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Brough v. Strathmann Supply Co.

decided: March 29, 1966.


McLaughlin, Hastie and Smith, Circuit Judges.

Author: Mclaughlin

McLAUGHLIN, Circuit Judge.

In this personal injury negligence action at the end of plaintiff's case, on motion of the defense, a directed verdict was granted against the plaintiff and in favor of the defendant. The verdict was primarily based on the finding of no diversity of citizenship between the parties but the court also held that the amount in controversy did not exceed $10,000; that there was contributory negligence as a matter of law against plaintiff and that the latter had not presented prima facie proofs of negligence against the defendant.

The plaintiff, Alfred Brough, was a minor of the age of nineteen at the time the injury occurred. It was sustained by him as a result of the defendant's alleged negligence, on September 28, 1959 when plaintiff was working for the third party defendant in the construction of a private swimming pool at Holland, Pennsylvania. On that date, and up to the present, the plaintiff and the defendant were and are Pennsylvania residents. On September 6, 1961, Alvin H. Frankel, a New Jersey resident, was appointed guardian of Alfred Brough's estate by the Orphan's Court as Brough was still a minor. It was Frankel who brought the suit in the Federal District Court in his own name pursuant to 28 U.S.C.A. Federal Rules of Civil Procedure, rule 17(a) for the benefit of his minor ward who at the time was not made a party to the action.

At pretrial on December 15, 1964, plaintiff's attorney moved to amend the caption of the complaint to remove the guardian as plaintiff and substitute Alfred Brough in his own right as plaintiff. At this point the Court asked defense counsel whether he had any objection and the answer was "No". The motion was granted from the bench. A suggestion of plaintiff's majority was filed later. At the trial Brough was substituted in the title caption as plaintiff.


On the question of diversity the trial judge held that at the commencement of the action there was diversity since the guardian was a New Jersey resident and defendant was a Pennsylvania resident, but the removal of the guardian as plaintiff and replacing him with Brough as plaintiff resulted in a loss of diversity and therefore the court had no jurisdiction.

It is appellee's contention that the court was correct in this ruling because in effect what appellant accomplished was an amendment as opposed to a substitution and that since it was an amendment the court must look to the new parties to determine whether or not there is diversity. To support this proposition the appellee cites the case of Grady v. Irvine, 254 F.2d 224 (4 Cir. 1958). That case is readily distinguished from this suit because what was attempted there was an amendment which would change the nature of the action from one for personal injuries to a claim for wrongful death. The two are fundamentally different with different measures of damages. The Grady court held that since, not merely a new plaintiff had been introduced but also a new and distinct cause of action, the citizenship of the new plaintiff would determine diversity. That same opinion, however, recognized a distinction which is most relevant to this appeal when it stated, "For purposes of federal jurisdiction, the requirement of diversity of citizenship is ordinarily determined by the situation existing at the time the action is commenced. Once federal jurisdiction has attached, it is not defeated by a subsequent change in the citizenship of one of the parties. Mollan [Mullen] v. Torrance, 22 U.S. 537, 9 Wheat. 537, 6 L. Ed. 154, nor by a formal substitution of a personal representative of nondiverse citizenship for an original party who dies while the cause is pending. Smith v. Sperling, 354 U.S. 91, 77 S. Ct. 1112, 1 L. Ed. 2d 1205." Supra, 254 F.2d p. 226. Appellee cites as further authority, Schwartz v. Metropolitan Life Insurance Co., 2 F.R.D. 167 (D.C., 1941). The case is inapposite for the same reasons as Grady v. Irvine, supra. It concerns an attempt made by a guardian, suing as representative of an insane ward, to introduce a personal action against defendant by means of substitution or, in the alternative, an amendment. The court held that Rule 25 did not provide for such substitution and that Rule 15(a) did not apply because a new cause of action was being brought in which the ward's beneficial interest was not involved. Here, at all times the suit has been on behalf of Alfred Brough, the exact same claim, both when the guardian was suing and when Brough himself became plaintiff.

Appellee argues that a new cause of action has been set up because the plaintiff is now attempting to recover for his medical expenses whereas the guardian could not have done so. That item was disposed of by the trial judge who refused to permit plaintiff to introduce evidence as to what the expenses were. The judge considered himself bound by Pennsylvania law which he felt placed that claim in the parents of the injured minor under the decision of In re Mikasinovich, 110 Pa.Super. 252, 261, 168 A. 506 (1933). The count for medical expenses never actually entered the cause at all.

The situation closest to the essence of our diversity problem is found in Alleghany Corp. v. Kirby, 218 F. Supp. 164 (D.C.N.Y.1963), affd. 333 F.2d 327 (2 Cir. 1964). A derivative suit was started by certain stockholders of a New York corporation against certain directors of the corporation and others. Some of the defendants were citizens of New York and the plaintiff stockholders were citizens of another state. At that point there was complete diversity of citizenship, just as in this appeal when the guardian commenced this suit. Subsequently, on motion of the plaintiffs, they were dropped as parties plaintiff and the corporation substituted as plaintiff in their stead. The defendants then moved to have the litigation dismissed on the grounds that there was no longer diversity of citizenship, since the corporation's principal place of business was in New York. The court denied the motion stating, "Once jurisdiction has been acquired a subsequent change of parties does not remove such jurisdiction." Supra, 218 F. Supp. at p. 170. In Allegheny just as in the instant appeal it is not quite clear whether there was a substitution or an amendment. The court in Allegheny uses the term "substitution" but the federal rule authorizes substitution only in four instances, i.e. death of a party, incompetency, transfer of interest; death or separation from office of a public official. F.R.C.P. 25.

In any event, it makes little difference what terminology is used. The determining factor is the effect of the change of parties plaintiff on the nature of the action. The nature of this action has remained the same and therefore diversity is to be determined as of the time of the commencement of the suit.


From the record, it appears that the physical injury sustained by the plaintiff is the loss of the distal phalanx of the middle finger of the right hand. Originally it was crushed by the tailgate of defendant's truck. Subsequently gangrene set in and after three separate surgical procedures the entire phalanx was amputated. For this plaintiff is seeking damages for pain and suffering, loss of income, permanent injuries, damages to his future earning power and medical expenses. With the exception of medical expenses, there is competent testimony in the record to sustain plaintiff's claim for all of his elements of damage. The trial judge made a finding that the amount in controversy did not exceed $10,000 as required by 28 U.S.C.A. 1332(a).

The settled rule of law to be applied in determining whether or not plaintiff's cause of action meets the jurisdictional amount is that so long as plaintiff is acting in good faith in his allegation of jurisdictional amount and it does not appear to a "legal certainty" that his claim is actually for less than the jurisdictional amount, the court will have jurisdiction. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S. Ct. 586, 82 L. Ed. 845 (1938); McDonald v. Patton, 240 F.2d 424, 426 (4 Cir. 1957); 2 Moore's Federal Practice ยง 8.11. There is no trial evidence which would impugn the plaintiff's good faith. Even excluding the claim for medical expenses, it cannot fairly be said that it "appears to a legal certainty" that plaintiff's damages do not exceed $10,000. So, while there could be possibly some doubt raised as to the monetary value of ...

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