Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

FAHERTY v. FENDER

September 28, 1983

J. ROGER FAHERTY and FAHERTY & FAHERTY, INC., Plaintiffs,
v.
HARRIS R. FENDER, Defendant



The opinion of the court was delivered by: MACMAHON

MacMAHON, District Judge.

 Defendant Harris R. Fender ("Fender") moves, pursuant to Rule 12(b), Fed.R.Civ.P., for an order dismissing the complaint for lack of subject matter and personal jurisdiction. He also moves to dismiss on the ground that there is another suit pending between the parties for the same cause of action as that upon which the instant case is grounded. Alternatively, defendant requests that this case be transferred to the United States District Court for the Eastern District of Texas, pursuant to 28 U.S.C. § 1404.

 Plaintiff, J. Roger Faherty ("Faherty"), is a citizen and resident of New York where he is involved in the investment banking and securities business. Plaintiff, Faherty & Faherty, Inc. ("F & F"), formerly named Faherty & Swartwood, Inc., is a New York corporation with its principal place of business in New York. Defendant Fender is a citizen and resident of Texas and is engaged in the business of drilling and operating oil and gas wells in the southwestern area of the United States.

 In their complaint, plaintiffs allege that Fender, on December 27, 1979, brought an action against F & F, Faherty, and Farwood Management Company ("Farwood") in the District Court of Smith County, Texas, for breach of contract. This suit was purportedly based on several written agreements that the parties entered into for the exploration of oil and gas, with Fender seeking to recover drilling costs incurred in establishing wells at various sites in Texas and Louisiana. Plaintiffs allege that they were not parties to any agreement with Fender, that the exploration agreements were between Fender and Farwood, and that Faherty executed these agreements solely in a representative capacity as president of Farwood. Plaintiffs further allege that they were served with process in New York by registered mail and that such service was based on fraudulent representations by Fender that plaintiffs had engaged in business in Texas. Plaintiffs did not appear in the Texas suit, and on March 28, 1980 Fender obtained a default judgment against them in the amount of $243,158.78.

 On August 22, 1980, Fender instituted a second action against Farwood, Faherty, and F & F in Texas state court for breach of contract, seeking an additional $98,690.42 in unreimbursed drilling costs. Plaintiffs have made a limited appearance in that suit for the purpose of contesting personal jurisdiction and the action is currently pending.

 Plaintiffs brought the instant action on December 22, 1982 and seek, in Count 1, a declaratory judgment, pursuant to 28 U.S.C. § 2201, to the effect that the Texas judgment rendered against them is void and unenforceable for lack of in personam jurisdiction. In Count 2, plaintiffs seek a declaratory judgment that the Texas judgment is void because it is based on false representations by Fender that F & F and Faherty were parties to the exploration agreements and subject to the jurisdiction of Texas courts. Count 3 is a claim for damages on behalf of Faherty for abuse of process. Count 4 asserts the same claim against Fender on behalf of F & F. In Count 5, Faherty seeks damages for intentional infliction of emotional distress, and in Count 6 he asserts a claim for prima facie tort.

 I. Subject Matter Jurisdiction

 Defendant's motion to dismiss for lack of subject matter jurisdiction is spurious. The complaint alleges complete diversity and a claim exceeding $10,000. Fender concedes that he is not a citizen of New York and does not challenge the amount in controversy. This, coupled with plaintiffs' allegations of New York citizenship, demonstrate complete diversity and the presence of subject matter jurisdiction.

 Defendant's effort to dismiss on the ground that there is a pending action between the parties is also unavailing. Fender bases his argument on N.Y. CPLR § 3211(a)(4), *fn1" which provides for dismissal when "there is another action pending between the parties for the same cause of action in a court of any state or the United States . . . ." This rule is plainly inapplicable for two reasons.

 First, the suits between the parties do not involve the same cause of action. In Texas, Fender again seeks to hold plaintiffs liable for breach of contract. Here, plaintiffs seek a declaration that the prior Texas judgment is null and void, along with damages for abuse of process, intentional infliction of emotional distress, and prima facie tort.

 Second, and most important, it is the federal law of abstention, rather than the New York Civil Practice Law and Rules, that determines whether this court will exercise its jurisdiction or stay its hand in deference to a state court proceeding. Fender has failed to identify any reason why we should fail to exercise our jurisdiction.

 Accordingly, defendant's motion to dismiss for lack of subject matter jurisdiction and on the ground of a pending state proceeding is denied.

 II. Personal Jurisdiction

 In determining personal jurisdiction in a diversity action, we apply the law of the forum state. Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir. 1963) (en banc). It is uncontroverted that defendant Fender maintains no office, telephone listing, or mailing address in New York; that he is engaged in no continuous course of business here, either by himself or through employees or agents; and that he owns no real property in the state. Plainly, Fender is not "doing business" in New York and ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.