London v. Standard Oil Company of California, Inc.

• Decision Date: 04 November 1969
• Docket Number: No. 22892.,22892.
• Citation: 417 F.2d 820
• Parties: Robert S. LONDON, Appellant, v. STANDARD OIL COMPANY OF CALIFORNIA, INC., Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

417 F.2d 820 (1969)

Robert S. LONDON, Appellant, v. STANDARD OIL COMPANY OF CALIFORNIA, INC., Appellee.

No. 22892.

United States Court of Appeals Ninth Circuit.

November 4, 1969.

Donald Burr (argued) of Burr, Boney & Pease, Anchorage, Alaska, for appellant.

James Delaney (argued) of Delaney, Wiles, Moore & Hayes, Anchorage, Alaska, for appellee.

Before HAMLEY and KOELSCH, Circuit Judges, and BYRNE, District Judge.^*

HAMLEY, Circuit Judge:

Robert S. London commenced this action on April 6, 1965 against Standard Oil Company of California, Inc. (Standard), in the Superior Court for the State of Alaska, Third Division. He sought damages in the sum of $700,000, alleging that the crash landing of his Piper Supercub airplane, as described below, was caused by defendant's negligence or breach of warranty in supplying automotive gasoline, instead of aviation gasoline, for his airplane. Standard removed the action to the United States District Court for the District of Alaska upon the ground of diversity of citizenship.

After a lengthy trial the jury returned a verdict for Standard and judgment was entered thereon. London appeals, arguing that the trial court erred in failing to give a requested instruction and in admitting, over plaintiff's objection, a certain line of testimony.

At the oral argument in this court inquiry was made from the bench as to whether the allegations of the complaint and the petition for removal were sufficient to show that the district court had diversity jurisdiction and, if not, whether the petition for removal was susceptible of amendment in this court to overcome any deficiency.

The complaint alleged that the defendant was a corporation "organized and existing under and by virtue of the laws of the State of Delaware and doing business in the State of Alaska." The petition for removal alleged that the action is a civil action of which the district court had original jurisdiction under 28 U.S.C. § 1332 (diversity of citizenship), and that it is an action which may be removed to the district court pursuant to 28 U.S.C. § 1441 (actions removable), "* * * in that it is a civil action wherein the matter in controversy exceeds the sum or value of $10,000, exclusive of interests or costs, and is between citizens of different states." The petition for removal, filled out on a form, contains these further allegations:

"The plaintiff__ at the time this action was commenced was/were and still is/are citizens of the State of Alaska, and the defendant__, Standard Oil Company of California, Inc. petitioner__ herein at the time this action was commenced was/were citizen__ of the State of Delaware, and defendant__ was/were or is/are not a citizen of the State of Alaska wherein this action was brought."

Title 28, § 1332(c) provides that for the purposes of that section and section 1441 a corporation shall be deemed a citizen of any state by which it has been incorporated and of the state where it has its principal place of business. The allegations of the complaint and removal petition contain no recital that the company's principal place of business is in a state other than Alaska. It follows that, as the record now stands, diversity jurisdiction was not adequately alleged.

After some discussion of the matter at oral argument, this court called for and received supplemental briefs on this question. Plaintiff argues in his supplemental brief that the allegations of the complaint and petition for removal were insufficient to establish diversity of jurisdiction and that it is now too late to cure the deficiency by amendment. In its supplemental brief, Standard acknowledges the deficiency in the allegations concerning diversity jurisdiction, but contends that this may be cured by amendment pursuant to 28 U.S.C. § 1653. At the time of filing its supplemental brief, the company moved in this court for leave to amend its petition for removal, to specify that "Standard Oil Company of California has its principal place of business in California and not in Alaska."

This same problem concerning the ability to amend a removal in the appellate court in order to cure any deficiency in establishing diversity jurisdiction was presented at oral argument on the same day, before the same panel of judges, in Barrow Development Company, Inc. v. Fulton Insurance Company, 418 F.2d 316 (9th Cir. 1969). In an opinion filed today in that case, we have held that such a deficiency in the allegations as to diversity jurisdiction may be cured by amending the petition for removal in this court.

For the reasons stated in the Barrow opinion, and upon the authority of that case, we grant the motion to amend the removal petition to supply the critical jurisdictional allegations.

