728 F.2d 658 | 4th Cir. | 1984
Lead Opinion
Margaret M. Krier-Hawthorne appeals from the district court’s order dismissing her personal injury action for lack of jurisdiction, 558 F.Supp. 694. We vacate the judgment and remand the case for further proceedings.
I
Mrs. Krier-Hawthorne was injured in an accident in York County, Virginia, when the automobile her husband was driving collided with one driven by Thomas L. Beam. Her husband, Joseph Krier, later died as a result of the injuries he sustained in the collision.
Virginia has abolished interspousal immunity in automobile accident litigation. Surratt v. Thompson, 212 Va. 191, 183 S.E.2d 200 (1971). When the surviving spouse contemplates bringing a personal injury action against the estate of a deceased spouse, who was a nonresident of the state, Virginia law requires the appointment of a resident administrator “solely for the purpose of prosecution of said suit .... ” Virginia Code §§ 64.1-75.1 (1980) and 26-59 (Supp.1983). Consequently, because Joseph Krier had been a citizen of New York, his widow, through her attorney, secured the appointment of L. Wallace Sink, a Virginia resident, as administrator of her husband’s estate.
The widow then filed a negligence action against Beam and Sink, the administrator. Jurisdiction was based on diversity of citizenship under 28 U.S.C. § 1332(a)(1). The widow was a citizen of New York, Beam was a citizen of Indiana, and Sink was a citizen of Virginia. Sink, through his attorney, filed an answer and moved to dismiss for lack of diversity jurisdiction.
The district court found that Sink was neither related to nor acquainted with the decedent. He is an attorney, a friend of the widow’s attorney, and he agreed to serve as administrator so the widow could prosecute this suit. The court found that the estate had no assets “in Virginia or any other locality.” It also found that if the widow prevailed, her damages would be paid by an insurance company and not from the decedent’s estate.
The district court concluded that it lacked jurisdiction for two reasons. First, the New York citizenship of the decedent’s heirs, and not the citizenship of the administrator, is decisive because the court found that the administrator had no assets to administer, no duties to perform, and no stake in the controversy. Second, the court perceived no “adversarial relationship” between the widow and the administrator and, consequently, no controversy in excess of $10,000 to be adjudicated.
II
The second reason for dismissal requires but brief discussion. Although the widow, through her attorney, nominated the administrator to comply with Virginia law, the record discloses that there is a controversy between the widow and the administrator. The widow alleged that the decedent was negligent; the administrator denied this allegation and pleaded contributory negligence and assumption of risk. The widow alleged the district court had jurisdiction; the administrator moved to dismiss for lack of jurisdiction. The fact that a lawyer retained by the decedent’s insurance carrier represents the administrator does not render the widow’s claim against the administrator noncontroversial. Generally, in automobile negligence litigation, the insurance company, and not the insured or the personal representative of the insured, chooses counsel, asserts a defense, and conducts settlement negotiations.
The record discloses that the decedent was insured by an automobile liability policy. Contrary to the district court’s finding of no assets, the contractual obligation created by the policy is an asset of the estate. Sink administered this asset by promptly notifying counsel for the insurance company of this action. The company responded by undertaking the defense.
Finally, there is no suggestion in the record that the widow’s damages are not in excess of $10,000. The fact that the estate does not have assets other than the insurance contract to satisfy these damages does not mean that the estate is without resources to pay the damages. It has a contractual claim for indemnification. Indeed, the Virginia Supreme Court expressly recognized in Surratt that insurance generally would be the source of a spouse’s recovery.
The district court’s reasoning appears to have been unduly influenced by the fact that the widow was suing her husband’s administrator, whose appointment she obtained. But Virginia confirmed the propriety of her conduct by requiring the appointment of a resident administrator and abolishing interspousal immunity in this type of litigation. Surely no one would question Beam’s right to nominate an administrator and sue in federal court in Virginia to recover damages in excess of $10,000 if he believed Krier was at fault. With respect to the adversarial nature of her claim and the source of compensation if she prevails, the widow, under Virginia law, is in a position similar to Beam’s.
Ill
The critical question is whether the parties are diverse. The answer depends on whether the administrator’s Virginia citizenship is accepted for the purpose of determining diversity.
We start with Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 186, 52 S.Ct. 84, 85, 76 L.Ed. 233 (1931), a wrongful death case, where the Court said:
It is settled that the federal courts have jurisdiction of suits by and against executors and administrators if their citizenship be diverse from that of the opposing party, although their testators or intestates might not have been entitled to sue or been liable to suit in those courts for want of diversity of citizenship.
But the rule stated in Mecom is tempered by 28 U.S.C. § 1359, which denies jurisdiction if a party “has been improperly or collusively made or joined to invoke” jurisdiction. See Bishop v. Hendricks, 495 F.2d 289 (4th Cir.1974); Lester v. McFaddon, 415 F.2d 1101 (4th Cir.1969).
