author: KERR, District Judge.

text:
    Max GOOD, Plaintiff, v. RELIANCE INSURANCE CO., Defendant.
    No. C84-137-K.
    United States District Court, D. Wyoming.
    Dec. 5, 1984.

      Robert C. Wilson, Douglas, Wyo., for plaintiff.
    William S. Bon, Schwartz, Bon, McCrary & Walker, Casper, Wyo., for defendant.
   ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT (WITH FINDINGS)

KERR, District Judge.

The above-entitled matter having come on regularly for hearing before the Court on cross-motions for summary judgment, plaintiff appearing by and through his attorney, Robert C. Wilson, and defendant appearing by and through its attorney, William S. Bon, and the Court having heard the arguments of counsel and having carefully considered the motions and briefs filed herein and being fully advised in the premises, FINDS:

Max Good was in an accident on October 28, 1978 at an oilfield site located in Washakie County, Wyoming, out of which he received personal injuries. At the time of the accident, he was an employee of Tanks, Inc., a Wyoming corporation, which was a wholly-owned subsidiary of Chinook Pipelines, Inc.

Tanks, Inc. had contracted to move a drilling rig belonging to Anderson-Myers and at the time of the accident was in the process of loading the rig parts on to trailers.

At the time of the accident, Patrick K. McCreery, an employee of P.K. Trucking, Inc., was supervising the loading and operating a winch on a 1978 Kenworth Tractor-Trailer, VIN 162642S, which was owned by P.K. Trucking, Inc. and/or Patrick K. McCreery.

The 1978 Kenworth unit had been leased to Tanks, Inc. by a lease signed June 1, 1978. Tax Plate No. 4-90959 was issued to the 1978 Kenworth owned by P.K. Trucking, Inc. and/or Patrick K. McCreery under the Tanks, Inc. Wyoming PSC permit.

During the process of the loading operation, the chains or cable of the truck broke resulting in the matting board falling upon Max Good and causing personal injury to him. On October 28, 1982, Max Good commenced a negligence action in Washakie County, Wyoming District Court against Anderson-Myers, a partnership, and Patrick K. McCreery, d/b/a P.K. Trucking, Inc., seeking damages for his injuries arising out of the accident of October 28, 1978.

At the time of the October 28, 1978 accident, Reliance Insurance Company had in effect a policy of liability insurance numbered CI8 75 46 86 it had issued in the name of Chinook Pipeline, Inc. and any of its owned subsidiaries, which included Tanks, Inc. By letter dated November 22, 1982, the attorney for Patrick K. McCreery notified Reliance Insurance Company of the litigation against McCreery and tendered the defense. On November 24,1982, McCreery’s attorney was notified by Reliance that no coverage was afforded and that they would not enter an appearance for P.K. Trucking or Patrick K. McCreery.

A Certificate of Insurance was filed by Reliance Insurance Company on behalf of Tanks, Inc., as the designated motor carrier, and the policy was amended to provide automobile bodily injury liability insurance covering the obligations imposed upon Tanks, Inc. by virtue of the provisions of the Motor Carrier laws of the State of Wyoming.

Following their refusal to defend and denial of coverage by Reliance Insurance Company, the trial was set, at which time counsel appeared before the court and, although the court took no testimony from any witnesses, the court was advised by counsel of the anticipated testimony and the parties stipulated to the facts of the case. On August 16,1988, a judgment was signed and entered in the Washakie County District Court finding in favor of Max Good against Patrick K. McCreery and P.K. Trucking Company in the amount of $716,-200.00.

Subsequently, P.K. Trucking, Inc. and Patrick K. McCreery assigned any claims they had against Reliance Insurance Company to Max Good and on or about March 1, 1984, Max Good brought this action in the State District Court in Converse County, Wyoming, seeking a declaration of coverage for P.K. Trucking, Inc. and Patrick K. McCreery, which case was subsequently removed to the United States District Court for the District of Wyoming on April 10, 1984.

The automobile liability provision of the Reliance Insurance Policy provides in relevant part:

III. PERSONS INSURED
Each of the following is an insured under this insurance to the extent set forth below:
(a) the named insured;
(c) any other person while using an owned automobile or a hired automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission.
None of the following is an insured:
(i) any person while engaged in the business of his employer with respect to bodily injury to any fellow employee of such person injured in the course of his employment;
(ii) the owner or lessee (of whom the named insured is a sub-lessee) of a hired automobile or the owner of a non-owned automobile, or any agent or employee of any such owner or lessee;

The important definitions within the policy provide:

“named insured” means the person or organization named as such on first page of this policy;
“insured” means any person or organization qualifying as an insured in the “Persons Insured” provision of the applicable insurance coverage. The insurance afforded applies separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the company’s liability; (This is the severability-of-interest clause).
“hired automobile” means an automobile not owned by the named insured which is used under contract in behalf of, or loaned to, the named insured, provided such automobile is not owned by or registered in the name of (a) a partner or executive officer of the named insured or (b) an employee or agent of the named insured who is granted an operating allowance of any sort for the use of such automobile;
“non-owned automobile” means an automobile which is neither an owned automobile nor a hired automobile.

The plaintiff has argued that the provisions of the Public Service Commission (PSC) regulations, along with the endorsement of insurance coverage filed by Reliance on behalf of Tanks, Inc., the insurance policy itself, and the Motor Carrier statutes and regulations when combined establish insurance coverage by Reliance for the acts of Patrick McCreery and P.K. Trucking.

The plaintiff has claimed that by virtue of Chapter I, Section 27(B) of the PSC regulations, Patrick McCreery is an employee of Tanks, Inc. and under the provisions of the policy § 111(c), McCreery and P.K. Trucking are, therefore, insured under the policy.

Chapter I, Section 27(B) of the PSC regulations states:

Leasing of equipment shall not include the service of a driver or operator. Employment of drivers or operators shall be made on the basis of a contract of employment by which the driver or operator shall bear the relationship of an employee to the carrier.

In Barnette v. Hartford Ins. Group, 653 P.2d 1375 (Wyo.1982), the Wyoming Supreme Court held that where a policy contains a co-employee exclusion clause and a severability-of-interest clause (whereby each person insured is separately insured), insurance coverage cannot be denied by reason of the co-employee exclusion where the co-employee is also insured in a different capacity (other than as employer) under the “persons insured” paragraph.

Assuming, that pursuant to the PSC regulations, McCreery is an employee of Tanks, Inc., plaintiff suggests that McCreery is separately insured under the “permissive user” clause and, therefore, under the holding of Barnette, McCreery would be insured. However, this argument overlooks the “owner” exclusion clause which excepts certain parties from insurance coverage.

There is a diverse split in authority as to whether the “[o]wner exclusion clause only applies to exclude owners or their employees who do not fall within the definition of persons insured,” ... or whether the owner exclusion clause operates “[t]o remove from coverage those who fall within the terms even though they are also within the definition of an insured.” Providence Washington Ins. Co. v. Alaska Pacific Assur., 603 P.2d 899, 900-901 (Ala.1979). In Providence, the court held that such an owner exclusion clause excepts from coverage those which would have fallen within the definition of “persons insured.” The court stated:

It is difficult to understand the function of the owner exclusion clause if it does not take away coverage from those who, except for its existence, would come within the definition of persons insured. If it only applied to those who were not covered anyway it would be superfluous. And the inclusionary and exclusionary clauses cannot be viewed as totally separate entities which thus create a logical conflict, for they both fall under the language at the beginning of the ‘Persons Insured’ paragraph: ‘Each of the following is an insured to the extent set forth below ... ’ (emphasis added). Thus a permissive user of a hired vehicle is an insured only to the extent set forth which is to the extent he is not its owner or an employee of its owner. Providence, 603 P.2d at 902.

