Thibodeau v. Foremost Ins. Co.

Decision Date18 January 1985
Docket NumberCause No. S 82-503.
Citation605 F. Supp. 653
PartiesLauren E. THIBODEAU and Richard C. Christie, Plaintiffs, v. FOREMOST INSURANCE COMPANY, Defendant.
CourtU.S. District Court — Northern District of Indiana


Thomas J. Brunner, Jr., John C. Hamilton, South Bend, Ind., for plaintiffs.

Gregory L. Kelly, South Bend, Ind., for defendant.


ALLEN SHARP, Chief Judge.

Plaintiffs, Lauren E. Thibodeau Thibodeau and Richard C. Christie Christie brought this action against Foremost Insurance Company Foremost alleging that Foremost had violated the Age Discrimination in Employment Act ADEA, 29 U.S.C. § 621 et seq. In Counts I and IV of their first amended complaint, plaintiffs allege that they are bringing their age discrimination action on behalf of themselves and a class of individuals who are "similarly situated." In Counts II, III, V and VI, plaintiffs have asserted state claims against defendant under Michigan law for breach of their employment contracts and abusive discharge. Defendant Foremost filed a Motion for Partial Summary Judgment seeking dismissal of Counts II, III, V and VI of plaintiffs' complaint on various grounds and seeking dismissal of plaintiff Christie's class allegations in Count IV because Christie did not assert in his EEOC charge that he was seeking redress for anyone but himself. Both parties have fully briefed the issues and oral argument was heard on August 14, 1984. The issues raised by defendant will be divided and addressed according to which plaintiff they apply to.


In plaintiffs first amended complaint, plaintiff Thibodeau asserts that this court has jurisdiction based on diversity of citizenship over his state claims, Counts II and III. In its motion for partial summary judgment, Foremost maintains that this court does not have diversity jurisdiction because complete diversity between opposing parties in this case is lacking. Thibodeau maintains that complete diversity is not required and that this court can exercise subject matter jurisdiction over Mr. Thibodeau's state law claims on the ground of diversity of citizenship between Mr. Thibodeau and Foremost, without regard to the non-diverse citizenship of plaintiff Christie.

Rule 8a1 of the Federal Rules of Civil Procedure requires that a pleading setting forth a claim for relief contain a short and plain statement of the grounds upon which the court's jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it. Fed.R.Civ. Proc. 8a1. The reason for the rule is clear — federal courts are courts of limited jurisdiction. Further, there is no presumption in favor of jurisdiction and the basis for jurisdiction must be affirmatively shown. Smith v. McCullough, 270 U.S. 456, 46 S.Ct. 338, 70 L.Ed. 682 1926.

Article III of the Constitution of the United States establishes federal courts as courts of limited jurisdiction and grants them diversity jurisdiction over "Controversies ... between Citizens of different States; ... and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects." U.S. Const. Art. III, Sec. 2. For this reason, statutes granting jurisdiction to the federal courts must be strictly construed. See Healy v. Ratta, 292 U.S. 263, 54 S.Ct. 700, 78 L.Ed. 1248 1934, including the statute conveying diversity jurisdiction on federal courts. See Indianapolis v. Chase National Bank, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47 1941; 28 U.S.C. § 1332a1.

In Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435 1806, the Supreme Court, when faced with an issue of diversity jurisdiction, first stated the rule of "complete diversity" when it held that a federal court could not exercise diversity jurisdiction when any opposing parties were citizens of the same state. This rule of complete diversity has been followed consistently except for one exception, interpleader cases which is not relevant here, Wright, Law of Federal Courts, § 24 1983, and has most recently been reaffirmed in Owen Equipment and Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 1978. However, if a federal court has an independent basis for exercising jurisdiction over claims of non-diverse parties, claims against the diverse parties do not need to be dismissed. Romero v. International Operating Co., 358 U.S. 354, 79 S.Ct. 468, 3 L.Ed.2d 368 1959.

