Leppard v. Jordan's Truck Line, 3362.

• Citation: 110 F. Supp. 811
• Decision Date: 05 March 1953
• Docket Number: No. 3362.,3362.
• Parties: LEPPARD v. JORDAN'S TRUCK LINE et al.
• Court: United States District Courts. 4th Circuit. United States District Court of South Carolina

110 F. Supp. 811

LEPPARD v. JORDAN'S TRUCK LINE et al.

No. 3362.

United States District Court E. D. South Carolina, Florence Division.

March 5, 1953.

Leppard & Leppard, Chesterfield, S. C. and J. P. Mozingo, III, Darlington, S. C., for plaintiff.

Shepard K. Nash and John S. Wilson, Sumter, S. C., R. W. Shand, Hartsville, for defendants.

WILLIAMS, District Judge.

This action was brought by plaintiff in the Court of Common Pleas for Darlington County, South Carolina, against Jordan's Truck Line, a corporation, The Travelers Insurance Company and The Travelers Indemnity Company, foreign corporations, to recover actual and punitive damages in the sum of $100,000, arising out of a collision which occurred between an automobile driven by plaintiff's intestate and a truck owned by Jordan's Truck Line. The liability of the insurance companies is predicated upon the provisions of a liability insurance policy issued under the provisions of Section 8511 of the 1942 Code of Laws for South Carolina.

The action was commenced August 7, 1952, and was removed to the United States District Court for the Eastern District of South Carolina by the insurance companies on September 6, 1952, on the ground that the complaint states a separate and independent claim or cause of action against the insurance companies. In due time a motion was filed by the plaintiff, to remand this cause to the Court of Common Pleas for Darlington County, South Carolina, on the ground that a separate and independent claim or cause of action against the insurance companies does not exist under the provisions of Section 1441(c) of the Judicial Code. The defendant insurance companies have also filed a motion for change of venue to the Western District of North Carolina sitting at Charlotte, North Carolina.

The new Section 1441(c) of the Judicial Code reads as follows:

"(c) Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction."

The plaintiff concedes that the complaint, under the decisions of the Supreme Court of South Carolina, states two causes of action: one in tort against the Jordan Truck Line, and one in contract against the insurance companies, but claims that the liability of the truck line and insurance companies is joint and concurrent under the State decisions, and under Section 487 of the 1942 South Carolina Code. Plaintiff also concedes that the claims against the Jordan Truck Line and the insurance companies are in different amounts.

Three questions must be decided: (1) Does the complaint state a separate and independent claim or cause of action against the defendant insurance companies under the provisions of Section 1441(c) of the Judicial Code? (2) Is it permissible to join the defendant insurance companies as parties defendant in an action for punitive damages? and (3) Should the cause of action be removed to the Western District of North Carolina sitting at Charlotte?

1. The rule with reference to separate and independent causes of action is clearly set forth in the case of American Fire & Casualty Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 538, 95 L.Ed. 702, 19 A.L.R.2d 738:

"A separable controversy is no longer an adequate ground for removal unless it also constitutes a separate and independent claim or cause of action. Compare Barney v. Latham, 103 U.S. 205, 212, 26 L.Ed. 514, with the revised § 1441. Congress has authorized removal now under § 1441(c) only when there is a separate and independent claim or cause of action. Of course, `separate cause of action' restricts removal more than `separable controversy.' In a suit covering multiple parties or issues based on a single claim, there may be only one cause of action and yet be separable controversies. The addition of the word `independent' gives emphasis to congressional intention to require more complete disassociation between the federally cognizable proceedings and those cognizable only in state courts before allowing removal.

"The effectiveness of the restrictive policy of Congress against removal depends upon the meaning ascribed to `separate and independent * * * cause of action'. § 1441. Although `controversy' and `cause of action' are treated as synonymous by the courts in situations where the present considerations are absent, here it is obvious different concepts are involved. We are not unmindful that the phrase `cause of action' has many meanings. To accomplish its purpose of limiting and simplifying removal, Congress used the phrase `cause of action' in an accepted meaning to obtain that result. By interpretation we should not defeat that purpose.

