608 F.Supp. 1261 (S.D.N.Y. 1985), 82 Civ. 3954, Wm. Passalacqua Builders, Inc. v. Resnick Developers South, Inc.

Docket Nº:82 Civ. 3954 (DNE).
Citation:608 F.Supp. 1261
Party Name:WM. PASSALACQUA BUILDERS, INC., and Safeco Insurance Company of America and General Insurance Company of America, Plaintiffs, v. RESNICK DEVELOPERS SOUTH, INC., Jack Resnick, Burton Resnick, 90079, Inc., Jack Resnick & Sons, Inc., Sunrise Builders, Inc., Jack Resnick & Sons of Florida, Inc., Resnick of Boca, Inc., PJFAM Investments, Inc., Resnick D
Case Date:May 16, 1985
Court:United States District Courts, 2nd Circuit, Southern District of New York
 
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Page 1261

608 F.Supp. 1261 (S.D.N.Y. 1985)

WM. PASSALACQUA BUILDERS, INC., and Safeco Insurance Company of America and General Insurance Company of America, Plaintiffs,

v.

RESNICK DEVELOPERS SOUTH, INC., Jack Resnick, Burton Resnick, 90079, Inc., Jack Resnick & Sons, Inc., Sunrise Builders, Inc., Jack Resnick & Sons of Florida, Inc., Resnick of Boca, Inc., PJFAM Investments, Inc., Resnick Development Corporation, Pearl Resnick, Judith Resnick, Ira Resnick, Marilyn Katz, Stanley Katz, Susan Abrams, John Doe, John Doe, Inc., Defendants.

No. 82 Civ. 3954 (DNE).

United States District Court, S.D. New York.

May 16, 1985

Page 1262

Peterson Young Self & Asselin, Atlanta, Ga., David J. Larson, of counsel, and Frank J. Franzino, New York City, for plaintiffs.

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Kronish, Lieb, Shainswit, Weiner & Hellman, New York City, Brian J. Gallagher & Richard Wynne, of counsel, for defendants.

OPINION AND ORDER

EDELSTEIN, District Judge.

This diversity action involves the enforcement of a judgment obtained by Wm. Passalacqua Builders, Inc. ("Passalacqua") against Resnick Developers South, Inc. ("Developers"). The defendants move for summary judgment contending that the court lacks subject matter jurisdiction, that the claims against all of the defendants except Developers must be dismissed as a matter of law, and that all of the claims are barred by the statute of limitations. The defendants' motion is granted in part and denied in part.

BACKGROUND

Passalacqua and Developers entered into an agreement in 1972 for the construction of an apartment condominium project in Florida called Mayfair House. Construction was concluded in 1974. Disputes relating to this project were sent to arbitration. On November 24, 1979, Passalacqua received an arbitration award of $1,721,171.00 against Developers which was judicially confirmed on June 17, 1981. Plaintiff collected $769,989.08 leaving an unpaid balance of $951,181.92. Plaintiffs brought this action to enforce the unpaid balance against Developers and the other defendants. Liability of the other defendants is based on a theory of piercing the corporate veil and voiding fraudulent transfers from Developers to various defendants.

DISCUSSION

Defendants contend that there is no subject matter jurisdiction, that this action is barred by the statute of limitations and that the action against defendants other than Developers must be dismissed because there is no basis for alter ego or instrumentality liability under the facts of this case.

I. Subject Matter Jurisdiction

In order to establish subject matter jurisdiction, there must be complete diversity--the residency of all of the plaintiffs must be different from that of all of the defendants. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806); 28 U.S.C. § 1332(a). For jurisdictional purposes, a corporation is a resident of the state of its incorporation and the state of its principal place of business at the time the suit is commenced. 28 U.S.C. § 1332(c). Passalacqua was incorporated under the laws of Ohio and qualified to do business in Florida in 1969. Defendants Developers, Jack Resnick & Sons of Florida, Sunrise Builders, Inc., PJFAM Investments, Inc., and Resnick of Boca, Inc. are all corporations organized under the laws of Florida.

Defendants contend that the principal place of business of Passalacqua in 1982 when this suit was commenced was Florida and therefore, there is no diversity between Passalacqua and various defendants. Plaintiffs argue that the corporation had no principal place of business because Passalacqua was an inactive corporation at the time the suit was commenced and that the corporation's sole residence was Ohio, its state of incorporation. The court finds that Passalacqua's principal place of business at the time the suit was commenced was Florida based on Judge Connors' decision in Puerto Rico Maritime Shipping Authority v. Star Lines, Ltd., No. 78 Civ. 602 (WCC) (S.D.N.Y. Nov. 22, 1979) (Opinion and Order). Judge Connor held that the principal place of business for a corporation that was inactive at the time a suit is filed is the state of the corporation's last business activity. In 1980, Passalacqua's certificate of incorporation was cancelled on the records of the Ohio Secretary of State Florida was the last state where Passalacqua conducted any business activity other than the mere storage of corporate records or the conduct of this lawsuit.

This presents the question whether the complaint must be dismissed in its entirety or whether the claims by Passalacqua

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should be dismissed. A claim may not be maintained by dismissing a non-diverse...

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