Holloway v. Pacific Indem. Co., Inc., 76-71556.

• Decision Date: 16 November 1976
• Docket Number: No. 76-71556.,76-71556.
• Citation: 422 F. Supp. 1036
• Parties: Lawrence HOLLOWAY, Plaintiff, v. PACIFIC INDEMNITY COMPANY, INC. and John Doe, Defendants.
• Court: U.S. District Court — Western District of Michigan

422 F. Supp. 1036

Lawrence HOLLOWAY, Plaintiff, v. PACIFIC INDEMNITY COMPANY, INC. and John Doe, Defendants.

No. 76-71556.

United States District Court, E. D. Michigan, S. D.

November 16, 1976.

Duane S. VanBenschoten, VanBenschoten & VanBenschoten, Saginaw, Mich., for plaintiff.

D. J. Watters, John P. Jacobs, Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, Detroit, Mich., for defendants.

OPINION AND ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

CORNELIA G. KENNEDY, District Judge.

Plaintiff, an osteopathic physician, filed this action in the Circuit Court for the County of Wayne, State of Michigan, to recover damages allegedly stemming from his liability insurer's action in settling a malpractice claim against him without his approval. In addition to the insurance company, plaintiff named as a defendant one John Doe, "an agent or factor of the said Defendant Corporation", who was alleged to be a resident of Wayne County, Michigan, and whose "true identity is well known, although his name is unknown." On July 28, 1976 defendant Pacific Indemnity Company, Inc. filed a timely petition for removal to this Court, contending that the said John Doe "is a patently fictitious person who is named in the Complaint . . . solely to destroy diversity of citizenship." Plaintiff promptly filed a motion to remand, which is now before the Court for decision.

Initially, it must be noted that the plaintiff's citizenship has not been clearly alleged, the complaint stating only that he is an osteopathic physician practicing in the State of Michigan. However, the petition for removal alleges "That it appears from the Complaint" that plaintiff is a Michigan resident, and it is clear from plaintiff's brief that he regards himself as a Michigan citizen. Defendant corporation is allegedly incorporated in California, and has its principal place of business there.

Whether defendant has the right to remove this case must be determined from the allegations in the complaint at the time of removal. Pullman Co. v. Jenkins, 305 U.S. 534, 59 S.Ct. 347, 83 L.Ed. 334 (1939), Thiel v. Southern Pacific Co., 126 F.2d 710 (9th Cir. 1942). Hence, the Court must disregard the assertions of plaintiff's brief that the Doe defendant in this case "actually made the alleged agreements with the plaintiff and caused the plaintiff to execute a written release which was subsequently rescinded."¹ The complaint described John Doe as an agent or factor of defendant Pacific Indemnity Company, Inc. In the charging paragraphs plaintiff alleges only that a malpractice claim against him was settled by "the said defendants, or either of them," despite the fact that they knew plaintiff did not want the case settled, and despite the fact that the contract of insurance gave plaintiff the right to refuse to settle.

In support of his motion to remand, plaintiff relies exclusively on Pullman Co. v. Jenkins, 305 U.S. 534, 59 S.Ct. 347, 83 L.Ed. 334 (1939). This is the only decision in which the United States Supreme Court has spoken on the issue of John Doe defendants and diversity jurisdiction. In Pullman, the plaintiff had filed suit in a California state court against the Pullman Company and several of its agents, identified only as "Does." One of the Does was a gate tender who was alleged to have negligently permitted a co-defendant to board a train while drunk and disorderly; the other Doe was a Pullman porter whose alleged negligence permitted the same intoxicated co-defendant to enter a Pullman sleeper where he struck the plaintiff. The Pullman Company removed the case to a federal court on the ground of diversity of citizenship. The Does — whose citizenship had not been alleged — had not been served with process. The Supreme Court held that removal was improper, stating:

. . . the fact that the resident defendant has not been served with process does not justify removal by the non-resident defendant.

305 U.S. at 541, 59 S.Ct. at 350.

Plaintiff urges that remand is required whenever a Doe defendant is alleged to be a resident of the forum. The rule of Pullman is not as clear and all-encompassing as plaintiff contends, however. Indeed, to read that case as broadly as plaintiff urges would permit litigants to destroy the federal courts' removal jurisdiction by merely naming a sham co-defendant alleged to reside in the forum state. The Pullman court expressly noted that "It is always open to the non-resident defendant to show that the resident defendant has not been joined in good faith ...." 305 U.S. at 541, 59 S.Ct. at 350. Thus, "John Doe" defendants may be disregarded in determining the propriety of removal if they are merely nominal parties or sham parties against whom no real relief is sought. See 14 Wright, Miller & Cooper, Federal Practice and Procedure, § 3723, p. 608 at note 48, and cases cited.

