Verschell v. Fireman's Fund Insurance Co., 257 F. Supp. 153 (S.D.N.Y. 1966)

Goldstein & Goldstein, New York City, for plaintiff, Gilbert Goldstein, New York City, of counsel.

Weintraub & Fass, New York City, for defendant, Fireman's Fund Ins. Co., Charles T. Weintraub, New York City, of counsel.

WYATT, District Judge.

This is a motion by plaintiff to remand the action to the New York Supreme Court, from whence it was removed by defendant Fireman's Fund Insurance Company ("Fund").

The remand is sought on the ground that the case "was removed improvidently and without jurisdiction". 28 U.S.C. § 1447(c).

The papers show the following state of affairs.

Sawka, apparently a citizen of New York, was the owner of a building in West Islip on Long Island. The building was mortgaged to defendant Security National Bank of Long Island (the "Bank").

Sawka obtained an insurance policy from Fund insuring against loss by fire damage to the building, or to the stock of goods therein, or to household and personal property therein, and also insuring against loss caused by business interruption due to fire. This policy contained a New York Standard Mortgage clause providing that any loss on the building should be payable to defendant Bank, as mortgagee, as its interest might appear.

Fund is a California corporation. It does not appear where its principal place of business is located, but the parties assume it is not in New York, so that Fund for present purposes is considered a California citizen (28 U.S.C. § 1332(c)).

The Bank is a national banking association (12 U.S.C. §§ 21 and following) located in the State of New York and thus a citizen of New York (28 U.S.C. § 1348).

*154 Sawka claimed that the building and contents were damaged by fire.

Apparently in order to defeat removal by Fund. Sawka assigned to plaintiff, a citizen of California. It has for many years been established that an assignment to defeat removal, if valid as an assignment by State law, is effective to defeat removal. Oakley v. Goodnow, 118 U.S. 43, 6 S. Ct. 944, 30 L. Ed. 61 (1886); see also Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 52 S. Ct. 84, 76 L. Ed. 233 (1931); 3 Moore's Federal Practice (2d ed.) 1320-24.

Plaintiff assignee then began an action on the policy in the New York Supreme Court against Fund and the Bank. The latter was joined as a defendant because under New York law the mortgagee is a necessary party in such a situation if the judgment is to be binding on the mortgagee. Syracuse Savings Bank v. Yorkshire Ins. Co., 301 N.Y. 403, 94 N.E.2d 73 (1950). No relief was asked against the Bank; on the contrary judgment was asked in substance in favor of plaintiff and defendant Bank as their interests might appear.

The Bank filed an answer in the State Court asserting a cross-claim against Fund for $17,560.15 as the alleged interest of the Bank in the policy, namely, the unpaid amount due on the mortgage.

Fund then removed the action to this Court. The petition did not make entirely clear the ground of removal but, with the opposing affidavit on this motion, it is evident that a right of removal is asserted on the ground that the parties to the cross-claim are of diverse citizenship, that the cross-claim is "a separate and independent claim", and that 28 U.S.C. § 1441(c) thus applies.

It is clear to me, however, that the joinder of claims to which 28 U.S.C. § 1441(c) refers is solely the joinder in the complaint by the plaintiff. The principle is that if plaintiff has not joined "a separate and independent claim" by him which is removable, then no defendant in any cross-claim thereafter filed has any right of removal. See 1A Moore's Federal Practice (2d ed.) 1046-48.

The motion is granted and the case is remanded to the New York Supreme Court, New York County.

So ordered.