Continental Time Corp. v. Swiss Credit Bank, 81 Civ. 7389 (MEL).
| Decision Date | 19 July 1982 |
| Docket Number | No. 81 Civ. 7389 (MEL).,81 Civ. 7389 (MEL). |
| Parties | CONTINENTAL TIME CORP., Plaintiff, v. SWISS CREDIT BANK, Swiss Air Transport Co., Ltd. and S. H. Pomerance Co., Inc., Defendants. S. H. POMERANCE CO., INC., Third-Party Plaintiff, v. The MERCHANTS BANK OF NEW YORK and Martin Staub, Third-Party Defendants. |
| Court | U.S. District Court — Southern District of New York |
Kraver & Martin, New York City, for plaintiff; Richard M. Kraver, Roy I. Martin, Lewis S. Fischbein, New York City, of counsel.
Milbank, Tweed, Hadley & McCloy, New York City, for defendant Credit Suisse.
Edward Cobert, Garden City, N. Y., for defendant S. H. Pomerance Co., Inc.
Condon & Forsyth, New York City, for defendant Swiss Air Transport Co., Inc.
Simon, Meyrowitz & Meyrowitz, New York City, for third-party defendant The Merchants Bank of New York.
Continental Time Corp. ("Continental") sues to recover damages allegedly arising out of Credit Suisse's ("Swiss Credit") wrongful refusal to honor its obligations under an irrevocable letter of credit. The letter of credit was issued on January 10, 1980, in favor of Continental. On January 21, 1980, Continental assigned its entire interest in the letter of credit to S. Frederick & Company ("Frederick") and to Arlington Distributing Co., Inc. ("Arlington"). On January 29, 1980, Swiss Credit advised Merchants Bank, where Frederick held his account, that the air waybill did not conform to the requirements of the letter of credit. The expiration date on the letter of credit subsequently passed with no payment made. On May 28, 1980, Frederick and Arlington separately instituted suit in Switzerland for recovery of their assigned portions of the letter of credit. The Swiss court consolidated the actions and granted Swiss Credit's application to join Georges Bloch, the person who had originally requested the issuance of the letter of credit, in the action. The suit in Switzerland is currently pending.
Continental instituted this suit in 1981. Swiss Credit now moves to dismiss the complaint or stay the action on the grounds that Continental is not the real party in interest and that the precise issues are being litigated in the Swiss action. On March 18, 1982, Continental and Frederick settled related litigation between themselves. As part of the settlement, Frederick assigned back to Continental 75% of its interest in the letter of credit, agreed to attempt to intervene in this suit, and agreed to consent to a stay of the Swiss action at Continental's request.
Swiss Credit contends that, despite Frederick's reassignment of most of its interest in the letter of credit to Continental, the court should exercise its discretionary power to dismiss suits involving the same parties where, as is claimed here, the earlier initiated litigation will resolve the issues in the present suit. Swiss Credit argues that it would be prejudiced by the continuation of this suit through the assignment of the claim from Frederick to Continental because it must continue to litigate the same issues in two fora, here and in Switzerland. In this regard, Swiss Credit notes that the assignment was only partial, that there has been no unconditional promise by Frederick to agree to a stay of the Swiss action, and that Frederick has yet to intervene here. Swiss Credit also maintains that Continental's maneuvers with Frederick amount to a method of forum shopping and that Continental has failed to join Arlington, a necessary party, in this suit. Swiss Credit contends that Switzerland is the appropriate forum for the litigation of the letter of credit claims because the Swiss action was filed first, Continental Time may "intervene" in the Swiss action, and all the relevant parties for the letter of credit claim are involved in the Swiss action.
Continental responds that Frederick's assignment to it renders Continental a real party in interest in this suit and that Arlington, as a minority assignee, is not an indispensable party under Fed.R.Civ.Pr. 19(b). Continental contends that this action should not be dismissed or stayed in favor of the Swiss action because the actions may proceed simultaneously, it is pressing claims against defendants other than Swiss Credit here, and Continental is not a party to...
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