Bendix Aviation Corporation v. Kury, Civ. No. 9652.

• Decision Date: 21 April 1949
• Docket Number: Civ. No. 9652.
• Citation: 85 F. Supp. 581
• Parties: BENDIX AVIATION CORPORATION v. KURY et al.
• Court: U.S. District Court — Eastern District of New York

85 F. Supp. 581

BENDIX AVIATION CORPORATION v. KURY et al.

Civ. No. 9652.

United States District Court E. D. New York.

April 21, 1949.

Hughes, Hubbard & Ewing, New York City (Charles C. Tillinghast, Jr., New York City, of counsel), for plaintiff, in opposition.

Bartlett, Eyre, Keel & Weymouth, New York City (Richard Eyre, New York City, of counsel), for defendant Kury.

KENNEDY, District Judge.

This is a motion for summary judgment dismissing the complaint. The action is one for declaratory judgment. The complaint alleges in substance that the plaintiff is a Delaware corporation, and the defendant Kury is a citizen of New York residing in this district.¹

It is shown by the complaint that the plaintiff manufactures certain devices, that Kury owns an undivided one-half interest in certain letters patent, that there is in existence a license agreement between the plaintiff, Kury, and Brewer, and that plaintiff is obligated to pay and has paid certain royalties under the terms of that agreement. But it is asserted that the inventors, Kury being one, are in actual controversy with the plaintiff over the question whether the devices enumerated in the complaint are covered by the letters patent. The purpose of the declaratory judgment, it is alleged, is to set this controversy at rest, because the patents are invalid.

Some time ago Kury and Brewer brought suit in the Supreme Court, New York County, against Bendix, the plaintiff here, and its wholly owned subsidiary, Bragg-Kliesrath Corporation, which is not a party to the present action. The gist of the State Supreme Court action was that the defendants there, of whom Bendix was one, had breached a series of agreements to pay royalties. The prayer for relief was that the plaintiff be awarded a judgment in the amount of $27,514.48. Bendix attempted unsuccessfully to remove the state court action. In fact, Bendix, after the filing of its removal petition, consented to a remand, a showing having been made by the plaintiffs in the state court action (Kury and Brewer) that there was not complete diversity of citizenship, in that Bragg-Kliesrath Corporation was and is a New York citizen. Bendix subsequently attempted in the state courts to stay or suspend the suit, but its application was denied.

To summarize the situation: there are pending two suits by these litigants, or some of them. In one (the state court action) the claim is that Bendix has violated its license agreement. In the other (the present suit) Bendix claims that while it is under obligation to pay royalties on some devices, it is free to manufacture others, because the letters patent are invalid as to those devices.

The grounds upon which the defendant Kury seeks summary judgment are carefully stated in his brief. His counsel says:

(1) that even if this court has jurisdiction of the subject matter, a declaratory judgment is "unwarranted", because the actual controversy can be fully determined in the state court (2) that the "actual controversy" between the parties cannot be completely or promptly adjudicated in the federal court, since neither Bragg-Kliesrath Corporation nor Brewer is a party to the federal suit;

(3) that this action is not brought in good faith, because the plaintiff has deliberately omitted as a party its wholly owned subsidiary Bragg-Kliesrath Corporation.

It can be seen at once that defendant really does not seek a judgment determining the merits, which is the normal outcome of a successful application for summary judgment. What defendant is really urging is that no federal court ought to award a declaratory judgment to the plaintiff, because indispensable parties are lacking, and because the...