American Jerex Co. v. Universal Alum. Extrusions, Inc.

• Decision Date: 07 March 1972
• Docket Number: Civ. A. No. 71 C 1633.
• Citation: 340 F. Supp. 524
• Parties: AMERICAN JEREX COMPANY, also known as American Ladder Company, a division of Chatham Corporation, Plaintiff, v. UNIVERSAL ALUMINUM EXTRUSIONS, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

340 F. Supp. 524

AMERICAN JEREX COMPANY, also known as American Ladder Company, a division of Chatham Corporation, Plaintiff, v. UNIVERSAL ALUMINUM EXTRUSIONS, INC., Defendant.

Civ. A. No. 71 C 1633.

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

March 7, 1972.

COPYRIGHT MATERIAL OMITTED

Richard S. Wolfeld, Null, Cooperstein & Wolfeld, Garden City, N. Y., for plaintiff.

Max Wild, Rubin, Wachtel, Baum & Levin, New York City, for defendant-petitioner.

MEMORANDUM AND ORDER

NEAHER, District Judge.

Plaintiff, a Delaware corporation, sued defendant, a New Jersey corporation, in the New York Supreme Court, Nassau County, to recover a money judgment for $40,261.57. Defendant removed the action to this court on grounds of diversity of citizenship. The complaint alleges that certain raw aluminum billets belonging to plaintiff, having a reasonable value of $40,261.57 were wrongfully received by defendant, which converted them to its own use and refused plaintiff's demand either to return the billets or pay their reasonable value. After removal, defendant served an answer denying the material allegations of the complaint and asserting six affirmative defenses and three counterclaims against plaintiff.

Upon commencing the action, plaintiff obtained ex parte in the State court a warrant of attachment against property and "debts owing to the defendant" within the State sufficient to satisfy plaintiff's demand and related costs and expenses. The attachment order also fixed plaintiff's undertaking in the sum of $6,200 to ensure defendant payment of all legal costs and damages should it later be decided that plaintiff was not entitled to the attachment.

Defendant has moved (1) for summary judgment dismissing the action on the ground that plaintiff lacks capacity to sue; and (2) to vacate the attachment and void all levies made thereunder on the grounds that the attachment was improperly granted, is unnecessary for jurisdiction or security, and is unduly oppressive to defendant. In addition, a non-party, The First Pennsylvania Banking and Trust Company, of Philadelphia, Pennsylvania, designating itself as "petitioner" (hereinafter referred to as such), has filed a motion for leave to intervene in the action for the purpose of making a motion to vacate plaintiff's attachment and levies thereunder. As part of that motion, petitioner also asks the court to vacate and/or discharge the attachment, hold void any and all levies thereunder, and declare petitioner the owner of all defendant's accounts receivable which are subject to the attachment. The grounds urged for this relief are that petitioner is the assignee of those accounts receivable, is entitled to receive the proceeds thereof, and its interests will be impaired unless permitted to intervene and relief granted. The same attorneys appear for defendant and petitioner on their respective motions.

1. Defendant's Motions

In support of its motion for summary judgment, defendant points to the name of plaintiff in the caption of the complaint and the description of plaintiff in paragraph 1 thereof. The caption reads:

AMERICAN JEREX COMPANY, also known as AMERICAN LADDER COMPANY, a division of CHATHAM CORPORATION,

Plaintiff.

Paragraph 1 of the complaint describes plaintiff in these terms:

1. At all times hereinafter mentioned, plaintiff AMERICAN JEREX COMPANY, also known as AMERICAN LADDER COMPANY, was a division of CHATHAM CORPORATION, a corporation duly organized and existing under and by virtue of the laws of the State of Delaware.

Defendant contends the foregoing conclusively establishes plaintiff's lack of capacity to sue (an affirmative defense raised in defendant's answer), since a division of a corporation is not a legal entity.

The court disagrees and considers defendant's contention captious. The complaint was verified in accordance with New York State practice prior to removal to this court. If the caption creates any doubt as to the identity of the real party in interest, i. e., Chatham Corporation, a glance at the "Corporate Verification" would dispel it. Sworn to by Alan Birkenfeld, as "treasurer", the verification recites that it is based upon "his own personal information and the records of the plaintiff corporation" (emphasis supplied).

Birkenfeld's affidavit in opposition to this motion reaffirms that he is its treasurer; that the corporation is organized under the laws of the State of Delaware and qualified to do business in New York; that during the latter half of 1969 the corporation was engaged in the business of manufacturing ladders in Amityville, New York, under the trade name of American Jerex Company, and earlier under the trade name of American Ladder Company; and that these "company" names were used only to identify plaintiff under the common tradenames utilized by it.

