Felgemaker v. Ocean Accident & Guarantee Corporation

• Citation: 47 F. Supp. 660
• Decision Date: 10 November 1942
• Docket Number: Civ. A. No. 20628,20632.
• Parties: FELGEMAKER v. OCEAN ACCIDENT & GUARANTEE CORPORATION, LIMITED, et al., two cases.
• Court: U.S. District Court — Northern District of Ohio

47 F. Supp. 660

FELGEMAKER v. OCEAN ACCIDENT & GUARANTEE CORPORATION, LIMITED, et al., two cases.

Civ. A. Nos. 20628, 20632.

District Court, N. D. Ohio, E. D.

November 10, 1942.

John J. Hynes and Joseph F. Hynes, both of Cleveland, Ohio, for plaintiffs.

John H. McNeal and Harley J. McNeal, both of Cleveland, Ohio, for defendants.

WILKIN, District Judge.

These cases came on for hearing on the motions of the Inter Insurance Exchange of the Chicago Motor Club to quash the purported service of summons.

Both cases originated in the common pleas court of Cuyahoga County upon the petitions of the respective plaintiffs, seeking damages for injuries suffered as the result of a collision between the automobile in which the plaintiffs were traveling and the automobile being driven by the defendant Vernita Mason. Messrs. John H. McNeal and Harley J. McNeal, as attorneys for the defendant Vernita Mason, filed petitions for removal on the ground of nonresidence of the defendant. The cases were removed to this court and on October 21, 1941 were consolidated and tried to jury, the defendant being represented by McNeal and McNeal. A verdict was returned for the plaintiff in each case and judgments were entered thereon. Thirty days having elapsed and the judgments being unpaid, the plaintiff in each case filed an amended and supplemental complaint in accordance with Section 9510-4 of the General Code of Ohio, and alleged that the defendant Inter Insurance Exchange of the Chicago Motor Club had issued a policy of insurance indemnifying the defendant Vernita Mason against liability for such judgments and that said policy was in full force and effect. The plaintiffs requested this court to cause service of summons to be made on the Inter Insurance Exchange in Chicago, and the motions now being considered were filed against the service made in conformity with such request. The plaintiffs oppose the motions to quash and seek to defend the service of summons beyond the Northern District of Ohio by virtue of Section 9510-4 of the General Code of Ohio and Rule 4(e) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, which provides: "Whenever a statute of the United States or an order of court provides for service of a summons, or of a notice, or of an order in lieu of summons upon a party not an inhabitant of or found within the state, service shall be made under the circumstances and in the manner prescribed by the statute, rule, or order."

As pointed out by the defendant Inter Insurance Exchange, however, that rule should not be construed to extend or limit the jurisdiction of the district court of the United States or the venue of actions therein. Rule 82, Rules of Civil Procedure. The jurisdiction of district courts is fixed by Judicial Code Sections 51 and 52, Title 28 U.S.C.A. §§ 112 and 113.

(Sec. 51) "* * * and, except as provided in sections 113 to 118 of this title, no civil suit shall be brought in any district court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; * * *".

(Sec. 52) "When a State contains more than one district, every suit not of a local nature, in the district court thereof, against a single defendant, inhabitant of such State, must be brought in the district where he resides; but if there are two or more defendants, residing in different districts of the State, it may be brought in either district, * * *".

It seems therefore that this court is without authority to issue process beyond the limits of this judicial district in order to give effect to the provisions of Section 9510-4 of the General Code of Ohio. The motions to quash will therefore be sustained, and the costs of service taxed against the plaintiffs.

As a consequence of the sustaining of the motions to quash, this court would be without jurisdiction to proceed and the amended and supplemental complaints would have to be dismissed unless the defendant, the Inter Insurance Exchange, has entered its appearance in the cases. It is affirmed by the plaintiffs and is not denied by the defendant Inter Insurance Exchange that it retained the counsel who represented the defendant Vernita Mason. It seems to be conceded that McNeal & McNeal, while having the cases removed to this court and while defending at the trial, were acting only ostensibly for Vernita Mason and were in fact protecting the interests of the Inter Insurance Exchange; that such defendant was obligated to pay for their services and that they were obligated to report to the Inter Insurance Exchange. The direction and control of the defendant's participation in the litigation was assumed by the Inter Insurance Exchange. The defendant Vernita Mason had no counsel or attorneys other than those selected by the defendant Inter Insurance Exchange.

It seems to this court in view of those facts and the present state of the law of Ohio that the defendant Inter Insurance Exchange must be held to have entered its appearance. This case falls within the legal doctrine established by Boehmke v. Northern Ohio Traction Co., 88 Ohio St. 156, 102 N.E. 700, Limbaugh v. Western Ohio R. Co., 94 Ohio St. 12, 113 N.E. 687, Jewett v. Fenton Dry Cleaning & Dyeing Co., 30 Ohio Dec. 124, Reinhart v. Great American Mutual Indemnity Co. et al., 25 Ohio N.P.,N.S., 331. All these cases are based on the sound moral and legal principle that one having an interest in the outcome of a lawsuit who authorizes attorneys to appear, even though under the name of some other defendant, will be held to the responsibility of a party. As was said in the Boehmke case 88 Ohio St. 156, 102 N.E. 701: "Counsels' mistake was in thinking their client could enjoy the privilege of defending a lawsuit and dodge the responsibility that goes with it."

And as was said in the Limbaugh case, supra 94 Ohio St. 12, 113 N.E. 688: "If the attorneys in the case had no authority to represent the substituted company, the latter company of course would not be bound, but every fact and presumption disclosed by this record support the conclusion that counsel had full authority to represent both companies in this action." (Both defendants in this action.)

In the Boehmke case and in the Limbaugh case the company held responsible was a wrongdoer, whereas in this case the company held responsible is an insurer of the wrongdoer. But the important consideration in both instances is that the company held accountable for the defense had an interest in the defense and had sent its attorneys in as ostensible representatives of another defendant while in fact protecting the interest of the undisclosed company. The case of Jewett v. Fenton Dry Cleaning & Dyeing Co., supra, extends the doctrine specifically to an indemnity company which assumes the defense of its insured. As was remarked by Judge Darby in that case:

"If it is the law of this state that an...