Redac Project 6426, Inc. v. Allstate Insurance Company, 231

• Decision Date: 07 November 1968
• Docket Number: Dockets 32907,No. 231,32908.,232,231
• Citation: 402 F.2d 789
• Parties: REDAC PROJECT 6426, INC., individually, and as a member of the firm of Redac Edgewater Limited Partnership and Redac Project 6427, Inc., individually and as a member of the firm of Redac Land Limited Partnership, Plaintiffs-Appellants, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

402 F.2d 789 (1968)

REDAC PROJECT 6426, INC., individually, and as a member of the firm of Redac Edgewater Limited Partnership and Redac Project 6427, Inc., individually and as a member of the firm of Redac Land Limited Partnership, Plaintiffs-Appellants, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee.

Nos. 231, 232, Dockets 32907, 32908.

United States Court of Appeals Second Circuit.

Argued November 6, 1968.

Decided November 7, 1968.

Dugald Campbell Brown, New York City (Whitman, Ransom & Coulson, New York City, on the brief), for plaintiffs-appellants.

Bernard J. Nussbaum, Chicago, Ill. (Sonnenschein, Levinson, Carlin, Nath & Rosenthal, Chicago, Ill., Aranow, Brodsky, Bohlinger, Einhorn & Dann, Robert J. Ward, New York City, on the brief), for defendant-appellee.

Before WATERMAN and FEINBERG, Circuit Judges, and LEVET, District Judge.^*

FEINBERG, Circuit Judge:

This is an appeal from an order of Sylvester J. Ryan, J., of the United States District Court for the Southern District of New York denying a motion of plaintiffs for a preliminary injunction. Despite the complexity of some of the financial arrangements involved in the case and the extreme urgency with which we have been required to hear it, the issue before us is simple to state: Did Judge Ryan abuse his discretion in deciding the motion without taking oral testimony? For reasons given below, we conclude that he did not.

Plaintiffs are Redac Project 6426, Inc. and Redac Project 6427, Inc., individually and as respective members of the firms of Redac Edgewater Limited Partnership and Redac Land Limited Partnership; defendant is Allstate Insurance Company. Plaintiffs' suit was originally filed in the Supreme Court of New York, County of New York, on October 18, 1968, but was removed to the court below on Monday, October 21. On that day, the court continued an ex parte temporary restraining order which had been obtained in the state court, but plaintiffs were ordered to show cause why it should not be vacated. On October 30, a hearing on that question was held before Judge Inzer B. Wyatt. Concluding, inter alia, that plaintiffs' "chances of success in the action * * * are virtually nil," the judge vacated the order, but continued it in effect for a short time to permit plaintiffs to request further relief. Plaintiffs immediately moved for a preliminary injunction, which Judge Ryan heard on November 1, 1968. From the denial of that motion, plaintiffs appealed and sought from this court a stay pending the appeal. We expedited the appeal and continued the stay until twenty-four hours after disposition of the appeal.

According to the record before us, plaintiffs and Allstate entered into various agreements in April 1965, in connection with a real estate project in Edgewater, New Jersey, under which the parties were limited partners, with Allstate holding 95 per cent of the interest and plaintiffs five per cent. Under a subsequent "buy-sell" agreement, executed in August 1967, and apparently as part of a transaction under which Allstate invested further funds, plaintiffs received an option for a designated period to purchase Allstate's interest and thereafter Allstate had a similar reciprocal option. In connection therewith, under an escrow agreement executed the following month, deeds to real property were deposited with an escrow agent. At...