James v. Daley & Lewis

• Decision Date: 07 January 1976
• Docket Number: Civ. A. No. 75-381.
• Citation: 406 F. Supp. 645
• Parties: Peter JAMES et al., Plaintiffs, v. DALEY AND LEWIS et al., Defendants.
• Court: U.S. District Court — District of Delaware

406 F. Supp. 645

Peter JAMES et al., Plaintiffs, v. DALEY AND LEWIS et al., Defendants.

Civ. A. No. 75-381.

United States District Court, D. Delaware.

January 7, 1976.

Peter James, pro se.

Jack B. Jacobs and James B. Tyler, III, Young, Conaway, Stargatt & Taylor, Wilmington, Del., for defendants.

MEMORANDUM OPINION

LATCHUM, Chief Judge.

In this case the plaintiffs seek to recover compensatory and punitive damages against the defendants for alleged malpractice. The complaint alleges that the defendants, Delaware attorneys who represented the plaintiffs, prepared and approved offering circulars for the sale of corporate stock and approved media advertisements related thereto which contained misleading information and omitted material information. Because of these errors of commission and omission by the attorneys, it is alleged that the Securities and Exchange Commission brought suit against them which resulted in effectively barring the plaintiffs from selling stock in Delaware to plaintiffs' great damage. (Docket Item 1, pars. 13-14). The complaint further alleges that jurisdiction exists by virtue of 28 U.S.C. § 1332, that the plaintiffs, VIP Phone of Delaware, Inc. and Magfilm, Inc., are Delaware corporations, and that plaintiff Delaware Securities is a division of National Enterprises, Inc., a corporation of the District of Columbia. (Docket Item 1, pars. 2-5, 9). With respect to the defendants, the complaint simply alleges that defendant Daley & Lewis practice law in the State of Delaware and that defendants Lewis and Amick are Delaware "residents." (Docket Item 1, pars. 7 and 8). The complaint contains no allegation of the citizenship of plaintiff James who appears pro se (Docket Item 1) although James has filed a paper in opposition to defendants' motion to dismiss which states that he is a citizen of Maryland and that he is entitled to represent the corporate plaintiffs in this action because he has a sworn power of attorney¹ from them authorizing him to act in their place and stead. (Docket Item 5, par. 1; Docket Item 9, Ex. 2).

Currently before the Court are (1) defendants' motion under Rule 12(b)(1), F.R.Civ.P., to dismiss the complaint for lack of subject matter jurisdiction on the ground that complete diversity is lacking as required by 28 U.S.C. § 1332(a)(1) between all the plaintiffs and all the defendants (Docket Item 3), and (2) plaintiff James' motion, under 28 U.S.C. §§ 1404(a) and 1406(a), for a change of venue to the United States District Court for the District of Columbia. (Docket Item 6).

At this early stage of the case, the Court is required to look to the "face of the complaint" to resolve defendants' jurisdictional objection. From this, it is obvious the complaint is defective because it fails to allege the citizenship of the defendants and the citizenship of the plaintiff James as required by 28 U.S.C. § 1332. L. D. Reeder Contractors of Arizona v. Higgins Industries, Inc., 265 F.2d 768, 770 (C.A.9, 1959). Alleging residence is not sufficient because citizenship and residency are not synonymous. Freedman v. Zurich Ins. Co., 264 F.Supp. 550 (W.D.Pa.1967). The complaint's jurisdictional allegations of diversity are also insufficient with respect to the corporate plaintiffs without an allegation as to their state of incorporation as well as to the state in which each has its principal place of business. Veeck v. Commodity Enterprises, Inc., 487 F.2d 423, 426 (C.A.9, 1973); Delome v. Union Barge Line Company, 444 F.2d 225, 233 (C.A.5, 1971), cert. denied, 404 U.S. 995, 92 S.Ct. 534, 30 L.Ed.2d 547 (1971). However, the defects may, with the Court's permission, be cured by amendment to the complaint. 28 U.S.C. § 1653. Accordingly, the Court will permit the plaintiffs leave to amend in order to comply with the jurisdictional requirements of 28 U.S.C. § 1332(a)(1).

