Epstein v. Guilford Industries, Inc.

• Decision Date: 03 April 1963
• Citation: 218 F. Supp. 286
• Parties: Edwin N. EPSTEIN, Plaintiff, v. GUILFORD INDUSTRIES, INC., a Corporation (Formerly Guilford Woolen Mills, Inc.) and Guilford Woolen Fabrics, Inc., a Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

218 F. Supp. 286

Edwin N. EPSTEIN, Plaintiff, v. GUILFORD INDUSTRIES, INC., a Corporation (Formerly Guilford Woolen Mills, Inc.) and Guilford Woolen Fabrics, Inc., a Corporation, Defendants.

United States District Court S. D. New York.

April 3, 1963.

Nemeroff, Jelline, Danzig & Paley, New York City, for plaintiff; Leonard M. Mandel, New York City, of counsel.

Hall, Patterson, Taylor, McNicol & Marett, New York City, for defendant Guilford Industries, Inc.; James J. Marett, New York City, of counsel.

Pennie, Edmonds, Morton, Taylor & Adams, New York City, for defendant Guilford Woolen Fabrics, Inc.; Robert McKay, New York City, of counsel.

McLEAN, District Judge.

This is a motion by plaintiff to remand this action originally begun in the Supreme Court, New York County and removed to this court by the defendants on the ground of diversity of citizenship. Plaintiff claims that defendant Guilford Woolen Fabrics, Inc. ("Fabrics"), has its "principal place of business" in New York within the meaning of 28 U.S.C. § 1332, that it is therefore a citizen of New York and that consequently there is no diversity, since plaintiff is also a New York citizen.

The question is one of fact. The relevant information disclosed by the moving and opposing affidavits may be briefly summarized as follows:

Defendant Guilford Industries, Inc. ("Industries"), is a Maine corporation engaged in manufacturing woolen fabrics in Guilford, Maine. Defendant Fabrics is its sales agent. Fabrics also acts as sales agent for at least one other manufacturer.

Fabrics is a Maine corporation. Its bylaws state that its "principal office" shall be in Guilford, Maine. All its capital stock is owned by Industries. It has only two officers, a President-Treasurer and a Clerk. They each reside in Maine. The President-Treasurer is also an officer of Industries. Fabrics has three directors, its President-Treasurer and his brother and mother. They all reside in Maine. Its stockholders' meetings are held in Maine.

Fabrics' office in Maine consists of space in the office of Industries. Fabrics maintains its principal bank account in Maine, but it has no other property there. It keeps all its financial, accounting, purchase and invoice records in Maine. It has two or three employees there, of whom one is the President-Treasurer. Its other employees, wherever situated, are paid by check sent from Maine. It files its federal income tax returns in Maine.

Orders obtained by Fabrics from customers are subject to acceptance by its principal, Industries, in Maine. This fact would be relevant if the issue were whether or not the parent company, Industries, is doing business in New York, but it does not seem to me to bear upon the present question. We are not concerned here with the relations between Fabrics and its principal, but simply with the issue of where Fabrics' own principal place of business is.

Fabrics is qualified to do business in New York. It pays taxes in New York as a foreign corporation. It has an office in the Empire State Building in New York City, characterized by plaintiff as "elaborate," for which it pays a rent of $23,000 per year. It owns its office furniture and equipment there situated. This office is listed in the Manhattan telephone directory and in the "Yellow Pages."

Fabrics has some 17 employees in New York, including most of its salesmen, who operate out of the New York office. The sales managers of its various product lines make their offices in New York. The president of Fabrics comes to New York on an average of once a week, presumably to oversee operations here. Fabrics has a small bank account in New York.

The confirmation of orders which are sent to its customers are headed "Guilford Woolen Fabrics, Inc., Empire State Building, 350 Fifth Avenue, New York 1, New York." There is a place at the bottom of the form for acceptance at Guilford, Maine, by Industries, i. e., by Fabrics' principal. There is nothing on the form to indicate that Fabrics itself is located anywhere other than New York.

The invoices which are sent to...