While Wyoming has not yet ruled on this specific issue, we believe that Wyoming, like this court, would find persuasive the reasoning of the Providence case as well as those cases holding likewise and cited therein. See also Annot. 32 A.L.R.2d 572 (1953); and Later Case Service Annot. 32 A.L.R.2d 572 (1977, 1984 suppl.).

The basis for such an exclusion is that normally an owner of a vehicle carries his own liability insurance. 12A COUCH ON INSURANCE § 45:1023 (2d ed. 1981); Providence, 603 P.2d at 902.

Many of the cases holding to the contrary can be distinguished for various reasons.

However, we acknowledge where a plaintiff prevails against the insured lessee, for the negligence of an operator or owner, the lessee’s insurer is normally held liable, “[b]ut if the injured party brings suit solely against the owner of a hired vehicle, the lessee’s insurer assumes no responsibility either to the owner ... or to the injured party.” 12A COUCH ON INSURANCE § 45:1026 (2d ed. 1981).

This Court is aware that some statutory or regulatory provisions may affect the applicability of the owner exclusion. However, where, as here, the regulations do not require the motor carrier to insure the owner or operator of a hired or leased vehicle, the regulations do not effect the owner exclusion in the Reliance policy.

Under the Wyoming PSC regulations the motor carrier is required to carry at least a specified amount of insurance to:

... pay, within the amount of such policy of insurance, (or certificate of insurance in lieu thereof), or other securities or agreements, any final judgment recovered against such motor carriers for bodily injuries to or the death of any person resulting from the negligent operation, maintenance, or use of motor vehicles in transportation subject to said Act, or for loss of or damage to property of others, (emphasis added).

At the time of the lease and accident, W.S. § 37-8-101(a)(xiii) (1977) provided that the term “motor carrier” included the motor carrier and any lessee, trustee, receiver, or assigns. However, we fail to see how McCreery or P.K. Trucking fall within the statutory definition of “motor carrier” as a lessor and operator of the vehicle and, therefore, be insured under Tank’s policy.

It is the opinion of this Court that McCreery and P.K. Trucking were not insureds under the Reliance policy as coverage was excluded by the “owner exclusion clause.”

Plaintiff further contends that in the lease agreement between Tanks, Inc. and McCreery and P.K. Trucking, Tanks agreed to furnish insurance coverage for bodily injury. Regardless of the interpretation of that portion of the lease agreement, the insurance policy provides a very specific exclusion that the “[ijnsurance does not apply: (a) to liability assumed by the INSURED under any contract or agreement;” ...

Further, the fact that the Reliance policy listed the leased McCreery-P.K. vehicle on its schedule of insured vehicles does not likewise mean that the owner and operator thereof are automatically insured. It is apparent from the policy that these scheduled vehicles were insured against certain types of physical loss and damage, but nowhere does it appear that the scheduling and insuring of the vehicle provided insurance coverage for the operator or owner of the vehicle.

Additionally, the Court finds that the defendant, Reliance Insurance Co., did not breach its duty to defend and that the defendant acted in good faith in so refusing.

Based on the foregoing, the Court finds there is no dispute as to any material fact and the matter is ripe for summary judgment.

NOW, THEREFORE, IT IS

ORDERED that plaintiff's motion for summary judgment be, and the same is, hereby denied; it is

FURTHER ORDERED that defendant’s motion for summary judgment be, and the same is, hereby granted.


source: Caselaw Access Project

author: JOE J. FISHER, District Judge.

license: Public Domain

text:
    BOOKKEEPERS TAX SERVICES, INC. Chester R. Robinson and Frances Earline Robinson v. The NATIONAL CASH REGISTER COMPANY and Henderson Development Corporation.
    Civ. A. No. B-84-187-CA.
    United States District Court, E.D. Texas, Beaumont Division.
    Dec. 5, 1984.

      David B. Black, Black & Ewart, Houston, Tex., for plaintiffs.
    Brian S. Greig, Fulbright & Jaworski, Austin, Tex., for defendants.
   MEMORANDUM ORDER GRANTING MOTION TO DISMISS

JOE J. FISHER, District Judge.

Before the Court is Defendant NATIONAL CASH REGISTER’S (NCR) Motion to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(6), and to award attorney's fees against the Plaintiff. Also before the Court is Plaintiff’s Motion to remand this action to the state court where it was originally filed.

The present lawsuit was originally commenced in state district court in Angelina County, Texas. Shortly thereafter, NCR removed this cause to this Court, pursuant to 28 U.S.C. sec. 1441. NCR then moved to dismiss the case on the grounds that it is identical to an earlier case in this Court entitled Chester R. Robinson et ux v. NCR Company, No. B-81-648-CA (the prior suit). The prior suit was tried to a jury and a verdict was rendered for NCR; judgment was entered for NCR. NCR thus alleges that the present suit is barred by the doctrine of res judicata, and inter alia collateral estoppel.

The Plaintiffs have moved to remand this case to state court on the ground that since Defendant HENDERSON DEVELOPMENT COMPANY (Henderson) is a Texas corporation, and since Plaintiffs are Texas residents, there is no diversity in this action that would give rise to federal jurisdiction. Federal jurisdiction, of course, is a prerequisite for removal to Federal Court. Additionally, they argue that the instant lawsuit involves a separate and distinct cause of action that differentiates the case from the prior suit.

Both parties have submitted extensive briefs on the issues. Moreover, the Court has allowed the parties time to produce and examine the transcript in the prior suit, and to submit arguments based on that transcript. After a review of the pleadings, motions, and evidence in this cause, the Court is of the opinion that this action was properly removed to this Court and that it must now be dismissed on the grounds of res judicata. Furthermore, the Court believes this suit violates the principles of good-faith pleading, and will award attorney's fees to Defendant NCR.

I. THE PRIOR SUIT

The Plaintiffs in this action are an entity known as Bookkeepers Tax Service, Inc. (BTS) and two individuals: Chester Robinson and his wife, Frances Robinson (The Robinsons). The Robinsons are the same two individuals who were plaintiffs in the prior suit. The cause of action in this earlier suit was in essence a damage claim for personal and economic injuries allegedly sustained as a result of chemical poisoning. It happened like this: The Robinsons operated a bookkeeping business in the front portion of a building in Lufkin, Texas. In the back portion of the building, NCR stored machines and kept chemicals used to clean those machines. Fumes from those chemicals, the Robinsons claimed, circulated through the building, and caused them to suffer both physical and mental harm. Moreover, as their original complaint makes clear, the Robinsons claimed the fumes forced them to close down their business. After a jury trial in March, 1983, a verdict was entered for NCR and against the Robinsons, and a judgment was entered on that verdict. An appeal was taken to the Court of Appeals, but was dismissed when the Robinsons (whose original counsel had withdrawn) failed to order a transcript within the time limit. The Court thought the matter closed.

