Stonybrook Tenants Association, Inc. v. Alpert, Civ. 8604.

CourtUnited States District Courts. 2nd Circuit. United States District Court (Connecticut)
Citation194 F. Supp. 552
Decision Date31 May 1961
Docket NumberCiv. 8604.
PartiesSTONYBROOK TENANTS ASSOCIATION, INCORPORATED, George F. Wright, Earl M. Gleason, John A. Matarazzo, and Earl McMaugh Barnes, Plaintiffs, v. Hyman ALPERT and Joseph Alpert, Individually and d/b/a Stonybrook Gardens Company, and Stonybrook Gardens, Incorporated, and Stonybrook, Incorporated, Defendants.

194 F. Supp. 552

STONYBROOK TENANTS ASSOCIATION, INCORPORATED, George F. Wright, Earl M. Gleason, John A. Matarazzo, and Earl McMaugh Barnes, Plaintiffs,
v.
Hyman ALPERT and Joseph Alpert, Individually and d/b/a Stonybrook Gardens Company, and Stonybrook Gardens, Incorporated, and Stonybrook, Incorporated, Defendants.

Civ. 8604.

United States District Court D. Connecticut.

May 31, 1961.


194 F. Supp. 553

Theodore I. Koskoff, Bridgeport, Conn., and Frank J. Hennessy, Stratford, Conn., for plaintiffs.

Hugh A. Hoyt, Bridgeport, Conn., Francis M. Shea and Alfred L. Scanlan, Washington, D. C., for defendants.

TIMBERS, District Judge.

Plaintiffs1 move, pursuant to 28 U.S. C. § 1447, to remand this case to the Superior Court for Fairfield County, from which it was removed to this Court, pursuant to 28 U.S.C. § 1441, by defendants Hyman Alpert and Joseph Alpert.

Question

The question presented by the motion to remand is whether two inactive Connecticut corporations named as defendants—both of which have been liquidated, have neither assets nor liabilities and are in the process of dissolution—are necessary or indispensable parties defendant so as to destroy requisite diversity of citizenship.

The Court holds that this question must be answered in the negative and accordingly denies the motion to remand.

Facts

Facts dispositive of this motion are set forth in the complaint originally filed in the Superior Court, the agreement of August 17, 1959 (Exhibit A referred to in the complaint) and the verified removal petition.

194 F. Supp. 554

Nature of this Action

The action is brought to enforce a written agreement entered into August 17, 1959 between defendants in this action (referred to as "Parties of the First Part") and plaintiffs in this action (referred to as "Parties of the Second Part"). The agreement provided, among other things, for the settlement of certain litigation arising out of the operation of Stonybrook Gardens, a 400 unit housing development in Stratford, Connecticut; for the sale of individual housing units in Stonybrook Gardens upon specified terms and conditions; for cooperation between the parties in attempting to work out a sale to plaintiffs of Stonybrook Gardens as a cooperative; and for certain maintenance, repairs, renovations and painting of the property.

Relief sought in this action, in addition to a claim of $400,000 damages, includes equitable relief in the form of an injunction ordering defendants to complete certain repairs, renovations and painting; to maintain the premises properly; to refrain from proceeding with summary process actions and from instituting new ones; to cooperate in working out a sale of the property to a cooperative, including securing the necessary financing; and to sell the property to a cooperative at a price to be determined by the Court.

Events Preceding this Action

Stonybrook Gardens was built during 1941 and 1942 as a permanent defense housing project, pursuant to the Lanham Act, 54 Stat. 1125 (1940), 42 U.S.C. §§ 1521-1524. Upon completion, it was placed under control of the Bridgeport Housing Authority. On June 30, 1943 it was placed under control of the Stratford Housing Authority. Both housing authorities were agents of the Public Housing Administration, an instrumentality of the United States.

On January 17, 1956 Stonybrook Gardens, having been put up for public sale by the Public Housing Administration pursuant to the Lanham Act, was sold to Stonybrook Gardens, Inc., a Connecticut corporation, for $1,327,492. The Public Housing Administration was paid $200,000 in cash and accepted a purchase-money mortgage note, secured by a mortgage on the premises, for the remainder of the purchase price.

On December 31, 1956 the interest of Stonybrook Gardens, Inc. in the property was conveyed outright to Hyman Alpert and Joseph Alpert (hereinafter "the Alperts") who were doing business under the name of Stonybrook Gardens Company, a New York partnership.

