Newark Insurance v. Sartain

20 F.R.D. 583, 1957 U.S. Dist. LEXIS 4544
CourtDistrict Court, N.D. California
DecidedJune 5, 1957
DocketCiv. No. 7457
StatusPublished
Cited by16 cases

This text of 20 F.R.D. 583 (Newark Insurance v. Sartain) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Newark Insurance v. Sartain, 20 F.R.D. 583, 1957 U.S. Dist. LEXIS 4544 (N.D. Cal. 1957).

Opinion

HALBERT, District Judge.

Defendants seek, under the provisions of Rule 43(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A., to call, as a “managing agent” of an adverse (corporate) party, the agent of plaintiff from whom defendants allegedly purchased the insurance which is the subject matter of this action. The agent, A. Darwin Tuttle, is the sole agent for plaintiff in the town of Colusa, California, where he conducts his business as an agent for several insurance companies. In general, under the terms of his written agency agreement with the Newark Insurance Company (which agreement was executed in 1938), Tuttle is authorized to solicit and make application to the Company for insurance, and collect premiums paid therefor. The evidence shows that he has complete authority with respect to the administration of his own business enterprise. He has, on occasion, handled loss claims of the defendants against the plaintiff in this action, and this he has done without objection on the part of the plaintiff, although no such authority has been given to him under the terms of any disclosed agreement with plaintiff. So far as appears from the record, plaintiff has always confirmed, or at least abided by, any arrangements made by Tuttle with defendants on its behalf in connection with insurance. Nothing in the record indicates that there is anyone, representing plaintiff, who is “over” or superior to Tuttle in the Colusa area. The evidence shows further that Tuttle has, on occasion, for insurance purposes, caused appraisals of his clients’ (including the defendants) property to be made (at his expense). Tuttle handles the premiums paid to him for insurance, which he has sold in the community, by depositing such amounts in a “trustee account”, from which are withdrawn the premiums owing to the insurance companies, and his own personal commissions.

An examination of the available law discloses a singular lack of articulated definitive standards with regard to the meaning of the term “managing agent” as the same is used in Rule 43(b), supra. The Fifth Circuit, in Dowell, Inc. v. Jowers, 182 F.2d 576, summarily found that the defendant’s engineer in charge of an acidizing crew (death caused by acidization of gas well by defendant) was not an officer, director or managing agent within Rule 43(b), but failed to mention what standards or tests were applied to reach this conclusion. The Third Circuit, in Moran v. Pittsburgh-Des Moines Steel Co., 183 F.2d 467, found that the signing of partnership stationery by a witness as a “manager”, although, in fact, such person was not a manager of the partnership (nor officially connected with the partnership in any capacity), was sufficient to constitute the witness a “managing agent” of the partnership for the purposes of Rule 43(b). Again no definitive standards are set forth. The District Court for the Western District of Wisconsin in 1939, in the case of Peterson Construction Co. v. LaFayette County, Wis., 2 F.R. [585]*585Service 43b. 2, Case 11 (D.C.W.D.Wis., 1939), held that a construction superintendent employed by a corporate party was not an officer, director or managing agent of the corporation because he had only limited authority (how his authority was limited is not made apparent by the version of the case in Federal Rules Service). No other case construing this facet of Rule 43(b) has been cited to me, and in my research on the point, I have found no other case bearing directly upon the problem.

While I am conscious of the fact that two separate rules are involved, a study of the subject has lead me to the conclusion that the authorities construing the term “managing agent”, as it is used in Rule 26(d) (2) of the Federal Rules of Civil Procedure (relating to depositions), will provide a helpful analogy. That the same standards are applicable to both Rule 26(d) (2) and Rule 43(b) is supported by the express reference to Rule 43(b) in Rule 26(c), and by the close similarity of the phraseology in Rule 26(d) (2) and Rule 43(b).

In discussing Rule 26(d) (2), Professor Moore suggests that for the purpose of determining who is a “managing agent”, the Court “must approach the question pragmatically, somewhat by analogy to its approach to the determination of who is a ‘managing agent’ for the purpose of receiving service of process as provided in Rule 4(d) (3).” 4 Moore, Federal Practice, at p. 1192. The standards in this regard are quite flexible, and the courts appear to be concerned more with whether the party whose agent is sought to be served is “doing business” or “present” in the forum (e. g. Lone Star Package Car Co., Inc., v. Baltimore and O. R. Co., 5 Cir., 212 F.2d 147; Bach v. Friden Calculating Mach. Co., Inc., 6 Cir., 167 F.2d 679; Krnach v. Electro Lift, Inc., D.C., 13 F.R.D. 131). It has been suggested that “the rationale of all rules for service of process on corporations is that service must be made on a representative so integrated with the corporation sued as to make it a priori supposable that he will realize his responsibilities and know what he should do with any legal papers served on him” (1 Barron & Holtzoff, Federal Practice and Procedure, pp. 319-320, citing De Santa v. Nehi Corporation, D.C., 81 F.Supp. 637). The fact, however, that the standards for valid service of process involve different considerations than are involved under Rules 26(d) (2) and Rule 43(b) should not militate against the soundness of using a flexible, pragmatic approach in applying standards and criteria to facts, and this I propose to do in this matter.

I am of the view that a study of the case law interpreting Rule 26(d) (2) will bring us to a good rational rule to apply to the question now before me. What appear to me to be the leading cases that have explored and ruled on the meaning of the term “managing agent” as that term is used in Rule 26(d) (2) are Bernstein v. N. V. Nederlandsche-Amerikaansche, etc., D.C., 15 F.R.D. 37;2 Krauss v. Erie R. Co., D.C., 16 F.R.D. 126;3 Warren v. United States, D.C., 17 F.R.D. 389;4 Rubin v. General [586]*586Tire & Rubber Co., D.C., 18 F.R.D. 51;5 and Klop v. United Fruit Company, D.C., 18 F.R.D. 310.6

There is discussed in these cases the liberal and the restricted definition of the term “managing agent”. No useful purpose would be served by continuing this discussion here. The reasons for adopting the liberal view are set forth in the authorities cited, and they are, in my opinion, applicable here. In the final analysis, the cited cases have reached the conclusion that a managing agent of a corporation, partnership or association is any person who;

1. Acts with superior authority and is invested with general powers to exercise his judgment and discretion in dealing with his principal’s affairs (as distinguished from a common employee, who does only what he is told to do; has no discretion about what he can or cannot do; and is responsible to an immediate superior who has control over his acts);

2.

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20 F.R.D. 583, 1957 U.S. Dist. LEXIS 4544, Counsel Stack Legal Research, https://law.counselstack.com/opinion/newark-insurance-v-sartain-cand-1957.