II. THE NEW SUIT: WAS IT PROPERLY REMOVED?

On February 8, 1984, approximately eleven months after the judgment in the first trial, this suit was filed in state court. Despite the fact that there was a non-diverse party, NCR removed the case to Federal Court. It is axiomatic that federal jurisdiction — here diversity jurisdiction— must exist before a case can be removed to Federal Court. It is also axiomatic, however, that when a party is added to a lawsuit simply to destroy that diversity, that the non-diverse defendant is only a “sham” party, and its presence will not prevent removal. See Tedder v. F.M. C. Corp., 590 F.2d 115 (5th Cir.1979). This is the situation here.

The Plaintiffs have based their claim against Henderson on the covenants in a 1970 lease between Henderson (as lessor) and NCR (as lessee) in which Henderson rented the building to NCR. The Robin-sons were not a party to this lease. Later, however, NCR did sublease the building to the Robinsons. The Plaintiffs in this lawsuit now allege that the warranties made by Henderson to NCR in the original lease should apply to them.

This is nonsense. Henderson has no relationship with Plaintiffs that would give rise to any duty on its behalf, either directly or indirectly. Under Texas law, there is no privity of contract between an original lessor and a sublessee. Zeidman v. Davis, 342 S.W.2d 555, 558 (Tex.1961). Nor can a sublessee recover from a lessor for breach of covenants in a lease. See e.g. International Dry Goods Co. v. Lyman Drug Co., 209 S.W. 268 (Tex.Civ.App.1919 no writ). Moreover, the terms of the sublease between NCR and the Plaintiffs expressly releases Henderson from any liability. It seems clear that the Plaintiffs could not recover from Henderson under Texas law. In that circumstance, Henderson is not a real party to this suit, and its joinder will not keep NCR from removing this suit. Tedder, supra at 116-17. The Plaintiffs’ motion to remand this case will be denied, and Henderson will be dismissed.

III. THE MOTION TO DISMISS ON RES JUDICATA GROUNDS

Since the Court has concluded that the case is properly in Federal Court, it can now address NCR’s motion to dismiss. NCR states that Plaintiffs cannot have stated a claim upon which relief can be granted because any such claim would be barred by res judicata. Res judicata bars the relitigation by the same parties of matters which were in issue and necessarily decided in an earlier action. See Southern Pacific Railroad Co. v. United States, 168 U.S. 1, 48-49, 18 S.Ct. 18, 27-28, 42 L.Ed. 355 (1897); Aerojet-General Corporation v. Askew, 511 F.2d 710 (5th Cir.1975). In determining the res judicata effect of a prior Federal Court judgment, Federal law applies. Aerojet, supra, at 715.

NCR bases its claim of res judicata on two elements. First, it states that the same parties are involved. On its face BTS appears to be a different party than the Plaintiffs in the prior suit. NCR claims, however, that this company is nothing more than the alter ego of the Robinsons. The Court agrees. Chester R. Robinson is the majority stockholder, controlling shareholder and president of BTS. Frances Robinson is secretary-treasurer of the company, serves on its board of directors, and was an original incorporator. Furthermore, in the original complaint in the prior lawsuit, the Robinsons even stated that they were the owner and operators of a bookkeeping business known as “Bookkeeper’s Tax Service.” Obviously the Robinsons have considered their interests as intertwined and identical with those of BTS. Under the Federal law of res judicata, a party may be bound by a prior judgment (even though not a party in a prior suit) if one of the prior parties was so closely aligned with his interests as to be his “virtual representative.” Aerojet, supra, 511 F.2d at 719. This is the situation here. The Robinsons were the “virtual representatives” of BTS in the prior suit. The Robinsons and BTS are, in effect, the same party.

NCR also states another element of res judicata is present. It states that the cause of action asserted in the prior suit and in the instant suit are one and the same. The instant suit was filed under the Texas Deceptive Trade Practices Act. The cause of action itself is based on the alleged breach of the sublease agreement by NCR. This breach, in turn, is said to have resulted from NCR’s failure to comply with a warranty in the lease that provided that NCR would comply with “all laws ... governing the premises.” In the alternative the Plaintiffs claimed NCR breached the lease by failing to deliver the premises in promised form. In sum, the Plaintiffs allege NCR breached its lease by allowing poisoned substances to infect the building. As a result, the Plaintiffs claim, BTS was forced to close, and the Robinsons suffered personal injuries and were rendered disabled to run BTS or any other business. The relief requested is $4 million dollars.

In the prior suit, an examination of the complaint reveals that the cause of action was based on negligence, nuisance, and a breach of a warranty of habitability. The breach of warranty claim was based on an allegation that NCR should have provided the Plaintiffs with a building “suitable for its intended use” and that NCR should have used its property so “as not to injure another or infringe his rights to ownership, possession, use and enjoyment.” In sum, as above, the breach of warranty claim in the prior suit essentially said it was a breach to allow poisoned substances to infect the building. As a result, the Robin-sons claimed personal injuries, loss of their business, and loss of profits from that business. Curiously enough, the relief requested in the prior suit was the same as in the instant suit: $4 million dollars.

Little more needs to be said. It is obvious that the substance of the claims in both suits are the same, and it is substance, not technicalities, that governs the application of res judicata. In Astron Industrial Associates Inc. v. Chrysler Motor Corp., 405 F.2d 958 (5th Cir.1968), the court provided a test for determining whether a suit was barred by the effects of a prior suit:

Is the same right infringed by the same wrong? Would a different judgment obtained in the second action impair rights under the final judgment? Would the same evidence sustain both judgments?

Id. at 641. Under any of these questions, it is clear that the substance of the suits, if not the form, are the same. The Plaintiffs argue that negligence was the only issue actually argued at the trial of the prior suit. The fact remains, however, that because of their nature, the breach of lease and warranty claims were part and parcel of the overall claim actually litigated.

Moreover, even if a particular issue or portion of an issue was not decided in the prior suit, the res judicata effect would be the same. Res judicata will bar “all claims that were or could have been advanced in support of the cause of action on the occasion of its former adjudication ... not merely those that were adjudicated.” Nilsen v. City of Moss Point, Miss., 701 F.2d 556, 560 (5th Cir.1983). Obviously, the breach claims here could have been brought in the earlier suit.

The Robinsons had their day in Court; and they lost. They could have prosecuted an appeal of the prior suit, but they did not. They are not entitled to bring another suit by a mere rewording of claims and a transparent reshuffling of parties.

IV. ATTORNEY’S FEES

This suit was instituted by a pleading filed by Plaintiffs’ counsel. It appears to the Court that this counsel was fully aware of the previous Federal Court action. Counsel for NCR made several attempts to inform Plaintiffs’ counsel of the substance of the prior suit. The Plaintiffs’ counsel was given an opportunity to withdraw the suit. He did not. NCR has thus moved the Court to award attorneys’ fees as sanctions pursuant to Fed.Rule Civ.P. 11. Rule 11 requires that an attorney’s signature on a pleading is that attorney’s guarantee that he has made a reasonable inquiry into a suit and believes that it is well-grounded in fact and is warranted by existing law or a good faith argument for an extension of that law. This suit, the Court believes, does not measure up to those standards. While inadvertent violations of Rule 11 are not grounds for sanctions, see Textor v. Bd. of Regents of North Ill. University, 87 F.R.D. 751 (N.D.Ill.1980), it is obvious that Plaintiffs’ counsel knew and was warned about the prior suit.

