Lytle v. Freedom Intern. Carrier, S. A., OSBORN-LANG

• Decision Date: 13 June 1975
• Docket Number: No. 74-1470,INC,OSBORN-LANG,74-1470
• Citation: 519 F.2d 129
• Parties: Robert J. LYTLE, Plaintiff, v. FREEDOM INTERNATIONAL CARRIER, S. A., et al. Defendant-Third-Party Plaintiff, v. AMERICAN GRAIN TRIMMERS, INC., Third-Party Defendant-Fourth-Party Plaintiff- Appellee, v., Fourth-Party Defendant-Appellee. Appeal of EMPLOYERS' SURPLUS LINES INSURANCE CO., Fourth-Party Defendant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 129

519 F.2d 129

Robert J. LYTLE, Plaintiff, v. FREEDOM INTERNATIONAL CARRIER, S. A., et al. Defendant-Third-Party Plaintiff, v. AMERICAN GRAIN TRIMMERS, INC., Third-Party Defendant-Fourth-Party Plaintiff- Appellee, v. OSBORN-LANGE, INC., Fourth-Party Defendant-Appellee.

Appeal of EMPLOYERS' SURPLUS LINES INSURANCE CO.,

Fourth-Party Defendant.

No. 74-1470.

United States Court of Appeals, Sixth Circuit.

June 13, 1975.

David J. Cook, Merkel, Campbell, Dill & Zetzer, Henry J. Zetzer, Cleveland, Ohio, for appellant.

John L. Foster, Foster, Meadows & Ballard, Detroit, Mich., David G. Davies, Cleveland, Ohio, for appellee.

Before PHILLIPS, Chief Judge, ENGEL, Circuit Judge, and CECIL, Senior Circuit Judge.

ENGEL, Circuit Judge.

Robert J. Lytle, the original plaintiff in the action before the district court, brought suit in June of 1969 against Freedom International Carriers, S. A. et al. (Freedom), seeking $1,000,000 in damages for injuries he had sustained while employed upon Freedom's ship, the "Meliton," as a longshoreman. Lytle's complaint in admiralty alleged two causes of action, the first charging Freedom with negligence and the second charging it with breach of the warranty of seaworthiness which Lytle alleged the shipowner owed him.

Shortly after Lytle brought suit against Freedom, that party filed in turn a third-party complaint seeking indemnity from American Grain Trimmers, Inc. (American), the stevedore which employed Lytle, relying upon the indemnification doctrine of Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). American at the time had in force a basic policy of liability insurance with the Liberty Mutual Insurance Company (Liberty) in the amount of $100,000 and in addition thereto, had a policy of excess insurance liability coverage with appellant Employers' Surplus Lines Insurance Company (Employers').

In July of 1971 an agreement was reached whereby a consent judgment was entered in favor of Lytle in the amount of $170,000 against Freedom. The consent judgment in turn provided that Freedom was indemnified in the amount of $152,500 from American. Of this latter sum, Liberty paid the full $100,000 limits of its policy. American, its insurance broker, appellee Osborn and Lange, Inc. (Osborn), and appellant Employers' each contributed $17,500 under an interim settlement agreement in which each, however, reserved its right of recovery against any other party who might ultimately be found liable.

The consent judgment was entered upon the stipulation of Lytle, Freedom, and American, on July 20, 1971 and on August 12, 1971 satisfactions of the judgments so entered were filed by Lytle and by Freedom, upon its separate third-party complaint. On September 30, 1971 American filed in this same action a motion with the district court for leave to file a so-called "Fourth-Party Complaint" against Employers' and Osborn as Fourth-Party defendants. The complaint alleged that under the terms of its policy of liability insurance, Employers' was obligated to pay so much of the original judgment as was in excess of the Liberty policy. American sought recovery of its contribution of $17,500. Defendant Osborn also cross-claimed against Employers' for recovery of its $17,500 contribution made pursuant to the settlement agreement. Both American and Osborn also sought recovery of costs, attorney fees, and interest.

District Judge Don J. Young granted summary judgments against Employers' and in favor of American and Osborn in the amount of $17,500 each, with interest thereon at 8%. Judge Young also ordered the payment of attorney fees in the amount of $3,434 to American and in the amount of $1,978.93 to Osborn. We affirm.

We deal with the several grounds of appeal in the order in which they are raised.

I. The Fourth-Party Complaint

Employers' contends, for the first time on appeal, that the district court was without any subject matter jurisdiction to enter judgment upon the "Fourth-Party Complaint", so-called, because it was filed 49 days after the judgments in the principal litigation had been fully satisfied, a circumstance which it urges completely disposed of all of the issues in litigation and thus brought the entire lawsuit to an end. Employers' relies particularly upon Wayman v. Southard, 23 U.S. 1, Wheat 1, 6 L.Ed. 253 (1825); Riggs v. Johnson County, 73 U.S. 166, 6 Wall. 166, 18 L.Ed. 768 (1867); Covell v. Heyman, 111 U.S. 176, 4 S.Ct. 355, 28 L.Ed. 390 (1884) and Central National Bank v. Stevens, 169 U.S. 432, 18 S.Ct. 403, 42 L.Ed. 807 (1898).

