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SHELLEY v. THE MACCABEES

February 23, 1961

George SHELLEY, Plaintiff,
v.
THE MACCABEES, Emile A. Haar, David A. Hersh, Robert E. Morris, R. B. Twogood, T. L. Kester, L. F. Ayer, C. Robert Young, A. F. Devine and Joseph A. Navarre, Defendants



The opinion of the court was delivered by: ZAVATT

This is a motion by the only defendants served (two out of a total of ten) to transfer this case to the United States District Court for the Eastern District of Michigan (Southern Division) pursuant to 28 U.S.C. § 1404(a). It illustrates some of the problems (of the litigant's own making) which the courts encounter in diversity cases, having one plaintiff and multiple defendants who are citizens of several states.

The plaintiff, a citizen of New York State residing in Nassau County, was the Chairman of the Board and a director of the defendant, The Maccabees (hereinafter referred to as the Society), a fraternal insurance society incorporated and having its principal place of business in the State of Michigan and licensed to do business and having an office in the State of New York. The plaintiff was also a regional officer in charge of the New York office of the Society and, in addition, maintained an insurance agency of his own which handled all insurance sales made by the Society in the New York Metropolitan region. The plaintiff claims to have the following contracts with the Society: one contract under which the Society is claimed to have agreed to buy certain commissions due and to become due to the plaintiff for the sum of $ 1,198,000; another contract whereby the Society and The Great Camp of New York (the New York Chapter of the Society) agreed to purchase the assets and the good will of the plaintiff's insurance agency for $ 1,000,000; an employment contract under which the plaintiff was manager of the insurance activities of the Society in the states of New Jersey, Connecticut and Rhode Island. He claims, further, to have been the Great Commander of the New York Chapter of the Society with an annual salary of $ 7,400. He claims further that his annual salary as Chairman of the Board of the Society was $ 50,000.

The Society is claimed to have canceled the contract to purchase the commissions for $ 1,198,000; to have canceled its participation in the contract to purchase the plaintiff's good will and to have revoked the charter of The Great Camp, the other party to the contract, all to the plaintiff's damage in the sum of $ 1,000,000 (and the incidental loss of his $ 7,400 salary as the Great Commander of The Great Camp); to have canceled the agreement with the plaintiff whereby he was in charge of the activities of the Society in New Jersey, Connecticut and Rhode Island resulting in damages to the plaintiff of $ 3,000,000; to have suspended plaintiff as Chairman of the Board of the Society at a loss of his annual salary of $ 50,000. The plaintiff claims that the Society was wrongfully induced to take these several steps by the officers and directors of the Society and another individual, Navarre, who is alleged to be a special insurance consultant to the Society and formerly Commissioner of Insurance of the State of Michigan. The plaintiff claims further that the acts of the individual defendants in inducing these breaches of contract by the Society and other acts of a nefarious nature committed by these individual defendants (including libel and slander) have ruined him in his business and reputation to the extent of $ 6,000,000.

 The plaintiff instituted several actions:

 Action No. 1. September 4, 1959. An action for wrongful interference with contractual relations against ten defendants (the Society and nine individual inducers) in the Supreme Court, Nassau County, New York, for $ 11,198,000. Only two defendants were served, to wit: the Society and Emile A. Haar, a director and the Secretary-Treasurer of the Society, who apparently, was a citizen of New York residing in Buffalo. This action was removed to this court September 24, 1959 and a motion to remand was denied by Chief Judge Bruchhausen November 10, 1959. 180 F.Supp. 517.

 Action No. 2. September 4, 1959. An action in the Supreme Court, New York County, against the Society for breach of the commissions contract and the good will contract seeking damages in the total sum of $ 2,198,000. This action was removed to the United States District Court for the Southern District of New York on or before September 24, 1959 and is pending there.

 Action No. 3. September 4, 1959. An action in the Supreme Court, New York County, against the Society for specific performance of an insurance policy of the Society issued to and held by the plaintiff. This claim is not included in Actions Nos. 1 or 2. It was removed to the United States District Court for the Southern District of New York on or before September 24, 1959 and is pending there.

 Action No. 4. September 4, 1959. An action against the Society in the Supreme Court, New York County, to recover $ 8,000 in membership dues. This action was removed to the Southern District of New York on or before September 24, 1959 and thereafter remanded because of the absence of the requisite jurisdictional amount to justify removal. 28 U.S.C. § 1332(a). This action is pending in the Supreme Court, New York County.

 Action No. 5. September 4, 1959. An action against the Society in the Supreme Court, New York County, to recover $ 9,500 of alleged insurance commissions. This action was removed and thereafter remanded for lack of jurisdictional amount and is pending in the Supreme Court, New York County. Paragraph 38 of the complaint in Action No. 1 suggests that this claim, or aspects thereof, against the Society may be included within the claims in Action No. 1.

 Action No. 6. September 4, 1959. An action against Emile A. Haar in the Supreme Court, Nassau County, to recover $ 4,000,000 for alleged libel and slander. This complaint suggests that this cause of action, in all or in part, comes within the fourth claim of the complaint in Action No. 1. This case is pending in the Supreme Court, Nassau County, New York.

 Action No. 7. September 11, 1959. An action against the Society, eight of the individual defendants in Action No. 1 and one additional defendant, Stanley Andrews, a director of the Society, in the Circuit Court for the County of Wayne, Michigan, to restrain the Society and its officers and directors from holding a hearing or trial on company charges which led to Shelley's suspension as Chairman of the Board and a director of the Society. The facts alleged in this complaint are similar in many respects to those alleged in Action No. 1. This case was removed to the United States District Court for the Eastern District of Michigan (S.D.) and thereafter remanded. All of the defendants have appeared and the action is pending in the state court in Michigan in the County where the Society has its principal place of business. On October 8, 1959 the Circuit Court for the County of Wayne granted a preliminary injunction and on October 14, 1960 granted a continuance to March 2, 1961 because of the substitution of attorneys for the defendants.

 The Society instituted two actions against the plaintiff:

 Action No. 8. September 21, 1959. An action in the United States District Court for the Eastern District of Michigan (S.D.) for a declaratory judgment as to the validity of the several contracts which the plaintiff claims exist between him and the Society. The attorney for the Society states that this action is being held in abeyance (by agreement between the attorneys for the respective parties) pending the disposition of Shelley's several suits. However, this is merely an agreement between counsel. A motion to dismiss or to stay this action was denied on or about December 2, 1959.

 Action no. 9. June 14, 1960. An action in the Supreme Court, New York County, for a mandatory injunction to compel Shelley to turn over to the Society certain books and records. The court granted a preliminary mandatory injunction on July 5 and modified it on July 20, 1960. Shelley moved to dismiss this suit upon the ground that the issues were within Shelley's fifth claim in Action No. 1, added April 14, 1960 by way of an amendment to ...


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