Surfact, Inc. v. South Pearl Chemical, Inc.
| Decision Date | 31 March 1994 |
| Docket Number | No. 93-2263,93-2263 |
| Citation | 21 F.3d 420 |
| Parties | NOTICE: First Circuit Local Rule 36.2(b)6 states unpublished opinions may be cited only in related cases. SURFACT, INC., Plaintiff, Appellant, v. SOUTH PEARL CHEMICAL, INC., Defendant, Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
Appeal from the United States District Court for the District of Puerto Rico [Hon. Gilberto Gierbolini, U.S. District Judge ]
David Efon and Kevin G. Little on brief for appellant.
Gloria L. Lebron Nieves and Cobian & Valls, on brief for appellee.
Before Breyer, Chief Judge. Selya and Boudin, Circuit Judges.
Appellant Surfact, Inc., a Florida corporation, appeals the dismissal for lack of diversity jurisdiction of its action against appellee, South Pearl Chemical, Inc. We affirm.
On February 1, 1988, appellant Surfact, entered into an exclusive dealership agreement with South Pearl Chemical, Inc. According to appellant, the agreement was illegally terminated on January 31, 1990, in violation of Puerto Rico Law 75, 10 L.P.R.A. Sec. 278. Appellant brought suit in the United States District Court for the District of Puerto Rico and invoked diversity jurisdiction pursuant to 28 U.S.C. Sec. 1332. Appellee in turn moved to dismiss for lack of diversity. A magistrate judge issued a report and recommendation that the motion for dismissal be granted because both parties to the agreement were Florida corporations. The district court affirmed.
The dispute in this case arises out of the fact that there have been two corporations with the name "South Pearl Chemical, Inc." One corporation [South Pearl Puerto Rico] was incorporated in 1984 in the Commonwealth of Puerto Rico. South Pearl Puerto Rico amended its corporate charter in July 1987 to change its corporate name to Ole South Pearl Chemical, Inc. The other corporation [South Pearl Florida] was incorporated in 1987 in the state of Florida. In May 1987, Ole South Pearl transferred all its "assets and business" to South Pearl Florida in exchange for 800 shares of South Pearl Florida common stock. 1 However, the corporations remained separate entities. The exclusive dealership agreement between Surfact and South Pearl Chemical, Inc. was entered into almost ten months after the transfer of assets between Ole South Pearl and South Pearl Florida.
Surfact asserts that it entered into the exclusive dealership agreement with Ole South Pearl. The district court, however, found that the exclusive dealership contract had been entered into by Surfact and South Pearl Florida. Hence, diversity of parties was absent. We review findings of jurisdictional facts only for clear error. See, e.g., Marshall County Bd. of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1178 (11th Cir. 1993); Rocovich v. United States, 933 F.2d 991, 993 (Fed. Cir. 1991).
The district court's finding is supportable in the record. Prior to the signing of the exclusive dealership agreement, all Ole South Pearl's "assets and business" were transferred to South Pearl Florida. From this, the court could have inferred that, at the time of the exclusive dealership agreement, South Pearl Florida was the only active corporation and thus the only one which would have entered into the agreement with Surfact. This inference is confirmed not only by the fact that, by the time of the agreement, South...
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