The opinion of the court was delivered by: HAIGHT
MEMORANDUM OPINION AND ORDER
Concepts of personal jurisdiction are continually expanding within the shifting constitutional limits of due process. At issue in this case is jurisdiction over a non-resident individual premised on his "doing business" in New York.
See N.Y.C.P.L.R. § 301 (McKinney 1972 & 1978-79 Supp.); ABKCO Industries, Inc. v. Lennon, 85 Misc.2d 465, 377 N.Y.S.2d 362 (S. Ct.1975), Aff'd in part, 52 A.D.2d 435, 384 N.Y.S.2d 781 (1st Dept. 1976). Simply stated the question is whether a controlling shareholder, officer and chairman of a New York corporation is amenable to suit here on claims unrelated to his contacts with New York.
The issue arises relatively late in the litigation. Plaintiff Dwight Lamar commenced this action on July 9, 1976, against the American Basketball Association ("ABA") and Arena Sports, Inc., doing business as the Indiana Pacers ("Pacers"). The complaint, as amended in December 1976, sought among other things damages for breach of contract relating to Lamar's employment as a professional basketball player during the 1975-76 and 1976-77 playing seasons. The contractual arrangements among Lamar, the ABA and the Pacers are set forth in a Memorandum Opinion and Order of this Court, dated June 23, 1977, and need not be reiterated here. Suffice it to say that Lamar alleged two items of damages. The first, in the amount of $ 15,000, represented the balance of compensation allegedly due Lamar for the 1975-76 season under his Pacers/ABA contract. The second, $ 35,000, represented the difference between Lamar's 1976-77 season earnings and the compensation allegedly guaranteed under his Pacers/ABA contract.
In response to plaintiff's motion for summary judgment on the $ 15,000 claim, this Court issued the Opinion and Order referred to above. Partial summary judgment was denied, essentially because the record was inadequate with respect to two occurrences.
The first concerned a May 1976 contract (the "Brown contract") between Lamar and John Y. Brown, "owner" of the ABA's Kentucky Colonels franchise (see note 10, Infra ), whereby Lamar contracted to perform player or public relations services for the Colonels, commencing October 1, 1976. The contract was apparently accompanied by a $ 15,000 payment from Brown to Lamar. The ABA and the Pacers urged that the Brown transaction may have constituted a novation relieving them of liability for compensation due for the 1975-76 season. However, Brown was not yet a party to the suit and the facts surrounding the $ 15,000 payment, and thus its legal effect, were unclear.
Secondly, it appeared that, notwithstanding the Brown contract, Lamar had played professional basketball for the Los Angeles Lakers during the 1976-77 season. The nature of the contractual arrangements among Lamar, the Pacers, Brown, and the Lakers was inadequately addressed on the summary judgment motion.
The final factor militating against summary judgment at that time was the fact that Lamar had moved, during the pendency of the summary judgment motion, to join Brown as an additional defendant.
Shortly after the denial of summary judgment, this Court entered an Order, on consent of the then parties, permitting the joinder of Brown as an additional defendant under Fed.R.Civ.P. 20, and the filing of a second amended complaint. Docket entries reflect that the following then occurred: Lamar filed a second amended complaint; the ABA and the Pacers filed their second amended answer; Brown was served and filed an answer; Lamar engaged in discovery with respect to Brown; and finally, Lamar stipulated to a dismissal with prejudice of his claims against the ABA and the Pacers, which was so ordered.
In the present posture of the litigation Lamar seeks recovery from Brown, individually, of the $ 15,000 and $ 35,000 referred to earlier, apparently based on theories of breach of the Brown contract and tortious interference with plaintiff's rights under his Pacers/ABA contract and the settlement terms of unrelated litigation spawned by the demise of the ABA. Plaintiff also seeks a declaration of rights and liabilities under the Brown contract.
Discovery has been completed and Brown now moves for dismissal of the complaint, raising three defenses which were asserted by way of his answer and not otherwise waived. See Fed.R.Civ.P. 12(h)(1). Brown contends that New York law provides no basis for the exercise of jurisdiction over his person; that service of process in Florida was insufficient to confer In personam jurisdiction here; and that venue in this Court is improper.
Initially, it must be noted that the Court's order permitting joinder of an additional defendant neither dispensed with the need for acquiring valid In personam jurisdiction over Brown, Cf. Fed.R.Civ.P. 19(a), nor obviated compliance with the requirements of Rule 4, Fed.R.Civ.P., respecting service of process.
See Block Indus. v. DHJ Indus., Inc., 495 F.2d 256, 259 (8th Cir. 1974); 7 Wright & Miller, Federal Practice and Procedure § 1659 (1972 ed. & 1979 Supp.). Additionally, pursuant to Rule 82, Fed.R.Civ.P., statutory venue requirements, 28 U.S.C. § 1391(a), must also be met with Brown joined as a defendant. See Wright & Miller, Supra § 1659.
I have concluded, for the reasons set forth below, that considerations of judicial economy and the interests of justice weigh in favor of a transfer of this action. There is a substantial question whether personal jurisdiction exists over the defendant. Further, venue in this forum appears to be improper. While a dismissal of the action on these grounds is the usual outcome, plaintiff has requested transfer as an alternative to dismissal.
Both the Supreme Court and the Second Circuit have sanctioned such a procedure. Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S. Ct. 913, 8 L. Ed. 2d 39 (1962); Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77 (2d Cir. 1978). Transfer to a district where jurisdiction and venue are proper serves the interests of justice and spares courts and parties the burdens of a litigation premised on possibly erroneous preliminary rulings unrelated to the ultimate merits. See Columbia Pictures Indus., Inc. v. Schneider, 435 F. Supp. 742, 748 (S.D.N.Y.1977); McLaughlin v. Copeland, 435 F. Supp. 513 (D.Md.1977).