Ferrara v. Philadelphia Laboratories, Inc.

• Decision Date: 10 August 1967
• Docket Number: 4754.,Civ. A. No. 4753
• Citation: 272 F. Supp. 1000
• Parties: St. Elmo FERRARA, Trustee of an Express Trust v. PHILADELPHIA LABORATORIES, INC., Proctor Hospital, Dr. Edward R. Bove, Dr. William A. O'Rourke, Jr. and Dr. Henry J. Fregosi.
• Court: U.S. District Court — District of Vermont

272 F. Supp. 1000

St. Elmo FERRARA, Trustee of an Express Trust v. PHILADELPHIA LABORATORIES, INC., Proctor Hospital, Dr. Edward R. Bove, Dr. William A. O'Rourke, Jr. and Dr. Henry J. Fregosi.

Civ. A. Nos. 4753, 4754.

United States District Court D. Vermont.

August 10, 1967.

COPYRIGHT MATERIAL OMITTED

Robert A. Bloomer, Bloomer & Bloomer, Rutland, Vt., for plaintiff.

Frederic W. Allen, Wick, Dinse & Allen, Burlington, Vt., for defendant Philadelphia Laboratories, Inc. Peter P. Plante, Black & Plante, White River Junction, Vt., for defendant Proctor Hospital.

Christopher A. Webber, Webber & Costello, Rutland, Vt., for defendant Dr. Edward R. Bove.

Richard E. Davis, Davis, Martin & Free, Barre, Vt., for defendant Dr. William A. O'Rourke, Jr.

Albert W. Coffrin, Coffrin & Pierson, Burlington, Vt., for defendant Dr. Henry J. Fregosi.

OPINION

LEDDY, District Judge.

These are two civil actions to recover against a drug manufacturer, a hospital and three physicians for personal injuries and other damages resulting from negligence and breach of warranties. The complaints in these actions both alleged, in substance, the following events:

On December 30, 1963, Gene Isabelle was admitted to the Proctor Hospital at Proctor, Vermont, for the delivery of her third child, born the following day. During the course of her labor, Mrs. Isabelle's attending physician, the defendant Dr. Edward R. Bove, administered to her a spinal or "saddle block" anesthetic, injecting a drug known as Lucaine, manufactured by the defendant Philadelphia Laboratories, Inc. and distributed in Vermont and other states. As a result, Mrs. Isabelle suffered serious physical and psychological injuries, including permanent paralysis from the waist down. During her first hospitalization, the defendant Dr. Henry J. Fregosi, an anesthesiologist on the staff of the Proctor Hospital, was consulted by Dr. Bove. Later Mrs. Isabelle was re-admitted to the Rutland Hospital as a post partum patient with neurological complications, and there Dr. Bove consulted the defendant Dr. William A. O'Rourke, an internist.

Liability against Philadelphia Laboratories, Inc., is premised on breach of warranties and on the violation of certain federal drug statutes and regulations of the Food and Drug Administration. Proctor Hospital is alleged to have been negligent in furnishing improper care. Doctors Bove, O'Rourke and Fregosi are alleged to have failed to exercise care and diligence in keeping with sound medical practice while treating Mrs. Isabelle.

These actions are brought in the United States District Court for the District of Vermont to recover damages for the personal injuries suffered by Mrs. Isabelle, and other incidental damages suffered by her and her husband, Albert. But they are not brought by the Isabelles, both of whom are citizens of Vermont, as are all the defendants save Philadelphia Laboratories, Inc., a Pennsylvania corporation doing business at all times material in Vermont. The plaintiff in both actions is St. Elmo Ferrara, a New Jersey citizen characterized in the captions of these actions as the "trustee of an express trust."

Both actions were filed on December 27, 1966. The complaints allege that on December 26, 1966, the Isabelles, "by written instrument, assigned, transferred, conveyed, set over and delivered" to Ferrara all their "right, title and interest in and to any claims, demands, suits or actions for damages" suffered by them on or after December 30, 1963. Since both actions are identical in all respects material to this decision, they shall hereafter be referred to as one case in this opinion, which shall apply to both.

Each defendant urges dismissal of the action for lack of jurisdiction over the subject matter on the ground that the plaintiff has been improperly or collusively made a party to invoke the jurisdiction of this Court in violation of 28 U.S.C. § 1359. That section provides as follows:

"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."

Hearings before the Court on this and other defenses¹ were held, at which the plaintiff and the defendants introduced evidence in support of their positions. From the evidence bearing on the issue raised under section 1359, the following facts appear:

The history of this case begins on December 31, 1963, the date on which Mrs. Isabelle allegedly suffered the injuries recited in the complaint. Shortly thereafter, Mr. Isabelle retained the law firm of Bloomer and Bloomer to represent him and his wife in their efforts to obtain a recovery from those thought to be responsible, and since then that firm has continued to represent them.