On January 10, 1957 the property was conveyed by the Alperts to Stonybrook, Inc., a Connecticut corporation, under an arrangement whereby this corporation was to act as nominee for the Alperts for the sole purpose of holding title to the property; the Alperts were to receive all income from the property, were to be responsible for all expenses of operating the property and were to assume all liabilities of the corporation arising from its holding title to the property.

On May 21, 1959 all interest of Stonybrook, Inc. in the property was conveyed outright to the Alperts.

On August 17, 1959 the agreement referred to above was executed.

Parties to this Action

All named individual plaintiffs are citizens and residents of Connecticut.2

194 F. Supp. 555
Plaintiff, Stonybrook Tenants Association, Inc., is an incorporated Connecticut association, all of whose members reside in Stonybrook Gardens and are Connecticut citizens

The two named individual defendants, Hyman Alpert and Joseph Alpert, are citizens and residents of New York. They do business under the name of Stonybrook Gardens Company, a New York partnership with its principal place of business in Brooklyn, New York. The partnership owns and operates Stonybrook Gardens, the housing project referred to above.

The two named corporate defendants, Stonybrook Gardens, Inc. and Stonybrook, Inc., are Connecticut corporations whose present status and interest in this action will be summarized below.

Interests of Defendants in this Action

The individual defendants—the Alperts—are the sole owners and operators of Stonybrook Gardens and have been continuously since execution of the agreement of August 17, 1959. Since December 31, 1956 they have owned the equitable title to the property and during this period have collected all rents from the property; have paid all taxes on the property; have brought eviction proceedings and other actions against tenants of the property; and have been responsible for all expenses of operating the property, including maintenance, repairs and renovations.

Defendant Stonybrook Gardens, Inc. had an active corporate existence from January 17, 1956 (the date it purchased Stonybrook Gardens from the Public Housing Administration) to December 31, 1956 (the date it conveyed its interest in the property to the Alperts). This corporation has been inactive since December 31, 1956; has no assets or liabilities; and is now in process of dissolution.

Defendant Stonybrook, Inc. held legal title to Stonybrook Gardens from January 10, 1957 (the date the Alperts conveyed the property to it under the arrangement referred to above) to May 21, 1959 (the date it conveyed its interest in the property to the Alperts). This corporation has been inactive since May 21, 1959; has no assets or liabilities; and is now in process of dissolution.

Controlling Statutory and Decisional Law

Defendants removed this case from the Superior Court for Fairfield County to this Court pursuant to 28 U.S. C. § 1441(a),3 invoking the jurisdiction of this Court pursuant to 28 U.S.C. § 1332(a) (1)4 on the ground that requisite diversity of citizenship exists and the requisite jurisdictional amount is involved.5

194 F. Supp. 556

In view of the $400,000 claim for damages, there is no issue as to jurisdictional amount. The sole issue is whether diversity of citizenship exists by reason of the two inactive Connecticut corporations named as defendants, all plaintiffs being Connecticut citizens and the two individual defendants being New York citizens.

Requisite diversity jurisdiction exists if all parties on one side are of citizenship diverse to that of all parties on the other side. Strawbridge v. Curtiss, 1806, 3 Cranch 267, 7 U.S. 267, 2 L.Ed. 435; In re Removal Cases, 1879, 100 U.S. 457, 468-470, 25 L.Ed. 593; Salem Trust Company v. Manufacturers' Finance Company, 1924, 264 U.S. 182, 189, 44 S.Ct. 266, 68 L.Ed. 628; City of Indianapolis v. Chase National Bank, 1941, 314 U.S. 63, 69, 62 S.Ct. 15, 86 L.Ed. 47. In a removal case, such diversity must exist at the time suit is commenced and at the time the removal petition is filed. Yulee v. Vose, 1878, 99 U.S. 539, 25 L.Ed. 355.

The right of removal cannot be defeated by joining unnecessary or dispensable parties. Salem Trust Company v. Manufacturers' Finance Company, supra, 264 U.S. at pages 189-190, 44 S.Ct. 266; Olsen v. Jacklowitz, 2 Cir., 1935, 74 F.2d 718, 719. In the Salem Trust Company case, the Supreme Court stated (264 U.S. 182, 189-190, 44 S.Ct. 266, 267):

"District Courts have jurisdiction if all the parties on the one side are of citizenship diverse to those on the other side. Jurisdiction cannot be defeated by joining formal or unnecsary parties. The right of removal depends upon the case disclosed by the pleadings when the petition therefor is filed, (Barney v. Latham, 103 U.S. 205, 215 26 L.Ed. 514; Ex parte Nebraska, 209 U.S. 436, 444 28 S.Ct. 581, 52 L.Ed. 876) and is not affected by the fact that one of the defendants is a citizen of the same state as the plaintiff, if that defendant is not an indispensable party to the controversy between plaintiff and defendant who are citizens of different States. Barney v. Latham, supra 103 U.S. 213."