Therefore, pursuant to Fed.Rule Civ.P. 11, this Court imposes sanctions upon Plaintiffs’ counsel in the form of attorneys’ fees to be awarded Defendant NCR for its reasonable expenses incurred in this action. On the basis of Defendant’s counsel’s affidavit, the Court finds the sum of $4,246.25 to be a reasonable award for work through May 15, 1984. Any further claim for attorney’s fees in this action shall be filed with the Court within twenty (20) days of this order. Plaintiffs Chester R. Robinson and Frances Earline Robinson, and Plaintiffs’ counsel, Roy K. Ewart and David Black are here adjudged jointly and severally liable to Defendant NCR for these attorneys’ fees. All costs of this action will be assessed against the Plaintiffs.

V. CONCLUSION

In summary, it is ORDERED, ADJUDGED AND DECREED that Plaintiffs’ Motion to Remand this cause is DENIED. It is further ORDERED that Defendants Henderson Development Corporation and National Cash Register Company, Inc. are hereby DISMISSED pursuant to Fed.Rule Civ.P. 12(b)(6).

It is further ORDERED, ADJUDGED AND DECREED that pursuant to the sanetions imposed by this Court pursuant to Fed.Rule Civ.P. 11, judgment is entered for defendant NATIONAL CASH REGISTER COMPANY, INC. and against Plaintiffs, CHESTER AND FRANCES ROBINSON and Plaintiffs’ counsel, ROY K. EWART AND DAVID BLACK in the amount of Four Thousand Two Hundred Forty-six and 25/100 ($4,246.25) Dollars.

It is ORDERED that Defendant NATIONAL CASH REGISTER COMPANY, INC. file any further claim for attorney’s fees in this cause within twenty (20) days of the entry of this order.

      . This sublease reads in pertinent part:
      “Lessor (Henderson) and Sublessor (NCR) shall not be liable for any damage to property or any injury to persons, sustained by Sublessee (Bookkeepers/Robinsons), its employees or others, caused by conditions or activities on the premises or the ways adjacent thereto. Sublessee shall hold harmless and indemnify Lessor and Sublessee against all claims and costs arising therefrom____"

      . In the alternative, it is obvious that under Texas law the Robinsons would be in privity with BTS. See Benson v. Wanda Petroleum Co., 468 S.W.2d 361 (Tex.1971). As such, BTS would be bound by the determination of an issue in the first suit. Hardy v. Fleming, 553 S.W.2d 790 (Tex.Civ.App. El Paso, 1977, writ ref'd n.r.e.)


author: RAYMOND J. BRODERICK, District Judge.

text:
    John NANGLE v. Margaret HECKLER, Secretary of Health and Human Services.
    Civ. A. No. 83-5166.
    United States District Court, E.D. Pennsylvania.
    Dec. 5, 1984.
    Mark Kaufman, Delaware County Legal Assistance, Media, Pa., for plaintiff.
    Edward S.G. Dennis, Jr., U.S. Atty., Serena H. Dobson, Asst. U.S. Atty., Philadelphia, Pa., for defendant.
   MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

The claimant, John Nangle, has appealed from a determination of the Administrative Law Judge (AU) denying his application for Supplemental Security Income disability benefits. The parties filed cross-motions for summary judgment. United States Magistrate Peter B. Scuderi has issued a report with a recommendation that the parties’ motions for summary judgment be denied and the matter remanded in order to allow the AU to apply the proper legal standard in determining whether the claimant’s alcoholism is disabling. The claimant has filed a partial objection to the Magistrate’s Report and Recommendation. The claimant agrees with the substance of the Magistrate’s report, but urges that the record in this case compels an outright reversal of the AU’s decision because (1) substantial evidence indicates that the claimant is disabled, and (2) further proceedings before the AU would result only in further delay of the receipt of benefits. The Secretary has filed no objections to the Magistrate’s Report and Recommendation, nor has she filed any response to the claimant’s partial objection. The Magistrate’s report was issued prior to the Third Circuit’s decision in Podedworny v. Harris, 745 F.2d 210 at 221-23 (3d Cir.1984), which provides some guidance as to when a district court should exercise its discretion to remand a social security case for a rehearing or reverse the Secretary’s decision and direct that benefits be awarded. For the reasons which follow this Court has determined that the decision of the Secretary will be reversed because another hearing before the AU could not produce any substantial evidence to support a finding that the claimant is not disabled.

The essential facts of this case are ably set forth in Magistrate Scuderi’s report. The claimant is a fifty-two year old man with a work history of mostly janitorial-type positions of short duration. The claimant submitted essentially uncontradicted medical evidence to support his claims of chronic alcoholism with many acute alcoholic episodes requiring hospitalization; alcohol-related grand mal epileptic seizures; alcohol-related depressive psychoneurosis; chronic duodenal ulcer requiring surgery in the past; chronic gastritis and enterocolitis; and degenerative disc disease of the lumbro-sacral spine with sciatic nerve involvement. In addition, there is evidence of impaired vision of the right eye, cirrhosis of the liver, and kidney cysts. At the time of the hearing before the AU (October 1, 1982) the claimant also was being treated for a broken jaw sustained in a mugging. The AU found that none of the claimant’s impairments had lasted or could be expected to last twelve continuous months; that none of the claimant’s impairments was severe; and that the claimant was not prevented from engaging in basic work activities. The AU rejected all of the claimant’s testimony regarding his inability to work as not credible, citing, inter alia, claimant’s “neat and clean” appearance, “inconsistencies” in the claimant’s testimony, and the AU’s disbelief of claimant’s remark that on occasion bartenders would provide him free drinks when he had no money. The AU characterized the claimant’s alcoholism as “episodic”, and stated that there was no evidence of significant end-organ damage.

As Magistrate Scuderi reported, the AU’s characterization of the claimant’s alcoholism as “episodic”, “not severe”, and “not continuous for twelve months” is simply incredible:

A review of the record reveals that the [claimant] began drinking at the age of seventeen while in the army. He was given a dishonorable discharge from the military due to his repeated intoxications. By the age of twenty-nine he was unable to control his drinking. The administrative record contains extensive documentation regarding [the claimant’s] continued [unsuccessful] attempts at treating his alcoholism. There have been innumerable [hospitalizations], detoxifications, and rehabilitations. Every doctor who has examined [the claimant] has denominated his thirty-one year drinking problem as “chronic” ...”

Magistrate’s Report at 7-8 (citations to Record omitted). The Magistrate correctly determined that the AU erred in considering the evidence of claimant’s alcoholism. First, the AU failed to evaluate claimant’s alcoholism in conjunction with his other impairments. McShea v. Schweiker, 700 F.2d 117, 118 (3d Cir.1983). Second, the AU impliedly based his finding that the claimant’s alcoholism was “not severe” on a finding of no “end-organ” damage. This finding not only is factually inaccurate, given the evidence of liver damage and chronic ulcer history, but the Third Circuit has stated that “[njothing in the Social Security Act permits rejection of a disability claim simply because the claimant has not experienced significant end organ damage.” McShea, 700 F.2d at 119, quoting Hicks v. Califano, 600 F.2d 1048, 1051 (4th Cir.1979). See Andrews v. Heckler, 573 F.Supp. 1089, 1092 (E.D.Pa.1983). Third, the AU failed to apply the test for determining whether an alcoholic is disabled, which is “whether the claimant is addicted to alcohol and, as a consequence, has lost the ability to control its use.” McShea, 700 F.2d at 119, quoting Hicks v. Califano, 600 F.2d at 1051.

