CLARENCE E. MORRIS, INC., а California corporation duly authorized to do business in the State of Nevada, Appellant,
v.
Alvin J. VITEK and United Pacific Insurance Company, а Washington corporation duly authorized to do business in the State of Nevada, Appellees.
No. 22351.
United States Court of Appeals Ninth Circuit.
June 17, 1969.
Carl J. Christensen (argued), Stanley W. Pierce, Las Vegas, Nev., for appellant.
Rex A. Jemison (argued), of Singleton, De Lanoy, Jemison & Reid, Las Vegas, Nev., for appellees.
Before HAMLEY, HAMLIN and HUFSTEDLER, Circuit Judges.
HUFSTEDLER, Circuit Judge.
Appellant, Clarence E. Morris, Inc. ("Morris"), filed the present action against appellee, United Pacific Insurance Company, a Washington corporation ("United Pacific"), and Alvin J. Vitek in a Nevada court. Appellee removed the action to the United States District Court for the District of Nevada. A default judgment was entered for Morris, but the District Court thereafter set aside the defаult and granted United Pacific's motion to dismiss for failure to state a claim for relief. Morris appeals. We hold that there is insufficient basis for federal jurisdiction over this action.
Morris's claims against Vitek and United Pacific arise out of a breach of contract action which Vitek commenced against Morris in the Nevada courts. After filing his complaint, Vitek sought to attach certain real and personal proрerty belonging to Morris. Nevada law allows the plaintiff to have the property of the defendant attached as security for the satisfaction of any judgment that may be recovered in certain enumerated categories of cases. (Nev.Rev.Stat. § 31.010.) One such categоry includes actions "upon a contract, express or implied, for the direct payment of money." Before a writ of attachment сan issue, however, Nevada law also requires that the plaintiff supply a written undertaking with two or more sureties to the effect that "if the plаintiff dismiss such action or if the defendant recover judgment the plaintiff will pay * * * all costs that may be awarded to the defendant, and all damages which he may sustain by reason of the attachment. * * *" (Nev.Rev.Stat. § 31.030.) The undertaking must be for not less than one fourth the amount claimed by the plaintiff.
United Pаcific agreed to act as surety for Vitek, and Vitek thereupon secured a writ of attachment on Morris's property. Thereafter, Morris moved to discharge the attachment on the ground that it was not authorized by statute. Morris contended that the contract in question provided for payment either in cash or in certain securities and therefore was not a contract for "the direct payment of money." Thе contention was ultimately sustained on appeal, and the attachment was dismissed. (Clarence E. Morris, Inc. v. Vitek (1964)
Morris then commenced thе present action in the Nevada courts against Vitek and United Pacific, as surety, to recover an alleged $470,000 damages for the wrongful аttachment of his property. United Pacific filed a petition for removal which recited that plaintiff Morris is a California corporаtion, that defendant Vitek is a citizen of California, and that defendant United Pacific is a Washington corporation with its principal place of business in Washington. Morris filed a motion to remand. The District Court denied the motion to remand. At the time the District Court assumed jurisdiction, Vitek was unserved, but bеfore the motion to dismiss was heard, Vitek had been served in Nevada.
The requisite complete diversity of citizenship between the plaintiff аnd the named defendants is lacking because Morris and Vitek are both California citizens. The District Court held that removal jurisdiction existed despitе the absence of complete diversity upon two grounds: First, the claims by Morris against Vitek and by Morris against United Pacific were separate and independent claims within the meaning of 28 U.S.C. section 1441(c). Second, Vitek's citizenship did not defeat diversity because he had not been served at the time the removal petition and the motion to remand were filed.
Assuming lack of complete diversity, this case could not be remоved unless Morris's claim against United Pacific is a "separate and independent claim or cause of action" from Morris's claim agаinst Vitek and the claim against United Pacific would be removable if sued upon alone. 28 U.S.C. § 1441(c).) The District Court decided that these prerequisites were met because Morris's claim against Vitek was in tort for malicious prosecution and its claim against United Pacific was in contract. Clаims are not separate and independent of each other for the purpose of section 1441(c) if multiple claims grow out of a single actionable wrong. A single wrong cannot be parlayed into separate and independent causes of action by multiplying the lеgal theories upon which relief is sought or by multiplying defendants against whom a remedy is sought for the same injury. (American Fire & Cas. Co. v. Finn (1951)
The second ground for the District Court's decision that removal jurisdiction existed was that Vitek could be ignored because he was an unserved, nonresident defendаnt. The ruling is contrary to Pullman Co. v. Jenkins (1939)
The Pullman rule does not adversely affect a defendant's right to remove if there are later developments in the case which create diversity initially absent, as, for example, the dismissal of a party whose presence destroyed diversity. (28 U.S.C. § 1446(b); Grigg v. Southern Pacific Co. (9th Cir. 1957)
Notes:
Notes
Occasional holdings that unserved codefendants can be ignored in deciding removal petitions stem from the erroneous assumption thatPullman turned on a distinction between unservеd nonresident defendants and unserved resident defendants, rather than upon want of diversity, and the further misassumption that 28 U.S.C. § 1441(b), by implication, expanded removal jurisdiction to permit removal, despite want of diversity, if a resident defendant whose presence would defeat diversity had not been served. E. g., Robertson v. Nye (W.D.Okla.1967)