Randolph v. Employers Mutual Liability Ins. Co. of Wis.

• Citation: 260 F.2d 461
• Decision Date: 28 November 1958
• Docket Number: No. 16009.,16009.
• Parties: Susie RANDOLPH, Appellant, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN Garnishee, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

260 F.2d 461 (1958)

Susie RANDOLPH, Appellant, v. EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN Garnishee, Appellee.

No. 16009.

United States Court of Appeals Eighth Circuit.

November 3, 1958.

Rehearing Denied November 28, 1958.

Sherman Landau, St. Louis, Mo., for appellant.

G. W. Marsalek, St. Louis, Mo. (D. G. Dempsey and Moser, Marsalek, Carpenter, Cleary, Jaeckel & Hamilton, St. Louis, Mo., were with him on the brief), for appellee.

Before JOHNSEN, VAN OOSTERHOUT and MATTHES, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

Plaintiff, Susie Randolph, appeals from judgment denying her the right to recover from the garnishee, Employers Mutual Liability Insurance Company of Wisconsin, Stokes' alleged insurer, the amount of a judgment obtained by plaintiff against Stokes in the Circuit Court of the City of St. Louis, Missouri.

Plaintiff was a passenger in Stokes' automobile when it collided with a train. She obtained the state court judgment for $10,000 against Stokes for damages alleged to have been caused her as a result of Stokes' negligent operation of his automobile. Said judgment has become final. Plaintiff caused execution to issue upon said judgment and, pursuant thereto, Employers Mutual Liability Insurance Company of Wisconsin was summoned as garnishee. The garnishee, after being served with summons, filed timely petition for removal of the action to the United States District Court for the Eastern District of Missouri, pursuant to the provisions of 28 U.S.C.A. § 1441 et seq., alleging that garnishment is a civil action, that the issues are completely different, separate, and distinct from the issues in the state suit, that diversity of citizenship exists, and over $3,000 is in controversy. Plaintiff moved to remand the proceedings to the state court, on the ground that garnishment is auxiliary to the principal action, and that the garnishment proceeding is not a separate and independent cause of action. The motion to remand was overruled. Thereupon, the garnishee filed answer to interrogatories, in which it states that it originally questioned whether its policy of automobile liability insurance issued to Stokes was in full force at the time of the accident, but that it had waived such defense. Garnishee specifically denied any liability on its policy, because of Stokes' failure to cooperate in the defense of plaintiff's suit against Stokes. In response to further interrogatories requiring it to state the facts upon which it based its contention that Stokes had failed to cooperate, the garnishee stated that Stokes, although notified and requested to do so, had failed to appear in court at the time his case was to be tried.

Plaintiff's position is that Stokes' failure to appear at the state court trial was justified because the garnishee insurance company had, prior to the scheduled trial, breached its insurance contract by refusing to reimburse Stokes for expenses incurred in one day's attendance in court in connection with a previous attempt to try this case, which resulted in a mistrial, and had refused to guarantee Stokes' expenses at the time he was requested to attend. The issues were submitted to a jury, verdict was returned for the garnishee, and judgment was entered thereon. This appeal by the plaintiff followed.

Plaintiff asserts that she is entitled to a reversal for the following reasons: (1) the federal court lacks jurisdiction to try the Missouri garnishment proceeding; (2) the court erred in overruling plaintiff's motion for a directed verdict made at the close of all the evidence; and (3) the court erred in admitting certain evidence offered by the garnishee. We shall consider plaintiff's contentions in the order stated.