Our determination of diversity jurisdiction in wrongful death cases has been based on two factors. First, although not formally named as plaintiffs, the real parties in interest are the statutory beneficiaries who are entitled to recover damages if the defendant is liable for the death of their decedent. Second, although formally named as plaintiff, the administrator of the decedent’s estate has no assets to administer in connection with the litigation and no stake in the outcome of the controversy.
These factors have led us to conclude that when the statutory beneficiaries and the defendant are citizens of different states, the district court has jurisdiction regardless of the common citizenship of the plaintiff administrator and the defendant. See Mes-ser v. American Gems, Inc., 612 F.2d 1367 (4th Cir.1980); Miller v. Perry, 456 F.2d 63 (4th Cir.1972). Conversely, the court lacks jurisdiction when the statutory beneficiaries and the defendant have identical citizenship even though the plaintiff administrator and the defendant are citizens of different states. See Mullins v. Seals, 562 F.2d 326 (4th Cir.1977); Vaughan v. Southern Ry. Co., 542 F.2d 641 (4th Cir.1976); Bishop, 495 F.2d 289; Lester, 415 F.2d 1101.
IV
Significantly, all of the cases mentioned above involved actions for wrongful death where the personal representative was named as plaintiff. This case presents the first occasion for considering the issue in a personal injury action where the administrator is named as defendant to comply with the law of the forum state. Should we abide by the general rule set forth in Me-com and applied in Sadler, as urged by the widow, or should we resort to the exception that we have created to Mecom in all of our recent wrongful death decisions, other than Sadler, and look to the citizenship of the decedent’s heirs, as urged by the administrator?
For the following reasons, we conclude that we should follow Mecom and Sadler in personal injury actions brought in a state that dictates appointment of a resident administrator as a defendant. Unlike a wrongful death action, there are no statutory beneficiaries. Moreover, the decedent’s heirs have no stake in the outcome of this case. They will be neither enriched nor impoverished by its outcome. They are not the real parties in interest. Consequently, unlike the statutory beneficiaries of a wrongful death action, the citizenship of the decedent’s heirs should not be determinative.
The appointment of a resident administrator, in conformity with Virginia law, does not establish collusion in violation of 28 U.S.C. § 1359. It was reasonable to file this action in Virginia, for the accident occurred there, Virginia law is applicable, and Beam could be served with process. In our wrongful death cases where state law required the appointment of a resident administrator, we did not base our decision on § 1359. Instead, we looked to the administrator’s duties and found them to be nominal. See Vaughan, 542 F.2d at 644; Miller, 456 F.2d at 67. In this personal injury case, unlike the administrator in wrongful death cases, the defendant administrator has more than a nominal role. As we pointed out in Part II, he administered an asset of the estate by notifying the insurance company of the institution of the action as required by the decedent’s policy. Moreover, the administrator had a stake in discharging this duty and the outcome of the case, for had he been dilatory, the company could have contested coverage. If the company were successful, the administrator would be
We conclude, therefore, that in this personal injury case no reason justifies departure from the rule stated in Mecom and followed in Sadler that the personal representative’s citizenship is decisive. Because the parties are citizens of different states, the district court has jurisdiction.
We vacate the judgment of the district court dismissing the action and remand for further proceedings.
Ideally, the citizenship of the decedent should be the determinative factor, but Mecom forecloses this solution, and Sadler quite properly did not attempt to impose it. The American Law Institute more than a decade ago proposed to attribute the decedent’s citizenship to his personal representative. See American Law Institute, Study of the Division of Jurisdiction between State and Federal Courts, official draft 1969, §§ 1301(b)(4), 1307. But Congress has not adopted the amendments the Institute proposed.
Dissenting Opinion
dissenting:
For the eighth time in fifteen years the Court is called upon to decide whether the citizenship, as an individual, of a personal representative of a decedent’s estate should be dispositive as to whether parties are diverse.
All of our previous cases, save one,
I.
On September 25, 1980, Margaret KrierHawthorne was a passenger in a car being driven by her late husband, Joseph Krier. The car collided with another car being driven by Thomas Beam in York County, Virginia. Krier-Hawthorne and Joseph Krier were citizens of New York; Beam was a citizen of Indiana. Joseph Krier died on November 1, 1980. Joseph Krier left no estate for administration, so appointment of an administrator for customary purposes was not required, in New York or elsewhere. Krier-Hawthorne’s brief baldly states that she “took steps to have a Virginia administrator appointed against whom she could institute the present proceedings”. Asserting diversity of citizenship as the jurisdictional basis for her suit, Krier-Hawthorne, then a citizen of New York, filed in the United States District Court for the Eastern District of Virginia an action on September 21, 1982, against Beam, a citizen of Indiana, and Wallace Sink, a citizen of Virginia who had qualified as the administrator of the estate of Joseph Krier four days previously.
