McDermott v. Western Union Telegraph Co.

• Decision Date: 29 August 1990
• Docket Number: Civ. No. S-88-0833 MLS.
• Citation: 746 F. Supp. 1016
• Parties: June McDERMOTT, Plaintiff, v. WESTERN UNION TELEGRAPH CO., Defendant.
• Court: U.S. District Court — Eastern District of California

746 F. Supp. 1016

June McDERMOTT, Plaintiff, v. WESTERN UNION TELEGRAPH CO., Defendant.

Civ. No. S-88-0833 MLS.

United States District Court, E.D. California.

August 29, 1990.

Jed Scully, Kathleen T. Friedrich, Community Legal Services, Sacramento, Cal., for plaintiff June McDermott.

William J. Coyne, Diepenbrock, Wulff, Plant & Hannegan, Sacramento, Cal., for defendant Western Union Telegraph Co.

MEMORANDUM OF DECISION AND ORDER

MILTON L. SCHWARTZ, District Judge.

This removed diversity action is before the court on defendant's motion for summary judgment, or, alternatively, for summary adjudication of issues, and plaintiff's cross-motion for partial summary judgment.

The motions were heard on the court's regularly scheduled Motions Calendar of August 4, 1989, and, after supplemental briefing on jurisdictional issues, at a continued hearing on December 8, 1989. At the close of oral argument, the court took the motions under submission. It now renders its decision based on the presentations made at oral argument and all pleadings and papers filed by the parties.

I. BACKGROUND

Plaintiff's son Kevin was stationed at the Naval Radio Transmission Station Facility at Capas in the Philippines, near Clark Air Force Base ("Clark AFB"). He met his fiance Yolanda in the Philippines, and had supported her since 1980. He was in the process of adopting Yolanda's three children when the events occurred out of which plaintiff's claims arise. On May 5, 1984, Kevin called plaintiff and asked her to send $1,000 to pay funeral expenses for Yolanda's daughter, Irene, who was sixteen.

Plaintiff alleges that she had seen a number of defendant's commercials on television prior to May 5 which said Western Union could deliver money to any of its 9,000 locations, usually within 15 minutes, and that Western Union was the fastest way to send money. Upon calling defendant, plaintiff says she explained that she needed to send money to her son who was stationed in the Philippines to help pay burial expenses. She was told she could charge the money on her VISA account, and that there was a charge of $45.95 for wiring the money. Plaintiff further alleges that she asked defendant's operator how long it would take for the money to arrive, and that the operator said it would take 15 to 45 minutes, and a maximum of 24 hours.

Plaintiff states that she was very emotional on the phone, and that when she began to give the operator Kevin's address at the naval station, she lost control and could not talk any more. Consequently, plaintiff's daughter Judy completed the telephone conversation. Plaintiff alleges that Judy also told the operator the reason for wiring the money, asked how long it would take, and was told it would take 15 to 45 minutes, or 24 hours maximum. Judy then gave the operator Kevin's address. Plaintiff further alleges that Judy called defendant two more times to see if the money order had been sent, and was told that it had.

Kevin placed collect calls to his mother on May 9 and 10 to say that he had not received the money order she had wired. When plaintiff called defendant, she was told there was nothing defendant could do to track down the money order. Plaintiff then called the Red Cross at Mather Air Force Base, and Red Cross personnel arranged for the Red Cross at Clark AFB to give Kevin $1,000 after plaintiff had a check in that amount delivered to the Red Cross at Mather. Plaintiff covered the $1,000 check to the Red Cross with a cash advance on her VISA card. Kevin received the money from the Red Cross at Clark AFB on May 11.

Kevin received the Western Union money order on May 28 or 29. He took the money order to a bank at Clark AFB, where he endorsed it before discovering that it could only be cashed for pesos. He then endorsed the money order over to plaintiff, and sent it to her to cash.

Plaintiff alleges that she tried to obtain a refund from defendant, but was told that the amount she would receive as a refund would be based on the exchange rate in effect when the money order was received in the Philippines, which meant she would only receive $600-700. Plaintiff then tried to deposit the money order in her checking account, but her bank would not accept it.

During the time plaintiff tried to resolve her differences with defendant, she spoke with several of defendant's employees. One, apparently without prompting, allegedly asked her if the delayed money order had been sent to the Philippines, and then told plaintiff she was lucky her son received the money order in a month or less, since it often took three or four months for money orders to reach people in the Philippines.