On the jurisdictional issue, it is plaintiff's contention that under Missouri law garnishment is not an independent suit, but is auxiliary to the main action, and hence that such a proceeding is not a removable civil action under 28 U.S.C.A. § 1441(a). Plaintiff further contends that the removal is prohibited by 28 U.S.C.A. § 1441(c). This court has passed upon the jurisdictional problem here presented in Stoll v. Hawkeye Casualty Co., 185 F.2d 96, 22 A.L.R.2d 899, and has ruled adversely to plaintiff's contentions. In the Stoll case this court fully considered the authorities bearing upon the question of whether a garnishment proceeding after final judgment is a civil action. Many of the conflicting authorities are cited in footnote 1 at page 98. Other authorities are collected in Annotation, 22 A.L.R.2d 904. The court held that a post judgment garnishment proceeding is a civil action within the meaning of 28 U.S.C.A. § 1441(a), and that diversity of citizenship and the jurisdictional amount having been established, the garnishment proceeding was properly transferred to the federal court.

Plaintiff urges that the Stoll case is not controlling since there a South Dakota garnishment was involved while we deal with a Missouri garnishment. It would appear that Missouri regards garnishment as a proceeding auxiliary to the main suit. See Hoagland v. Rost, D.C.W.D.Mo., 126 F.Supp. 232, and cases therein cited. In the Stoll case, supra, we found it unnecessary to determine whether South Dakota regarded the garnishment proceeding as auxiliary and ancillary or as an independent suit. We stated (185 F.2d at page 99):

"The question whether a civil action is removable and has been properly removed is one for the consideration of the federal court and is not controlled by State law. Harrison v. St. Louis & San Francisco R. Co., 232 U.S. 318, 328-329, 34 S.Ct. 333, 58 L.Ed. 621; Donald v. Philadelphia & Reading Coal & Iron Co., 241 U.S. 329, 333, 36 S.Ct. 563, 60 L.Ed. 1027; Terral v. Burke Construction Co., 257 U.S. 529, 532, 42 S.Ct. 188, 66 L.Ed. 352; Commissioners of Road Improvement District No. 2 of Lafayette County, Ark., v. St. Louis Southwestern Ry. Co., 257 U.S. 547, 557-558, 42 S.Ct. 250, 66 L.Ed. 364.

"We therefore find it unnecessary to consider whether the Supreme Court of South Dakota regards a garnishment proceeding as auxiliary and ancillary to the main action or as an independent suit, a question as to which the parties disagree. * * *"

Since federal law controls on the question of whether the garnishment proceeding is a civil action, the classification which the Missouri courts give garnishment proceedings is in no way binding upon us.

Federal district courts have followed the Eighth Circuit and have upheld removal of Missouri garnishment proceedings to the federal court. Clarkin v. Worthley, D.C.W.D.Mo., 114 F.Supp. 877; E. C. Robinson Lumber Co. v. Fort, D.C.E.D.Mo., 112 F.Supp. 242. A contrary result was reached in Hoagland v. Rost, supra. In that case the court was of the opinion that American Fire & Cas. Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702, 19 A.L.R.2d 738, made the state law on classification of garnishment proceedings controlling. Plaintiff takes the same position here. We find nothing in the Finn case which impairs the basis of our decision in the Stoll case. In the Finn case a Texas resident brought suit against a Texas resident and two nonresident insurance companies. One of the insurance companies secured the removal of the case to the federal court. The three defendants were charged jointly and severally with liability for damages caused plaintiff by a fire loss. Since the action was joined against three defendants and was not removable as to one of the defendants, the removal proceedings were based upon section 1441(c) which provides:

"(c) Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction."

The Court in the Finn case held that there was a single wrong to the plaintiff — failure to pay the loss, that liability for such loss was asserted against all defendants, and hence the claims against the defendants were not separate and independent claims.

We are unable to see where section 1441(c) applies to the facts of our present case. Here we have no joinder of causes of action. The only issue is the liability of the garnishee on its insurance contract. If the garnishee is liable, the amount of such liability has been established by the judgment against Stokes in the state court action. Moreover, in the present controversy we have only one defendant, the garnishee. There has been no joinder of the present civil action with any other cause of action, and certainly no joinder with a cause of action which is not removable. It does not appear that Stokes, the defendant in the state court case, is a party to this proceeding. Even if he...