Turning to the merits of the appeal, the following facts are relevant. On May 26, 1964, Standard's employees mistakenly supplied London with one hundred gallons of automotive gasoline instead of the 80/87 aviation gasoline that was ordered. Without knowledge of this mistake, London placed between ten and twenty gallons of the automotive gasoline in the fuel tanks of his airplane. The tanks had a capacity of thirty-six gallons. London flew the plane for seven and one-half hours on the automotive fuel with no difficulty, although there was some evidence of a slightly higher than normal cylinder head temperature.

On May 27, 1964, London was notified of the error. He then drained as much of the automotive gasoline from the aircraft as he could and filled the tanks with aviation fuel. At this time the eight spark plugs were removed from the plane's engine, found to be in a sooted condition, and replaced with new plugs. London then flew the plane on a forty-five minute test flight and it appeared to be operating properly. He flew the plane again on June 7 and June 8 without incident.

On June 9, 1964, London took off in the plane with one passenger on a prospecting trip. After about an hour in the air, the engine started to miss and backfire and London made an emergency landing. He examined the aircraft engine and found that the top four plugs were sooted. He replaced these with new plugs, restarted the engine, found it to be operating smoothly, and took off to resume his trip.

The engine ran well for an hour and thirty minutes and then once more began to miss and backfire. The plane lost power and crash landed. It was this crash which, according to London, caused the property damage and personal injuries for which he seeks recovery in this action.

Around July 1, 1964, London returned to the accident scene with a mechanic and made repairs on the plane. At that time London removed the eight spark plugs, examined them, and replaced the same plugs in the aircraft. London attempted to fly the plane out but it crashed on takeoff. However this accident had nothing to do with any power failure. After this second crash, the plane was hauled out by helicopter and taken to the Fairbanks Aircraft Service for repairs and for an overhaul of the engine.

While the engine was at Fairbanks Aircraft Service, London removed, examined and returned two of the eight spark plugs which were in the engine at the time of the first crash. Subsequently, on November 30, 1964, two of Standard's accident investigators visited the Fairbanks Aircraft Service shop. At their request, Jess Bachner, the owner of the shop, showed them the eight spark plugs in the engine. Bachner then marked the letters "SO" on the base of the plugs for future identification, and gave them to one of the investigators to preserve as evidence.¹ London had not given Bachner actual authority or permission to show or give the plugs to anyone.

The investigator took the plugs to Anchorage on that day and placed them in a file in Standard's office. In January, 1965, they were destroyed in a fire which consumed the Standard Oil Company office in Anchorage, their warehouses, and a storage tank. Standard was therefore unable to produce the spark plugs for examination by London's expert witness or for presentation as evidence at the trial.

Because of this, London asked the trial court to give the following instruction:

"You are instructed that if it is shown that either party in this case has destroyed, disposed of, or otherwise suppressed evidence material to the issues before you, then this destruction, disposal or withholding of evidence raises a strong inference that the evidence was unfavorable to the party who destroyed, disposed or withheld it."

The trial court declined to give the instruction on the ground that no evidence was received indicating that the company had "destroyed, disposed of, or otherwise suppressed evidence material to the issues" of the case.²

London here argues that the trial court erred in failing to give this requested instruction. The rule upon which he relies is that an unfavorable inference may result from the unexplained failure of a party to produce documentary or other real evidence. See Evis Manufacturing Company v. F.T.C., 287 F.2d 831, 847 (9th Cir. 1961); 2 Wigmore, Evidence, §§ 285, 291 (3d Ed. 1940).

London concedes that an inference that missing evidence is unfavorable to the withholding party is not normally justified if the withholding party is unable to produce the evidence. However, he asserts that since negligence of the withholding party in failing to preserve the evidence will not render such an inference inappropriate,³ the same rule should apply where the evidence is wrongfully taken by the withholding party and thereafter destroyed in a fire. In support of this view, London relies upon the equity maxim that "where one of two parties, both guiltless of intentional wrong, must suffer a loss, the one whose conduct, act, or omission occasions the loss must stand the consequences."⁴

It therefore appears that London does not contend that Standard employees or agents intentionally "destroyed, disposed of, or otherwise suppressed" the spark plugs in question. Nor...