Phoenix Mut. Life Ins. Co. v. England, 9795.
| Decision Date | 16 February 1938 |
| Docket Number | No. 9795.,9795. |
| Citation | 22 F. Supp. 284 |
| Parties | PHŒNIX MUT. LIFE INS. CO. OF HARTFORD, CONN., v. ENGLAND et al. |
| Court | U.S. District Court — Western District of Missouri |
Kenneth E. Midgley and Michaels, Blackmar, Newkirk, Eager & Swanson, all of Kansas City, Mo., for plaintiff.
John A. McGuire and Charno & Drummond, all of Kansas City, Mo., for defendant.
It appears from the pleadings that:
Two life insurance policies with monthly indemnity benefit provisions were issued to Robert J. England in 1917; in June, 1923, England was declared insane by court order; by the terms of the policies the monthly benefits became payable by reason of the insanity of the insured; Mary E. England, a resident of this judicial district, was duly appointed guardian and curatrix of his person and estate; much more than the jurisdictional amount has become due on the policies; Mary E. England in writing assigned all claims, demands, and choses in action which she, as guardian, had against the insurer arising out of the policies of insurance, to Harry Bernblum, a resident of the state of Connecticut, for the sole purpose, as stated in the assignment, of collecting the claims and holding the amount collected in trust for the use of Mary E. England, as guardian.
The insurer, Phoenix Mutual Life Insurance Company of Hartford, Conn., is a corporation domiciled in the state of Connecticut.
The actual reason for the assignment to Bernblum was stated by counsel with refreshing and commendable frankness to be the prevention of the removal of an action on the insurance policies to the federal courts.
Bernblum brought an action in the state court on the policies, duly alleging his interest as assignee. The insurance company thereupon brought this action in this court against Mary E. England, as guardian, seeking a declaratory judgment fixing the rights and obligations of the parties under the insurance policies. Mary E. England thereupon filed a motion to dismiss this action upon the ground that not she, but Bernblum, was the real party in interest and the necessary party to this action, and that since Bernblum is a resident of the state plaintiff is a resident of, and neither of them is a resident of Missouri, there is no diversity of citizenship, and this court is without jurisdiction.
It is conceded by defendant Mary E. England that the assignment was made to Bernblum for the sole purpose of placing the legal title to the claim in Bernblum in order to defeat plaintiff's right to removal of the case from the state court or the bringing of the action by plaintiff in this court. It is also frankly admitted that Bernblum has no personal interest whatever in the claim. He was selected as assignee because of his residence in the state of plaintiff's domicile for the purpose, as heretofore stated, of controlling the forum of the anticipated litigation.
The question presented, simply stated, is: Can the defendant defeat plaintiff's right to a trial in this court by transferring the naked legal title to the chose in action to a "straw man" for the sole purpose of defeating jurisdiction? It is asserted that the answer must be in the affirmative. Bernblum v. Travelers' Ins. Co., D.C., 9 F.Supp. 34, (the same Bernblum involved in the present action) Provident Sav. Life Assurance Society v. Ford, 114 U.S. 635, 5 S.Ct. 1104, 1107, 29 L.Ed. 261; Oakley v. Goodnow, 118 U.S. 43, 6 S.Ct. 944, 30 L. Ed. 61; Leather Mfrs. Nat. Bank v. Cooper, 120 U.S. 778, 7 S.Ct. 777, 30 L.Ed. 816, are cited by defendant in support of her position.
It is difficult to reconcile these cases with Ex parte Nebraska, 209 U.S. 436, 28 S.Ct. 581, 584, 52 L.Ed. 876. The distinction may arise from the fact that in the former cases the legal title was treated as resting in the assignee, although the assignment was treated as being "colorable" with the problem of determining its validity left to another tribunal. Indicative thereof is the following language in Provident Savings Life Assurance Society v. Ford, supra:
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...upon this Court's jurisdiction. See Wilson v. Republic Iron & Steel Co., supra 257 U.S. at 97, 42 S.Ct. 35; Phoenix Mutual Life Ins. Co. v. England, supra 22 F.Supp. at 286; see also Lisenby v. Patz, supra. As Professor Moore has observed, "If the federal courts will not protect their juris......
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