"In a suit turning on the meaning of `cause of action,' this Court announced an accepted description. Baltimore S. S. Co. v. Phillips, 274 U.S. 316, 47 S.Ct. 600, 71 L.Ed. 1069. This Court said, 274 U.S. at page 321, 47 S. Ct. at page 602:

"`Upon principle, it is perfectly plain that the respondent suffered but one actionable wrong and was entitled to but one recovery, whether his injury was due to one or the other of several distinct acts of alleged negligence or to a combination of some or all of them. In either view, there would be but a single wrongful invasion of a single primary right of the plaintiff, namely, the right of bodily safety, whether the acts constituting such invasion were one or many, simple or complex.

"`A cause of action does not consist of facts, but of the unlawful violation of a right which the facts show.'

* * * * * *

"In making this determination we look to the plaintiff's pleading, which controls. Pullman Co. v. Jenkins, 305 U.S. 534, 538, 59 S.Ct. 347, 349, 83 L. Ed. 334. The single wrong for which relief is sought is the failure to pay compensation for the loss on the property. Liability lay among three parties, but it was uncertain which one was responsible. Therefore, all were joined as defendants in one petition. * * *"

The question to be determined, therefore, is whether under the rule laid down in the case of American Fire & Casualty Company v. Finn, supra, the complaint states a separate and independent claim or cause of action. I think that the complaint does state a separate and independent claim or cause of action against the defendant insurance companies. It is admitted that since this accident occurred in the State of North Carolina, the statutory as well as the common law of force in that State controls the issues and status of the parties in this action. The right to recovery is governed by the lex loci and not the lex fori.

The rule which has been adopted by the Supreme Court of South Carolina in the cases of Piper v. Fidelity and Casualty Company, 157 S.C. 106, 154 S.E. 106, Benn v. Camel City Coach Company, 162 S.C. 44, 160 S.E. 135, and many other cases, holds: (1) That when an indemnity company issues its policy as required by Section 8511 of the Code of Laws of South Carolina 1942, it may be joined as a party defendant with the insured, provided the contract is for liability and not loss of the insured and where the parties and the damages are the same; (2) That the contract of indemnity is not one to answer for wilfulness of the insured and hence the indemnity company could not be joined with an insured in an action seeking punitive damages for personal injury due to wilful conduct of the insured; and (3) That where wilfulness is not alleged the person injured has the beneficial interest in the policy and is entitled to sue thereon.

Section 8511 of the 1942 South Carolina Code requires liability insurance which shall be a policy insuring or indemnifying passengers receiving personal injury by reason of any act of negligence on the part of the insured. In the case of Mobley v. Bland, 200 S.C. 448, 21 S.E.2d 22, 25, the plaintiff, Mobley, by his agent, operated his truck on a public highway in North Carolina and an accident occurred between that truck and two trucks owned by the defendant, Bland. Plaintiff in that action brought suit against defendant Bland and alleged that the defendant Pennsylvania Casualty Company issued its policy of insurance insuring its codefendant Bland against loss from any liability imposed by law on Bland for damages resulting from the operation of said trucks, and under the said policy of insurance defendant Pennsylvania Casualty Company was liable to the plaintiff, with its codefendant Bland, for such damages as were sustained by the plaintiff. It was under this allegation that the Pennsylvania Casualty Company was made a party defendant. The Pennsylvania Casualty Company interposed a demurrer on the ground that the plaintiff was undertaking to assert a cause of action against Bland arising out of an alleged tort committed in the State of North Carolina, and against the defendant Pennsylvania Casualty Company under an alleged contract whereby it insured the said Bland against loss from liability imposed by law on the said Bland for damages resulting from the operation of the automobile or trucks referred to in the complaint, in that the company failed to state a cause of action against that defendant since it did not appear on the face of the complaint that the plaintiff had any rights under the policy of insurance issued by the Pennsylvania Casualty Company to Bland. The demurrer was overruled. The Supreme Court, opinion by Mr. Chief Justice Bonham, Justice Baker and Circuit Judge Grimball, Acting Associate Justice, concurring, held as follows:

"In our judgment, the question of prime importance for disposition in this case is whether his honor erred in his interpretation of the North Carolina case of Williams v. Frederickson Motor Express Lines, Inc., 195 N.C. 682, 143 S.E. 256. After citing the North Carolina case of Brown v.

...