The Magistrate also correctly pointed out that there was nothing inconsistent in the claimant’s testimony, and that the AU’s credibility findings were unsupported by the evidence. Finally, the AU also erred in compartmentalizing his analysis of the claimant’s various other impairments, rather than evaluating “the claimant’s overall condition” and reviewing the claimant’s numerous impairments in combination. Kent v. Schweiker, 710 F.2d 110, 114 (3d Cir.1983); see 20 C.F.R. § 404.1526(a).

The issue raised by the claimant’s objection to the Magistrate’s report is whether, on this record, any purpose would be served by remanding the matter to the AU for a rehearing. In Podedworny v. Harris, 745 F.2d at 221, the Third Circuit stated that a district court, after reviewing the decision of the Secretary, may in its discretion “affirm, modify, or reverse the Secretary's decision with or without a remand to the Secretary for a rehearing.” The Court advised that the decision to direct the Secretary to award benefits should be made “when the administrative record of the case has been fully developed and when substantial evidence on the record as a whole indicates that the claimant is disabled and entitled to benefits. When faced with such cases, it is unreasonable for a court to give the AU another opportunity to consider new evidence ... because the administrative proceeding would result only in further delay in the receipt of benefits.” Podedworny, 745 F.2d at 221 (citations omitted). The Court also noted that “[i]t is apparent that direct reversal of the Secretary is no longer an uncommon judicial remedy.” Id. at 222 n. 11.

In the present case this Court has concluded that it would be inappropriate to remand for a rehearing because substantial evidence on the record compels a finding of disability. The uncontradicted medical evidence of the claimant’s impairments, considered in conjunction with his chronic alcoholism, clearly shows that the claimant is disabled. A review of the thirty-one year history of this claimant’s alcoholism can lead to only one conclusion: that the claimant has “lost the ability to voluntarily control his drinking, thereby preventing his substantial gainful employment.” Andrews v. Heckler, 573 F.Supp. at 1093. The only evidence on the record which could provide any support for a contrary finding is the claimant’s statement at the hearing that he hadn’t had a drink in several months (R. 54). The AU did not refer to this statement in his findings, and it is assumed that (like all the rest of claimant’s testimony) the AU didn’t believe it. The Third Circuit has cautioned that a claimant’s insistence that he has curtailed the use of intoxicants is “a common accompaniment of the disease”, and often “represents the rationalization of a sick individual who does not realize the extent of his illness.” McShea, 700 F.2d at 119, quoting Adams v. Weinberger, 548 F.2d 239, 245 (8th Cir.1977). In this case the' records of the claimant’s numerous detoxifications and hospitalizations are replete with the claimant’s reported claims of sobriety or cure, all of which unfortunately and invariably have proven to be false.

For the reasons set forth above, this Court has determined that substantial evidence on the record indicates that the claimant is disabled and entitled to benefits. Accordingly this Court will reverse the decision of the ALJ and remand for a calculation of benefits beginning March 1, 1980. In order to provide some guidance to the Secretary for the distribution of claimant’s benefits, the Court notes that the regulations specifically provide for the treatment of alcoholics and for the withholding of benefits if treatment is refused. See 20 C.F.R. §§ 416.1720, 416.1725. The regulations also provide that if a beneficiary is not able to manage his benefits in his own best interest, payments may be made to a representative payee on his behalf. See 20 C.F.R. §§ 416.601-621; McShea, 700 F.2d at 119-20. The Secretary should consider these regulations in determining the most appropriate distribution of the claimant’s benefits.

ORDER

AND NOW, this 5th day of December, 1984, upon consideration of the Report and Recommendation of United States Magistrate Peter B. Scuderi, objections having been filed by the claimant and this Court having made a de novo determination of those portions of the report to which objection was made pursuant to Local Rule 7(IV)(b), for the reasons set forth in this Court’s Memorandum of December 5th, 1984,

IT IS HEREBY ORDERED:

1. The Report and Recommendation of the Magistrate is APPROVED and ADOPTED as modified by this Court’s Memorandum of December 5th, 1984.

2. The motion of the defendant Secretary of Health and Human Services for summary judgment is DENIED.

3. The motion of the plaintiff, John Nangle, for summary judgment is GRANTED.

4. The decision of the Secretary of Health and Human Services is REVERSED, and judgment is ENTERED in favor of the plaintiff, John Nangle, and against the defendant Secretary of Health and Human Services.

5. This matter is REMANDED to the Secretary for a calculation of benefits beginning March 1, 1980.


author: VERON, District Judge.

text:
    Irene Stelly, wife of/and Gorchin STELLY v. UNITED STATES, United States Department of the Army, and United States Army Corp of Engineers.
    Civ. A. No. 84-0086.
    United States District Court, W.D. Louisiana, Lake Charles Division.
    Dec. 5, 1984.

      Warren J. Pickle, Law Office of Joseph W. Nelkin, New Orleans, La., for plaintiff.
    John R. Halliburton, Asst. U.S. Atty., Shreveport, La., for defendants.
   RULING

VERON, District Judge.

Plaintiffs Irene and Gorchin Stelly allege that in 1980 and 1981 the United States Army Corps of Engineers negligently operated the Vermilion Lock, which is part of ■the Gulf Intercoastal Waterway, and the Scooner Bay and Catfish Point Control Structures, which are part of the Mermen-tau River and Tributaries Project, causing salt water to infiltrate various fresh-water canals. When the Stellys drew water from them to irrigate their crops, its high salinity allegedly stunted crop growth, killed crawfish in production and ruined grazing land. They seek damages of $750,000 under the Federal Tort Claims Act (“FTCA”), 28 U.S.C. §§ 1346(b) and 2671 et seq. This matter comes before the Court on the motion to dismiss named defendants Department of the Army and the Army Corps of Engineers, and on Defendant United States’ motion for summary judgment.

We grant the motion to dismiss the Army and its Corps of Engineers as defendants because the United States is the only proper party defendant in FTCA suits. 28 U.S.C. § 2679(a); see Wollman v. Gross, 637 F.2d 544, 547 (8th Cir.1980) (“The FTCA waives the sovereignty of the United States, and the courts in construing the statute of limitations, which is a condition of that waiver, should not extend the waiver beyond that which Congress intended”). Our decision to grant the United States’ motion for summary judgment is likewise dictated by controlling authority.

Section 3 of the Flood Control Act of 1928, 33 U.S.C. § 702c (1976), provides that “no liability of any kind shall attach to or rest upon the United States for any damage from or by floods or flood waters ____” This provision is the linchpin of the United States’ motion, but the Stellys argue that it cannot cloak the Government with immunity because their claim is based on the Government’s ruination of their fresh-water supply, not on flood damage. Judge Reavley, writing for the Fifth Circuit, recently admitted that the Circuit’s prior decisions giving the Government absolute immunity under section 702c were “unwarranted” in light of its legislative history. James v. United States, 740 F.2d 365, 370 (5th Cir.1984). He also insisted that:

[This panel] recognize[s] the harshness ... that may result from the ... precedent of absolute immunity [under section 702c]. If, for example, the Corps of Engineers in charge of a flood control project sends out a boat to replace the buoys warning skiers of the water current and, in the process, runs over a swimmer, the government may have immunity.

