Marichal v. Consolidated Mutual Insurance Company
| Decision Date | 14 March 1968 |
| Docket Number | Civ. No. 730-67. |
| Parties | Rafael A. MARICHAL, per se and as Administrator of the Conjugal Partnership constituted by him and his wife, Alicia Lloveras, Plaintiff, v. CONSOLIDATED MUTUAL INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Puerto Rico |
Pieras & Martin, San Juan, P. R., for plaintiff.
Irwin Zemen, San Juan, P. R., for defendant.
This case is now before the Court on defendant's motion to dismiss the complaint for lack of jurisdiction filed on October 30, 1967. The parties argued before this Court on November 17, 1967 and memorandums of law were filed regarding the issue of whether or not this Court has jurisdiction to entertain this case, under Title 48 U.S.C.A. ß 863.
A brief exposition of the facts which govern this case must necessarily follow before reaching the controlling jurisdictional question.
It appears from the complaint that the plaintiffs are residents of the Commonwealth of Puerto Rico and being married to each other, constitute a conjugal partnership on whose behalf the husband, Rafael A. Marichal, instituted this suit. Jurisdiction of this Court is invoked under Section 41 of the Puerto Rican Federal Relations Act and under Title 48 U.S.C.A. Section 863.
The defendant in this case is the insurer of the San Juan Hotel Corporation which is a corporation doing business within the Commonwealth of Puerto Rico and owns a hotel known as Hotel San Juan, which is engaged in the regular hotel business.
The plaintiff claims that on October 28, 1966 while he was a guest of the Hotel using its facilities and, in particular, those banquet facilities provided for persons attending a banquet sponsored by the Chamber of Commerce of Puerto Rico, was caused to fall down from a platform placed by the Hotel for the sitting of guests. He further claims that as a direct result of the aforesaid accident, he has been damaged in the sum of fifty thousand dollars and has been obligated to undergo hospital and medical care with a cost exceeding $1,000. The wife, co-plaintiff, also claims damages of ten thousand dollars due to the great mental anguish which she suffered as a result of her husband's injuries.
It is significant that in the case at bar a direct action against the insurer has been undertaken by the plaintiff pursuant to Section 20.030 of the Insurance Code of Puerto Rico, 26 L.P.R.A. ß 2003.
We must now turn to an examination of defendant's motion to dismiss for lack of jurisdiction.
In substance, the arguments raised by the defendant are as follows:
1. That the jurisdiction of this Court is invoked by plaintiff under Section 1332 of Title 28 U.S.C.A.
2. That the plaintiffs are residents of the Commonwealth of Puerto Rico.
3. That this is a direct action brought against the defendant as liability insurer of Hotel San Juan, Inc., a Puerto Rican corporation.
4. That pursuant to Section 1332, as amended, regarding corporate citizenship in a direct action, as is the one before the Court, the defendant must be considered to be a citizen of the Commonwealth of Puerto Rico, and in the absence of diversity of citizenship, the complaint must be dismissed.
First of all, let us state that defendant's arguments are erroneous according to the cases decided previously by this Court and that his motion to dismiss must be denied in all respects. Let us make an examination of defendant's arguments.
According to the complaint filed in this case, the jurisdiction of the Court is not invoked solely under Section 1332 of Title 28 U.S.C.A., but also and in the alternative, under Section 863 of Title 48 and under Section 41 of the Puerto Rican Federal Relations Act.
It is an established fact that plaintiffs are residents of the Commonwealth of Puerto Rico and that this is a direct action brought against the defendant as liability insurer of Hotel San Juan, Inc., a Puerto Rican corporation, under Title 26 L.P.R.A. Section 2003.
The Court deems it proper that Section 1332, as amended, be reproduced since, as stated before, defendant's motion to dismiss rests upon the amendment made to this Section and to the applicability of such amendment, if any, to Section 863.
The amendment of 28 U.S.C.A. ß 1332 reads as follows:
In any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has been incorporated and of the State where it has its principal place of business.
Now, we meet the controlling issue squarely; namely, whether Congress, in amending Section 1332 of Title 28 U.S. C.A., also amended, or had the intention to amend Section 863 of Title 48 U.S.C.A.
If the answer to this question is in the affirmative, this Court must then obviously conclude that it lacks jurisdiction since the requisite of diversity of citizenship has not been met, being both the plaintiffs and the defendant's insurer citizens of the Commonwealth of Puerto Rico. But we conclude the opposite, that is, we find that Congress, in amending Title 28, Section 1332, did not nor did it have the intention to amend also 48 U.S.C.A. ß 863.
The Court deems proper at this point to reproduce Section 863 of Title 48 U.S.C.A., which defendant claims was amended by the Act of July 25, 1958, 72 Stat. 415.
In the case of Firpi v. Pan American World Airways, D.C., 175 F.Supp. 188, Chief Judge Clemente Ruiz Nazario categorically stated, in reference to Section 863:
This special jurisdiction, not vested in other district courts, was in no wise affected by the Act of July 25, 1958. That statute only purported to amend sections 1331 and 1332 of Title 28 U.S.C.A. and left the special jurisdiction conferred by...
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