The salient issue is, of course, whether diversity of citizenship, the asserted basis for federal jurisdiction, exists. There is a long-standing requirement that there be complete diversity of citizenship between all of the plaintiffs and all of the defend
Krier-Hawthorne, seeking to rely on a rule she claims to be a traditional one that an executor’s or administrator’s citizenship, as an individual, controls for determining diversity of citizenship, arranged to have a Virginia citizen located by her lawyer appointed administrator of her husband’s estate. See Mecom v. Fitzsimmons Drilling Company, 284 U.S. 183, 52 S.Ct. 84, 76 L.Ed. 233 (1931); Coal Co. v. Blatchford, 78 U.S. 172, 175, 11 Wall. 172, 175, 20 L.Ed. 179 (1870); Childress v. Emory, 21 U.S. (8 Wheat.) 642, 668-69, 5 L.Ed. 705 (1823); Chappedelaine v. Dechenaux, 8 U.S. (4 Cranch) 306, 2 L.Ed. 629 (1808). The flagship in that armada, Mecom, however, applied the “traditional” rule to uphold avoidance of diversity jurisdiction. The case was permitted to proceed in state court as “non-diverse.” Krier-Hawthorne, on the contrary, was engaged in a venture designed to manufacture diversity jurisdiction. It is not surprising, therefore, that the “traditional” rule was shaken by Kramer v. Caribbean Mills, 394 U.S. 823, 828 n. 9, 89 S.Ct. 1487, 1490 n. 9, 23 L.Ed.2d 9 (1969) and subsequently eroded by this Circuit and other circuits.
The previous cases in other circuits and this Circuit have all dealt with plaintiff personal representatives bringing wrongful death actions. But the technical status of Sink as a defendant rather than a plaintiff is hardly of material significance bearing in mind that his appointment and appearance on the scene are exclusively “for the purpose of prosecution” of the law suit. All of the cases have examined the executor’s or administrator’s duties and relationship to the decedent and only considered the personal representatives’s citizenship as significant where the fiduciary (1) had duties other than to bring suit or (2) was related to the decedent in some fashion.
The majority opinion is correct that the present case, where the administrator is a defendant in a tort action, is not altogether like a wrongful death action brought by the administrator, as plaintiff. But a mere distinction does not necessarily mandate a difference in treatment, especially, where, as here, it has no significance to the controlling considerations. No case has ever addressed the issue of whether the citizenship of a defendant fiduciary should be disregarded where the administrator had no substantial stake in the controversy. The majority opinion states that, since the decedent’s heirs have no stake in the outcome of the case, they are not the real parties in
Lester and its progeny are based on the prohibition of improper or collusive joinder to invoke jurisdiction contained in 28 U.S.C. § 1359.
Kramer’s recognition of a need to re-examine Mecom, and the relevance of the roles of administrators, frees us from a blind invocation of Mecom’s result. At the very least, Kramer authorizes attention to the substantive relation of the administrator, the beneficiaries and others to the controversy before an undiscriminating decision that the citizenship of a representative controls the determination of diversity jurisdiction.
Miller v. Perry, 456 F.2d 63, 65-66 (4th Cir.1972) (emphasis added). The majority seems to say we have two choices as to whose citizenship controls — the heirs’, who are analogous to the beneficiaries in a wrongful death case, and the administrator’s. Kramer freed the courts from rigidity; the hallmark of Lester and its progeny has been a desire to tie in to the actual dynamics of a case and determine citizenship based on the real party in interest.
It is clear that Sink, the Virginia administrator, was appointed for the sole purpose of being sued. “[T]he administrator’s lack of a stake in the controversy was enough to make his citizenship irrelevant.” Vaughan, 542 F.2d at 644. It is true that, for purposes of Virginia law,
“Reasonable” from some points of view of Virginia state law, the filing of the action did not properly, under 28 U.S.C. § 1359, create jurisdiction in the federal court.
Returning to the matter of “improperly or collusively,” in Vaughan we held that, even though there was good reason to bring a wrongful death action in North Carolina and North Carolina law required that a North Carolinian be appointed administrator, the appointment was not compatible with Section 1359. Chief Judge Hayns-worth said:
Here, Vaughan has no stake in the outcome of the controversy; given the decision to file the action in North Carolina, his appointment was not solely for the purpose of creating diversity of citizenship, but the attempt to put it to that use may be regarded as a substantial equivalent. With no stake in the outcome of the controversy, substantive diversity of citizenship is as artificial and shadowy as it was in Lester and in Bishop. In that sense, it is pretense, not reality. Indeed, in Bishop we said that the administrator’s lack of a stake in the controversy was enough to make his citizenship irrelevant.
542 F.2d at 644. The reasoning is equally applicable to the present case which it fits like a glove of the finest kid leather.
