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HOLZSAGER v. VALLEY HOSP.

December 18, 1979

BARBARA G. HOLZSAGER, Executrix of the Estate of DONALD M. HOLZSAGER, deceased, and BARBARA G. HOLZSAGER, individually, Plaintiffs, against THE VALLEY HOSPITAL, Defendant.


The opinion of the court was delivered by: LASKER

Barbara Holzsager brought this wrongful death action, on her own behalf and as the executrix of her husband's estate, against the Valley Hospital in Ridgewood, New Jersey, which treated and released her husband just before he died in December, 1974. The action was originally filed in New York Supreme Court, and personal jurisdiction over the hospital was obtained by attaching the obligations of its liability insurance carrier, which does business in New York, under the doctrine of Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99, 216 N.E.2d 312 (1966). The hospital removed the action to this court, predicating federal subject matter jurisdiction on the diverse citizenship of the parties.

After removing the case to this court on diversity grounds, the hospital sought to have it dismissed for lack of federal subject matter jurisdiction, asserting that Holzsager was not, in fact, a resident of New York but of New Jersey. In the alternative, the hospital moved to transfer the case to the United States District Court for the District of New Jersey. The court found that Holzsager was a resident of New York, that trial of the action in New York would not be inconvenient, and denied the hospital's motion to dismiss or transfer. (Endorsement of March 18, 1977)

The hospital then moved again to transfer the case to the United States District Court for the District of New Jersey, on the grounds that in New Jersey it could implead the physician who had treated Mr. Holzsager at the hospital, who had since retired to California, where he was beyond the reach of New York's long arm statute, but not of New Jersey's. Concluding that it would be more convenient to try the case in New Jersey if all the defendants could be brought before a single tribunal there, the court granted the motion, and the case was transferred to the District of New Jersey. (Endorsement of September 30, 1977)

 After the treating physician had been impleaded, the hospital again moved (in the District of New Jersey) to dismiss the complaint for lack of federal subject matter jurisdiction, this time on the grounds that the amount in controversy did not exceed $ 10,000., because any recovery against the hospital was limited to that amount by New Jersey's charitable immunity statute, N.J. Rev. Stat. § 2A:53A-7. Applying New Jersey law, Judge Meanor granted the motion. He held that the hospital was within the class of institutions protected by the statute, and, relying on Deutsch v. Hewes Street Realty Corp., 359 F.2d 96, 100 (2d Cir. 1966) (dictum), Oikarinen v. Alexian Brothers, 342 F.2d 155, 155 (3d Cir. 1965), and Trail v. Green, 206 F. Supp. 896, 900-01 (D.N.J.1962), concluded that the court lacked subject matter jurisdiction over the case. Accordingly, Judge Meanor dismissed the hospital's third party action against the physician without prejudice, and "remanded" Holzsager's action against the hospital to the Southern District of New York "for appropriate action," No. 77-2128 (D.N.J.) (Order of April 13, 1978), with a suggestion that it would be appropriate further to remand the case to the state court from which it was originally removed, Id. (Hearing of April 10, 1978, transcript at 15), returning the parties to the status they enjoyed when the suit was originally commenced, over a year and a half earlier.

 After the case had returned to this court, but before any other action had been taken, Holzsager filed the present motion, *fn1" in which she seeks an order striking the hospital's ninth affirmative defense, which sets up the New Jersey charitable immunity statute as a bar to any recovery in excess of $ 10,000. *fn2" She argues that New York law governs this case, and that under New York law the limitation on the hospital's liability would not be recognized. In so moving, Holzsager directly challenges Judge Meanor's earlier ruling that federal subject matter jurisdiction is lacking.

 The hospital opposes Holzsager's motion, asserting that Judge Meanor's ruling bars reconsideration of the issue of subject matter jurisdiction, and the underlying issue of the applicability of New Jersey's charitable immunity statute. In addition, the hospital contests the court's personal jurisdiction over it. Although the hospital has neglected to move formally for an order dismissing the action on this ground, the questions raised have been fully briefed by both parties, and will be decided. The hospital's procedural motions have delayed consideration of the merits of this case for over three years its failure to file a motion now should not be the occasion for further delay. *fn3"

 I.