Moreover, nominal or formal parties, being neither necessary nor indispensable, are not required to join in the petition for removal. Shattuck v. North British & Mercantile Insurance Company, 8 Cir., 1893, 58 F. 609, 610.

For purposes of determining whether requisite diversity of citizenship exists, the...

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39 practice notes
  • Rose v. Giamatti, Bankruptcy No. C-2-89-0577.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • July 31, 1989
    ...or no actual interest or control over the subject matter of the litigation. Stonybrook Tenants 721 F. Supp. 915 Ass'n, Inc. v. Alpert, 194 F.Supp. 552, 556 While these related governing principles of federal court jurisdiction are clear and not in dispute, the parties strongly disagree as t......
  • Farias v. Bexar County Bd. of Trustees for Mental Health Mental Retardation Services, Nos. 89-5620
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • March 11, 1991
    ...which would not be in any way unfair or inequitable to the plaintiff." Id. (quoting Stonybrook Tenants Assoc., Inc. v. Alpert, 194 F.Supp. 552, 559 (D.Conn.1961)). The test places no limitation on whether removal is based on diversity or federal question jurisdiction and neither do we 4. Si......
  • Glenmede Trust Company v. Dow Chemical Company, Civ. A. No. 74-2345.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • October 25, 1974
    ...Aberle Hosiery Co. v. American Arbitration Assn., 337 F.Supp. 90 (E.D.Pa. 1972); Stonybrook Tenants Assoc., Inc. v. Alpert et al., 194 F.Supp. 552 (D. Conn.1961); Helms v. Ehe, 279 F.Supp. 132 (S.D.Tex.1968); Leadman v. Fidelity & Casualty Company, 92 F.Supp. 782 (S.D.W.Va. Because the dete......
  • F & L DRUG CORP. v. American Central Insurance Co., Civ. No. 7644.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Connecticut)
    • December 15, 1961
    ...is not required to be served on the defendant, whichever period is shorter." 3 Stonybrook Tenants Ass'n Inc. v. Alpert (D.C.Conn.1961), 194 F.Supp. 552 (allowed amending jurisdictional amount in petition from $3,000 to $10,000 in view of ad damnum in the accompanying complaint of $400,000.)......
  • Request a trial to view additional results
39 cases
  • Rose v. Giamatti, Bankruptcy No. C-2-89-0577.
    • United States
    • United States District Courts. 6th Circuit. United States District Courts. 6th Circuit. Southern District of Ohio
    • July 31, 1989
    ...or no actual interest or control over the subject matter of the litigation. Stonybrook Tenants 721 F. Supp. 915 Ass'n, Inc. v. Alpert, 194 F.Supp. 552, 556 While these related governing principles of federal court jurisdiction are clear and not in dispute, the parties strongly disagree as t......
  • Farias v. Bexar County Bd. of Trustees for Mental Health Mental Retardation Services, Nos. 89-5620
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • March 11, 1991
    ...which would not be in any way unfair or inequitable to the plaintiff." Id. (quoting Stonybrook Tenants Assoc., Inc. v. Alpert, 194 F.Supp. 552, 559 (D.Conn.1961)). The test places no limitation on whether removal is based on diversity or federal question jurisdiction and neither do we 4. Si......
  • Glenmede Trust Company v. Dow Chemical Company, Civ. A. No. 74-2345.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • October 25, 1974
    ...Aberle Hosiery Co. v. American Arbitration Assn., 337 F.Supp. 90 (E.D.Pa. 1972); Stonybrook Tenants Assoc., Inc. v. Alpert et al., 194 F.Supp. 552 (D. Conn.1961); Helms v. Ehe, 279 F.Supp. 132 (S.D.Tex.1968); Leadman v. Fidelity & Casualty Company, 92 F.Supp. 782 (S.D.W.Va. Because the dete......
  • F & L DRUG CORP. v. American Central Insurance Co., Civ. No. 7644.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Connecticut)
    • December 15, 1961
    ...is not required to be served on the defendant, whichever period is shorter." 3 Stonybrook Tenants Ass'n Inc. v. Alpert (D.C.Conn.1961), 194 F.Supp. 552 (allowed amending jurisdictional amount in petition from $3,000 to $10,000 in view of ad damnum in the accompanying complaint of $400,000.)......
  • Request a trial to view additional results

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