There is a presumption against diversity jurisdiction. Lehigh Mining and Manufacturing Co. v. Kelly, 160 U.S. 327, 337, 16 S.Ct. 307, 311, 40 L.Ed. 444 (1895); see also McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936). Krier-Hawthorne, since she was the plaintiff below, has the burden
In a nutshell, the decision as to whose citizenship should control — as to who is the real party in interest on the defendant side associated with Krier — is not limited exclusively to a choice between the personal representative and the heirs or beneficiaries. If there is another possible alternative, it should also be considered. In the present case the only person with a substantial interest in the outcome of the case, other than the plaintiff and Beam, the co-defendant, is the decedent’s automobile liability insurer. The decedent’s estate is wholly without assets and the personal representative is at most a purely formal party.
The present case is, in essence, a direct action against the decedent’s insurer. The only reason this case was not filed directly against the insurer is because Virginia does not have a direct action statute. In 1964, the Congress amended the diversity statute to provide that the insured’s citizenship controls in a direct action.
II.
The majority hold on to Mecom probably not because of affection, but, presumably, because of its ease in application. The rule of Mecom may, by permitting resort to a label, without plumbing to ascertain actuality, enjoy a certain ease of application. But once this Court decided to look to the citizenship of the real party in interest, we decided that reality rather than mere expediency should rule. This Circuit’s case-by-case limitation of Mecom to its proper place in the jurisdictional world has raised many questions about the significance of representatives’ citizenship and, in a sense, added complexity to the law.
The law grows, as children grow. As Heraclitus said, in a more classical language: “Nothing is but is becoming.” A preeminent American jurisprudential expert has pointed out: “The life of the law has not been logic: it has been experience.”
The rule that an executor’s or administrator’s citizenship controls for the purpose of determining diversity of citizenship was first enunciated in Chappedelaine v. Deche-naux, 8 U.S. (4 Cranch) 306, 2 L.Ed. 629 (U.S.1808). In Chappedelaine, the plaintiffs were citizens of France and the defendant was a citizen of Georgia. The defendant claimed that there was an absence of complete diversity because the plaintiffs were representatives of Georgia decedents. The defendant’s counsel was stopped by Chief Justice Marshall when counsel opened the question of jurisdiction. The Chief Justice said:
The present impression of the court is, that the case is clearly within the jurisdiction of the courts of the United States. The plaintiffs are aliens, and although they sue as trustees, yet they are entitled to sue in the circuit court.
Id. at 308, 2 L.Ed. 629. No reasoning or support was given for the statement. No reference was made to the predecessor of 28 U.S.C. § 1359. It could not have been, for the statute first saw the light of day over 60 years after Chappedelaine was decided. See Act of March 3, 1875, ch. 137, 18 Stat. 470, 472. The next time the issue was raised in the Supreme Court, Mr. Justice Story ruled that the executors in the case were the real parties in interest and their citizenship controlled. Childress v. Emory,
Then came Mecom v. Fitzsimmons Drilling Co., 284 U.S. 183, 52 S.Ct. 84, 76 L.Ed. 233 (1931). In Mecom the Court held that an administrator who sued for the beneficiaries named in a wrongful death action was the real party in interest and his citizenship controlled for the purpose of defeating diversity. Mecom’s holding was based on two different lines of reasoning. One, that it was settled that the citizenship of executors and administrators controlled. Id. at 186, 52 S.Ct. at 85, citing, inter alia, Childress and Blatchford. Two, that to rule otherwise would collaterally attack the decree appointing the party to be an administrator. Id. at 189, 52 S.Ct. at 87. This Court has expressly said that Mecom’s second line of reasoning is an empty notion. Miller, 456 F.2d at 68. Mecom’s first line is nothing more than a recital of decisions that ultimately depend on Chappedelaine and Chil-dress. Again there was simply no allusion to the predecessor to 28 U.S.C. § 1359, because the result was dismissal for lack of jurisdiction because of the joinder.
Over and beyond the consideration that Mecom simply is not relevant where a personal representative’s citizenship is invoked to obtain jurisdiction, thus contravening 28 U.S.C. § 1359, Chappedelaine, suffers from a lack of any reasonable support. Its rule is nothing more than a blind repetition of an extemporaneous statement by Chief Justice Marshall. Childress has no reasoning worthy of the name, but Justice Story did use the term “real parties in interest.” Chil-dress, 21 U.S. (8 Wheat) at 668, 5 L.Ed. 705. At the time Story used the term “real parties in interest,” it signified merely that the persons had a right, granted by the substantive law of the case, to sue and control the action. See Clark & Hutchins, supra, note 6, at 259-60; Simes, supra, note 6, at 61. Today, we interpret the term differently. See Lester, 415 F.2d at 1105-06.
When Marshall and Story came up with the rule that an executor’s or administrator’s citizenship controls for diversity purposes, it was not possible to bring a tort action based on personal injury on behalf of or against a decedent’s estate.
