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VARLOTTA CONSTR. CORP. v. CARLA DEV. CORP.

May 17, 1995

VARLOTTA CONSTRUCTION CORP., Plaintiff, against CARLA DEVELOPMENT CORPORATION, JERYL INDUSTRIES, KINGS COURT, MIMI DEVELOPMENT, LINCOLN PARK NURSING HOME, ANDOVER TOWN HOUSES, ANDOVER INTERMEDIATE CARE, KERNAN QUARRY, ROAD BUILDING & CONSTRUCTION CO., JERRY TURCO and DOLORES TURCO, Defendants.

JOHN GLEESON, United States District Judge


The opinion of the court was delivered by: JOHN GLEESON

JOHN GLEESON, United States District Judge:

 On May 4, 1995, the Court conducted a final pretrial conference in this case. Jury selection and trial were scheduled to commence on May 15, 1995. At the pretrial conference, counsel for the defendants stated their intention to move to dismiss the complaint for lack of subject matter jurisdiction. Such a motion had been made twice before (once to each of the judges to whom the case was previously assigned), and had been denied both times. Because the second denial contemplated the possibility of a renewal of the motion, and because subject matter jurisdiction may be challenged at any time, see, e.g., United Food & Commercial Workers Union, Local 919, AFL-CIO v. Centermark Properties Meriden Square, Inc., 30 F.3d 298 (2d Cir. 1994), the Court set a briefing schedule for the motion.

 The motion was fully briefed on May 12, 1995, one business day before trial. On May 15, 1995, the Court held oral argument on the defendants' motion and took it under advisement, and the trial commenced. The following day, the Court granted the motion and discharged the jury. This memorandum sets forth the reasons for that decision.

 On February 14, 1980, two companies, Varlotta Construction Company ("VCC") and Road Building and Construction, Co., Inc. ("Road Building"), executed a written joint venture agreement. The purpose of the joint venture was to join forces to bid on and perform road paving contracts. Although the agreement provided that the joint venture would operate under the name "Varlotta-Road Building," it actually performed the work under the name of VCC.

 VCC commenced this action on January 9, 1990. It seeks damages from Road Building, Jerry and Dolores Turco, and nine corporations controlled by the Turcos for goods, materials, equipment and services provided to them by VCC. Jurisdiction was based on diversity of citizenship, as VCC is a New York corporation and all the defendants are New Jersey corporations or residents.

 Since VCC conducted its own business and the business of the joint venture under the same name, there has been some confusion as to which entity, i.e., the corporation or the joint venture, is the plaintiff in this case. *fn1" The issue is not an academic one. If the plaintiff is the joint venture, there is no subject matter jurisdiction. The reason for this is that, for the purpose of determining whether diversity jurisdiction exists, unincorporated associations such as joint ventures are citizens of every state in which their members are citizens. See generally 13B C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure ยง 3630 (1995). Because Road Building is a member of the joint venture, the joint venture is a citizen of both New Jersey and New York. Thus, if the plaintiff is the joint venture, complete diversity is absent, and there is no subject matter jurisdiction.

 In opposing this motion, plaintiff contends that VCC the corporation, not VCC the joint venture, has brought this action, and thus that complete diversity exists. This argument fails for two reasons. First, as a factual matter, it is belied by the record. In an affidavit dated November 21, 1990, submitted in opposition to a prior motion to dismiss for lack of subject matter jurisdiction, counsel for plaintiff stated as follows:

 
Plaintiff, at all times relevant, was a joint venture engaged in the construction business. The joint venture was comprised of two parties, Road Building and Construction Co., Inc. and Varlotta Construction Corp. During the existence of said joint venture, the joint venture was requested by Jerry and Dolores Turco to furnish the defendants in this action with certain goods, materials, equipment and services, the value of which exceeded $ 219,167.71, exclusive of interest.

 (Affidavit of Mark A. Rosen, Esq., dated November 21, 1990 at P 5.) In addition, the president of VCC, Isabel Varlotta, testified at her deposition that the claims in this case are the claims of the joint venture:

 
Q. Is it your claim in this action that the goods, services, materials and equipment which Varlotta Construction Corp., as the plaintiff in this action, seeks to recover from each of the defendants were provided to the defendants in this action by the joint venture?
 
A. They were provided by the joint venture, yes.
 
Q. So the claims that Varlotta Construction Corp. has raised in the context of this Federal Court litigation in the Eastern District of ...

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