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McGlinchey v. Hartford Accident and Indemnity Co.

filed: February 3, 1989.

MCGLINCHEY, HERBERT J., MCGLINCHEY, CATHERINE J.
v.
HARTFORD ACCIDENT AND INDEMNITY CO. AND LIBERTY MUTUAL INSURANCE COMPANY, HERBERT AND CATHERINE MCGLINCHEY, APPELLANTS



Appeal From the United States District Court for the Eastern District of Pennsylvania, D.C. No. 87-1707.

Gibbons, Chief Judge, Seitz, and Greenberg, Circuit Judges.

Author: Seitz

Opinion OF THE COURT

SEITZ, Circuit Judge.

Plaintiffs Herbert McGlinchey and Catherine McGlinchey appeal from the district court's entry of judgment in favor of defendant Liberty Mutual Insurance Company ("Liberty"). In addition, plaintiffs appeal from the district court's order denying their motion to remand this case to the state court from which it was removed. We have jurisdiction as this is an appeal from a final judgment. 28 U.S.C. § 1291.

I. BACKGROUND

On November 11, 1983, Herbert McGlinchey, while driving a car that he had rented from Budget-Rent-A-Car ("Budget") two days earlier, was injured in an automobile accident in Naples, Florida. Neither the driver of the other car nor that car's owner had insurance.

Thereafter the plaintiff Herbert McGlinchey brought this action in the Pennsylvania state court against defendants Liberty and Hartford Accident & Indemnity Company ("Hartford"), based on an insurance policy which plaintiff had purchased from Hartford. Liberty was, at the time of plaintiff's accident, Budget's insurance carrier. Later Catherine McGlinchey was joined as a plaintiff.

The entire action was removed to the district court. Count I of the three-count Complaint sought uninsured motorist benefits*fn1 from Liberty. Liberty filed a motion for summary judgment alleging that uninsured motorist benefits were not available to the plaintiffs because uninsured motorist coverage had been rejected by the named insured, Budget. This motion was granted by order of the district court. Thereafter, the two counts against Hartford were settled and this appeal followed.

II. REMOVAL

This case was removed to federal court pursuant to 28 U.S.C. § 1441(a). Subsection (a) of § 1441 provides in pertinent part: "any civil action brought in a State Court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending." Here the federal district court found original jurisdiction based on the diverse citizenship of the parties. See 28 U.S.C. § 1332(a)(1). It is uncontroverted that plaintiffs are citizens of Pennsylvania, Liberty is a citizen of Massachusetts and Hartford is a citizen of Connecticut.

Plaintiffs claim that diversity was lacking in this case because under 28 U.S.C. § 1332(c) the citizenship of Herbert McGlinchey, the insured, must be imputed to both Liberty and Hartford. Subsection (c) of § 1332 provides:

For the purposes of this section and section 1441 of this title, a corporation shall be deemed a citizen of any state by which it has been incorporated and of the state where it has its principal place of business: Provided further, That in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which the insured is not a party-defendant, such insurer shall be deemed a citizen of the state of which the insured is a citizen, as well as any state by which the insurer has been incorporated and the State where it has its principal place of business.

Thus, plaintiffs argue that their action against Hartford and Liberty is a "direct action against the insurer of a policy or contract of liability insurance" thereby making Liberty and Hartford a "citizen of that state in which the insured is a citizen."

In light of controlling precedent in this Circuit, we conclude that plaintiffs' contention is meritless. See, e.g., Myers v. State Farm Insurance Co., 842 F.2d 705, 707 (3d Cir. 1988); Shiffler v. Equitable Life Assurance Society of the United States, 838 F.2d 78, 82 n.5 (3d Cir. 1988). It has been said that a "direct action," as that term is used in § 1332(c), does not exist "unless the cause of action against the insurance company is of such a nature that the liability sought to be imposed could be imposed against the insured." Myers v. State Farm Insurance Co., 842 F.2d at 707 (quoting Fortson v. St. Paul Fire and Marine Insurance Co., 751 F.2d 1157, 1159 (11th Cir. 1985)). In Myers, this Court specifically found that when an insured, as the injured party, brings suit against his insurer, no direct action could be found because the insurer's status is not that of a "payor of a judgment based on the negligence of one of its insureds." Id. (quoting, Velez v. Crown Life Insurance Co., 599 F.2d 471, 473 (1st Cir. 1979)). Thus, plaintiffs' suit against Liberty and Hartford cannot be said to have been a direct action within the meaning of 28 U.S.C. § 1332(c).

Plaintiffs also challenge the removal of this action from state court on two other grounds. First, plaintiffs contend that Liberty failed to join in or consent to the removal petition. See Lewis v. Rego Co., 757 F.2d 66, 68 (3d Cir. 1985) ("Section 1446 has been construed to require that when there is more than one defendant, all must be joined in the removal petition."). Second, plaintiffs argue that the removal petition was not timely filed.

Plaintiffs' arguments fail because they neglected to present these contentions to the district court. It is a clearly established rule of this Court that issues will not be considered for the first time on appeal absent some special circumstances. See Neal v. Secretary of the Navy, 639 F.2d 1029, 1035 (3d Cir. 1981); Caisson Corp. v. Ingersoll-Rand Co., 622 F.2d 672, 680-81 (3d Cir. 1980); Newark Morning Ledger Co. v. United States, 539 F.2d 929, 932 (3d Cir. 1976). While it is true that contentions questioning the subject matter jurisdiction of this Court must be considered even if not raised before the district court, neither the failure to join all the defendants in a removal petition nor the failure to file a removal petition within the 30 day statutory time limit affect this Court's jurisdiction. See Allbritton Communications Co. v. National Labor Relations Board, 766 F.2d 812, 820 (3d Cir. 1985) ("[R]emoval proceedings are in the nature of process, and defects in removal procedures are waivable."), cert. denied, 474 U.S. 1081, 106 S. Ct. 850, 88 L. Ed. 2d 891 (1986). See also Harris v. Edward Hyman Co., 664 F.2d 943, 945 (5th Cir. 1981) ("[S]trict compliance with the limitations period in the removal statute does not effect the jurisdiction of the district court."); Intercoastal Refining Co., Inc. v. Jalil, 487 F. Supp. 606, 608 (S.D. Tex. 1980) ("The failure of a defendant to join in a removal petition or consent to such action within the thirty day limitation is a waivable nonjurisdictional defect") (citing Robertson v. Ball, 534 F.2d 63 (5th Cir. 1976)).

Plaintiffs contention that they implicitly raised these issues before the district court is unavailing. Plaintiffs argue that by noting the specific dates when the action was commenced and when the motion to remove was filed they can be said to have raised the issue of timeliness. In addition, plaintiffs claim that by stating in their motion to remand that Hartford "allegedly" included Liberty in the petition for removal, they can be said to have raised the issue of joinder of all defendants. As plaintiffs admit, these statement do not amount to an express argument and do not justify appellate review of the issues so obliquely raised.

Having determined that the district court was clothed with subject matter jurisdiction, we conclude that the removal was proper. See Medlin v. Boeing Vertol Co., 620 F.2d 957, 960 (3d Cir. 1980); ...


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