Walker v. Pritzker

• Decision Date: 03 May 1983
• Docket Number: No. 105,No. 82-2200,D,105,82-2200
• Citation: 705 F.2d 942
• Parties: David L. WALKER and Louis Fischer, Defendants-Crossdefendants-Appellants, v. Abram N. PRITZKER, Jay A. Pritzker, Nicholas J. Pritzker d/b/a Pritzker & Pritzker, an Illinois partnership, Plaintiffs-Appellees, and Richard C. Jones, as Trustee under Trust Agreementefendant-Coplaintiff-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 942

705 F.2d 942

David L. WALKER and Louis Fischer Defendants-Crossdefendants-Appellants, v. Abram N. PRITZKER, Jay A. Pritzker, Nicholas J. Pritzker d/b/a Pritzker & Pritzker, an Illinois partnership, Plaintiffs-Appellees and Richard C. Jones, as Trustee under Trust Agreement No. 105 Defendant-Coplaintiff-Appellee.

No. 82-2200.

United States Court of Appeals Seventh Circuit.

Argued Jan. 7, 1983.

Decided May 3, 1983.

John J. McInerney, Leahy & Eisenberg, Chicago, Ill., for defendants-crossdefendants-appellants.

Lawrence Gunnels, Reuben & Proctor, Ronald H. Galowich, Galowich & Galowich, Chicago, Ill., for plaintiffs-appellees.

Before PELL and ESCHBACH, Circuit Judges, and NEAHER, Senior District Judge. ^*

PELL, Circuit Judge.

In this statutory interpleader action plaintiff, the law firm of Pritzker & Pritzker, sought to determine who was entitled to a $400,000 deposit of earnest money it held under a real estate sales contract. For the purpose of this appeal, it is sufficient to know that Richard C. Jones, as seller, and David L. Walker, as buyer, negotiated a real estate contract that Walker later refused to perform. Under the contract plaintiff held $400,000 paid by Walker as earnest money. When it became clear that the contract would not be performed both Walker and Jones demanded the earnest money.

In response to these conflicting demands plaintiff filed this interpleader action in federal court pursuant to 28 U.S.C. Sec. 1335, requesting that the court determine which of the defendants was entitled to the earnest money. Walker's agent, Louis Fischer, was also named as a defendant. Plaintiff, upon agreement of the parties, deposited the money into an interest bearing account subject to the court's order on disposition. The court entered a temporary restraining order prohibiting defendants from filing any other suits regarding the contract. Walker and Fischer then waived any claim they might have against plaintiff and moved to dissolve the restraining order and dismiss the complaint. The court denied this motion and entered a preliminary injunction preventing appellants from instituting further suits.

Appellants claim that by waiving their claim against plaintiff they have retroactively defeated the court's jurisdiction by eliminating one of the requisite adverse claimants under 28 U.S.C. Sec. 1335, thereby leaving themselves free to file suit in a forum of their own choosing. Although, to our knowledge, there are no cases invalidating this ploy we believe that appellants' argument misses the mark for two reasons.

First, waiver of a claim against the stakeholder, but not against the fund, does not affect jurisdiction under section 1335. In pertinent part section 1335 provides the district courts with jurisdiction to hear interpleader actions filed by a plaintiff having possession of money or property worth at least $500 if "Two or more adverse claimants ... are claiming or may claim to be entitled to such money or property ... and if ... the plaintiff has deposited such money ... into the registry of the court, there to abide the judgment of the court." 28 U.S.C. Sec. 1335(a) (emphasis added). Section 1335, then, only requires two adversaries who claim to be entitled to the fund. Appellants have explicitly stated that they are not waiving their claim to the earnest money. As long as they claim an interest in the fund appellants' magnanimity in waiving their claim against the stakeholder does not remove the jurisdictional prerequisite of section 1335.

The authorities cited by appellants do not refute this position. In each of these cases the defendant disclaimed any interest in the fund rather than against the stakeholder. Libby, McNeill, and Libby v. City National Bank, 592 F.2d 504 (9th Cir.1978); Gaines v. Sunray Oil Co., 539 F.2d 1136 (8th Cir.1976); John...