George Swanson v. Liberty National Insurance Company and Guaranty National Insurance Company and Melvin Sharp

In a negligence action in the Fourth Judicial District of the Superior Court of Alaska, Swanson, a citizen of Alaska, obtained a judgment against one Sharp for about $39,000. We are told that that judgment has become final. Liberty National, now absorbed into Guaranty National, had a ten thousand dollar liability policy insulating Sharp at least to that extent.

After obtaining the judgment against Sharp, as permitted by the Rules of Practice in Alaska, Swanson in the same state cause ran a garnishment against Liberty and Guaranty seeking the entire judgment amount, now exceeding $39,000, not just IIO.OOO, Swanson has a legal theory that the insurance companies subject to the garnishment are liable to Sharp in the full amount of his damage and thence, because of special circumstances, to him. Of course, the companies do not admit it.

The companies want to try the issue of liability of the excess over the $10,000 limit in the United States District Court for the District of Alaska. (Swanson wants the issue tried in the state court.) The companies, citizens of states other than Alaska, removed the garnishment facet of the proceedings to the federal district court, asserting that…