Nevertheless, deferring to the principle of stare decisis, the Fifth Circuit declined to remove the precedential impediments to plaintiffs’ recovery and held:

If the government’s negligence is related to a flood control project, the immunity of the government [under section 702c] appears to be absolute.
+ * X * * *
Liability of the United States for damages due to operation of a flood control project ... does not depend upon a change in the stage ... of the water____

Id., at 369-70. Our only inquiry on this motion, therefore, is whether the Government’s alleged negligence was related to a federal flood-control project. If so, section 702c bars liability.

We answer that question affirmatively. To answer negatively, we would have to find that each of the projects the Stellys claim were operated negligently is “wholly unrelated” to any Congressional act earmarking federal funds for flood control. James, supra, at 369. Both the Gulf Inter-coastal Waterway and the Mermentau River and Tributaries Project, the allegedly offending projects, were authorized by legislation devoted at least in part to flood control. See S.Doc. No. 231, 79th Cong., 2d Sess. (1946) (Intercoastal Waterway); H.R. Doc. No. 238, 68th Cong., 1st Sess. (1925) (Mermentau Basin Project). Accordingly, we grant the United States’ motion for summary judgment.


author: GESELL, District Judge.

text:
    Geraldine WILLACY, Plaintiff, v. Lester Leroy LEWIS, Jr., et al., Defendants.
    Civ. A. No. 84-0652.
    United States District Court, District of Columbia.
    June 20, 1984.

      H.E. Sullivan, George Harper, George A. Lahey, Hyattsville, Md., for plaintiff.
    Joseph Montedonico, Washington, D.C., for defendants Lester Leroy Lewis, Jr., M.D. and Washington Hospital Center.
    • Robert E. Scott, Jr., Washington, D.C., for defendant Lundberg.
    Richard A. Stanley, Asst. U.S. Atty., Washington, D.C., for defendant Shelby L. Lewis, M.D.
    Linda Lazarus, Asst. Corp. Counsel, Washington, D.C., for defendant District of Columbia.
   MEMORANDUM

GESELL, District Judge.

Motions now before the Court present the question whether a private physician who detains an individual and makes application for that person’s admission to a hospital pursuant to D.C.Code § 21-521, which authorizes such action if the individual’s, physician has reason to believe the patient is mentally ill, thereby acts “under color of state law” within the meaning of 42 U.S.C. § 1983.

Plaintiff alleges that she was detained and involuntarily committed to a mental hospital based on a misdiagnosis that she was mentally ill. The ten counts of her complaint include claims under the common law, 42 U.S.C. § 1981, and the Fourth Amendment. Defendants, Dr. Leroy Lewis (hereinafter Dr. Lewis), the Washington Hospital Center, and Dr. Ante Lundberg, have moved to dismiss Counts Three, Four and Six of the complaint, which each allege violations of § 1981. Plaintiff has opposed these motions.

In considering a motion to dismiss the Court must, of course, accept the allegations of the complaint as true. The complaint states, in pertinent part, that on the evening of February 4-5, 1983, plaintiff was driven by her employer to the emer- ’ gency room of the Washington Hospital: Center, where she sought medical care from a Dr. Smith. For some reason not' stated, plaintiff was instead seen by Dr. Lewis, who told plaintiff she would die if' she did not receive medication he sought to prescribe. Plaintiff nevertheless refused treatment, whereupon Dr. Lewis “threatened to detain Plaintiff for an extended period of time” and “forbade Plaintiff from leaving.” After consulting with Dr. Lundberg by telephone, Dr. Lewis then called the police and “caused” them to arrest or detain plaintiff. Dr. Lewis also executed an application for plaintiff’s emergency hospitalization, and she was taken by the police to St. Elizabeth’s Hospital, a federal mental hospital located in the District of Columbia, where she was involuntarily committed. Plaintiff was later released upon a finding by that hospital’s staff that she was not mentally ill.

Defendants argue that these allegations fail to state a claim under § 1983 because the requisite “state action” has not been alleged. Plaintiff responds that state action is present because defendants detained her and executed an application for her admission to St. Elizabeth’s pursuant to D.C.Code § 21-521, which plaintiff argues “has authorized physicians to perform what is clearly a state function.” Section 21-521 provides:

An accredited officer or agent of the Department of Public Health [Department of Human Services] of the District of Columbia, or an officer authorized to make arrests in the District of Columbia, or a physician of the person in question, who has reason to believe that a person is mentally ill and, because of the illness, is likely to injure himself or others if he is not immediately detained may, without a warrant, take the person into custody, transport him to a public or private hospital, and make application for his admission thereto for purposes of emergency observation and diagnosis. The application shall reveal the circumstances under which the person was taken into custody and the reasons therefor.

State action exists where “there is a sufficiently close nexus between the state and the challenged action ... so that the [challenged action] may be fairly treated as that of the state itself.” Jackson v. Metropolitan Edison Co., 419 U.S. 345, 351, 95 S.Ct. 449, 453, 42 L.Ed.2d 477 (1974). In Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 98 S.Ct. 1729, 56 L.Ed.2d 185 (1978), the Supreme Court considered under what circumstances the actions of a private citizen can be deemed “state action” under § 1983. State action is present “when the State, by its law, has compelled the act.” 436 U.S. at 164, 98 S.Ct. at 1737, quoting Adickes v. S.H. Kress & Co., 398 U.S. 144, 170, 90 S.Ct. 1598, 1615, 26 L.Ed.2d 142 (1970). State action may also be found where private individuals are given authority under state law to perform “public” functions, that is, those functions “traditionally exclusively reserved to the State.” 436 U.S. at 157, 98 S.Ct. at 1734, quoting Jackson, 419 U.S. at 352, 95 S.Ct. at 454.

The complaint alleges two separate pertinent acts on the part of Dr. Lewis: that he took plaintiff into custody, and that he executed an application for her involuntary admission to St. Elizabeth’s. Dr. Lundberg is alleged to have “ordered and/or advised” Dr. Lewis to make application for plaintiff’s commitment, an action which Dr. Lundberg “knew, or should have known, ... would result in the false imprisonment and/or involuntary commitment of Plaintiff.” In essence Dr. Lundberg is thus charged with the two actions taken by Dr. Lewis. Defendant Washington Hospital Center is likewise charged with the actions-of Dr. Lewis under the doctrine of respondeat superior.

It is clear that Dr. Lewis was not “compelled” by the District of Columbia to perform the acts alleged. The question, therefore, is whether in allegedly detaining plaintiff and making application for her involuntary admission to a hospital under D.C.Code § 21-521 he performed a function “traditionally exclusively reserved to the State.”

A number of federal courts have addressed the issue of whether state action exists when a physician acts pursuant to state statutes similar to D.C.Code § 21-521. Those cases which have involved the mere execution of an application requesting that a person be admitted have uniformly held that no state action is involved. The rationale behind these cases is that the “power” to, in essence, simply recommend that a person be involuntarily committed has traditionally not been reserved to state officials but has been made available to the individual’s physician, family, and, under some statutes, members of the general public.

