Moosbrugger v. McGraw-Edison Company

• Decision Date: 14 February 1963
• Docket Number: Civ. No. 3-62-261.
• Citation: 215 F. Supp. 486
• Parties: Charles O. MOOSBRUGGER, Plaintiff, v. McGRAW-EDISON COMPANY, American Laundry Machinery Industries, Small Equipment Sales Company, Equipment Acceptance Corporation and Econ-O-Wash, Inc., all foreign corporations, Defendants.
• Court: U.S. District Court — District of Minnesota

215 F. Supp. 486

Charles O. MOOSBRUGGER, Plaintiff, v. McGRAW-EDISON COMPANY, American Laundry Machinery Industries, Small Equipment Sales Company, Equipment Acceptance Corporation and Econ-O-Wash, Inc., all foreign corporations, Defendants.

Civ. No. 3-62-261.

United States District Court D. Minnesota, Third Division.

February 14, 1963.

Stringer, Donnelly & Sharood, by Henry H. Cowie, Jr., St. Paul, Minn., for plaintiff.

Young, Denenberg & Mullery, by Malcolm D. Young, Omaha, Neb., and Dorsey, Owen, Marquart, Windhorst & West, by William A. Whitlock, Minneapolis, Minn., for defendants McGraw-Edison Co. and Equipment Acceptance Corp.

King, MacGregor & Lommen, Minneapolis, Minn., for defendant Econ-O-Wash, Inc.

DONOVAN, District Judge.

Plaintiff commenced this action against defendants in Ramsey County District Court to recover damages on a contract of warranty, express and implied, and upon which plaintiff relied.¹

The contract of sale involved certain coin-operated dry cleaning machines. These machines were designed and manufactured by the McGraw-Edison Company (herein referred to as McGraw) or its subsidiaries, and sold to the plaintiff by defendant Econ-O-Wash, Inc. (herein referred to as Econ). The financing was done by defendant Equipment Acceptance Corporation (herein referred to as EAC). Plaintiff alleges that the machines were defective to the extent that they were completely useless, and that he has suffered loss of investment and loss of prospective earnings, all in the amount of $160,000.00. Plaintiff also seeks cancellation of the financing agreement with EAC.

McGraw and EAC petitioned for removal of the cause to this court under 28 U.S.C.A. § 1441 (herein referred to as 1441) which allows removal of a cause from the State courts to the Federal courts if all the defendants join in the petition, and the cause is one which could have been brought in the Federal court originally. The plaintiff now moves to remand this action to the State court because defendant Econ did not join in the petition to remove. Section 1441(c) provides for removal by defendants having separate and independent claims which could have been removed if sued upon alone. The issue is whether the complaint states separate and independent claims within the meaning of the removal statute.

The general statement of the law is that all defendants must join in a petition to remove.² Where separate and independent claims exist, the defendants affected thereby may remove.³ When a separate and independent claim is removed, the entire cause is subject to removal.⁴ It is also the policy of the Federal courts to restrict their jurisdiction, and doubtful removal cases should be remanded to the State courts.⁵

Removing defendants assert that the complaint states three claims: one for breach of warranty, one for negligence in design and manufacture, and last, for rescission of the financing agreement.

EAC contends that the claim for rescission of the financing agreement is separate and independent. Assuming this to be true, nonetheless it is of no avail for the reason that 1441(c) states that removal is possible only if the separate and independent claim could be removed if sued upon alone. It is alleged in the complaint, and not denied by defendant, that the financing agreement involved the sum of $1,000.00. This is far less than the amount required to vest jurisdiction in Federal court. EAC cannot remove the asserted separate and independent claim.

McGraw contends that the claim of negligence in design and manufacture is separate and independent, and that it and its subsidiaries are the only defendants affected by this claim. In American, supra, the suit involved two fire insurance policies issued by separate companies and the liability of the insurance agent because of fraud. The insurance companies tried to remove the cause to the Federal court, and the court held that though the plaintiff sued both companies on the policies, and for fraud on the part of the agent, they did not constitute separate and independent claims within the meaning of the removal statute. The court...