Charlie Lewis, Appellant, v. Consolidated Underwriters, Appellee, 276 F.2d 687 (5th Cir. 1960)

Alleging his employment by one E. O. Malone, a resident citizen of the State of Alabama, and injuries received in the course of his employment, plaintiff, a citizen of Mississippi, brought this suit against the defendant, a foreign insurance company authorized to do business in Mississippi, as Malone's compensation carrier, under the Alabama Workmen's Compensation Law, for the compensation benefits provided by that law.

The defendant filed a motion to dismiss,¹  and the deposition of E. O. Malone was taken by agreement of the parties. Because it was on the basis of this deposition that the order appealed from was entered, the substance of his testimony is fully set out in the margin.² 

Subject to its motion to dismiss, defendant filed an answer denying plaintiff's right to recover. Thereafter defendant's motion to dismiss came on to be heard, and the court, after hearing, entered the following order:

'This cause coming on for hearing on defendant's plea to the jurisdiction of the Court by agreement of the parties, and there was by agreement introduced and made a part of the record of testimony the deposition of E. O. Malone, and the Court having heard and considered same is of the opinion that the defendant is not subject to suit in the State of Mississippi for the matters complained of in the declaration under the laws of the State of Alabama where the injury allegedly occurred and that the plaintiff has no right or authority under the laws of Alabama to sue directly and alone an insurance carrier under the Workmen's Compensation Act of the State of Alabama in the light of the facts before the Court in the deposition of E. O. Malone and the law applicable thereto.

'It is, thereupon, the judgment of the Court and ordered that this cause be and it is hereby dismissed for want of jurisdiction in this court, and all costs herein be and the same are hereby taxed against the plaintiff and for which let execution issue.'

Appealing from this order, plaintiff is here urging upon us that the district judge erred in dismissing the action for want of jurisdiction, both generally because there was federal jurisdiction based on diversity of citizenship, and particularly because the dismissal was based on his conclusion that because his employer failed to post and give the notices required by the Alabama Workmen's Compensation Law, the district court was without jurisdiction to entertain the action of plaintiff to sue directly and alone an insurance carrier under the Workmen's Compensation Act of that state. Insisting that the law of Alabama requiring the posting and giving of notices, etc. is directory and not mandatory, and that the failure in this case to post or give them in no manner affected the rights of plaintiff under the Alabama Workmen's Compensation Law, appellant urges that the judgment should be reversed and the cause remanded with directions to the court to try the case on the merits.

Appellee, of the contrary opinion, quoting the Alabama Code,³  insists that the posting and giving of notices is an essential prerequisite to liability under the Alabama Workmen's Compensation Law, and that the district judge was right in his order dismissing the case. In support of its view, it cites Pounds v. Travelers Ins. Co., 239 Ala. 573, 196 So. 108, holding merely that, where there is no workmen's compensation, a direct action against an insurer will not lie. Cf. Humphrey v. Poss, 245 Ala. 11, 15 So. 2d 732, while appellant, relying firmly

We are of the clear opinion: that the 242 Ala. 653, 7 So. 2d 859, holding that the provision for posting notices is not mandatory but directory.

We are of the clear opinion: That the holding in the Belcher case is persuasive authority here in support of plaintiff's claim, that he was covered by the Act; and that, while the district judge did not give as his reason for dismissing the suit for want of jurisdiction the fact that the employer did not post a notice or notices in conspicuous places about his place of employment, the conclusion that this was the basis of his action is inescapable.

The plaintiff, in good faith, stated in his complaint the requisite diversity and jurisdictional amount, and there was, therefore, no basis for the dismissal of the cause for want of jurisdiction. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S. Ct. 586, 82 L. Ed. 845; Bell v. Preferred Life Assur. Soc., 320 U.S. 238, 64 S. Ct. 5, 88 L. Ed. 15; Colonial Oil Co. v. Vining, 5 Cir., 237 F.2d 913; Liberty Mutual Ins. Co. v. Horton, 5 Cir., 275 F.2d 148.

The judgment of dismissal for want of jurisdiction is, therefore, reversed and the cause is remanded with directions to proceed with the trial of the case on its merits.