The opinion of the court was delivered by: POLLACK
MILTON POLLACK, Senior United States District Judge
Three motions are before the court. The first is a motion to remand an action commenced in state court and removed here by fourth-party defendant Argonaut Insurance Company ("Argonaut"). The second motion requests dismissal of a diversity suit by which Argonaut seeks a declaratory judgment in federal court; that suit mirrors the fourth-party claim in the state court seeking the same relief. The third motion seeks to vacate or regulate the notice of discovery in the federal suit. For the reasons set forth below, the first motion will be granted; the second will be denied; and the third will be granted to the extent to be indicated.
In 1982 plaintiffs Kyle and Romaine Crawford brought a medical malpractice action in The Supreme Court of New York, Bronx County, against The Hospital of Albert Einstein College of Medicine ("The Hospital"), Dr. Irwin H. Kaiser, and Dr. Samuel G. Oberlander. Argonaut Insurance Company ("Argonaut") appeared by its counsel for defendant Dr. Kaiser pursuant to an insurance policy carried by Yeshiva University covering its employees; Dr. Kaiser is a full-time faculty member.
On September 4, 1986, on the verge of trial of the state court case, defendants The Hospital and Dr. Oberlander served a third-party complaint naming Yeshiva University as a third party-defendant in the action. The claim alleged that when he treated plaintiff, Dr. Kaiser was acting within the scope of his employment as an employee of Yeshiva, and that Yeshiva should indemnify or contribute to the other defendants in the event of an adverse judgment.
Yeshiva countered by demanding that Argonaut take over its defense and indemnify Yeshiva on the third-party claim. When Argonaut demurred, Yeshiva served Argonaut with a fourth-party claim seeking a declaratory judgment that it was covered by its insurance policy. Yeshiva contended that it was, apart from the coverage of Dr. Kaiser, entitled to coverage and defense by Argonaut to the limits of the policy, separately and apart from the Argonaut indemnification and defense of Dr. Kaiser. Argonaut, however, believes that this would improperly expose it to a doubling of the policy limits. Incidentally, even if the fourth-party claim were not remanded, Argonaut and its policy would remain subject to the state court action, representing Dr. Kaiser.
Argonaut sought to head off and bifurcate the claims against it upon being apprised of Yeshiva's request of defense and indemnity on the third-party claim, by a hasty removal on October 29, 1986 of the state court case to this court on the ground of diversity of citizenship between it and Yeshiva, the fourth party plaintiff.
Argonaut claims as support for the removal that the fourth-party claim represents a "separate and independent" action between it and Yeshiva. The larger lawsuit in which the Argonaut-Yeshiva dispute incidentally arises has no independent basis of federal jurisdiction and is otherwise non-removable. Yeshiva and all other parties now move to remand the case, in whole or in part, to Supreme Court, Bronx County pursuant to 28 U.S.C. § 1447(c). Argonaut opposes the remand motion.
The procedural posture of this dispute became further complicated when Argonaut, fully apprised of Yeshiva's intent to file a declaratory judgment claim in the state case, nevertheless commenced a parallel federal declaratory judgment action on October 6, 1986 (86 Civ. 7639). Yeshiva now moves this court to dismiss or defer the federal action.
THE MOTION TO REMAND 86 CIV. 8318 (MP)
The initial question presented is whether this case was properly removed from the state court by Argonaut, a fourth-party defendant. Section 1441(c) of the removal statute provides:
(c) Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise non removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction.
A. Removal By Third-Party and Cross-Claim Defendants Under ...