 An initial question is whether this court has the authority, at this stage in the proceedings, to do anything other than remand the case to New York Supreme Court, as suggested by Judge Meanor. The hospital contends that it does not that Judge Meanor's decision and order left this court with authority to do nothing other than the purely ministerial task of remanding to the state courts. We disagree.

 First, it is quite clear that what the hospital suggests is not what Judge Meanor intended. His order provides simply that the case be "remanded" to the Southern District of New York "for appropriate action." At the hearing at which he reached his decision, he indicated only that he would retransfer the case "with a suggestion to Judge Lasker, or whatever judge to whom it is assigned in that court, that it would probably be appropriate to remand it under the circumstances to the New York State courts from whence it came." This statement is far too tentative to support an argument that Judge Meanor intended his "suggestion" to be binding.

 Second, even if Judge Meanor had intended to bind this court, he lacked the power or authority to do so. As he clearly recognized, any attempt by one district court to circumscribe the authority of a coordinate court would be Ultra vires. It is quite true that if Judge Meanor was correct in concluding that the federal courts lack subject matter jurisdiction over this case, anything this court were to do (other than remand the case to the state courts) would be a nullity not because of Judge Meanor's ruling to that effect, but because in the absence of subject matter jurisdiction the federal courts lack the authority to adjudicate at all. At present, however, the issue determined by Judge Meanor is properly before this court, and unless barred by res judicata or estoppel principles, the court has the authority to redetermine it.

 II.

 The hospital contends that reconsideration of Judge Meanor's determination that the hospital's liability is limited by New Jersey's charitable immunity statute is barred by the doctrines of res judicata and collateral estoppel.

 Res judicata prevents a party from bringing a second suit on a claim that was decided in a previous action. Collateral estoppel prevents a party from relitigating issues of fact or law that were actually litigated and were necessary to a prior judgment, even if the second suit is based on a different cause of action. Lawlor v. National Screen Service Corp., 349 U.S. 322, 326, 75 S. Ct. 865, 99 L. Ed. 1122 (1955); Commissioner v. Sunnen, 333 U.S. 591, 597, 68 S. Ct. 715, 92 L. Ed. 898 (1948); Cromwell v. County of Sac, 94 U.S. 351, 352-53, 24 L. Ed. 195 (1876); See generally 1B J. Moore, Federal Practice and Procedure P 0.405-.448 (1965); Restatement (Second) of Judgments, ch. 3 (Tent. Draft No. 1, 1973); Developments in the Law-Res Judicata, 65 Harv.L.Rev. 818 (1952). Both doctrines apply only after a final judgment has been rendered. Their function is to preclude relitigation of what has been finally adjudicated, and consequently they come into play only after a case has gone to judgment. 1B J. Moore, Federal Practice and Procedure P 0.404(1) at 404-05 (1965); See Miller Manufacturing Co. v. Zeiler, 45 N.Y.2d 956, 958, 411 N.Y.S.2d 558, 559, 383 N.E.2d 1152, 1153 (1978) ("It is, of course, axiomatic that a party seeking to assert res judicata or claim preclusion must show the existence of a prior judgment on the merits.").

 The hospital argues that Judge Meanor's decision and order constituted a final judgment disposing of Holzsager's claim because it left this court with no authority to do anything other than remand the case to the state court from which it was originally removed. We have already noted that this is not so, but even if it were Judge Meanor's decision would not be a final judgment, since the case would continue before the state court. To argue that a remand to the state court would constitute a final adjudication of Holzsager's wrongful death claim is ludicrous. Indeed, except to the extent that it felt bound to accept Judge Meanor's determination as the law of the case, the state court might well reconsider it not, of course, to determine whether federal jurisdiction exists but to determine ...


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