Green v. Hale

• Decision Date: 17 November 1970
• Docket Number: No. 28878.,28878.
• Citation: 433 F.2d 324
• Parties: Wilbur GREEN, Administrator of the Estate of Phillip Ray Walker, Deceased, Plaintiff-Appellee, v. William P. HALE, Defendant, O. H. Thompson, Vaneta Thompson et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

433 F.2d 324 (1970)

Wilbur GREEN, Administrator of the Estate of Phillip Ray Walker, Deceased, Plaintiff-Appellee, v. William P. HALE, Defendant, O. H. Thompson, Vaneta Thompson et al., Defendants-Appellants.

No. 28878.

United States Court of Appeals, Fifth Circuit.

October 20, 1970.

Rehearing Denied November 17, 1970.

Harold W. Ochsner, Ochsner, Nobles & Baughman, Amarillo, Tex., for appellants.

H. K. Myers, Jr., Hollis, Okl., for appellee.

Before TUTTLE, THORNBERRY and INGRAHAM, Circuit Judges.

THORNBERRY, Circuit Judge:

This medical malpractice case presents important questions of federal diversity jurisdiction as well as a few evidentiary points controlled by Texas law. Since we find in favor of the plaintiff-appellee on the jurisdictional issue, and further find no reversible error in the trial court's rulings, we Affirm.

I. FACTS

Plaintiff-appellee brought this survival action¹ as administrator of the estate of Phillip Ray Walker, deceased infant, against the defendant-appellants,² Dr. O. H. Thompson, a licensed physician, and Vaneta Thompson and Mary Lou Martin, assistants to Dr. Thompson, for negligence in the diagnosis and treatment of the deceased. Plaintiff-appellee is a resident of Oklahoma,³ and the three defendant-appellants are residents of Texas. The deceased was also a resident of Texas.

The plaintiff claimed that on Sunday, February 18, 1968, the parents of Phillip Ray Walker took their infant son to the defendants for treatment of the infant's illness.⁴ Dr. Thompson diagnosed the illness as an ear infection, prescribed medication, and sent the baby home. On Monday morning the baby's condition became worse and the father took him to Dr. Thompson's clinic. The plaintiff claimed that on this day the parents, alarmed by the baby's condition, twice requested Dr. Thompson to admit the baby to a hospital, but Dr. Thompson replied that hospitalization was unnecessary. In addition, the plaintiff claimed that defendant Martin told the baby's mother that even if hospitalization were necessary, the hospital would not admit the baby unless the parents paid the full costs of hospital care in advance. The parents took the child home that evening, February 19. On February 20, the baby turned blue and his breathing became labored. They called Dr. Thompson and again requested that the baby be admitted to a hospital, but Dr. Thompson told them to bring the baby to his clinic instead. When the child arrived at the clinic, he was not breathing. Defendant Martin attempted to resuscitate the child, and defendant Vaneta Thompson administered a dose of glucose, which plaintiff alleges was excessive. The child died at 10 a. m. of infectious hepatitis.

The case went to trial on these allegations, and the jury returned a verdict in plaintiff-appellee's favor in the amount of $5,858.58 actual damages against all three defendants jointly and severally, and $30,500 exemplary damages, $15,000 being assessed against defendants O. H. Thompson and Vaneta Thompson, respectively, and $500 against defendant Martin. The defendants moved for judgment n. o. v., and alternatively for a new trial. From the denial of these motions by the trial court, defendants prosecuted this appeal.

II. JURISDICTION

The appellants' first point is that the trial court lacked jurisdiction of this case because the apparent diversity of citizenship between the parties⁵ was "manufactured" by the appointment of an out-of-state administrator to prosecute the suit for the estate of a resident minor. The appellants urge this court to adopt the recently announced rule of McSparran v. Weist, 3d Cir. 1968, 402 F. 2d 867, cert. denied sub nom., Fritzinger v. Weist, 395 U.S. 903, 89 S.Ct. 1739, 23 L.Ed.2d 217 (1970), in which the Third Circuit found diversity jurisdiction lacking because the out-of-state guardian in the suit had been selected to prosecute the claim solely to confer diversity jurisdiction on the federal court. The appointment of an out-of-state guardian for the sole purpose of creating federal jurisdiction, the Third Circuit held, offends 28 U.S.C. § 1359, which provides that "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."

At the time the instant case was appealed, McSparran was not the rule in this Circuit. Subsequent to oral argument of the case, however, this Court in another case, Bass v. Texas Power & Light Company, 5th Cir. 1970, 432 F.2d 763, dated August 19, 1970, modified on petition for rehearing, dated September 30, 1970, adopted the McSparran rule and applied it to the case of an out-of-state administrator.