The American Law Institute has proposed that:
An executor, or an administrator, or any person representing the estate of a decedent or appointed pursuant to statute with authority to bring an action because of the death of a decedent shall be deemed to be a citizen only of the same State as the decedent; and a guardian, committee, or other like representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the person represented.
American Law Institute, Study of the Division of Jurisdiction Between State and Federal Courts § 1301(b)(4) (1969). The majority in the present case acknowledges that the ALI proposal is the ideal solution to the problem facing us.
Without intimating that we should or can effect the change simply by judicial pronouncement, we, nevertheless want it known that, if a case arises which presents the question [of whose citizenship controls] in a way that its answer will affect the outcome, we shall expect the issue of applicability of the A.L.I. proposal to be raised and fully presented.
Messer, 612 F.2d at 1375 n. 11. The parties in the present case did not raise the issue. With that fair notice to counsel, however, it is appropriate to do so, sua sponte.
The doctrine that the executor’s or administrator’s citizenship controls is a judge-made doctrine. In Surratt v. Thompson, 212 Va. 191, 193, 183 S.E.2d 200, 202 (1971), the very case that allowed suits against spouses, such as the present case, to proceed in Virginia, the court said: “former rules should give way to rules of reason in the light of changed circumstances.” The courts can and should change outmoded, judge-made rules to conform to present reality.
The doctrine that the citizenship of a decedent’s personal representative should control for the purpose of establishing diversity of citizenship is based on outmoded concepts of the real party in interest and was established before the present non-effect of a decedent’s death upon causes of action had fully evolved. Even if the doctrine were correct when it was summarily adopted by judicial ukase in 1808, it should, if it indeed reaches the present case, be abandoned today.
The reasons underlying the creation and maintenance of diversity jurisdiction are disputed.
III.
For the reasons stated above, I dissent.
. The seven previous cases are: Messer v. American Gems, Inc., 612 F.2d 1367 (4th Cir. 1980), cert. denied, 446 U.S. 956, 100 S.Ct. 2927, 64 L.Ed.2d 815 (1980); Sadler v. New Hanover Memorial Hospital, Inc., 588 F.2d 914 (4th Cir. 1978); Mullins v. Seals, 562 F.2d 326 (4th Cir.1977); Vaughan v. Southern Railway Company, 542 F.2d 641 (4th Cir. 1976); Bishop v. Hendricks, 495 F.2d 289 (4th Cir. 1974), cert. denied, 419 U.S. 1056, 95 S.Ct. 639, 42 L.Ed.2d 653 (1974); Miller v. Perry, 456 F.2d 63 (4th Cir. 1972); Lester v. McFaddon, 415 F.2d 1101 (4th Cir.1969).
. The appointment was made pursuant to a statute requiring a resident administrator “solely for the purpose of prosecution of said suit....” Va.Code § 64.1-75.1 (1980) and 26-59 (Supp.1983). That manifestly referred to a purpose of the plaintiff.
. Sadler v. New Hanover Memorial Hospital, 588 F.2d 914 (4th Cir.1978). The case differed from the six others, and from the instant case, because the personal representative was an executrix named, necessarily, before death (and, almost certainly, before the fatal accident) in the decedent’s will, foreclosing any presumption of collusion or impropriety. Furthermore, there was no indication that the testator was destitute of other assets requiring administration.
. The Supreme Court has recently reaffirmed the complete diversity requirement for cases brought under 28 U.S.C. § 1332(a), the diversity statute. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 373-74, 98 S.Ct. 2396, 2402-03, 57 L.Ed.2d 274 (1978) (“[re-enactment of the diversity statute] clearly demonstrates a congressional mandate that diversity jurisdiction is not to be available when any plaintiff is a citizen of the same State as any defendant.”).
. There might, as subsequently indicated, be the additional difficulty, from Krier-Haw-thorne’s viewpoint, of an imputation of Joseph Krier’s citizenship, i.e., New York citizenship, to his insurance carrier.
