Bell v. Federal Reserve Bank

57 F.R.D. 632, 1972 U.S. Dist. LEXIS 10607
CourtDistrict Court, E.D. Virginia
DecidedDecember 21, 1972
DocketCiv. A. No. 510-72-R
StatusPublished
Cited by9 cases

This text of 57 F.R.D. 632 (Bell v. Federal Reserve Bank) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bell v. Federal Reserve Bank, 57 F.R.D. 632, 1972 U.S. Dist. LEXIS 10607 (E.D. Va. 1972).

Opinion

MEMORANDUM

MERHIGE, District Judge.

Marie Jones Bell, as Administrator of the Estate of Emmett D. Jones, deceased, brings this action against the Federal Reserve Bank of Richmond and Travelers Indemnity Company (Travelers) for wrongful death of her decedent in an elevator accident at the Federal Reserve Bank (hereinafter “Bank”). Jurisdiction is attained by virtue of 12 U.S.C. § 632 with respect to the Bank and 28 U.S.C. § 1332 (diversity) with respect to Travelers (an Ohio corporation) .

The Bank has subsequently filed a Third Party action for indemnity against Otis Elevator Company (Otis), a New Jersey corporation, the employer of the deceased as of the time of his death. The basis of said complaint is a contract requiring of Otis that work be performed in a reasonably safe manner, an alleged breach of which gives rise to the third party complaint.

The parties are presently before the Court pursuant to Otis’ motion to dismiss the third party complaint. The parties have briefed the matters raised thereby, and it is upon same that the Court finds the matter ripe for disposition.

Otis has grounded its motion on three bases:

1. The third party complaint fails to state a cause of action.

2. Because the deceased was an employee of Otis, it is asserted that the third party complaint is barred by Virginia’s Workmen’s Compensation Act.

3. Otis, itself, is entitled to indemnification from the Federal Reserve Bank by virtue of contract agreements.

The gravamen of Otis’ first argument is that the third party complaint, if at all, states a claim for contribution and that it, accordingly, is premature. Otis relies for support of its position on Judge Kellam’s opinion in Brooks v. Brown, 307 F.Supp. 907 (E.D.Va.1969).

[634]*634In Brooks, Judge Kellam found that the third party complaint was addressed to a right of contribution which, under Virginia law, does not arise until payment has been made by the joint tort-feasor against whom judgment was initially sought.1 Accordingly, it was there found that said claim, not ripe under State law, could not be litigated pursuant to Rules 13 and 14, F.R.Civ.P. as a third party claim in the federal forum.

While cognizant of Judge Kellam’s ruling in Brooks, this Court respectfully differs from the conclusion enunciated therein. The Court is prompted to its result by several factors.

First, it is clear that the application of Rule 14, F.R.Civ.P. to the claim here asserted is determined by substantive State law, Brooks, supra; Smith v. Whitmore, 270 F.2d 741, 745 (3d Cir. 1959). Subsequent to Brooks, in March 1972, the Virginia Supreme Court promulgated new rules of civil procedure. In contrast to former Rule 3:9.1, which abolished third'party practice, new Rule 3:10 permits third party suits against a person “not a party to the action who is or may be liable to him for all or part of the plaintiff’s claim against him.” The question is whether the phrase “is or may be liable” changes the substantive law with respect to the maturing of a claim for contribution. The Court is presently unaware of any Virginia appellate case authority which deals with this new issue.

It is arguable at first blush that the change in Virginia procedural law should have no bearing upon existent substantive law, a contention supported by traditional rules of statutory eon-struction. See, Washington Southern Navigation Co. v. Baltimore & Philadelphia Steamboat Co., 263 U.S. 629, 44 S. Ct: 220, 68 L.Ed. 480 (1924). Nevertheless, the Court concludes that that general principle is inapplicable here in light of the history of Virginia procedural law with respect to third party suits.

Prior to the aforementioned rule change, third party suits were prohibited by Virginia procedural rules. The logical consequence of same could but only be a substantive law which reflected that prohibition. Thus, a claim for indemnification would cease to have the character of a third party claim and become a suit in its own right only upon final determination of liability between the primary parties. See, e. g., City of Richmond v. Branch, 205 Va. 424, 137 S.E.2d 882 (1964). While the same substantive rule could well remain in effect despite the procedural changes in Virginia practice, the result thereby is clearly inconsistent with the liberal spirit of said procedural changes (which in effect are modeled in turn upon the liberal language of Rule 14 F.R.C.P.). In short, the issues of substantive and procedural law are here so intertwined as to make a concrete distinction between them overly formalistic. This result at the least prompts a re-evaluation of the Virginia substantive rule.

As heretofore stated, the Court is at this time without benefit of guidance from the Virginia Supreme Court on this matter and is thus placed in the somewhat difficult position of construing the law as it deems the Virginia Supreme Court would itself do. In reaching this issue as it is bound to do, the [635]*635Court concludes that the impleader action is not barred under Rule 14, F.R.C. P. The spirit of liberality which characterizes the new rule and the abandonment of the contrary older procedural policy requires that the third party action be allowed, the result thereby being the simultaneous rather than multipliei-tous determination of issues raised by the primary litigations as it affects all the parties involved. See Wright and Miller, Federal Practice & Procedure, § 1448 at 264, et seq. There is as well some indication to the Court that the lower Virginia courts are also interpreting the procedural rule change as a mandate to permit third party claims for indemnity and contribution. See, Nelms v. Richmond, Fredericksburg & Potomac R. R. Co., Law & Equity Court of Richmond, opinion of Honorable Alexander Sands (August 9, 1970).

In summary, the Court concludes that the third party complaint is not barred by Rule 14, F.R.C.P., and the application of Virginia law thereto.

Otis’ second contention is that the Bank’s claim against it is barred by the Virginia Workmen’s Compensation Act, Va.Code § 65.1-1, et seq. The Bank in support of its position contra, relies upon General Electric v. Moretz, 270 F.2d 780 (4th Cir. 1959). That case may be cited, however, for representing the well established rule that a Workmen’s Compensation Act does not bar suits against an employer for indemnity where the employer is so bound to indemnification by contract.2 Absent said contractual relationship, however, this Court concludes that it would be a violation of the intent of the Workmen’s Compensation laws to subject an employer to further liability beyond direct statutory liability for injuries to an employee, for to do so would in effect liable the employer both

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Bluebook (online)
57 F.R.D. 632, 1972 U.S. Dist. LEXIS 10607, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bell-v-federal-reserve-bank-vaed-1972.