Updike v. West

172 F.2d 663, 1949 U.S. App. LEXIS 2758
CourtCourt of Appeals for the Tenth Circuit
DecidedFebruary 7, 1949
DocketNo. 3690
StatusPublished
Cited by23 cases

This text of 172 F.2d 663 (Updike v. West) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Updike v. West, 172 F.2d 663, 1949 U.S. App. LEXIS 2758 (10th Cir. 1949).

Opinion

MURRAH, Circuit Judge.

The only question presented by this appeal is whether the trial court erroneously denied the appellants’ motion to remand this case to the District Court of Creek County, Oklahoma, where it was originally filed.

The appellants, partners doing business under the firm name of Updike Awning Company, sued the appellees, West, Dunlap and Nacheff, and the National Bank of Tulsa, seeking damages for the alleged breach of agreements, under which West, Dunlap and Nacheff assumed control and management of appellants’ business. It was alleged that the appellees “failed and refused to carry out, assume and discharge the duties and obligations imposed upon them under the said management agreements”. In the petition for removal, the appelleesalleged that the appellants were residents.’ of Oklahoma, and that they and each of them were, at the commencement of the suit,, residents of the State of Kansas; that the National Bank of Tulsa was organized under the laws of the United States of America; that the controversy -was wholly between citizens of different states, since the National Bank of Tulsa was only a nominal party to the asserted cause of action. It yvas alleged that the National Bank of Tulsa was improperly and fraudulently made a party to the action for the single purpose of preventing a removal to the Federal court. It was also alleged that although the petition in general form asserted a joint cause of action against West, Dunlap and Nacheff, the very nature of the claim shows that the acts complained of against West are separate and distinct, hence constituted separate grounds of recovery, to which neither Dunlap nor Nacheff, were indispensable or necessary parties, and that they were therefore improperly and fraudulently .made- parties to the same cause of action for the sole purpose of preventing removal to the Federal court.

To support this allegation, the movants attached as Exhibit A, the contract between the partners and West, to which Dunlap and Nacheff were not parties; they attached as Exhibit B, the separate contract between the partnership and Dunlap and Nacheff; and as Exhibit C, a letter from the partners to the Federal Reserve Bank, Kansas City, approving and confirming the two contracts as thus executed.

[665]*665The motion to remand alleged in general terms that jurisdiction of the' action was vested in the District Court of Creek County, Oklahoma, and was not one of which the Federal Court had original jurisdiction. Specifically, it was alleged that there was no requisite diversity oí citizenship, and that the defendants had falsely and fraudulently averred diversity of citizenship for the sole purpose of vesting the Federal court with colorable jurisdiction. Other grounds not material here were alleged, but the petition in no wise traversed the allegations of fraudulent joinder.

The motion to remand was overruled on the 6th day of July, 1945, on the grounds that the court had jurisdiction, based upon diversity of citizenship. Thereafter, numerous motions were filed on behalf of both parties; the plaintiffs filed an amended petition; the Massachusetts Bonding Company was made party defendant; the National Bank of Tulsa was dismissed from the action; the case was set for trial and continued a number of times at the instance of the plaintiffs; and there were amendments to the amended petition. Finally, after the matter had pended in the trial court for approximately two years, the plaintiffs filed what they denominated an alias motion to remand, in which they again took issue with diversity of citizenship, alleging that since the court’s order on removal, they had discovered that at the time of the institution of the suit, Nacheff had removed his residence from Wichita, Kansas, to Ponca City, Oklahoma, where he had been divorced and remarried. After an extended hearing on this motion, the trial court concluded that Nacheff was a resident of the State of Oklahoma at the time the suit was filed, and that jurisdiction therefore failed for want of diversity of citizenship. It, how-ever, overruled the alias motion to remand on the grounds that the plaintiffs having failed to traverse the allegations of fraudulent joinder, they must be taken as true for the purpose of jurisdiction, and that the court therefore had jurisdiction of the subject matter, based upon fraudulent joinder of separable causes of action.

When the case came on for trial, the appellants declined to offer any evidence, but elected to stand on the question of jurisdiction, whereupon the trial court dismissed the cause and entered judgment for the appellees.

Appellants take the position here, as they did in the trial court, that the petition for removal did not state facts sufficient on which to base a finding of fraudulent joinder, and that the motion to* remand raised the question which the trial court should have resolved in its favor.

A separable controversy of the requisite amount, wholly between citizens of different states, may be removed to the Federal court, notwithstanding the presence of a resident defendant, if it is shown that the resident defendant was made a party for the fraudulent purpose of defeating removal. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 42 S.Ct. 35, 66 L.Ed. 144; Pullman Co. v. Jenkins, 305 U.S. 534, 59 S.Ct. 347, 83 L.Ed. 334; Chesapeake & Ohio R. Co. v. Cockrell, 232 U.S. 146, 34 S.Ct. 278, 58 L.Ed. 544. But fraudulent joinder, like any other allegation of fraud, must be pleaded with sufficient certainty to justify the conclusion that th.e joinder was a fraudulent device to prevent removal. A mere allegation of fraudulent joinder is not sufficient. Kentucky v. Powers, 201 U.S. 1, 34, 26 S.Ct. 387, 50 L.Ed. 633, 5 Ann.Cas. 692; Wecker v. National Enameling & Stamping Co., 204 U.S. 176, 27 S.Ct. 184, 51 L.Ed. 430, 9 Ann.Cas. 757; Illinois Central R. Co. v. Sheegog, 215 U.S. 308, 316, 30 S.Ct. 101, 54 L.Ed. 208; Chesapeake & Ohio R. Co. v. Cockrell, supra; Wilson v. Republic Tron & Steel Co., supra. The pleader is the architect of his own lawsuit, and the misjoinder of parties or causes of action does not without more amount to a fraudulent joinder. There must be a deducible bad faith purpose to defeat Federal jurisdiction. Alabama Great Southern R. Co. v. Thompson, 200 U.S. 206, 26 S.Ct. 161, 50 L.Ed. 441, 4 Ann.Cas. 1147; Wecker v. National Enameling & Stamping Co., supra; Illinois Central R. Co. v. Sheegog, supra; Chicago, B. & Q. R. Co. v. Willard, 220 U.S. 413, 31 S.Ct. 460, 55 L.Ed. 521; Mecom v. Fitzsimmons Drilling Co., 284 U. S. 183, 52 S.Ct. 84, 76 L.Ed. 233, 77 A.L.R. 904; Pullman Co. v. Jenkins, supra.

[666]*666Here, hbwever, as the trial court

pointed out, the petition for removal did not stop with a bare allegation of fraudulent joinder of separable causes of action.

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Cite This Page — Counsel Stack

Bluebook (online)
172 F.2d 663, 1949 U.S. App. LEXIS 2758, Counsel Stack Legal Research, https://law.counselstack.com/opinion/updike-v-west-ca10-1949.