. The reason Kramer came to a radically different, 180 degree different, result from that indicated by Mecom is that it had before it additional authority, a controlling statute, not applicable, and hence not available, in Mecom, but fully applicable to the instant case. “[28 U.S.C.] Section 1359, of course, does not apply to the Mecom situation since it attempts only to limit federal jurisdiction and not to protect it.” Lester, 415 F.2d at 1104; cf. Vaughan, 542 F.2d at 644 (Mecom, however, dealt with a case in which the administrator had been selected because his citizenship was not diverse. The effort was not collusively to create federal jurisdiction, but to defeat it.”); Messer, 612 F.2d at 1375 (“28 U.S.C. § 1359 attaches no consequences to steps taken to defeat diversity juris- . diction.”). Kramer held that an assignment, which was legal under Texas law, nevertheless, was collusive under 28 U.S.C. § 1359. The statute prohibits improper or collusive action to invoke the jurisdiction of a federal court. Thus, in Kramer, the assignee’s citizenship was not considered for the purpose of establishing diversity of citizenship. 398 U.S. at 829-30, 89 S.Ct. at 1490-91. Kramer was significant because it discarded Mecom’s holding that to look behind the appointment of an administrator and rule that his citizenship was not controlling would be an impermissible collateral attack on a state court decree. See Mecom, 284 U.S. at 189, 52 S.Ct. at 87; cf. Miller, 456 F.2d at 66-67 (“[Mecom] rested on the twin pillars of the earlier views that looking behind the appointment of an administrator to the reality was somehow a collateral attack on the order of appointment, and that inquiry into motive was impermissible. See, Black & White Taxicab & Transfer Co. v. Brown & Yellow Taxicab & Transfer Co., 276 U.S. 518, 48 S.Ct. 404, 72 L.Ed. 681 (1928). Neither view can survive Kramer."). Indeed, what is of controlling importance is that Mecom upheld the right to defeat federal diversity jurisdiction by careful orchestration of who was to play the role of administrator. 28 U.S.C. § 1359 does not forbid that behavior, only the reverse. We have before us, however, a direct attempt to confer jurisdiction on a federal district court in a frontal assault on 28 U.S.C. § 1359.
The severe cutting back on the traditional rule of Mecom had already begun prior to Kramer in McSparran v. Weist, 402 F.2d 867 (3d Cir.1968), cert. denied, 395 U.S. 903, 89 S.Ct. 1739, 23 L.Ed.2d 217 (1969). The trend
. See Hackney v. Newman Memorial Hospital, Inc., 621 F.2d 1069 (10th Cir.1980), cert. denied, 449 U.S. 982, 101 S.Ct. 397, 66 L.Ed.2d 244 (1980) (administratrix—decedent’s daughter); Woods v. Holy Cross Hospital, 591 F.2d 1164 (5th Cir.1979) (administratrix—decedent’s widow); Sadler v. New Hanover Memorial Hospital, 588 F.2d 914 (4th Cir.1978) (executrix—decedent’s sister, named in will); O’Brien v. Stover, 443 F.2d 1013 (8th Cir.1971) (administratrix—decedent’s daughter, sole heir).
. The term “real party in interest” has both a procedural and a substantive meaning. See Fed.R.Civ.P. 17(a); Recent Decisions, 36 Md.L. Rev. 901, 907 n. 31 (1977); cf. Clark & Hutchins, The Real Party in Interest, 34 Yale L.J. 259 (1925); Simes, The Real Party in Interest, 10 Ky.L.J. 60 (1922). In Lester v. McFaddon, 415 F.2d 1101, 1105-06 (4th Cir.1969), Chief Judge Haynsworth lucidly described the difference between a “real party in interest” for the purpose of Rule 17(a) and a “real party in interest” for the purpose of determining diversity of citizenship. A “real party in interest” for the purpose of Rule 17(a) is merely a person authorized to bring a suit in his own name without joining his beneficiaries. A “real party in interest” for the purpose of determining diversity of citizenship is a person who has a “substantial stake” in the outcome of the case. The term is used here in the latter sense.
See also Navarro Savings Assn. v. Lee, 446 U.S. 458, 462 n. 9, 100 S.Ct. 1779, 1782 n. 9, 64 L.Ed.2d 425 (1980).
. See part II, infra.
. He stands to gain nothing, he stands to lose nothing, however the case might be decided on the merits. The normal defendant, protected by insurance, affords no exact or even close analogy, despite the contrary suggestions of the majority. Cf. Majority Op. at 659. He would be exposed to any excess judgment over and beyond the policy limits. Sink would not be. A plaintiff would go after the normal defendant to the extent of any judgment not met by the insurance company. Sink faces no such risk. The normal defendant, consequently has a real, a substantial interest in the outcome. Sink does not.
. A district court shall not have jurisdiction of a civil action, in which any party by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.
28 U.S.C. § 1359.
. Here, however, the question we must wrestle with is one of federal law. See Lester, 415 F.2d at 1105 (“[Whether an administrator’s citizenship should be disregarded] seems clearly a federal question, the answer to which need not
. Virginia law provides that an administrator can be appointed to represent an estate against which a cause of action is anticipated. Va. Code § 64.1-75.1 (1980 replacement volume). Section 64.1-75.1 does not mention whether the administrator must be a Virginia resident. However, all nonresident fiduciaries had, until 1983, to have a resident cofiduciary. Va.Code § 26-59 (1979 replacement volume). In 1983, § 26-59 was amended. The amended statute does not require a resident cofiduciary if the nonresident fiduciary is, inter alia, a descendant of a decedent or a surviving spouse. Va. Code § 26-59(B) (1983 supplement). However, the 1983 amendment was not in effect when Krier-Hawthorne sought Sink’s appointment. Otherwise she could have qualified as administratrix and sued herself, which certainly would reveal the ephemerality of the role of the personal representative.
