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GENERAL AMERICAN LIFE INS. CO. v. RANA

June 27, 1991

GENERAL AMERICAN LIFE INSURANCE COMPANY, a Corporation, Plaintiff,
v.
GARY S. RANA, Defendant



The opinion of the court was delivered by: WEIGEL

 STANLEY A. WEIGEL, UNITED STATES DISTRICT JUDGE

 On November 13, 1990, plaintiff General American Life Insurance Company ("General American") brought this action seeking rescission of a business overhead expense disability insurance contract and damages against defendant Gurcharan S. Rana. Plaintiff alleges: (1) that defendant misrepresented and concealed material facts from plaintiff, and (2) that defendant is not entitled to the contract benefits. Plaintiff's action is based upon diversity jurisdiction. General American is a Missouri corporation and Rana is a California citizen.

 On April 17, 1991, defendant filed a third-party complaint which he denominated a counter, cross, and third-party complaint ("third-party complaint"). Defendant names fifteen third-party defendants, including both California and non-California citizens. *fn1" It does not appear from the record that defendant has served the third-party defendants. In his third-party complaint, Rana alleges that General American and the third-party defendants, including several insurance companies, conspired to deny him the disability insurance benefits he was due under the insurance companies' policies. Defendant has brought twelve causes of action seeking damages against plaintiff and the third-party defendants. *fn2"

 I. Plaintiff's and Third-Party Defendant's Motion to Dismiss for lack of Subject Matter Jurisdiction

 Plaintiff and third-party defendant Kasalko contend that all third-party defendants named in the third-party complaint should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1) because the Court lacks pendent party and/or ancillary jurisdiction over these defendants. In his third-party complaint, defendant names fifteen third-party defendants, including both California and non-California citizens. Thus, there is no diversity between defendant and those third-party defendants who reside in California. However, defendant asserts that he has jurisdiction over the third-party defendants based upon the supplemental jurisdiction provision of the Judicial Improvements Act of 1990, 28 U.S.C.A. § 1367 (West Supp. 1991).

 The supplemental jurisdiction provision of the Judicial Improvements Act of 1990 applies to "civil actions commenced on or after the date of the enactment of this Act [Dec. 1, 1990]." 28 U.S.C. § 1367 note (1990); see also Harbor Ins. Co. v. Continental Bank Corp., 922 F.2d 357, 362 (7th Cir. 1990). "A civil action is commenced by filing a complaint with the court." Fed. R. Civ. P. 3. Therefore, the Judicial Improvements Act is inapplicable in the present case because plaintiff filed his complaint on November 13, 1990, prior to the effective date of the Act. The Court's subject matter jurisdiction is, therefore, based on the rules and case law in effect at the time the complaint was filed.

 It is unclear whether defendant named these third-party defendants pursuant to Federal Rule of Civil Procedure 14(a) or 13(h). Federal Rule of Civil Procedure 14(a) provides for the filing of a third-party complaint "upon a person not a party to the action who is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff." Fed. R. Civ. P. 14(a). However, a third-party claim may be asserted pursuant to Rule 14(a) only when the third-party's liability is dependent upon the outcome of the main claim and the third-party's liability is secondary or derivative. United States v. One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir. 1983), cert. denied, 464 U.S. 1071, 79 L. Ed. 2d 217, 104 S. Ct. 981 (1984).

 In his third-party complaint, defendant has sought neither indemnification nor contribution from the third-party defendants for plaintiff's claims against defendant. Nor does it appear from the complaint that defendant's claims against these third-party defendants are dependent upon the outcome of plaintiff's main claim against him. Therefore, the Court concludes that the third-party defendants have not been named pursuant to Rule 14(a).

 The only other possibility is that defendant seeks to join the third-party defendants as additional parties pursuant to Federal Rule of Civil Procedure 13(h). In order to add parties under Rule 13(h), defendant must show that this Court has an independent jurisdictional basis for the assertion of federal jurisdiction over these parties. Danner v. Himmelfarb, 858 F.2d 515, 522 (9th Cir. 1988); Safeco Ins. Co. of America v. Guyton, 692 F.2d 551, 555 & n. 5 (9th Cir. 1982). *fn3"

 Therefore, the Court grants plaintiff's motion to dismiss with regard to the above non-diverse third-party defendants. The Court denies plaintiff's motion to dismiss the remaining third-party defendants (Maccabees Insurance Company, Mueller, Guardian Insurance Company, Lancetter, Provident Insurance Company, and Kasalko) because the Court has diversity jurisdiction over these joined parties. The Court allows defendant leave to amend his third-party complaint because he may be able ...


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