Good v. Hartford Accident & Indemnity Co.

• Citation: 39 F. Supp. 475
• Decision Date: 23 June 1941
• Docket Number: C. A. No. 221.
• Court: U.S. District Court — District of South Carolina
• Parties: GOOD v. HARTFORD ACCIDENT & INDEMNITY CO. et al.

39 F. Supp. 475

GOOD v. HARTFORD ACCIDENT & INDEMNITY CO. et al.

C. A. No. 221.

District Court, W. D. South Carolina.

June 23, 1941.

COPYRIGHT MATERIAL OMITTED

Wilson & Wilson, of Rock Hill, S.C., and Hart & Moss, of York, S.C., for plaintiff.

Hemphill & Hemphill, of Chester, S.C., and Osborne, Butler & Moore, of Spartanburg, S.C., for defendants.

WYCHE, District Judge.

The above case was removed from the Court of Common Pleas of York County to this court by the petition of the non-resident defendants, Hartford Accident and Indemnity Company and Maryland Casualty Company, upon the grounds of separable controversy and fraudulent joinder. In due time the plaintiff filed his traverse to the removal petition and the matter first came before me upon motion of the non-resident defendants to strike and dismiss plaintiff's traverse to the petition upon certain grounds, which motion was denied for the reasons stated in an order by me dated April 29, 1941, in which order I directed that the issues of fact as to fraudulent joinder raised by the traverse to the petition be heard and determined by affidavits to be submitted by the parties. Affidavits were submitted, which I now have for consideration, together with the removal record, in determining the question of fraudulent joinder in connection with plaintiff's motion to remand.

There can be no doubt that in a civil action a plaintiff, who has in truth and in fact a reasonable basis for so doing, has the right to set forth and maintain in one cause of action as against two or more defendants, either jointly or concurrently liable, his claim for damages as against all, and that under such circumstances no defendant has a right to say that an action shall be separable which the plaintiff has elected to make joint, and cannot deprive the plaintiff of his right to prosecute his own suit to a final determination in his own way. On the other hand, it is equally clear that a civil action, at law or in equity, presenting a controversy between citizens of different states and involving the requisite jurisdictional amount, is one which may be removed from a state court into the District Court of the United States by the defendant if not a resident of the state in which the action is brought, and this right of removal cannot be defeated by a fraudulent joinder of a resident defendant having no real connection with the controversy. If, in such a case, a resident defendant is joined, the joinder, although fair upon its face, may be shown by a petition for removal to be only a sham or fraudulent device to prevent a removal; but the showing must consist of a statement of facts rightly leading to that conclusion, apart from the pleader's deductions. If a removal is effected, the plaintiff may, by a motion to remand, plea, answer or traverse, take issue with the statements in the petition. If he does, the issues so arising must be determined by the District Court, and at the hearing, the petitioning defendant must take and carry the burden of proof. Wilson v. Republic Iron & Steel Company, 257 U.S. 92, 42 S.Ct. 35, 66 L.Ed. 144.

Merely to traverse the allegations upon which the liability of the resident is rested or to apply the epithet "fraudulent" to the joinder will not suffice; the showing must be such as compels the conclusion that the joinder is without right and made in bad faith. Chesapeake & Ohio Railway Co. v. Cockrell, 1913, 232 U.S. 146, 152, 34 S.Ct. 278, 58 L.Ed. 544.

To make out a fraudulent joinder, as Judge Learned Hand has aptly written, the petitioner "must show more than that no relief can be granted against him the resident defendant in the state court; he must show that the plaintiff could not reasonably suppose that no such relief could be given". Hough v. Societe Electrique, D.C. N.Y.1916, 231 F. 341, 343. A comparatively recent decision from this State, in somewhat analogous language, states the rule thus: "If it be clear that legally the defendant who is a citizen of the same state as the plaintiff can be liable to the plaintiff on no reasonably legal ground on the cause of action set up in the complaint or declaration, and that the plaintiff knew or must be presumed to have known such to be the case, then the joinder as a codefendant of such citizen of the same state as plaintiff, the presence of which codefendant cannot be justified by any legal rule as to parties, so as that his presence as a defendant is explainable only by the joinder having been pretensively made so as to defeat a removal. This would justify the inference that the joinder was a fraudulent one on the part of the plaintiff." Price v. Southern Power Co., D.C.S.C.1913, 206 F. 496, 499.

