Allied Petro-Products, Inc. v. Maryland Casualty Co.

• Citation: 201 F. Supp. 694
• Decision Date: 22 December 1961
• Docket Number: Civ. A. No. 30180.
• Parties: ALLIED PETRO-PRODUCTS, INCORPORATED, formerly Allied Petroleum Corp. v. MARYLAND CASUALTY COMPANY.
• Court: U.S. District Court — Eastern District of Pennsylvania

201 F. Supp. 694

ALLIED PETRO-PRODUCTS, INCORPORATED, formerly Allied Petroleum Corp. v. MARYLAND CASUALTY COMPANY.

Civ. A. No. 30180.

United States District Court E. D. Pennsylvania.

December 22, 1961.

David S. Malis, of Malis, Malis & Malis, Philadelphia, Pa., for plaintiff.

William T. Campbell, Jr., of Swartz, Campbell & Henry, Philadelphia, Pa., for defendant.

JOSEPH S. LORD, III, District Judge.

This case is before us on the defendant's motion to transfer the action to the Southern District of Florida under Title 28 U.S.C.A. § 1404(a). We have the benefit of an affidavit on behalf of the defendant and a counter-affidavit and supplemental affidavit on behalf of the plaintiff. From these affidavits and from the pleadings it appears that the suit is one to recover on a Blanket Position Bond indemnifying the plaintiff against loss by reason of fraud or dishonesty of, or theft by its employes.

The plaintiff's main, if not only, office is located at 1445 City Line Avenue, Montgomery County, Pennsylvania, in this District, but the plaintiff's plant at which the defalcations occurred is in Jacksonville. Most, if not all, of the defalcating employes are residents of the Jacksonville area. The plaintiff's officers, bookkeeper, accountants, investigators and books are all in the Philadelphia area. It further appears that the defalcating employes are necessary witnesses, eleven of whom will be produced by the plaintiff at trial.

Plaintiff's supplemental affidavit sets forth in some detail the cost to it of trial in Florida, totalling $8,153.85, part of which is an estimation of increased counsel fee. This total includes the transportation and maintenance expenses of eleven persons, the same number as plaintiff states will be produced here from Florida. However, from an examination of plaintiff's two affidavits most, if not all, of the eleven persons going to Florida will be required to stay for the entire duration of the trial, whereas those coming here would not. In any event, the cost to plaintiff of trial in Florida over and above the cost in Philadelphia varies between $3,800. and $6,800., not counting increased counsel fee.

Defendant's position is this: The loss, if any, was occasioned by the dishonest acts of plaintiff's employes. If plaintiff recovers from defendant, then defendant would be entitled to recover from the employes by virtue of its subrogation rights. Its sole reason for seeking removal to Florida is to permit it to join the defalcating employes as third-party defendants. Thus, says defendant, its rights will be better preserved and a multiplicity of suits will be avoided.

There are persuasive and appealing arguments on both sides.

For the defendant, it can certainly be said that the ability to implead a third party is an important consideration. Fein et al. v. Public Service Coordinated Transport, 1958, D.C.E.D. Pa., C.A. No. 23658, 165 F.Supp. 370, Kirkpatrick, J. It seems clear that at least as to loss caused by identifiable employes,¹ the proof required to sustain this plaintiff's burden would be identical to the proof which the defendant would be compelled to advance in a separate action against the employes to recover for its loss. In other words, if the plaintiff is successful in this action the defendant would automatically be entitled to a judgment against the identifiable employes if they were joined as third-party defendants. However, if they were not so joined, another jury in Florida in a separate suit against the employes might, on the same proof, find against the bonding company, for the case here between this plaintiff and this defendant alone would not be res judicata as to the employes.

In Caldwell Manufacturing Co. v. Unique Balance Co., 1955, S.D.N.Y., 18 F.R.D. 258, at page 267, the Court said:

"* * * The bisecting of what is essentially a single controversy will be obviated by remitting the parties to the Western District. There, the validity of the patent and the issue of infringement will be litigated in one lawsuit; all of the interested parties will be before the court; its judgment will be res judicata; and its jurisdiction is unquestioned. * * *"

However, the ability to implead is not the only factor to be considered. Indeed, in Fein, supra, where the case...