. I.e., the notifying of the decedent’s insurance company of the action and the administrator’s potential, but here altogether illusory, liability for a failure to discharge his duty to administer the estate faithfully.
. To speak as the majority does, Majority op. at 659, of denial of liability by Sink and his pleading of contributory negligence and assumption of the risk as evidence of his having an interest is to exalt form above substance for it is the insurance company which in fact is doing the pleading. Indeed, a sentence or two further on the majority acknowledges that it is the insurance company who actually is asserting defenses through counsel of its choice.
. In Vaughan, it was conceded that it was not easy to say that appointment of the administrator was collusive, mandated as it was by North Carolina law. Purity of motive was acknowledged to be “beyond question.” Yet 28 U.S.C. § 1359 was invoked to prohibit conversion of the controversy between citizens of Virginia “into one between citizens of different states.” 542 F.2d at 644.
. Krier-Hawthorne was allegedly injured by the negligence of Beam and her late husband. Virginia is probably the only forum which has jurisdiction over both men. The question is, however, whether the Commonwealth courts alone provide a forum or whether the federal
The reliance by the majority, Majority op. at 660, on a supposed analogy between Beam and Krier-Hawthorne to support federal jurisdiction in Krier-Hawthorne’s case is simply misplaced. Beam could appoint a Virginia administrator for Krier and sue in federal court because, coming from Indiana, he is diverse in his own right from Krier and probably from Krier’s insurance company. Krier-Hawthorne, from New York, simply is not.
. The author of the present majority opinion dissented from the majority opinion in Vaughan. His criticism of Vaughan, that it interprets Section 1359 too broadly, has been voiced by others, too. See, e.g., Gross v. Hougland, 712 F.2d 1034, 1039 n. 10 (6th Cir.1983); Note, 18 B.C.Ind. & Com.L.R. 975, 995 (1977). Whatever the merits of the Vaughan dissent, the majority opinion in that case remains as prece-dential and binding authority. I simply am not persuaded that a distinction amounting to a difference exists between Vaughan and the present case. The question in each case is whether selection of the fiduciary was to bring about diversity jurisdiction. An executor named in a will executed before an accident even took place almost certainly was not selected for such a purpose. Here, however, as also in Vaughan, the administrator was selected after the accident, partly to conform to a state law requirement, but mainly to invoke diversity jurisdiction. The results in Vaughan and the instant case should be the same. Else 28 U.S.C. § 1359 is disregarded.
To the extent the majority attempts to spell out that other duties existed for Sink as administrator making his “more than a nominal role,” they all directly relate to the very steps designed to “invoke the jurisdiction” of the federal district court in Virginia, namely the very activity 28 U.S.C. § 1359 is designed to prevent. Those duties consist of (1) “notifying the insurance company of the institution of the action as required by the decedent’s policy” and (2) exercising “a stake in discharging this duty and the outcome of the case, for had he been dilatory, the company could have contested coverage” making Sink “liable for failure to discharge his duty faithfully.” Majority op. at 661.
Yet, over and beyond that telling consideration, the duties are truly not more than nominal, constituting behavior which one can be sure Krier-Hawthorne’s attorney monitored and controlled, rather than leave them to chance or solely to his accommodating friend, Sink, since the actions were crucial to Krier-Hawthorne’s recovery from the insurance company.
. 28 U.S.C. § 1332(c) provides, in pertinent part:
That in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has been incorporated and of the State where it has its principal place of business.
(Emphasis added).
. In Moragne v. States Marine Lines, Inc., 398 U.S. 375, 392, 90 S.Ct. 1772, 1783, 26 L.Ed.2d 339 (1970), the Supreme Court said:
It has always been the duty of the common-law court to perceive the impact of major legislative innovations and to interweave the new legislative policies with the inherited body of common-law principles....
The view expressed in Moragne was earlier advocated by preeminent legal scholars of the present century. See Landis, Statutes and the Sources of Law, Harvard Legal Essays 213, 221-27 (1934); Pound, The Common Law and Legislation, 21 Harv.L.Rev. 383, 388 (1908) (“In other words, statutes are to be taken to be parts of the law for all purposes. The courts reason from them by analogy the same as from any other legal rules.”); Stone, The Common Law in the United States, 50 Harv.L.Rev. 4, 12-16 (1936); see also H. Read, J. MacDonald, J. Fordham, & W. Pierce, Materials on Legislation, 43-48, 891-893 (4th ed. 1982); see generally, G. Calabresi, A Common Law for the Age of Statutes (1982).