Plaintiff filed suit against defendant in state court on May 6, 1985, asserting twelve causes of action. After the case was filed, and approximately one year after plaintiff purchased the money order, defendant credited plaintiff's VISA account in the amount of $1,045.95. By this time, plaintiff had paid back the amount she had borrowed to purchase defendant's money order and the $1,050 cash advance to cover the check she had given to the Red Cross at Mather.

While this action was in state court, plaintiff amended her complaint. On February 27, 1987, the state court struck three of plaintiff's causes of action (Counts VIII, IX, and X). Defendant removed the action to this court on June 27, 1988, after Doe defendants were dismissed by the state court on June 14.

Plaintiff's first amended complaint now contains the following claims:

Count I Breach of contract;

Count II Intentional misrepresentation (operator);

Count III Negligent misrepresentation (operator);

Count IV Suppression of fact (operator);

Count V Intentional misrepresentation (commercial);

Count VI Negligent misrepresentation (commercial);

Count VII Suppression of fact (commercial);

Count XI Intentional infliction of emotional distress;

Count XII Negligent infliction of emotional distress.

Defendant seeks summary judgment on all claims under a variety of theories. Plaintiff seeks summary judgment on Claims V, VI, and VII and a number of defendant's affirmative defenses. When the court heard these motions on August 4, 1989, it requested additional briefing on jurisdictional issues. After further hearing on December 8, the motions were taken under submission.

II. JURISDICTIONAL AND RELATED ISSUES

A. Jurisdiction

In conducting its own research prior to the August 4, 1989 hearing, several cases suggested that this court might lack jurisdiction to hear plaintiff's action. Consequently, the parties were asked to brief jurisdictional issues in light of Ivy Broadcasting Company v. American Telephone & Telegraph Company, 391 F.2d 486 (2d Cir.1968), and Frenkel v. Western Union Telegraph Company, 327 F.Supp. 954 (D.Md.1971). Frenkel suggested that tariffs limiting recovery for lost or delayed telegrams and money orders to $500 might be on file with the Federal Communications Commission ("FCC"). A limitation on liability would preclude this court from hearing plaintiff's claims because the jurisdictional limit for diversity cases was $10,000 when this action was removed to federal court.

In its supplemental brief, defendant informed the court that its tariff covering money transfer services was cancelled effective May 17, 1979, and that the FCC does not limit liability in cases where there have been delays or mistakes in transmitting international money orders. Thus, the jurisdictional problem found in Frenkel does not exist in this action.

Furthermore, in determining whether a matter in controversy exceeds the jurisdictional amount, the sum claimed in the complaint controls. Powers v. Fultz, 404 F.2d 50, 52 (7th Cir.1968); see Davenport v. Mutual Benefit Health & Accident Association, 325 F.2d 785, 787 (9th Cir.1963) ("Where the complaint asserts a claim in the jurisdictional amount, the action should not be dismissed unless the proof not only shows that the plaintiff cannot recover that amount, but also shows this with such certainty as to indicate a lack of good faith on the part of the plaintiff in bringing the action in the federal court"). Plaintiff has alleged $1,250,000 in general damages and $2,500,000 in exemplary and punitive damages, amounts well above the jurisdictional limit. Because plaintiff initially filed this action in state court, it is apparent that she did not allege the damages she now asserts purely for jurisdictional purposes. Plaintiff did not exhibit a lack of good faith. Accordingly, the court may properly exercise its diversity jurisdiction.

B. Does State or Federal Law Apply?

Congress enacted comprehensive legislation regulating common carriers engaged in interstate telegraph and telephone transmission by amendment of the Interstate Commerce Act in 1910, which brought communications carriers under the jurisdiction of the Interstate Commerce Commission. Ivy Broadcasting, 391 F.2d at 490. Jurisdiction was transferred to the FCC with enactment of the Communications Act of 1934, 47 U.S.C. §§ 151-609. Id. One of the purposes of the Communications Act was to make a rapid, efficient, nationwide and worldwide communications service with adequate facilities available to the people of the United States at reasonable prices. Id.; 47 U.S.C. § 151.

The Supreme Court, in a series of decisions, has held that the establishment of this broad scheme indicates Congress' intent to occupy the field to the exclusion of state law. See, e.g., Western Union Telegraph Company v. Boegli, 251 U.S. 315, 40 S.Ct. 167, 64 L.Ed. 281 (1920) (state law inapplicable on question of carrier's liability for negligence not specifically covered by tariff provisions); Western Union Telegraph Company v. Speight, 254 U.S. 17, 41 S.Ct. 11, 65 L.Ed. 104 (1920) (recovery for mental suffering resulting from defendant's negligence not available under federal law). As late as 1968, in discussing the series of Supreme Court cases, the Second Circuit stated:

These cases lead us to conclude

...