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LLOYDS BANK PLC v. NORKIN

April 1, 1993

LLOYDS BANK PLC, Plaintiff,
v.
DAVID D. NORKIN and FRIEMA NORKIN, Defendants.



The opinion of the court was delivered by: LAWRENCE M. MCKENNA

 McKENNA, D.J.

 1.

 Before this Court is the motion of plaintiff Lloyds Bank Plc ("Lloyds" or "Plaintiff"), pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, for summary judgment against defendant David D. Norkin ("Mr. Norkin") and for partial summary judgment against defendant Friema Norkin ("Ms. Norkin") (the Norkins are collectively referred to as "Defendants") on the first and only count of the Amended Complaint and on the counterclaims asserted by Mr. Norkin. Plaintiff further seeks to limit discovery to the amount recoverable from Ms. Norkin. Defendants oppose Plaintiff's motion on various grounds including, inter alia, lack of subject matter jurisdiction, lack of consideration, inadequate pretrial discovery, and existence of factual disputes. For the reasons set forth below, the Complaint is dismissed for lack of subject matter jurisdiction.

 2.

 This action is based on personal guarantees of payment made by Defendants to secure a $ 4.45 million loan (the "Loan") from Lloyds to Britestarr Homes, Inc. ("Britestarr"). The Loan was made on September 7, 1988 as part of a larger contemplated financing package to finance the purchase of the Oak Point Rail Yard (the "Rail Yard"). *fn1" (Mr. Norkin's Rule 3(g) Statement P 1.) The Loan was made pursuant to the terms of a Mortgage Note secured by a Mortgage by Britestarr to Lloyds. (Exs. A and C to Notice of Mot.) In addition, Defendants executed a Guarantee of Payment and Performance (the "Guarantee") also dated September 7, 1988. (Ex. A to Am. Compl.)

 It is uncontested that the Loan matured in December, 1989. According to Plaintiff, Britestarr made no Loan payments between August 1, 1989 and November 13, 1989. On November 13, 1989, Plaintiff contends, it sent Britestarr written notice of default. Plaintiff further alleges that the default was never cured. (Pl.'s Rule 3(g) Statement P 19.) In response to Mr. Norkin's allegation that it unreasonably refused to cooperate with The Middle East Bank, Lloyds asserts that The Middle East Bank's loan commitment of January, 1990 was subject to certain conditions, one of which required a statement by Lloyds that the Loan was not in default. (Id. P 22.)

 3.

 Subject matter jurisdiction is premised on diversity pursuant to 28 U.S.C. § 1332. Plaintiff Lloyds is a foreign banking corporation incorporated under the laws of the United Kingdom, with its principal place of business located at 71 Lombard Street, London. Pursuant to Article 5 of the New York Banking Law, *fn2" Lloyds is licensed to (and does) maintain a branch banking office in the City of New York. (Pl.'s Rule 3(g) Statement P 1.) Lloyds' New York branch office does not affect this Court's jurisdictional analysis. "An alien corporation's worldwide principal place of business, and not its principal place of business within the United States is controlling" for jurisdictional purposes. Bailey v. Grand Trunk Lines New England, 805 F.2d 1097, 1101 (2d Cir. 1986), cert. denied, 484 U.S. 826, 98 L. Ed. 2d 54, 108 S. Ct. 94 (1987). Mr. Norkin is a citizen of the State of Connecticut. *fn3" Ms. Norkin is a permanent resident alien and a domiciliary of New York. *fn4" (Am. Compl. P 3.) It is not disputed that the amount in controversy exceeds $ 50,000, exclusive of interest and costs.

 Because Ms. Norkin is a permanent resident of the United States and resides in New York, it is alleged that she is a citizen of New York for purposes of subject matter jurisdiction pursuant to the Judicial Improvements and Access to Justice Act (the "Judicial Improvements Act"). The Judicial Improvements Act amended 28 U.S.C. § 1332(a) (last sentence) to read as follows:

 
For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled. *fn5"

 Ms. Norkin, a signatory to the Guarantee assertedly jointly and severally liable to Lloyds, is not a dispensable party and, therefore, may not be dropped from the action pursuant to Rule 21 of the Federal Rules of Civil Procedure. ...


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