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CHEMICAL BANK v. WORLD HOCKEY ASSN.

November 4, 1975

CHEMICAL BANK, Plaintiff,
v.
WORLD HOCKEY ASSOCIATION et al., Defendants



The opinion of the court was delivered by: GRIESA

GRIESA, District Judge.

 Defendants Schwartz and Professional Sports Enterprises, Inc. move to dismiss the action for lack of personal jurisdiction over them. The motion is granted.

 I.

 Plaintiff Chemical Bank's claim in this action is that defendants have interfered with its security interest in a hockey franchise held by a team known as the "Golden Blades". Defendant World Hockey Association ("WHA") is the franchisor. Defendants Schwartz and Professional Sports are alleged to have participated with WHA in depriving plaintiff of its rights in the Golden Blades hockey franchise. Subject matter jurisdiction is based upon diversity of citizenship.

 Both Schwartz and Professional Sports are located in Maryland and were served in Maryland. Plaintiff's claim of personal jurisdiction over Schwartz and Professional Sports is made solely under the New York "long arm" statute -- specifically C.P.L.R. §§ 302(a)(1) and 302(a)(3)(ii).

 The present motion of Schwartz and Professional Sports is submitted to the Court on the basis of extensive discovery. Plaintiff has failed to make the necessary showing to sustain jurisdiction over Schwartz and Professional Sports.

 II.

 The complaint alleges that in April 1973 WHA entered into an agreement with certain persons to grant these persons a WHA franchise in New York for the operation of a team shortly thereafter known as the Golden Blades. The complaint alleges that this agreement was closed in May 1973 and that at this time plaintiff loaned to the Golden Blades $500,000.00 secured by a pledge and assignment of the franchise. It is alleged that in October 1973 WHA purported to terminate the franchise of the Golden Blades and to move the Golden Blades hockey team to Cherry Hill, New Jersey where it operated under the name of the Jersey Knights. It is alleged that in January 1974, while the $500,000.00 debt to plaintiff remained unpaid, and while the plaintiff's lien on the franchise was in full force and effect, WHA purported to transfer and reissue the franchise, free of plaintiff's lien, to Schwartz and Professional Sports, who thereafter operated the team as the Jersey Knights in Cherry Hill, New Jersey. The complaint alleges that Schwartz and Professional Sports knew, or should have known, of the existence of plaintiff's lien.

 There are five claims alleged in the complaint. The first of these is a claim that the acts of Schwartz, Professional Sports and WHA constituted a wrongful appropriation and conversion of the collateral upon which plaintiff held a lien; the second is against WHA only and alleges fraud; another "second" claim is against all defendants to impose a lien; the third is against all defendants for an accounting of money paid by Schwartz or Professional Sports to WHA; the fourth is against Schwartz and Professional Sports for wrongful interference with the performance of WHA's agreements with plaintiff; the fifth is against WHA only and is a claim for unjust enrichment.

 III.

 Certain of the allegations of the complaint appear to be factually correct, as indicated by the discovery. A WHA franchise for the Golden Blades in New York was set up, and plaintiff did loan $500,000.00 to the Golden Blades secured by the franchise. This loan was made in May 1973.

 Plaintiff relies strongly on certain trips made by Schwartz to New York City, as providing a jurisdictional nexus. For reasons hereafter described, I cannot accept this contention.

 It appears that the first of these trips to New York City was in May 1973. Schwartz spoke to representatives of WHA on the subject of obtaining a hockey franchise for Baltimore. Apparently there were no affirmative indications by the WHA people. Schwartz testified in his deposition that he was merely told that WHA would take the matter up.

 Schwartz made another trip to New York City, probably in June 1973, and had discussions with the principals of the Golden Blades -- Matison and Brent. There are somewhat conflicting versions about what occurred at this meeting. According to Schwartz's deposition, the June 1973 meeting related solely to the possible acquisition of a new WHA franchise for ...


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