We recognize that courts, including our own Court, have expressed concern in the past over applying the rule against "manufactured diversity" to cases involving out-of-state representatives because they feared that denying diversity might entail a collateral attack on a state probate court decree.⁶ This idea originated in a Supreme Court decision, Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 189, 52 S.Ct. 84, 87, 76 L.Ed. 233, 238 (1931). To deny diversity on section 1359 grounds, it was thought, would be to examine the motives behind the state court appointment and, discovering their purpose to be solely the creation of federal diversity jurisdiction, to conclude that fraud had been practiced upon the state court. The Mecom decision uses this argument in connection with an appointment to defeat diversity jurisdiction, but the Third Circuit subsequently extended the reasoning to out-of-state appointments intended to create diversity.⁷ Corabi v. Auto Racing, Inc., 3d Cir. 1959, 264 F.2d 784; Jaffe v. Philadelphia & Western R. Co., 3d Cir. 1950, 180 F.2d 1010. The Third Circuit's extension of the Mecom rule met with criticism by the commentators,⁸ and the Corabi decision itself was eroded by judicial distinctions and repudiations in other federal courts. In Caribbean Mills, Inc. v. Kramer, 5th Cir. 1968, 392 F.2d 387, aff'd, 394 U.S. 823, 89 S.Ct. 1487, 23 L.Ed.2d 9 (1969), this Court refused to extend the Corabi rule to the case of an assignment of a claim made only to create diversity jurisdiction. In doing so we rejected the Corabi court's restrictive reading of the words "improper and collusive" in section 1359,⁹ which we said "virtually emasculated the statute." Caribbean Mills,supra, at 393. We distinguished Corabi otherwise because Carribbean Mills did not involve the problem of the state court appointment of a foreign representative. We stated that the result in Corabi "is supported by the rule that the decree of a state probate court naming an administrator cannot be collaterally attacked because of the purposes and motives of the parties when they practiced no fraud upon the court." Caribbean Mills,supra, at 393. We have no difficulty in repudiating that statement now. In the first place, it was mere dictum, and the Supreme Court further diminished its importance by declining to express an opinion on the question when it reviewed our decision. Kramer v. Caribbean Mills, Inc., 394 U.S. 823, 828, 89 S.Ct. 1487, 1490, 23 L.Ed.2d 9, 14, n. 9.¹⁰See also Lester v. McFaddon, 4th Cir. 1969, 415 F.2d 1101, 1104, in which Judge Haynsworth, in commenting on this problem, stated that "since the Supreme Court in Kramer reserved this question, it substantially eliminated the effect of earlier dicta."

In the second place, our statement was based upon what was at the time considered a well-settled rule and an interpretation that had been ascribed to Mecom by the Third Circuit. That rule now is no longer well-settled. The Third Circuit, which has been the leader all along in this area, has expressly repudiated and overruled Corabi and Jaffe, supra. In doing so, it not only explained why denying jurisdiction in the case of an out-of-state appointment solely to create diversity does not entail a collateral attack on the state court decree, it also distinguished Mecom on what we consider to be a very sound basis. We quote from the McSparran decision:

We do not impugn the state court decree collaterally by refusing to recognize the citizenship of a straw guardian. Guardian he remains, but since he is acting in the capacity of a straw party we refuse to recognize his citizenship for purposes of determining diversity jurisdiction.

* * * * * *

Mecom is immediately distinguishable from the present case because it involved an administrator, whereas here we deal with a guardian, who does not have title to the ward\'s right of action. But we believe § 1359 reaches executors and administrators as well as guardians and therefore put this difference aside. The fundamental distinction between Mecom and the present case is that there the collusion statute was not involved because the resignation of the administratrix and the appointment of her successor were acts done not to create federal jurisdiction but to prevent it from attaching.¹¹

See also Lester v. McFaddon, supra, 415 F.2d at 1104.

We think that McSparran has laid to rest whatever concerns this Court heretofore may have had with the problem of appointments of out-of-state administrators. We therefore embrace the Bass decision, supra, as the new rule in this Circuit and begin our discussion of the peculiar jurisdictional problem of this case.

Even though our disposition of this case is controlled by Bass, there is at the outset a significant difference between that case and ours. In Bass, as in McSparran, the party seeking to invoke the jurisdiction of the federal court candidly admitted that the out-of-state administrator or guardian was appointed for the sole purpose of creating diversity of citizenship. In the instant case, however, the record is silent on the reasons for Wilbur Green's appointment. The trial court simply accepted at face value the administrator's nonresident status and concluded that diversity...