The plaintiff, a New Jersey attorney, apparently first became connected with the matter in the spring of 1965, when he discussed the case with Attorney Robert Bloomer at the latter's request in New York City. The plaintiff's first meeting with Albert Isabelle was in October, 1966, in Mr. Bloomer's office in Rutland, Vermont. The following day he had a two-hour conversation with Mrs. Isabelle in Burlington, Vermont, where she was hospitalized for treatment and therapy. It does not appear that the plaintiff was acquainted in any way with the Isabelles prior to these meetings. Since then, he has seen them only once, visiting them at their home in Rutland on or about December 7, 1966, with Attorney Bloomer.

Mr. Ferrara told the Isabelles that at one time he was associated with another attorney representing a client suffering from the same or similar conditions as Mrs. Isabelle. He related his handling of the case, the therapy his client received and the improvement she subsequently made. He suggested that by reason of that experience he might be of assistance to the Isabelles. He also informed them of a physical therapy institution in New Jersey with which he had become acquainted during that case and, upon his return to New Jersey from one of his visits to Vermont, he sent a brochure describing that institution to Mr. Bloomer. At the December 7th meeting, Mr. Ferrara and Mr. Bloomer first discussed with the Isabelles the possibility that the Isabelles' claims against the defendants might be assigned in trust to Ferrara.

On November 17, 1966, prior to the last meeting with Ferrara, Albert Isabelle commenced an action in United States District Court for the District of Vermont, civil action number 4725, against Philadelphia Laboratories, Inc., one of the defendants here, based on substantially the same allegations as appear in this action. He is represented in that suit by the firm of Bloomer and Bloomer.

By writs dated December 15, 1966, Albert and Gene Isabelle each brought separate actions in Rutland County Court, Rutland, Vermont, against Philadelphia Laboratories, Inc., Proctor Hospital, Dr. Edward R. Bove and Dr. William A. O'Rourke, Jr., all defendants here. Those suits, docket numbers 21937 and 21938, were both entered in the county court on December 21, 1966. Further, by writs dated December 19, 1966, Mr. and Mrs. Isabelle each brought separate suits in Rutland County Court against Dr. Henry J. Fregosi, also a defendant here. Those actions, docket numbers 21942 and 21943, were entered in that court on December 24, 1966. Each of the county court suits assert causes of action arising out of the same events as those upon which the action before this Court is based, and in each the plaintiff is represented by Bloomer and Bloomer.

All of the above suits are now pending and were at the time of execution of the trust instruments upon which the present case is based.

On December 9, 1966, a trust agreement, prepared by Mr. Bloomer and having substantially the same terms and provisions as the instruments upon which this action is premised, was executed by Mrs. Isabelle and Ferrara. Sometime between that date and December 22, 1966, this agreement was revoked by mutual consent of the parties to it, since it was decided during that interval that Mr. and Mrs. Isabelle should each execute such an agreement.

The trust agreements relied upon by the plaintiff here were prepared by Attorney Bloomer, forwarded to the plaintiff in New Jersey for his signature on December 22, and then returned to Mr. Bloomer in Vermont, where they were signed by the Isabelles on December 26. This suit was filed in federal court on the following day. This, the plaintiff testified, was "purely coincidental." Ferrara, the trustee and plaintiff here, is also represented by Bloomer and Bloomer.

With certain minor and immaterial exceptions, both trust instruments of December 26 are identical. Each purports to "assign, transfer, convey, set over and deliver * * * in trust" to the plaintiff all the "right, title and interest in and to any and all claims, demands, suits or actions" that each of the Isabelles may have "for damages, expenses, personal injuries, conscious pain and suffering, disability, losses, costs and any and all other damage suffered * * * on or after December 30, 1963," against the defendants, and against whom the plaintiff, as trustee, is directed by the terms of the agreements promptly to commence suit. Each instrument provides that the trustee is to receive a reasonable compensation not to exceed six hundred dollars per year for his services as trustee, and that he is to be reimbursed for expenses incurred in connection with the prosecution of the settlors' claims and the management of the trust. There is no provision that the trustee's compensation is in any way contingent upon a recovery or its amount. Each trust is to endure from its date until January 1, 1971, but power of revocation at any time after January 1, 1969, is expressly reserved to the settlor in each case.

The capacity in which Ferrara is acting is not entirely clear to the Court. His testimony at the hearings was vague, uncertain and often...