The opinion of the court was delivered by: PLATT
Plaintiff, Federal Deposit Insurance Company (FDIC), in this action, asserts four causes of action against the named defendants: the first to foreclose the mortgages on certain real estate located in Huntington, New York, and, if the mortgage debt remains unsatisfied after the property is sold, to secure a judgment in such unsatisfied amount; the second to recover money lent to defendant Huntington Towers, Ltd. on an unsecured basis; the third to recover payment from defendant Huntington Towers, Ltd. on ten promissory notes, less the amount owed on the mortgages as discussed above; and the fourth to enforce against defendants Richard and Ronnie Carey, Roslyn Plaza, Ltd., Willow Crest Estates, Inc. and Hilldale Estates, Inc., the guarantees executed by them with respect to debt of defendant Huntington Towers Ltd.
Defendants move for an order dismissing the complaint on the following grounds: (1) lack of subject matter jurisdiction; (2) lack of personal jurisdiction over defendants Richard and Ronnie Carey; (3) failure to join necessary parties; (4) improper joinder of the mortgage foreclosure and the actions on the debt claims; (5) failure to particularize the allegations made in the complaint; (6) failure to state a claim upon which relief can be granted; and (7) for improper venue.
As to the issue of this Court's subject matter jurisdiction, FDIC asserts that this Court does have such jurisdiction in this action pursuant to 12 U.S.C. § 1819 and 28 U.S.C. §§ 1331(a), 1345 and 1348.
Section 1819 of Title 12 of the United States Code provides in pertinent part as follows:
"Fourth. To sue and be sued, complain and defend, in any court of law or equity, State or Federal. All suits of a civil nature at common law or in equity to which the Corporation shall be a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction thereof, without regard to the amount in controversy; * * * except that any such suit to which the Corporation is a party in its capacity as receiver of a State bank and which involves only the rights or obligations of depositors, creditors, stockholders, and such State bank under State law shall not be deemed to arise under the laws of the United States." (Emphasis added)
Since FDIC alleges that it brought suit in its corporate capacity,
Section 1819 is properly relied upon to give this Court subject matter jurisdiction. Even if FDIC had initiated this action as receiver of the Franklin National Bank, the last clause of the statute set forth above would not deny this Court subject matter jurisdiction. The exception is expressly limited to suits in which FDIC acts as receiver of a state bank, and would not apply here, where FDIC would be bringing suit as receiver of a national bank. Furthermore, 12 U.S.C. § 1819, read together with 28 U.S.C. § 1331(a), creates an additional basis for this Court's subject matter jurisdiction. Section 1331(a) provides that district courts shall have jurisdiction over an action which "arises under the Constitution, laws, or treaties of the United States" where the amount in controversy exceeds $10,000. As Section 1819 deems actions involving FDIC to "arise under the laws of the United States," and this suit involves considerably more than $10,000, the two requirements of 28 U.S.C. § 1331(a) are satisfied so as to give this Court an additional basis for subject matter jurisdiction.
In reaching this conclusion, this Court is unpersuaded by defendants' argument that these statutes are unconstitutionally broad in their grant of jurisdiction to the federal courts. While, as defendants argue, mortgage foreclosure proceedings are normally within the province of state courts, such proceedings can also be constitutionally entertained by federal courts in diversity actions, as well as in the instant context. Furthermore, Congress acted well within its authority pursuant to the commerce clause of the Constitution in creating the FDIC and Section 1819 is likewise a concomitant constitutional congressional enactment.
As to the question of this Court's in personam jurisdiction, defendants Richard and Ronnie Carey argue that the Court lacks such jurisdiction over them because they were served outside New York.
However, as FDIC properly argues, Federal Rule of Civil Procedure (FRCP) 4(e) authorizes service outside the state in which the court is located if a statute of that state provides for service on a party "not an inhabitant of or found within the state." In this regard, New York Civil Practice Law and Rules (CPLR) §§ 302 and 313 provide for such out-of-state service of process in certain instances. Hence, if CPLR §§ 302 and 313 are applicable, FRCP 4(e) gives this Court in personam jurisdiction over the Careys.
Section 313 authorizes service without the state of persons (1) domiciled in New York; or (2) subject to the jurisdiction of New York State courts pursuant to CPLR § 302. FDIC first alleges that defendants Richard and Ronnie Carey remain New York domiciliaries although they presently reside in Florida (Plaintiff's Memorandum of Law at 15). If this is true, then clearly, service outside the state pursuant to CPLR § 313 may be relied upon to confer in personam jurisdiction. The Court need not make this determination however since in personam jurisdiction exists nevertheless by virtue of CPLR § 302 which authorizes New York State courts to exercise personal jurisdiction over a non-domiciliary who transacts any business within the state. Defendants' execution of the guarantee in New York constitutes a transaction of business within the meaning of CPLR § 302. See United Artists Theatre Circuit, Inc. v. Nationwide Theatres Investment Co., 269 F. Supp. 1020, 1021 & n.1 (S.D.N.Y. 1967) and Hi Fashion Wigs, Inc. v. Peter Hammond Advertising, Inc., 32 N.Y.2d 583, 587, 347 N.Y.S.2d 47, 300 N.E.2d 421 (1973). Consequently, defendants Richard and Ronnie Carey are subject to in personam jurisdiction in New York State courts pursuant to ...