Cass v. Sonnenblick-Goldman Corp.

• Decision Date: 07 August 1968
• Docket Number: Civ. A. No. 43550.
• Citation: 287 F. Supp. 815
• Parties: William B. CASS v. SONNENBLICK-GOLDMAN CORP., Ralph P. Obedin, and the Prudential Insurance Company of America.
• Court: U.S. District Court — Eastern District of Pennsylvania

287 F. Supp. 815

William B. CASS v. SONNENBLICK-GOLDMAN CORP., Ralph P. Obedin, and the Prudential Insurance Company of America.

Civ. A. No. 43550.

United States District Court E. D. Pennsylvania.

August 7, 1968.

Austin J. McGreal, Philadelphia, Pa., for plaintiff.

Edward Greer, Philadelphia, Pa., for defendant.

OPINION

MASTERSON, District Judge.

On September 12, 1967, the plaintiff, William B. Cass, instituted this action alleging breach of contract, fraudulent conversion, and fraudulent misrepresentation on the part of the defendants. The plaintiff alleged original federal jurisdiction pursuant to Title 28 U.S.C. § 1332(a) on the basis of diversity of citizenship of the parties. Presently the defendants all have made motions to dismiss. The defendant Ralph P. Obedin has based his motion to dismiss partially upon the claim that there does not exist diversity of citizenship between himself and the plaintiff. He also has joined with the other defendants in their argument that the plaintiff's action must be dismissed because it does not involve a matter in controversy exceeding the sum of $10,000.00 as required by Title 28 U. S.C. § 1332(a). For the reasons discussed below, Obedin's motion to dismiss will be granted and the motions to dismiss made by the other two defendants will be denied. The Court also has decided to consolidate this case with a currently pending civil action instituted in this district court by Sonnenblick-Goldman Corporation against William Cass and other defendants.

The plaintiff alleges in his complaint that he is a citizen and resident of Pennsylvania, that the defendant Sonnenblick-Goldman Corporation, hereinafter referred to as Sonnenblick, was incorporated in the state of New York and has its principal place of business there, that the defendant the Prudential Insurance Company of America, hereinafter referred to as Prudential, was incorporated in the state of New Jersey and has its principal place of business there, and, that Mr. Obedin is a "* * * citizen of a state other than that of Plaintiff", i. e. other than Pennsylvania. Neither Sonnenblick nor Prudential has controverted the plaintiff's jurisdictional allegations regarding their respective states of incorporation and/or their principal places of business. The defendant Ralph Obedin, however, has denied the plaintiff's allegation that he is a "* * * citizen of a state other than that of Plaintiff." In support of his denial he has filed an affidavit in which he has averred under oath that he is a resident and a citizen of Pennsylvania.

The plaintiff has opposed Obedin's motion to dismiss with the single argument that all allegations in his complaint, including the allegation regarding Obedin's citizenship, must be accepted as true for the purposes of disposing of this motion. The law clearly is to the opposite effect, i. e. once a plaintiff's jurisdictional averments have been challenged the plaintiff bears the burden of establishing the requisite jurisdictional facts. See, E. g. Ramsey v. Mellon National Bank and Trust Company, 350 F.2d 874, 876-877 (C.A.3, 1965), and Hamlin v. Holland, 256 F.Supp. 25, 27 (E.D.Pa., 1966). Therefore, once Obedin challenged the plaintiff's allegation that he was a citizen of a state other than Pennsylvania, the plaintiff assumed the burden of supporting that allegation by affidavit or other evidentiary matter, in order to satisfy the standards of Title 28 U.S.C. § 1332 which require that the citizenship of each plaintiff must be diverse from that of each defendant. See, John Birch Society v. National Broadcasting Company, 377 F.2d 194, 197 (C.A.2, 1967).

Despite the fact that the Court granted the plaintiff thirty days from the date of the argument of the defendants' motions to file counter-affidavits or to take depositions in support of his jurisdictional contentions, to this date he has not filed anything to support the general allegations contained in his pleadings which relate to Obedin's allegedly foreign citizenship. The only averments contained in the record which are relevant to this issue, therefore, are those contained in Obedin's affidavit which are to the effect that he is a resident and a citizen of Pennsylvania. In the absence of any countervailing showing, under these circumstances the defendant's affidavit is sufficient proof of the absence of diversity and requires this Court to dismiss the plaintiff's action at least insofar as it is directed to Obedin. See, E. g. Bryfogle v. Acme Market, Inc., 176 F.Supp. 43, 45 (E.D. Pa., 1959).

Defendants Sonnenblick and Prudential have argued in their brief that the lack of diversity between Obedin and the plaintiff is fatal to the entire action. Although the law traditionally has required complete diversity of citizenship between parties in actions under Title 28 U.S.C. § 1332, See, Strawbridge v. Curtis, 3 Cranch 267, 7 U.S. 267, 2 L.Ed. 435 (1806), it is clear that a federal court may retain jurisdiction over a case where one of the non-diverse defendants who was dismissed from the case was not an indispensable party. See, Girardi v. Lipsett, Inc., 275 F.2d 492, 494, f. n. 1 (C.A.3, 1960), Kerr v. Compagnie De Ultramar, 250 F.2d 860, 863 (C.A.2, 1958), and Barron and Holtzoff, Federal Practice and Procedure, Volume 1, § 26, p. 154. Resolution of the defendants' contention thus depends upon a determination of whether Obedin is an indispensable party or, instead, merely a necessary party to this action.

The Supreme Court enunciated the classic definition of an indispensable party in 1854 in the case of Shields v. Barrow, 58 U.S. (17 Howard) 130, 137, 15 L.Ed. 158:

"Persons who not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience."

Since that time it has become clear that "* * * there is no prescribed formula for determining * * * whether a person * * * is an indispensable party or not.", Niles-Bement-Pond Co. v. Iron Moulders' Union, 254 U.S. 77, 80, 41 S.Ct. 39, 65 L.Ed. 145 (1920), and that, in general, this determination must be guided by practical and equitable considerations of the circumstances of the individual case. See, Provident Trademens B. & T. Co. v. Lumbermens Mut. Cas. Co., 365 F.2d 802, 817-818 (C.A.3, 1966) (Dissenting Opinion, Freedman, J.).

This action arises out of an alleged breach of a contract which was entered into by the plaintiff and other business associates and Sonnenblick. Under the contract Sonnenblick agreed to procure a mortgage loan from Prudential for property owned by the plaintiff. The plaintiff alleges that after Sonnenblick had failed to procure a mortgage commitment, Sonnenblick and Prudential wrongfully refused to return his deposit of $3,000.00 and, instead, deposited the funds to Sonnenblick's account. The plaintiff's complaint indicates clearly that, although Obedin played a conspicuous part in...