which said judgments are a matter of record in said court." The complaint did not allege the amount of the judgment of any one of the three appellees. It is obvious that no more than one of them could have had a judgment in excess of $10,000, and when the case came on for hearing on a motion for summary judgment and the three judgments were attached to the motion for summary judgment, it appeared that one, in favor of Arroyo, was for the sum of $10,000, together with costs of $28.60, one in favor of Augustin Maltes, was for the sum of $4,000, together with costs of $28.60, and the other was in favor of Gilberto Perez in the sum of $200, together with costs in the amount of $26.60.

From the face of the complaint it is apparent that the three plaintiffs combined their judgments to produce the amount of the claim asserted in the sum of $13,285.80, together with interest and costs.

Florida does not have a direct action statute, and the appellant did not defend the assured in the prior action where the appellees obtained their judgments.

The main defense of the appellant in this suit by appellees under the policy¹ was that the assured's vehicle was being used as a "public or livery conveyance" at the time of the accident, and by the terms of the policy the assured was excluded from coverage. On appeal the appellant raises the jurisdictional question of aggregating damages to exceed the $10,000 amount in controversy.² Because we reverse the lower court on the jurisdictional question we do not reach the question of policy coverage.

Essentially, the appellant's position is that this case is no different from a suit by three individual plaintiffs against the tortfeasor himself with the insurance company defending the tortfeasor. In such a case there could be no aggregation of claims. Mitchell v. Great American Indemnity Co., 87 F.Supp. 961 (W.D.La., 1950).³ Appellees admit this to be the law. However, they contend that this is not such a suit, but a suit on a common contract with a common question of law and fact.⁴

Appellees have a further contention on the same theme, viz., that at least one of the judgments of the appellees was in excess of the jurisdictional amount, and that somehow this supports their joint action and aggregation. This adds no strength to the position of the appellees. Since they brought suit on a joint claim, at least claiming it as such so as to aggregate their claims, it must be treated as such, and there can be no such "ancillary" relief granted to the two plaintiffs who do not allege the requisite jurisdictional amount. See Aetna Ins. Co. v. Chicago R. I. & Pac. R.R., 229 F.2d 584, 586 (10th Cir., 1956). Nor may the plaintiff who did have a claim in excess of $10,000, but who did not allege the existence of this claim as a basis of showing the requisite jurisdictional amount amend his complaint in this court to cure the jurisdictional defect. To do so would allow plaintiff to change his suit from an action by these owners of a single joint claim to a suit by a single owner of a separate claim in the appellate court.

The general rule of aggregation to satisfy the jurisdictional amount in controversy has been stated many times, but like many rules of a general nature, it requires an examination of its actual application to the cases to determine its binding effect on a subsequent case with a different factual situation. To aggregate claims of several plaintiffs the plaintiffs must have a "common and undivided interest," though it may be separable as between themselves. But where their interests are distinct, and their only relationship is that "they form a class of parties whose rights or liabilities arose out of the same transaction, or have a relation to a common fund or mass or property sought to be administered, such distinct demands or liabilities cannot be aggregated * * *" Clay v. Field, 138 U.S. 464, 11 S.Ct. 419, 34 L.Ed. 1044 (1891).

A common element in the cases from the Supreme Court on this question of aggregation is a jointness or dependency, as opposed to a separateness, of the rights of the individual plaintiffs in order to aggregate their claims. In Pinel v. Pinel, 240 U.S. 594, 36 S.Ct. 416, 60 L. Ed. 817 (1916), the several complainants and defendant were children of the same parents, the complainants claiming that the father unintentionally omitted them from his will, seeking an interest in the one piece of property devised by the will. Although there was one will and one piece of property the Court found that they could not aggregate their distinct claims. The Court emphasized that the testator's mistake was independent as to each child.

Likewise, in Stratton v. Jarvis & Brown, 8 Peters (33 U.S.) 4, 8, 10, 11, 8 L.Ed. 846 (1834), the Court would not allow aggregation. A shipowner filed a libel against some of the owners of the goods which were aboard the shipwrecked vessel when the shipowner had to salvage it. The claim was for salvage service. "It is true that the salvage service was in one sense entire; but it certainly cannot be deemed entire for the purpose of founding a right against all the claimants jointly responsible for the whole salvage. On the contrary each claimant is responsible only for the salvage properly due and chargeable on the gross proceeds or sales of his own property pro rata." The Court appeared to emphasize the lack of "jointness" of the claimants' liability.

On the other hand the Court allowed aggregation where it found that the sum of money was "due to the plaintiffs collectively * * *. They all claimed under one and the same title. They had a common and undivided interest in the claim; and it was perfectly immaterial to the defendant, how it was to be shared among them." Shields v. Thomas, 58 U.S. (17 How.) 3, 15 L.Ed. 93 (1855). The suit was on a judgment obtained by the representatives of the estate of Mr. G against G's widow's new husband claiming conversion of G's estate. The Court likened the situation to a "contract with several to pay a sum of money." In order to stress the requirement of the jointness or dependency of the joint parties' claims in order to aggregate them, the Court pointed to one of its prior decisions, a suit by several seamen for seamen's wages, which did not allow aggregation. Oliver v. Alexander, 4 Peters (31 U.S.) 143, 8 L.Ed. 349. The Court in Shields stated that the right of each seaman is separate and distinct from his associates. "His contract is separate, and his recovery does not depend on the recovery of others, but rests altogether upon its own evidence and merits. And he does not recover a portion of the common fund to be distributed among the claimants, but the amount due him on his own separate contract."

Although in one case in the Second Circuit, Ayer v. Kemper, 48 F.2d 11 (2d Cir., 1931),⁵ where aggregation was not allowed, the Court accentuated the fact that there was no single fund in which all the plaintiffs must share, the Supreme Court in another case de-emphasized this common fund argument: "it is true the litigation involves a common fund * * * but neither of the judgment creditors has any interest in it exceeding the amount of his judgment." Seaver v. Bigelow, 5 Wall. (72 U.S.) 208, 18 L.Ed. 595. Thus the Supreme Court has evinced a desire to give a strict...