For diversity purposes a corporation may have dual citizenship, its state of incorporation and the state where its principal place of business is located. 28 U.S.C. § 1332(c). The instant complaint expressly alleges that two corporate plaintiffs — VIP Phone of Delaware, Inc. and Magfilm, Inc. — are Delaware corporations.² (Docket Item 1, pars. 4 and 5). Thus, if it were assumed that all the defendants who are alleged to be Delaware residents are also Delaware citizens and this is reflected in any amendment to the complaint, complete diversity between all the plaintiffs and all the defendants as required by § 1332, Straw-bridge v. Curtiss, 3 Cranch (7 U.S.) 267, 2 L.Ed. 435 (1806), would not exist at least with respect to the Delaware corporate plaintiffs. Therefore the Court would lack subject matter jurisdiction and accordingly would have to dismiss the claims of the Delaware corporate plaintiffs. Rule 12(h)(3), F.R.Civ.P.

At oral argument defendants argued that if the two Delaware corporations were dismissed from the case, there would be an absence of indispensable parties which would necessitate the dismissal of the entire complaint under Rule 19(b), F.R.Civ.P. On the other hand, plaintiff James at oral argument requested the Court to drop the two Delaware corporate plaintiffs under Rule 21, F.R.Civ.P., if their presence as plaintiffs would destroy the Court's jurisdiction. However, the Court is unable on the present record to determine whether the Delaware corporate plaintiffs are indispensable parties. The determination of these oral motions of the parties will have to await further development of the record³ if an amended complaint is filed.

A further defect appears in the record. Title 28 U.S.C. § 1654 provides:

"In all courts of the United States the parties may plead and conduct their own cases personally or by counsel as, by rules of such courts, respectively, are permitted to manage and conduct causes therein."

There is no doubt that under the above statute the plaintiff James may represent himself with respect to his individual civil claim. Collins v. O'Brien, 93 U.S. App.D.C. 152, 208 F.2d 44 (1953), cert. denied, 347 U.S. 944, 74 S.Ct. 640, 98 L.Ed. 1092, reh. denied, 347 U.S. 970, 74 S.Ct. 776, 98 L.Ed. 1111 (1954). And it is equally well settled that under the above statute a corporation may not appear and represent itself in proper person or by its president or officers but only by an attorney admitted to practice law. United States v. 9.19 Acres of Land, 416 F.2d 1244 (C.A.6, 1969); Shapiro, Bernstein & Co. v. Continental Record Co., 386 F.2d 426 (C.A.2, 1967); Simbraw, Inc. v. United States, 367 F.2d 373 (C.A.3, 1966); Flora Construction Co. v. Fireman's Fund Ins. Co., 307 F.2d 413 (C.A.10, 1962), cert. denied, 371 U.S. 950, 83 S.Ct. 505, 9 L.Ed.2d 499 (1963), reh. denied, 373 U.S. 919, 83 S.Ct. 1296, 10 L.Ed.2d 419 (1963); MacNeil v. Hearst Corporation, 160 F.Supp. 157 (D.Del. 1958). An opportunity will be given to the corporate plaintiffs to obtain counsel.

Plaintiffs' motion for a change of venue under 28 U.S.C. § 1404(a) is based essentially on three grounds (1) due to adverse publicity, plaintiff will not be able to receive a fair trial in this district, (2) even after "substantial effort,"⁴ plaintiffs have been unable to retain local counsel to represent them, and (3) a majority of plaintiffs' witnesses reside or work in the District of Columbia. (Docket Item 6). At the outset it should be noted since all defendants reside in Delaware, venue here was proper under 28 U.S.C. § 1391(a). Even though the plaintiffs initially chose this forum, it is clear that a plaintiff can move for a change of venue. Pruess v. Udall, 123 U.S.App.D.C. 301, 359 F.2d 615 (1965); Philip Carey Mfg. Co. v. Taylor, 286 F.2d 782, 784 (C.A.6, 1961), cert. denied, 366 U.S. 948, 81 S.Ct. 1903, 6 L.Ed.2d 1242 (1961). However, before a court will grant a plaintiff's motion for a change of venue, he must first show a change in circumstances since the filing of his suit. Harry Rich Corp. v. Curtiss-Wright Corp., 308 F.Supp. 1114, 1118 (S.D.N.Y. 1969). None of plaintiffs' reasons for transfer has arisen since the inception of this suit, and, therefore, the motion for change of venue under § 1404(a) will be denied.

Furthermore, a balancing of the convenience of the parties and the interests of justice has convinced the Court that a change of venue is unwarranted. It apparently has been more than two years since the adverse publicity abated, and the Court has concluded that plaintiffs can obtain a fair and impartial jury. Although broad hints about a conspiracy of Delaware lawyers who refuse to assist victims of attorney malpractice have been set forth, the...