[DOWNLOAD] "Truck Insurance Exchange v. Ashland Oil" by United States Court of Appeals for the Seventh Circuit * Book PDF Kindle ePub Free

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• Title: Truck Insurance Exchange v. Ashland Oil
• Author : United States Court of Appeals for the Seventh Circuit
• Release Date : January 06, 1992
• Genre: Law,Books,Professional & Technical,
• Pages : * pages
• Size : 68 KB

Description

POSNER, Circuit Judge. This is an intricate insurance case. Ashland Oil (and some other companies -- but we'll ignore them to simplify our opinion) brought a fraud suit against Toy Rex Arnett, accountant Donald Richards, and others. The suit was under RICO, with pendent law claims under Indiana law. It resulted in a substantial judgment (of which $175,000 was against Richards), which we affirmed in Ashland Oil, Inc. v. Arnett, 875 F.2d 1271 (7th Cir. 1989). Meanwhile, Truck Insurance Exchange -- which had issued a liability insurance policy to Richards, Isenberg & Co., a corporation of which Donald Richards was a one-half owner -- had filed a declaratory judgment action against the corporation (also in federal district court under the diversity jurisdiction), Richards himself, and Ashland, seeking a declaration that the policy did not cover the judgment against Richards. That is the case before us. The district Judge entered judgment for the insurance company on its motion for summary judgment. Ashland (and the other fraud plaintiffs -- but we're ignoring them, remember) have appealed. Mr. Richards has not appealed. Indiana law governs the substantive issues. The basis of federal jurisdiction over the declaratory judgment suit is diversity of citizenship, and there is no question that the plaintiff, Truck Insurance Exchange, is a citizen of a different state from any of the defendants. But we must consider whether the parties are properly aligned -- that is, whether the plaintiff and the defendants are the real adversaries. City of Indianapolis v. Chase National Bank, 314 U.S. 63, 86 L. Ed. 47 , 62 S. Ct. 15 (1941); Fidelity & Deposit Co. v. City of Sheboygan Falls, 713 F.2d 1261, 1264-68 (7th Cir. 1983). Ordinarily the victim of an insured is on one side of the lawsuit and the insured and his insurance carrier are on the other; and if we realigned the parties accordingly, the requirement of complete diversity would no longer be satisfied. But such a realignment would be improper in this suit, as opposed to the first one, the fraud suit against Richards. The insurance company brought the present suit in order to disclaim any liability it might have either to Richards, the insured (or rather the half owner of the insured), or to Richards' victims; therefore the plaintiff in this suit really is the adversary of all the defendants. Bonell v. General Accident Fire & Life Assurance Corp., 167 F. Supp. 384, 385 (N.D. Cal. 1958). So there is diversity jurisdiction, but, as we are about to see, there is another jurisdictional issue.

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