The rule thus deducible from these decisions is that fraudulent joinder can only be established by a showing that plaintiff could have "granted" unto him "no relief" against the resident defendant and that the resident defendant "can be liable to the plaintiff on no reasonably legal ground on the cause of action set up in the complaint or declaration."

The complaint in this action alleges that the defendants conspired, colluded and planned to take undue advantage of plaintiff's illness, and did, in consummation of such plans and conspiracy, abuse, ridicule, annoy, discourteously treat and subjected him to insult, indignities and abuse, for the purpose of causing the plaintiff to withdraw any claims he had against the insurance companies for benefits under accident policies issued by the non-resident defendants, from which the plaintiff alleges he suffered damages. Paragraphs 10 and 11 thereof are as follows:

"10. Plaintiff further alleges, upon information and belief, that by virtue of the terms of the aforesaid mentioned Policies of Insurance sold by the defendants to the plaintiff, and the defendants seeking to avoid the liabilities incurred under the terms of said Policies, began an investigation while said Policies were in full force and effect, seeking information for the purpose, if possible, of avoiding the payment to plaintiff of any sums due him under the terms of said Policies of Insurance.

"11. That while plaintiff was seriously ill and sick and confined to his home in the City of Rock Hill as a result thereof, and while under the care and supervision of his Physicians, the Agents of the defendants herein did among themselves conceive the idea, purpose and design of avoiding the payment to plaintiff of the substantial monetary benefits to which he was entitled under the terms of each of the aforesaid Policies, and with the wicked and malicious intent, collude, plan and conspire together to take undue advantage of plaintiff's weakness, illness and sickness, all of which said facts were well known to the defendants, their agents and servants, to annoy, harass, embarrass, worry, did come to the home of this plaintiff in the City of Rock Hill, on March 21, 1940, and acting principally through E. P. McGill and William Dawes, agents and servants of the defendants, and acting in pursuance of said conspiracy previously formed for the purposes aforesaid, did come to plaintiff's home, the plaintiff at such time being a very ill man, highly nervous, and physically unfit for the transaction of business, which said facts were well known to the defendants, their agents and servants, and the said agents, acting for the purposes aforesaid, did most vigorously abuse, ridicule, annoy, embarrass and discourteously treat this plaintiff, and subjected him to insult, indignities and abuse, and did use towards plaintiff abusive and insulting language, all for the wicked, willful and malicious purpose of embarrassing and humiliating the plaintiff who had a contractual relation with the defendants by reason of the aforesaid Policies, and for the purpose of causing plaintiff to withdraw any claim against the defendants under the terms of the aforesaid Policies; that such abuse of plaintiff continued for more than two hours, until the wife of plaintiff gave the defendants' agents a suggestion that they should leave plaintiff's home."

On the hearing before me it developed that E. P. McGill was a representative and agent of the defendant, Hartford Accident and Indemnity Company, and William Dawes was the representative and agent of the Maryland Casualty Company, and R. T. Fewell was the agent and representative of the Peoples Trust Company, and the said Peoples Trust Company was agent of its two co-defendants. It further appears from the pleadings and the affidavits submitted on the hearing before me, that the plaintiff had with the Hartford Accident and Indemnity Company an automobile accident policy, and with the defendant, Maryland Casualty Company, a disability policy, each of said policies providing for indemnity in case of loss caused by bodily injuries sustained through accident. It further appears that the plaintiff sustained injuries in an accident on December 5, 1938, and that thereafter he filed a claim with each of the insurance companies for certain benefits under the said policies, the said blanks upon which the claims were submitted being filled out by R. T. Fewell, Agent, of the Peoples Trust Company, the said Trust Company having sold and delivered each of said policies to the plaintiff, and that in the letter of R. T. Fewell forwarding the claim to the Hartford Accident and Indemnity Company, he directed particular attention to the fact that the plaintiff had similar insurance with the Maryland Casualty Company, Travelers Protective Association and probably others. It is true that this appeared in the claim as filed, but R. T. Fewell directed particular attention to this part of the claim in his letter to the Hartford. It appears from plaintiff's affidavit that this information was evidently given by Hartford to Maryland Casualty; during the course of the conversation at his home Dawes asked plaintiff "If he did not have a policy in the T. P. A.", and McGill thereupon asked him "What had the...