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NATIONAL UNION FIRE INS. v. TURTUR

August 23, 1990

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., PLAINTIFF,
v.
MARIO TURTUR, JR., DEFENDANT. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., PLAINTIFF, V. CHRIS TURTUR AND STEPHEN P. TURTUR, D/B/A C & S JOINT VENTURE, DEFENDANTS.



The opinion of the court was delivered by: Stanton, District Judge.

National Union Fire Insurance Company of Pittsburgh, Pa. ("National Union"), an issuer of financial guarantee bonds, sues to enforce indemnity agreements between itself and limited partners in a tax shelter limited partnership, and to enforce its rights as subrogee on the limited partners' promissory notes which it honored on their behalf.

National Union had issued a bond which guaranteed, to the limited partnership and to the bank which financed the limited partnership, that the limited partners would make all of their capital contributions represented by the promissory notes. When the limited partners stopped making their required contributions, National Union made them on their behalf. Now it seeks reimbursement, under the indemnity agreements defendants gave it at the time it guaranteed their payments, and as subrogee on the notes on which they defaulted.

The defendant limited partners, Mario, Chris, and Stephen Turtur move to transfer these actions to the United States District Court for the Southern District of Texas under 28 U.S.C. § 1404(a). National Union moves to compel discovery.

The motion to transfer is granted. The motion to compel discovery is denied without prejudice.

BACKGROUND

National Union, a Pennsylvania corporation, has its principal place of business in New York City and does business in many states, including Texas. The Turturs are residents of Texas.

In December 1982 the Turturs purchased limited partnership interests in American National Associates 367 ("ANA"), a New York limited partnership. ANA was one of several computer equipment leasing limited partnerships organized by one Barry Trupin. Rothschild Registry International Inc. ("Rothschild"), an entity Trupin controlled, was ANA's general partner. The purchase price for Mario Turtur's interest consisted of an initial cash payment of $28,000 and promissory notes ("notes") for $429,000. The purchase price for Chris and Stephen Turtur's interest consisted of an initial cash payment of $9,600 and notes for $143,000.

The notes were assigned to La Salle National Bank (the "Bank") in return for loans of working capital which the Bank made to ANA. To induce the Bank to make the loans and accept assignment of the notes, the Turturs obtained National Union's guarantee of payment of their notes.

In return, the Turturs executed indemnity agreements in which they agreed to reimburse National Union for any payments it made on their behalf. The indemnity agreements contain permissive forum selection clauses:

  Any action or proceeding of any kind against the Undersigned
  arising out of or by reason of this Indemnification . . .
  Agreement may be brought in any state

  or federal court of competent jurisdiction in any County in the
  State of New York, in addition to any other court in which such
  action might properly be brought.

The Turturs made the first two payments on their notes, but failed to make the third payments which were due on March 15, 1985. National Union made those payments to the Bank on the Turtur's behalf. In October 1985 National Union commenced actions against Mario Turtur, No. 85 Civ. 8024, and Chris and Stephen Turtur, No. 85 Civ. 8025 (the "'85 actions"), to recover those amounts.

The Turturs did not make the fourth and fifth payments on their notes, which were due on March 15, 1986 and 1987. National Union again paid the Bank on their behalf. In May 1989 National Union commenced actions against Mario Turtur, No. 89 Civ. 3427, and Chris and Stephen Turtur, No. 89 Civ. 3428 (the "'89 actions"), to recover the amount it paid the Bank.

Both the '85 and '89 actions (collectively referred to as the "New York actions") seek reimbursement under the terms of the indemnity agreements, and by subrogation to ...


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