In Romero, the plaintiff was a Spanish subject and crewman on a ship owned by "Compania Transatlantica," a Spanish corporation. While working on the ship while it was docked at Hoboken, a port of New York, Romero was injured by a cable. Romero filed suit in the District Court for the Southern District of New York against Compania Transatlantica, alleging claims under the Jones Act, 46 U.S.C. § 688, and general maritime law of the United States. Plaintiff also alleged in his complaint claims against Garcia & Diaz, Inc., a New York corporation under the Jones Act, general maritime law of the United States, and a maritime tort, and claims against International Terminal Operating Co. a Delaware corporation, and Quin Lumber Co., a New York corporation, based on a maritime tort. The District Court dismissed the complaint against all the defendants for various reasons and the second circuit affirmed. The Supreme Court reversed the lower court holding that the District Court had federal question subject matter jurisdiction to consider the Jones claim by Romero against Compania Transatlantica and could consider the general maritime claims against Compania Transatlantica under pendent jurisdiction to the Jones Act claim. The Supreme Court then addressed the diversity jurisdiction question and stated that:

Respondents Garcia & Diaz and Quin Lumber Company, New York Corporations and International Operating Company, a Delaware Corporation are of diverse citizenship from the petitioner, a Spanish subject. Since the Jones Act provides an independent basis of federal jurisdiction over the nondiverse respondent, Compania Transatlantica, the rule of Strawbridge v. Curtiss, 3 Cranch 267 2 L.Ed. 435, does not require dismissal of the claims against the diverse respondents.

358 U.S. at 381, 79 S.Ct. at 485.

Although Romero involved a case where one of the defendants was non-diverse to plaintiff and the case presently before this court involves a non-diverse plaintiff, the same analysis would apply. Mr. Christie, the non-diverse plaintiff in the case presently before the court has a federal claim under the ADEA and FLSA. Accordingly, since Mr. Christie can invoke this court's federal question jurisdiction as an independent basis of jurisdiction, this court is not required to dismiss the state claims of Mr. Thibodeau for lack of complete diversity. Such an outcome certainly appears logical since Mr. Thibodeau and Mr. Christie could have filed separate lawsuits and then there would have been no question of complete diversity.


The second ground for dismissing Mr. Thibodeau's state law claims raised by defendant in its motion for partial summary judgment is that Thibodeau asserts his state claims and requests relief under Michigan law and that Mr. Thibodeau possesses no causes of action under Michigan law. Rather, the defendant maintains that Mr. Thibodeau's claims are governed by Indiana law and because he did not allege that the causes of action arose under Indiana law or request relief as provided by Indiana law his claims should be dismissed. Although the defendant's position with respect to the choice of law issue is correct, its position with respect to dismissal is not supported by law.

In Janke Construction Co. v. Vulcan Materials Co., 527 F.2d 772 7th Cir.1976, the Seventh Circuit Court of Appeals held that a complaint should not be dismissed and a party precluded from relief because a plaintiff's lawyer has misconceived the proper legal theory of the claim. If the complaint shows that the plaintiff is entitled to any relief which the court can grant, regardless of whether it asks for the proper relief, under the liberal rules of federal practice, the complaint is sufficient. 527 F.2d at 776-77.

Under Rule 8a2 of the Federal Rules of Civil Procedure, a pleading containing a claim for relief requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." This rule, together with the other federal rules and decisions construing them clearly indicate that when a party has a valid claim, it should recover on it regardless of counsel's failure to perceive the true basis of the claim at the pleading stage, provided that a late shift in the thrust of the case will not prejudice the other party in maintaining a defense upon the merits. Fed.R.Civ.Proc. 8a, 8e, 8f, 15b, 54c; see, e.g., Janke Construction Co. v. Vulcan Materials, supra; 5 Wright & Miller, Federal Practice and Procedure: Civil § 1219.

In the case presently before the court, plaintiff Thibodeau alleges claims under Michigan law for breach of employment contract and abusive discharge in Counts II and III respectively of his first amended complaint. Under appropriate choice of law rules and the record in this case, the laws of the State of Indiana govern the contract in question and the claims Thibodeau makes pursuant to the contract. See Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 1938; Coldwell Banker & Co. v. Karlock, 686 F.2d 596, 600 7th Cir.1982; Peresipka v. Elgin, Joliet & Eastern Ry. Co., 231 F.2d 268 7th Cir.1956; Sullivan v. Savin Business Machines Corp., 560 F.Supp. 938 N.D.Ind.1983; Dart Indus. v. Adell Plastics, 517 F.Supp. 9 S.D.Ind.1980; W.H. Barber Co. v. Hughes, 223 Ind. 570, 63 N.E.2d 417 1945; Suyemasa v. Myers, Ind.App., 420 N.E.2d 1334 1981; Clow Corp. v. Ross Township School Corp., 179 Ind.App. 125, 384 N.E.2d 1077 1979; Utopia Coach Corp. v. Weatherwax, 177 Ind. App. 321, 379 N.E.2d 518 1978. Thus, plaintiff's c...

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