. That Krier-Hawthorne is now a Virginia resident is of no consequence. Diversity jurisdiction is determined at the time the action is commenced. Smith v. Sperling, 354 U.S. 91, 93 n. 1, 77 S.Ct. 1112, 1113 n. 1, 1 L.Ed.2d 1205 (1957); Louisville, N. & C.R. Co. v. Louisville Trust Co., 174 U.S. 552, 19 S.Ct. 817, 43 L.Ed. 1081 (1899).
. This was recognized very soon after Lester was handed down. In testimony favoring legislative adoption of the American Law Institute’s proposals with respect to federal court jurisdiction, see p. 671 infra, Chief Judge Hayns-worth discussed Lester. He said, in part:
So that under the present rule it means that each case has to be looked at and this means the district court has to spend judicial time and effort and if the parties then do not like the result, they can appeal to the court of appeals and it will have to spend a great deal of judicial time and effort also in getting the answer to the preliminary question: Can we hear this case or not. And this is a dreadful waste of time.
Diversity Jurisdiction, Multi-Party Litigation, Choice of Law in the Federal Courts: Hearings on S. 1876 Before the Subcommittee on Improvements in Judicial Machinery of the Senate Committee on the Judiciary, 92d Cong., 1st Sess. 162 (1971) (statement of Chief Judge Haynsworth). See, also, Bass v. Texas Power & Light Co., 432 F.2d 763, 766-67 (5th Cir. 1970), cert. denied, 401 U.S. 975, 91 S.Ct. 1194, 28 L.Ed.2d 324 (1971); Note, 47 N.Y.U.L.Rev. 801, 813-14 (1972). The complexity engendered by Lester inspired the dissent in Vaughan v. Southern Railway Co., 542 F.2d 641, 647 (4th Cir. 1976) (Butzner, J., dissenting).
However, anyone exposed to judging as a regular diet or duty knows that the longing for simplicity is chimerical. Judging will always be abundantly complex, if not in the instant area then in numerous others clamoring for attention.
. Again, the case long antedated enactment in 1875 of the predecessor to 28 U.S.C. § 1359. Also, as previously indicated, the cases treat an executor, to some extent differently than they do an administrator, especially one appointed with achievement of diversity jurisdiction in mind.
. Here the consequence was to dismiss for want of diversity jurisdiction because an identity of citizenship existed between one of the plaintiff trustees and the defendant. Hence, the result fully coincided with the objective of the predecessor to 28 U.S.C. § 1359 enacted five years later.
. Suit by and against executors for debt was authorized as early as the reign of Edward I. See 3 W. Holdsworth, A History of English Law 573 (5th ed. 1942); 2 F. Pollock & F. Maitland, The History of English Law 347-48 (2d ed. 1898). However, suits by and against executors for torts based on personal injuries were not allowed until the late nineteenth and early twentieth centuries. See W. Prosser, Handbook of the Law of Torts 898-901 (4th ed. 1971). Virginia now, however, allows all causes of action to survive the death of either party. See Va.Code § 8.01-25.
. Cohan & Tate, Manufacturing Federal Diversity Jurisdiction By The Appointment of Repre
. See also, Vaughan, 542 F.2d at 647 n. 4.
. The majority is not alone on the point. See White v. Lee Marine Corp., 434 F.2d 1096, 1099 n. 8 (5th Cir.1970); Lester v. McFaddon, 415 F.2d 1101, 1106 (4th Cir.1969); Bugbee v. Donahue, 483 F.Supp. 1328, 1330 (E.D.Wis.1980) (“until that proposal becomes law, it remains only a proposal”); Herrick v. Pioneer Gas Products Co., 429 F.Supp. 80, 84 (W.D.Okl. 1976).
. For an excellent disquisition on the proposition see the opinion of Chief Justice Arthur T. Vanderbilt in State v. Culver, 23 N.J. 495, 505-507, 129 A.2d 715, 721-22 (1957), cert. denied, 354 U.S. 925, 77 S.Ct. 1387, 1 L.Ed.2d 1441 (1957) (citing, inter alia, Cardozo, Coke, Holds-worth, Holmes, Pound, and Williston). See also G. Calabresi, A Common Law for the Age of Statutes (1982).
. See, e.g., Shaffer v. Heitner, 433 U.S. 186, 205-206, 208, 97 S.Ct. 2569, 2580-2581, 2582, 53 L.Ed.2d 683 (1977) (the Court questioned requirements for quasi in rem jurisdiction in light of changes in the law and subsequently held that the standard of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), governed actions in rem as well as in personam).
. For reasons advanced in Section I binding precedent properly applied precludes it from so extending.
. See, e.g., American Law Institute, Study of the Division of Jurisdiction Between State and Federal Courts 101 (1969).
. American Law Institute, supra, note 22, at 101. See also Bank of the United States v. Deveaux, 9 U.S. (5 Cranch) 61, 87-88, 3 L.Ed. 38 (1809).