There can be no serious question that Chatham Corporation has capacity to sue, is the real party in interest, and is sufficiently named in the complaint to satisfy the requirements of Rules 10(a) and 17(a) of the Federal Rules of Civil Procedure. Rule 17(a) is particularly apposite. It provides that "no action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection" to cure the asserted defect. Once cured, the rule provides, its effect shall be "as if the action had been commenced in the name of the real party in interest." Here there was no defect but at most an objection to surplusage. Defendant's motion for a summary judgment of dismissal on such a ground must be denied.

The other branch of defendant's motion seeks to vacate plaintiff's attachment on grounds of (a) insufficient evidentiary showing of a cause of action; (b) no need for an attachment since defendant has appeared in the action and there are no attachable assets in New York; and (c) defendant's alleged counterclaims in excess of plaintiff's demands. None of these grounds has merit.

(a) Plaintiff secured the order of attachment in State court pursuant to § 6201, New York CPLR, which provides:

An order of attachment may be granted in any action, ... where the plaintiff has demanded and would be entitled ... to a money judgment against one or more defendants, when:

1. the defendant is a foreign corporation. . . .

The attachment was granted on the basis of the verified complaint which alleges specific facts constituting a cause of action for a conversion of goods and demands a money judgment for the specific sum of $40,261.57 and an affidavit by a corporate officer establishing prima facie that defendant is a foreign corporation — a fact now admitted in defendant's answer. The verified complaint itself "may be treated as an affidavit (see CPLR 105(q)) and used by the movant to show that he has a cause of action." 7A Weinstein-Korn-Miller, New York Civil Practice ¶ 6212.03 at 62-83. The affidavit of verification sworn to September 27, 1971 by Alan Birkenfeld, as treasurer of plaintiff, specifies the grounds of his knowledge and belief as "His own personal information and the records of the plaintiff corporation." Thus enough is shown to support the attachment. Marklin v. Drew Properties Corp., 280 F.Supp. 176, 178 (S.D.N.Y.1967).

Here any ground of objection is further obviated by Birkenfeld's affidavit in opposition sworn to January 27, 1972. That affidavit sets forth facts and photocopies of records from apparently trustworthy sources, including some from defendant, which reinforce the claim that shipments of aluminum billets as alleged in the complaint were made to defendant for which no payment has been made. "On a motion to vacate an order of attachment, the court is not restricted to the documents submitted in support of such attachment, but `shall give the plaintiff a reasonable opportunity to correct any defect.' N.Y.R. Civ.Prac. 6223 (emphasis added). ..." Worldwide Carriers, Ltd. v. Aris Steamship Co., 301 F.Supp. 64, 66 (S.D.N.Y.1968). If any evidentiary defect existed here, it has been cured.

(b) That defendant has now answered the complaint and consented to the jurisdiction of this court is not a reason for regarding the attachment as unnecessary. Obtaining jurisdiction over a non-resident defendant is only one purpose of an attachment; the other is security to ensure ultimate payment of any judgment a plaintiff may obtain. Under New York law the defendant has "the burden of proof ... to show that the attachment is unnecessary." George A. Fuller Co. v. Vitro Corporation, 26 A.D.2d 916, 274 N.Y.S.2d 600 (1st Dept. 1966). That burden is not satisfied by contentions that the security purpose of the attachment must fail because defendant's receivables in New York — the only property an attachment could reach — were already assigned to petitioner, and the attachment levies against defendant's customers are having an adverse effect upon its business. Defendant has not shown that the attachment was invalidly obtained or that plaintiff must ultimately fail on the merits. Accordingly, the attachment may not be vacated. B. B. Weit Printing Company v. Frances Denney, Inc., 300 F.Supp. 405, 408 (S.D.N.Y.1969). If, as defendant states, the attachment levies are hurting its business, it has a remedy. Defendant can discharge the attachment by posting a bond. N.Y. CPLR § 6222.

(c) Defendant's counterclaims against plaintiff are likewise not a ground for vacating the attachment. The requirement of N.Y. CPLR R. 6212 that the papers on a motion for an order of attachment must show "the amount demanded from the defendant above all counterclaims known to the plaintiff" is construed to mean only those counterclaims that a plaintiff is willing to concede as just. 7A Weinstein-Korn-Miller, supra, ¶ 6212.05 at 62-90. Here defendant's answer asserting counterclaims was not served until after removal of the action to this court, and there is no indication that plaintiff concedes it owes anything to defendant by...