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February 4, 1969


The opinion of the court was delivered by: Will, District Judge.


This action is brought by the First National Bank of Chicago for the construction of a will. Plaintiff, as trustee, seeks instructions on whether the will of John D. Hertz, Jr., exercised testamentary powers of appointment given him under the terms of certain trusts established by his father and mother in 1922. Named in the complaint as defendants are Thomas Mottola, individually and as Executor of the Estate of John Hertz, Jr., and eleven other individuals and institutions.

It appears from the face of the complaint that one defendant, John Ettlinger, is a trust remainderman. He takes only if the powers of appointment were not exercised under the will. One defendant, Helen Hexter, is both a trust remainderman and a residuary legatee under the will. Except for the executor, all the other defendants are residuary legatees, who take only if the powers were exercised.

The complaint was originally filed on September 10, 1968, in the Chancery Division of the Circuit Court of Cook County, Illinois. On October 24, 1968, defendant Mottola, as executor, filed a petition, pursuant to 28 U.S.C. § 1441, removing the action to this Court. Defendant Ettlinger now moves to remand the cause to the State Court.

In support of his motion, Ettlinger submits two separate and distinct grounds. First, he contends that the action was improvidently removed in that all of the defendants did not join in the removal petition. Second, he contends that this Court does not have jurisdiction of the subject matter because there is an absence of complete diversity of citizenship between the parties. In respect to this latter contention, Ettlinger points out that the Court is under a duty to re-align the parties according to their real interests, and that, when this is done, he and defendant Sturgis, who are both citizens of California, fall on opposite sides of the case.

The Necessity of the Joinder of All the Defendants in the


The Federal Removal Statute provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants * * *." 28 U.S.C. § 1441(a). The words "the defendant or the defendants" have uniformly been construed to require that defendants be treated collectively. As a general rule, in the absence of a separable controversy, all the defendants who are sued jointly in the state court must join in the petition for removal.*fn1 The consent of a non-resident defendant who has not been served with process, however, is not necessary to the removal of the cause. Since it is possible that such a defendant may never be served or, at least, may not be served before the time for filing a petition to remove has expired, it is only reasonable that the other defendant or defendants, who have been served, be permitted to exercise their right of removal in his absence.*fn2

Three defendants in the instant case were served before the removal petition was filed. Defendant Mottola was served on September 25th and filed his appearance on October 23, 1968. Defendant Michelle Montgelas Vanderkief also filed her appearance on the same date. Defendant Ettlinger was served on October 11, 1968. The suit was subsequently removed solely upon the petition of Mottola, as Executor; Ettlinger and Vanderkief did not join in the petition.

The executor insists, however, that, under the circumstances of the case, it was not necessary to join the other defendants. Specifically, he contends that Ettlinger's consent is not necessary because his interest in the suit is opposed to the interests of the other defendants. The joinder or consent of Vanderkief and the other defendants is alleged to be unnecessary because the petitioner, as executor of the Estate, is the only real party in interest.

The denomination given the parties in the pleadings is not always conclusive. In determining whether federal jurisdiction exists, a federal district court is obliged to examine the underlying, substantive interests of the parties in the dispute. If a party's actual interest is not reflected by his alignment in the pleadings it is the duty of the court to rearrange the party on the proper side of the suit.*fn3 Such re-alignment is required both where it has the effect of defeating or creating jurisdiction.*fn4

In the instant case, the pleadings clearly indicate that the real interest of defendant Ettlinger is in direct opposition to those of the executor and the residuary legatees. Ettlinger is a remainderman under the trusts in question. As a remainderman, he will realize a financial gain only if this Court holds that powers of appointment given to John D. Hertz, Jr. were not exercised in his will and that the residuary legatees are not entitled to the assets of the trusts. Under these circumstances, it is obvious that Ettlinger's position is diametrically opposed to that of the other defendants on the controlling issue.*fn5 The relative positions of the parties, therefore, requires that he be re-aligned. In respect to the other defendants, he may properly be characterized as a party-plaintiff.*fn6

As in cases of original diversity jurisdiction, where the removal jurisdiction of a federal court is invoked on the basis of diversity, the characterization of a party as defendant or plaintiff in the state action is not determinative. The court is first obliged to examine the substantive interests of the parties and align them in a manner which is consistent with their actual interests.*fn7 The propriety of removal is then considered in the light of the parties' respective positions in the suit.*fn8

Ettlinger suggests, nevertheless, a caveat to these general principles. He submits that a realignment of the parties is relevant only to the question of diversity for removal and that it is irrelevant to the general requirements of the joinder of all the defendants in the removal petition. Accordingly, he contends that his relative ...

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