Employers' recognizes the propriety, generally, of filing third-party complaints upon leave of court and in particular of third-party complaints seeking indemnification and contribution in maritime claims, Rule 14 Federal Rules of Civil Procedure. Employers' also recognizes that no specific time limitation for filing third-party complaints is set forth in Rule 14. At the same time, Employers' urges upon us the language of Chief Justice Marshall in Wayman v. Southard, supra, that:

"The jurisdiction of a court is not exhausted by the rendition of its judgment, but continues until that judgment shall be satisfied." 23 U.S. 1, 11, Wheat 1, 11, 6 L.Ed. 253.

Thus, it argues, the jurisdiction of the district court ended upon the satisfaction of the original judgments and there was thereafter no jurisdiction to entertain the fourth-party complaint.

Neither Wayman v. Southard, nor the other cases cited, deals with the circumstance where the district court purports to exercise jurisdiction after the filing of satisfactions of judgment. Nevertheless, contends Employers', these cases by implication hold that the jurisdiction of the court was at an end upon the satisfaction of the judgment.

The appellees, on the other hand, rely upon those cases which hold generally that jurisdiction over still-pending ancillary claims survives the final disposition of the principal claims. Dery v. Wyer, 265 F.2d 804 (2nd Cir. 1959); Oakes v. Graham Towing Co., 135 F.Supp. 485 (E.D.Pa.1955); Murphy v. Kodz, 351 F.2d 163 (9th Cir. 1965). Appellees' cited cases are also distinguishable from the case here for they all involve circumstances in which a third-party complaint had been filed and was pending prior to the filing of satisfactions of judgment, or settlement of the original cause of action.

Whatever might have been the power of the district court to deny the motion to file the fourth-party complaint, or to have dismissed it upon the motion of Employers' that it was untimely filed, we are satisfied that upon the undisputed facts here, an independent basis of subject matter jurisdiction in the district court existed and that this independent basis was sufficient to defeat an objection thereto raised for the first time on appeal. The complaint which was filed in the district court plainly alleged the existence of a case and controversy within the meaning of Article III of the Constitution. Likewise, the amount in controversy was alleged to be in excess of $10,000. Finally, the well pleaded facts of the complaint are sufficient to invoke the diversity jurisdiction of the district court under 28 U.S.C. § 1332, thus meeting the pleading requirements of Rule 8, Federal Rules of Civil Procedure. Williams v. United States, 405 F.2d 951 (9th Cir. 1969), Quality Beverage Co. v. Sundrop Sales Corp. of America, 291 F.Supp. 92 (E.D.Wis.1968).

Though the fourth-party plaintiff sought to append its action to the original but closed action, and the court allowed it to do so, the complaint could fully stand on its own as an independent action. We, therefore, regard the district court in accepting the filing of the complaint to have acquired full subject matter jurisdiction over the controversy as if it had been started as a fully independent suit. Any defect in the proceedings below was procedural and not jurisdictional, and was waived by appellant's failure to object in the court below. Mackay v. Uinta Development Co., 229 U.S. 173, 33 S.Ct. 638, 57 L.Ed. 1138 (1913).

II. Propriety of Summary Judgment

Appellant's claim that the district court erred in granting summary judgment rests upon two separate grounds. First, appellant claims that the district court failed to comply with the requirements of Rule 56(d) in granting partial summary judgment on the liability issue. Rule 56(d) requires that where only a part of a case can be disposed of by summary judgment, the district judge should enter an order to indicate which portion of the case is no longer in controversy, and directing further proceedings in the action. Here no such order was entered. However, Rule 56(d) is designed for those situations in which issues still remain to be litigated. Such is not the case here. The district court, in granting the motion for summary judgment, implicitly reserved only the question of damages. Under Rule 56(c) no order listing the remaining issues to be litigated was required.

A second basis for Employers' claim that summary judgment is inappropriate is its contention that there are genuine issues of material fact which still remain to be decided and which require a trial upon the merits. In its brief, Employers' states that " . . . the complexity of the case required inquiry into the facts to clarify the application of the law". The difficulty with this contention is that appellant's claims are general and conclusory. Nowhere in its brief does Employers' state precisely what material facts are in dispute, and indeed, we can find none. Our careful examination of the entire record fully satisfies us that this case involves circumstances in which summary judgment procedures are particularly useful:

"In the insurance field the sumary (sic) procedure has been effectively used and summary judgment rendered in the following situations, either on the basis of admitted facts, or upon facts clearly established (as there often can be in these...