Almost all of the cases discussing the John Doe aspect of Pullman are decisions of United States District Courts in California, or the Court of Appeals for the Ninth Circuit. Beginning with Thiel v. Southern Pacific Co., supra, decided three years after Pullman, these courts have defined the limitations of the Pullman holding and disregarded John Doe defendants under a variety of circumstances and allegations. The facts in Thiel were quite similar to those in Pullman, except that in Thiel the plaintiff's injuries were self-inflicted, resulting from his action in leaping out of a window of a moving train — an action which it was alleged defendants should have guarded against, since they were warned in advance of plaintiff's intoxicated and highly depressed mental state. The defendants were the railroad company and three Does. Although the complaint alleged negligence by defendants, plural, in failing to take adequate precautions, and referred to acts of carelessness by a conductor and other agents of the company, there was no explicit claim that the Does were those agents. The Ninth Circuit observed that the allegation of careless conduct by defendants was a mere conclusion insofar as the Does were concerned. It, therefore, held that no cause of action had been stated against them and that the district court had properly ignored them in denying a motion to remand the case to the state court in which it had originally been filed. The court referred to Pullman in connection with another issue (i. e., whether a "Doe" defendant may be disregarded must be decided on the record at the time of removal), and yet did not regard Pullman as compelling a remand.

Thiel was followed by Southern Pacific Co. v. Haight, 126 F.2d 900 (9th Cir., 1942). Plaintiff Haight had filed suit in a California state court against a Kentucky-based railroad and two fictitiously-named employees of the railroad alleged to be California residents. Plaintiff's injuries allegedly resulted from the negligence of the company in equipping and operating a railroad crossing and the negligence of the employees in failing to give a warning or signal of the train's presence. The fictitiously-named employees were not served. On the day of trial, plaintiff announced she was ready to proceed, and the railroad immediately petitioned to remove the case to federal district court, claiming that plaintiff's willingness to try the case without the resident defendants was equivalent to a voluntary dismissal as to them. The state court denied the petition and allowed plaintiff to withdraw her election to proceed with trial. Removal procedure at that time differed from the present procedure; see Grigg v. Southern Pacific Co., 246 F.2d 613, 620 at note 15 (9th Cir., 1957). Plaintiff served one Charles Poley the next day under the fictitious name, and he filed an appearance ten days later. Thereafter, the railroad served notice that the case had been removed to federal court. Plaintiff's subsequent motion to remand was denied.

On appeal, the Ninth Circuit first considered the propriety of the removal and disregarded entirely the service of process on Poley:

We must look at the situation as it existed at the time the petition for removal was presented in the State Court. ... Where a case has been properly removed, jurisdiction over it will not be defeated by later changes or developments in the suit, such as changes .. in parties ....

126 F.2d at 903. The panel then decided that, by announcing ready to proceed in the absence of the resident defendants, plaintiff had abandoned her case against them, making the action properly removable. In response to plaintiff's claim that the case should have been removed before defendant answered, if at all, the court noted that prior to trial the case was not removable, citing Pullman.

In thus holding that the fictitiously-named defendants could not have been disregarded for removal purposes until plaintiff announced ready for trial, the Haight opinion merely restated Pullman. Unfortunately, the Haight opinion does not discuss the specific allegations regarding the Doe defendants. Certainly Haight does not dictate the result of later cases holding that certain Doe defendants should be ignored ab initio. Haight is not necessarily inconsistent with those cases, however, since the factual allegations of negligence in that case may have been more specific than mere reference to plural defendants, as in the later cases.

The more recent district court cases have to a large extent been based upon Grigg v. Southern Pacific Co., 246 F.2d 613 (9th Cir., 1957). In that case plaintiff, who was injured when his car struck a mule on a freeway, filed suit in a California state court against the owner of the mule, the railroad which had delivered the mule to a corral near the freeway, and six Does. The complaint alleged only that "defendants, and each of them" had custody of the mule and negligently allowed it to stray onto the freeway. Shortly before the case was called for trial in the state court, plaintiff dismissed his case against the owner (a California resident); the railroad...