American Home Assur. Co. v. Insular Underwriters Corp., 71 Civ. 663.
| Decision Date | 17 May 1971 |
| Docket Number | No. 71 Civ. 663.,71 Civ. 663. |
| Parties | AMERICAN HOME ASSURANCE COMPANY et al., Plaintiffs, v. INSULAR UNDERWRITERS CORPORATION, Manuel San Juan Company, Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Lee, McCarthy & DeRosa, New York City, for plaintiffs; by Peter J. Malloy, Jr., New York City.
Shearman & Sterling, New York City, for defendants; Charles C. Parlin, Jr., Leo Kayser, III, New York City, of counsel.
Defendants move for an order pursuant to Rule 12(b), F.R.Civ.P., dismissing this action on the ground that this court lacks personal jurisdiction over the defendants; or, in the alternative, for an order pursuant to 28 U.S.C. § 1404(a) transferring this action to the United States District Court for the District of Puerto Rico; or, in the alternative, for an order staying all proceedings in this action pending a final determination of certain actions now pending between the parties in the United States District Court for the District of Puerto Rico.
In January, 1971, plaintiffs, insurance companies organized and existing under the laws of the states of New York and New Jersey with offices in New York, instituted this action in the New York Supreme Court against defendants, corporations organized and existing under the laws of the Commonwealth of Puerto Rico with their principal places of business in San Juan, Puerto Rico. Defendants removed the action to this court. In their complaint, plaintiffs allege that defendants failed to comply with the terms and conditions of certain agreements, by which defendants were appointed to act as general agents for plaintiffs in Puerto Rico, and seek damages in the amount of $10,000,000.
Litigation between the parties with respect to the agency agreements has been pending in Puerto Rico since September 1970. The Puerto Rican actions, separately instituted by the parties to this action, arose out of the service by plaintiffs on defendants in September 1970 of notices of termination of the general agency agreements between the parties, such termination to be effective December 31, 1970. The issues in the Puerto Rican actions are: (1) whether the plaintiffs have any just cause for terminating the agreements, and (2) if not, whether Puerto Rican Law 75, 1964 (10 L.P.R.A. § 278 et seq.) precludes termination of the agreements. The issue of just cause involves litigating the alleged breaches of the agreements by the defendants.
By way of alternate relief, defendants seek an order transferring this action to the District of Puerto Rico pursuant to 28 U.S.C. § 1404(a), which provides as follows:
"For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought."
Two issues are presented: (1) whether the action sought to be transferred "might have been brought" in the proposed transferee forum; and (2) whether the convenience of parties and witnesses would be best served by the transfer. Schneider v. Sears, 265 F. Supp. 257, 261 (S.D.N.Y.1967). See also Stull v. Baker, 311 F.Supp. 1205 (S.D.N.Y.1970).
It is clear that this action could have been brought in the District of Puerto Rico. The defendants' principal places of business are in San Juan, and the complaint alleges breaches of the agency agreements in Puerto Rico. The agency agreements were executed outside of the United States (in Puerto Rico, the Bahamas, or Bermuda). One of the pending actions in Puerto Rico was instituted by these plaintiffs, which demonstrates that this action could have been brought in the District of Puerto Rico and that there is personal jurisdiction over defendants in Puerto Rico.
Clearly the convenience of defendants, with their principal places of business in San Juan, would be best served by a transfer. Since plaintiffs have previously instituted an action in Puerto Rico involving the same subject matter, the inconvenience to the plaintiffs caused by a transfer should not be great. As the complaint in this action alleges breaches of contract...
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