District of Columbia law is similar in this respect. Under D.C.Code § 21-541, an individual’s parents, spouse, legal guardian or physician, as well as state officials, may petition for that person’s involuntary admission based on mental illness. Such a petition must be made to the Commission on Mental Health, and the individual is entitled to a jury trial in Superior Court on the issue of whether he is mentally ill before being committed. Clearly such a petition, which merely invokes the legal process, does not constitute state action.

The execution of an application by a physician under § 21-521 is no different in this respect. The individual can be admitted only by the receiving hospital itself and only after being examined by “a psychiatrist on duty at the hospital.” A court order must be sought before the individual can be detained in excess of 48 hours. §§ 21-522, 523.

Thus, the consequence of a certificate is nothing more than an examination, albeit involuntary. The power of a certificate is very limited. It does not commit a person for treatment. It merely subjects a person to any emergency care that may be required and an examination by the state to confirm or reject the beliefs stated in the certificate____ Basically, the certificate simply initiates the state’s involvement and is not of and in itself the point of origin of state action.

Watkins, 529 F.Supp. at 329. The Court concludes, therefore, that in executing an application for plaintiff’s involuntary commitment no state action is involved.

A more difficult question is presented by the provision in § 21-521 which allows a physician to take a person into custody for the purpose of transporting him or her to a hospital for admission. A series of cases has held that under certain circumstances the exercise of police powers by private individuals pursuant to an authorizing statute does not constitute state action. Flagg Bros, and a number of lower court cases found no state action where creditors seized property or disposed of property to satisfy a lien where such seizure and/or disposal was specifically authorized by statute. “This system of rights and remedies [governing private disposal of property subject to a warehouseman’s lien], recognizing the traditional place of private arrangements in ordering relationships in the commercial world, can hardly be said to have delegated to Flagg Brothers an exclusive prerogative of the sovereign.” 436 U.S. at 160, 98 S.Ct. at 1735 [footnotes omitted].

Closer to the present case, the majority of courts which have considered the issue have concluded that no state action is involved where shopkeepers act pursuant to statutes which allow them to detain and in some instances to search suspected shoplifters. Several factors, however, suggest that the present circumstances may be distinguishable. First, both Flagg Bros, and the cases involving detention of shoplifters are grounded on the notion that the state has simply allowed private individuals to exercise traditional “self-help” measures to protect their own property.

A merchant’s detention of persons suspected of stealing store property simply is not an action exclusively associated with the state. Experience teaches that the prime responsibility for protection of personal property remains with the individual. A storekeeper’s central motivation in detaining a person whom he believes to be in the act of stealing his property is self-protection, not altruism. Such action cannot logically be attributed to the state.

White v. Scrivner Corp., 594 F.2d at 142 [citations omitted]. A physician who detains an individual “likely to injure himself or others” pursuant to § 21-521, by contrast, is not simply availing himself of a “self-help” remedy with the acquiescence of the state; instead, the function he performs is more akin to the state’s power and duty to protect against threats to the general public and to care for those unable to care for themselves.

A second possible distinguishing factor is also present. The role played by the police as alleged in the complaint raises the question whether defendants acted “in concert” with state officials or as part of a preconceived plan involving state officials. The bare allegations of the complaint, however, are not sufficient to address this question with any certainty.

Finally, plaintiffs allegation that Dr. Lewis “was not, and never had been, the physician Plaintiff selected or went to for help,” Complaint ¶ 7, raises serious questions concerning whether Dr. Lewis was “a physician of the person in question” within the meaning of § 21-521. See Williams v. Meredith, 407 A.2d 569 (D.C.App.1979). What effect this has on plaintiffs cause of action under § 1983 is also unclear.

For these reasons, therefore, it is difficult to determine at this stage whether state action might be present, and the Court is reluctant to attempt such a determination prior to development of a fuller factual record. Accordingly, defendants’ motions to dismiss Counts Three, Four and Six are each denied.

      . 42 U.S.C. § 1983 provides:
      Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia.

      . Byrne v. Kysar, 347 F.2d 734, 736 (7th Cir.1965), cert. denied, 383 U.S. 913, 86 S.Ct. 902, 15 L.Ed.2d 668 (1966); Landry v. Odom, 559 F.Supp. 514, 517-18 (E.D.La.1983); Watkins v. Roche, 529 F.Supp. 327, 330 (S.D.Ga.1981); Green v. Truman, 459 F.Supp. 342, 344 (D.Mass.1978); Orlando v. Wizel, 443 F.Supp. 744, 751 (W.D.Ark.1978).

      . That lesser procedural protections are afforded before commitment initiated with an application executed by a physician than a petition by a family member may be justified by the greater likelihood that the physician's application is accurate. Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976).

      . White v. Scrivner Corp., 594 F.2d 140, 143 (5th Cir.1979); Gipson v. Supermarkets General Corp., 564 F.Supp. 50, 55 (D.N.J.1983); Klimzak v. City of Chicago, 539 F.Supp. 221, 223 (N.D.Ill.1982). But see El Fundi v. Deroche, 625 F.2d 195, 196 (8th Cir.1980) (finding state action).


author: WARREN, District Judge.

text:
    KELLEY COMPANY, INC., a Wisconsin corporation, Plaintiff, v. The CENTRAL NATIONAL INSURANCE COMPANY OF OMAHA, a Nebraska corporation, Defendant.
    No. 84-C-0664.
    United States District Court, E.D. Wisconsin.
    Dec. 5, 1984.
    Matthew J. Flynn, Quarles & Brady, Milwaukee, Wis., for plaintiff.
    Ned J. Czajkowski, Kluwin, Dunphy & Hankin, Milwaukee, Wis., for defendant.
   ORDER

WARREN, District Judge.

The defendant, The Central National Insurance Company of Omaha (hereafter “Central National”), has filed a motion for change of venue seeking to have this action transferred to the United States District Court for the District of Minnesota. Based upon its examination of those facts that are not in dispute, the Court will deny this motion.

The plaintiff, Kelley Company, Inc. (hereafter “Kelley”), is a Wisconsin corporation with its principal place of business in said state. Kelley manufactures mechanical and hydraulic dockboards, incinerators, and other industrial products. Central National is a Nebraska corporation with its principal place of business there. The insurance it provides is principally “excess” insurance which covers liability for damages over and above that covered by the primary layer of insurance.

In April of 1977, Central National issued an excess liability policy to Kelley under which Kelley was required to maintain $500,000.00 of primary coverage. This primary coverage was obtained from American Home Assurance Company (hereafter “American”). The Central National policy provided for coverage of $1,000,000.00 over and above the $500,000.00 primary coverage, and was subject to an additional $250,-000.00 deductible for which Kelley was responsible.

On December 5, 1977, Albert J. Bilotta, Jr. was injured in an industrial accident in Minnesota which allegedly involved one of Kelley’s products. Bilotta brought an action against Kelley in the Dakota County (Minnesota) District Court, and a jury originally awarded him 2.3 million dollars, of which Kelley was assigned 50% responsibility. This judgment subsequently was overturned by the Minnesota Supreme Court, and a new trial was ordered on the sole issue of liability.

Prior to the second trial, a settlement was reached between Bilotta and American under which American would pay Bilotta $486,942. In return, Bilotta agreed to satisfy the first $750,000 of any judgment against Kelley in a future trial.

