The opinion of the court was delivered by: KAPLAN
LEWIS A. KAPLAN, District Judge.
The plaintiff in this dispute claims in substance that it was duped by the defendants into purchasing stock of Gulf Resources and Chemicals Corporation ("Gulf") in 1991. The same controversy is the subject of parallel litigation in the United Kingdom. The matter is before the Court on the defendants' application to supplement their motion to dismiss the complaint or stay the action by adding to the grounds asserted the defense of lack of jurisdiction over the person. This seemingly minor procedural request, however, raises an important and unsettled question concerning the proper construction of Rule 12 of the Federal Rules of Civil Procedure which has potentially substantial consequences for this litigation.
The stock purchase closed on July 12, 1991 and was followed almost immediately by a dispute and litigation in which plaintiff claimed that the defendants had defrauded it and violated provisions of the SPA. The dispute was settled on October 4, 1991 at which time the parties entered into three agreements which, among other things, reduced the purchase price by $ 360,000. One of the agreements (the "Settlement Agreement") contained the following paragraph:
"Following the aforesaid [price] reduction, each party to the [SPA] hereby acknowledges that it has no further claims arising out of the SPA or the transactions contemplated thereby or any guarantee given in relation thereto by any person against any other party or guarantor or any officer of any other party or guarantor and hereby waives any such claim as may now exist or as may arise after the date hereof." (Rowland Aff. Ex. E)
Notwithstanding the 1991 settlement, further controversies have arisen among the parties with respect to the plaintiff's purchase of the Gulf shares. There is litigation pending in Idaho and the United Kingdom, the details of which are not material to the point now before the Court. Suffice it to say for present purposes that plaintiff brought this action in August 1996 for rescission of the SPA on grounds of fraud and for breach of the SPA during the interval between its execution and the closing.
The only basis of personal jurisdiction over the defendants is the consent to jurisdiction contained in the SPA.
Prior Proceedings in This Action
On October 19, 1996, the plaintiff served a notice to depose defendant Inoco PLC ("Inoco") pursuant to Rule 30(b)(6), a course of action that left it to Inoco to determine in the first instance the identity of the individual who would testify on its behalf. A few days later, Inoco advised the plaintiff that it intended to move to dismiss or stay the action in deference to the United Kingdom litigation and that it therefore would not produce a witness for examination.
On November 4, 1996, Inoco by letter requested that the Court stay all discovery pending the making and determination of the anticipated motion to dismiss. At a conference held on November 6, the Court declined to do so. The plaintiff indicated that it wished to depose Mr. David Rowland, then Inoco's chairman, immediately in New York. Defendants acquiesced in plaintiff thus designating the witness by whom Inoco would be examined, which it had the right to do more formally in any event. FED. R. CIV. P. 30, 1970 Advisory Committee Note to Rule 30(b)(6). At defendants' request, the Court directed that the deposition proceed in London and that it be deferred at least until November 15 to accommodate Mr. Rowland. The parties subsequently agreed that the deposition would take place on December 9.
On November 12, 1996, the defendants moved to dismiss or stay this action in favor of the parallel United Kingdom litigation, to dismiss the breach of contract claims for failure to state a claim upon which relief may be granted, and to dismiss the fraud claim for failure to plead fraud with particularity as required by FED. R. CIV. P. 9(b). The motion did not assert lack of jurisdiction over the person.
On December 3, 1996, Inoco's counsel, then still Carter, Ledyard & Milburn, advised plaintiff that Mr. Rowland would not appear as scheduled and commenced discussions regarding an alternate date. On December 4, plaintiff was advised that Inoco had discharged the Carter Ledyard firm.
The Court held another conference with counsel on December 5 at which the defendants were represented by their newly retained present counsel.
The issue was the timing of Mr. Rowland's deposition. Defendants' counsel indicated a need for additional time to familiarize himself with the case. The Court suggested that the parties try to work out a new date within one week failing which it would take appropriate action.
Four days later, defendants' new counsel (a) advised the Court that Mr. Rowland had resigned from Inoco's board of directors on December 2 and could not be produced for deposition, and (b) filed a document styled "Defendants' Supplement to Their Motion Under Rules 12(b) and 9(b) to Dismiss the Complaint" in which defendants for ...