Balfour v. Gutstein

• Decision Date: 16 September 1982
• Docket Number: Civ. A. No. 82-2127.
• Citation: 547 F. Supp. 147
• Parties: Richard BALFOUR, individually and trading as Newark Dental Supply Company and Newark Dental Supply Corporation v. Allan A. GUTSTEIN, D.D.S. and Dentalworks, Inc. and Dental Works — Bethlehem, Inc. and William Sokolic and Dentalworks —Easton, Inc. and Sam Rosenfeld and Bill Hollingshead and Dental Works — Plymouth Meeting, Inc. and Joel Berger and Larry Levin.
• Court: U.S. District Court — Eastern District of Pennsylvania

547 F. Supp. 147

Richard BALFOUR, individually and trading as Newark Dental Supply Company and Newark Dental Supply Corporation v. Allan A. GUTSTEIN, D.D.S. and Dentalworks, Inc. and Dental Works — Bethlehem, Inc. and William Sokolic and Dentalworks —Easton, Inc. and Sam Rosenfeld and Bill Hollingshead and Dental Works — Plymouth Meeting, Inc. and Joel Berger and Larry Levin.

Civ. A. No. 82-2127.

United States District Court, E. D. Pennsylvania.

September 16, 1982.

Gilbert Abramson, Philadelphia, Pa., for plaintiffs.

Richard D. Director, Allentown, Pa., for defendants.

MEMORANDUM AND ORDER

TROUTMAN, District Judge.

Defendants, all either dentists, corporations involved in the manufacture of dental equipment, or their principals, move for a stay or dismissal of the instant action which alleges generally breach of contract and tortious interference with contract rights.¹ They argue that notions of comity and the beneficial use of scarce judicial reasons compel the conclusion that this Court should refuse to adjudicate the matter because of the existence of a similar action now pending in state court. Plaintiffs vehemently contest the defendants' characterization of this action as a "dressed up" version of the state suit and urge that the instant motion represents a dilatory tactic interposed in bad faith and solely to delay. Hence, they assert that the motion is a "sham" pleading within the meaning of Fed.R.Civ.P. 11 and that sanctions in the form of counsel fees for the breach thereof are necessary. We conclude that defendants' motion to dismiss or to stay and plaintiffs' request for fees are both properly denied.

Defendants' motion to dismiss is predicated upon the theory that the pending state action is virtually identical to the one at bar, and that the lack of any substantial federal question warrants deferral to the state court. In support of their motion, defendants rely upon Will v. Calvert Fire Ins. Co., 437 U.S. 655, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978) which reaffirmed the rule announced in Brillhart v. Excess Ins. Co. of America, 316 U.S. 491, 492, 495, 62 S.Ct. 1173, 1174, 1175, 86 L.Ed. 1620 (1942) that it is "uneconomical" and "vexatious" for a "federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties". (emphasis added.) See, ACandS, Inc. v. Aetna Casualty and Surety Co., 544 F. Supp. 128 (E.D.Pa.1982) (finding that portions of a declaratory judgment action sufficiently parallel a pending state court action to compel partial dismissal thereof.) The cited cases do not, however, aid defendants in that each action sought a federal declaratory judgment. By contrast, plaintiffs at bar do not seek such relief.

Defendants also rely upon Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) in support of their motion to dismiss. There, the Supreme Court held that the District Court had properly dismissed the action due to the pendency of a state suit. The Colorado River Water Conservation Dist. court grounded its holding in the "clear federal policy" evidenced in the McCarran Amendments that courts should seek to "avoid the piecemeal adjudication of water rights in a river system". Id. at 819, 96 S.Ct. at 1247. Since the court viewed the allocation of water rights as akin to the disposition of property, it concluded that the state court, which had first acquired control of the res, should be free to adjudicate the matter without the hinderance of a similar federal action also proceeding to judgment. In so holding, the court was concerned that any contrary conclusion could create "inconsistent dispositions of property". Colorado River Water Conservation Dist. v. U.S., 424 U.S. at 819, 96 S.Ct. at 1247. Clearly, however, the court did not retreat from the long established rule that abstention is an "extraordinary and narrow exception to the duty of the District Court to adjudicate a controversy properly before it". In fact, invocation of the doctrine is only justified under "exceptional circumstances". 424 U.S. at 813, 96 S.Ct. at 1244. See also, Zimmerman v. Pioneer Chain Saw Co., Inc., No. 82-1501, slip op. at 4-5 (E.D.Pa. August 2, 1982). Since we find no such "exceptional circumstances" at bar, we decline to dismiss the action.

We now turn to defendants' alternate argument that this action should be stayed. It is well settled that a court's ability to stay a pending action is "incidental" to its "inherent power", Landis v. North American Co., 299 U.S. 248, 57 S.Ct. 163, 81 L.Ed. 153 (1936) (Cardozo, J.), and that motions requesting such relief are committed to the court's "sound discretion". Bechtel v. Local 215, Laborers' International Union, 544 F.2d 1207, 1215 (3d Cir. 1976). Factors which courts consider in determining the propriety of a stay include principles of comity, the adequacy of relief available in the alternative forum, promotion of judicial efficiency, the identity of the parties and issues in the two actions, the likelihood of prompt disposition in the alternative forum, the convenience of the parties, counsel and witnesses and the possibility of prejudice if the stay is granted. See, Nigro v. Blumberg, 373 F.Supp. 1206 (E.D.Pa.1974).

Considerations of comity, the first factor, do not support defendants' application for a stay. In fact, the general rule between state and federal courts is that the "pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal Court having jurisdiction". Colorado River Water Conservation Dist. v. United States, 424 U.S. at 817, 96 S.Ct. at 1246, quoting, McClellan v. Carland, 217 U.S. 268, 282, 30 S.Ct. 501, 504, 54 L.Ed. 762 (1910). Principles of comity are not offended by concurrent federal and state adjudications of closely related issues. The danger of inconsistent results is here more illusory than real since res judicata may be properly invoked to...