Thereafter, Central National entered into an agreement with Bilotta to pay him a sum of money in excess of $250,000 in return for discharging Kelley and Central National from all further liability over $750,000. Central National then demanded payment of the $250,000 deductible by Kelley, and the latter refused.

Kelley now seeks a declaratory judgment from this Court that it is not responsible under the insurance contract between it and Central National for the $250,000 deductible or any amount of money. Central National contends that this case should be transferred to the District Court for the District of Minnesota, pursuant to 28 U.S.C. § 1404(a). Kelley opposes the transfer, and the Court agrees that the case should remain here.

Section 1404(a) provides as follows: For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.

As derived from the statute, there are three considerations which must be made in determining whether a change of venue is appropriate: (1) whether the action could have been brought in the alternative forum; (2) whether the alternative forum would be more convenient for the parties and witnesses; and (3) whether the transfer would be in the interest of justice. The first consideration requires a more academic analysis, while the second and third considerations invoke the broad discretion of the Court. Adler v. Avis Rent-A-Car System, Inc., 391 F.Supp. 466, 469 (E.D.Wis.1975). The Court will address each consideration seriatim.

A. Whether This Action Could Have Been Brought In The U.S. District Court For The District Of Minnesota.

Despite plaintiff’s protestations to the contrary, the Court believes that either party could have brought this action in the United States District Court for the District of Minnesota. While neither of the parties is a Minnesota-based corporation, both of them have sufficient “minimum contacts” with Minnesota such that a court in that state would have in personam jurisdiction over them. International Shoe Company v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).

The affidavit of Ned J. Czajkowski establishes that Central National does business in Minnesota, and this testimony is not contested. It is apparent that Kelley also does business in Minnesota, as it admits that it “manufactures dockboards and sells them throughout the country.” (Plaintiffs Brief In Opposition To Motion For Change Of Venue, p. 6). In fact, one of Kelley’s products was allegedly the cause of Bilotta’s injury in Minnesota.

Since Kelley is doing business in Minnesota, the level of contact that it has with Minnesota is significantly higher than the level of contact between the automobile dealership and the State of Oklahoma in the case cited by Kelley in support of its position, World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Kelley sells its products in Minnesota, while the dealership in World-Wide Volkswagen had merely sold a car which was transported through Oklahoma by the buyer..

In Nordberg Division of Rex Chainbelt, Inc. v. Hudson Engineering Corp., 361 F.Supp. 903, 906 (E.D.Wis.1973), Judge Reynolds stated that:

“Even without solicitation, one who invades the markets of the forum state to sell his products has sufficiently penetrated the state from an economic perspective to subject himself to its jurisdiction.”

This Court is satisfied that Kelley has “sufficiently penetrated” Minnesota “to subject himself to its jurisdiction.” Accordingly, this action could have been brought in the U.S. District Court for the District of Minnesota, and the first criterion for granting a change of venue is met.

B. Convenience Of The Parties And Witnesses.

Central National has submitted a list of potential witnesses that it may call to testify regarding Kelley’s alleged breach of contract. All of these witnesses are Minnesota residents. On- the other hand, Kelley has named four individuals that it expects will testify about the negotiations between Kelley and Central National that culminated in the issuance of the excess insurance policy. Presumably, these individuals are residents of Wisconsin. From the statements in Kelley’s brief, it is at least clear that they are not residents of Minnesota.

Kelley argues that Central National’s list of witnesses is too speculative to be given much weight in the balancing process. Moreover, Kelley argues that none of these prospective witnesses has any knowledge of the underlying insurance contract, and so their testimony is not likely to be material to the issues in the case.

Kelley’s objections concerning Central National’s prospective witnesses must be rejected. This Court has previously stated that, when a motion for change of venue comes at an early stage of the proceedings, it is not fatal to the movant’s cause that the witnesses cannot be specified with certainty. Adler, 391 F.Supp. at 469. It is too early in the case to determine what the issues in the case will be, and what testimony will be relevant. Therefore, Central National cannot be expected to name, with certainty, what witnesses it will call at the trial.

Clearly, both parties have named witnesses who would be inconvenienced if the trial were held in the opposing party’s preferred forum. Although uncertainty about which witnesses will testify is not a basis for completely discontinuing the “witness inconvenience factor,” the existence of this uncertainty renders it inappropriate for the Court to simply count the number of named prospective witnesses in Minnesota and Wisconsin and opt for the forum where the majority reside. By the time the trial is held, these numbers could change. The only determination that can be made at this point with any degree of certainty is that there will be witnesses from both states who will be called upon to testify, and that witnesses will be inconvenienced whether the trial is held in Wisconsin or Minnesota.

With regard to the convenience of the parties, neither corporation has its main office in Minnesota, which would appear to be an inconvenient forum for both. What is perhaps a more pertinent consideration, however, is which forum would be more convenient for each party’s attorneys, since the convenience of the parties themselves becomes a somewhat muted concern when the parties are large corporations. Both parties have retained Milwaukee counsel to represent their interests thus far in this action, which leads the Court to believe that a trial in Wisconsin would not prove a problem for the lawyers involved.

Therefore, the Court does not view the District Court for the District of Minnesota as a more convenient forum for the parties, attorneys and witnesses than the Eastern District of Wisconsin, and there is no reason to grant the motion upon this basis.

C. Interest Of Justice.

In Adler, this court reiterated five factors which should be considered in determining whether a change of venue is required in the interest of justice:

“... (1) the relative ease of access to sources of proof, (2) availability of compulsory process for attendance of unwilling witnesses, (3) the cost of obtaining attendance of willing witnesses, (4) the possibility of a view of the premises, and (5) the state of the court calendars.”

Adler, 391 F.Supp. at 470 (quoting Wyandotte Transportation Co. v. Great Lakes Towing Co., 196 F.Supp. 494, 496 (E.D.Wis.1961)). The fourth factor is irrelevant for purposes of this motion, since there are no “premises” involved which could be viewed. The fifth factor must also be eliminated from consideration, since this Court is not apprised of the state of the court calendars in the prospective transferee forum.

The remaining factors pertain to those witnesses who will be called upon to testify at the trial. As the Court has already discussed, this determination is a matter of speculation. It appears certain that some of the witnesses would not be subject to compulsory service of process if the trial was held in Wisconsin, and others would not if the trial was held in Minnesota. Likewise, the cost of transporting willing witnesses, while very much in doubt, would seem to balance out. In any case, it is not a tremendous economic burden to transport a witness to a neighboring state, whether it be from Wisconsin to Minnesota or viceversa.

This is not an instance where it is clearly more advantageous to transfer an action to another forum rather than try the case where it was originally brought. Absent a showing by the movant that a different forum is clearly more convenient to the parties and witnesses, and that the interests of justice so require it, a change of venue is not warranted. Adler, 391 F.Supp. at 469. Courts in this district have stated that the plaintiff’s choice of forum is to be accorded “a large measure of deference.” Adler, 391 F.Supp. at 469; see also McGraw-Edison Co. v. United States Fidelity & Guaranty Co., 322 F.Supp. 1049, 1051 (E.D.Wis.1971). The Court believes that Central National, as the moving party, has not met its burden, and that this failure together with the measure of deference that must be accorded the plaintiff’s choice of forum convinces the Court that the action belongs where it was originally brought.

Therefore, the Court hereby denies defendant’s motion for change of venue.