Magnusson v. American Allied Insurance Company
| Decision Date | 10 July 1968 |
| Docket Number | No. 3-67 Civ. 317.,3-67 Civ. 317. |
| Citation | 286 F. Supp. 573 |
| Parties | Cyrus E. MAGNUSSON, as Commissioner of Insurance of the State of Minnesota, Plaintiff, v. AMERICAN ALLIED INSURANCE COMPANY, Defendant. In the matter of Claims Numbered 001869 and 001883, RESOLUTE INSURANCE COMPANY, a Rhode Island Corporation, Claimant. |
| Court | U.S. District Court — District of Minnesota |
Briggs & Morgan by Samuel L. Hanson, St. Paul, Minn., for Homer A. Bonhiver, receiver of American Allied Ins. Co.
Stearns, Torrison, Goetteman & Driscoll by Edward J. Driscoll, St. Paul, Minn., appeared for Resolute Ins. Co. NEVILLE, District Judge.
The novel question presented on this motion to remand is whether the petitioner for removal from State Court is in the position of a defendant within the meaning and language of 28 U.S.C. § 1441(a) so as to be entitled to a removal. American Allied Insurance Company (American Allied) is a Minnesota corporation with its principal place of business in Minnesota. It appears in this case by and through its duly appointed Receiver Homer A. Bonhiver, who has moved the court for an order remanding this controversy to the appropriate State of Minnesota District Court. Resolute Insurance Company (Resolute) is a Rhode Island corporation with its principal place of business in the State of Connecticut. The amount in controversy exclusive of costs and interest clearly exceeds $10,000.00.
June 10, 1965 the Commissioner of Insurance for the State of Minnesota commenced an action in State Court against American Allied for an injunction restraining it from further proceeding with its business and requesting the appointment of a receiver to take possession of its assets for purposes of liquidation. August 4, 1965 the State Court entered an order granting the relief requested and appointing Homer A. Bonhiver as Receiver. This main action has not been removed to Federal Court, nor has any attempt been made so to do. By supplemental order dated August 31, 1965 the State Court ordered inter alia that all persons having claims against American Allied file verified and itemized proof thereof in the office of the Receiver on or before August 5, 1966.
In response to notice served upon it Resolute filed with the Receiver Claim No. 001869 in the amount of $123,550.00 based upon losses to Resolute as excess reinsurer of the Reliable Insurance Company of Chicago, which reinsurance contract was 100% retroceded to American Allied by an agreement effective January 1, 1964, and Claim No. 001883 in the amount of $162,662.23 for losses paid by Resolute Insurance Company under a quota share reinsurance agreement effective March 9, 1964. The Receiver thereafter petitioned the State Court for leave to serve upon Resolute what it styled a "counterclaim" to these two claims seeking to recover from Resolute earned premiums received by Resolute under these same two reinsurance agreements and alleged to be due to American Allied and not accounted for. The counterclaim seeks recovery of the amount of $93,817.40 and a determination that said sum constitutes a trust fund held by Resolute for the benefit of the Receiver and is therefore not subject to any set off by the claims of Resolute against the Receiver.
Leave to file the counterclaim was granted on November 13, 1967. Subsequently on December 1, 1967, Resolute filed its petition to remove the counterclaim to this court pursuant to 28 U.S.C. § 1441. Apparently the removal petition is designed to include as well the two claims filed by Resolute, though the petition is not completely clear as to this. The dispositive question on the motion of American Allied's Receiver is whether Resolute, assuming that the "counterclaim" states an independent cause of action, is in the position of a defendant within the meaning of 28 U.S.C. § 1441 (a), either by virtue of the instigation of the original receivership proceedings or by virtue of the "counterclaim" asserted by American Allied. 28 U.S.C. § 1441(a) provides as follows:
"Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." (Emphasis added).
Removal to the federal courts is purely a statutory right, In re Stuart, 143 F.Supp. 772 (W.D.Mich.1956), and the removal statute should be...
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