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HAGEDORN & COMPANY v. SOFINOR FINANCE

United States District Court, S.D. New York


March 19, 2004.

HAGEDORN & COMPANY, Plaintiff -against- SOFINOR FINANCE, LLC., DR. SALEM HABAL and SANDRA HABAL, Defendants

The opinion of the court was delivered by: THOMAS GRIESA, Senior District Judge

OPINION

This is a breach of contract action by a New York plaintiff against Florida defendants. There are two actions now pending. The action commenced first is the present action in the Southern District of New York. The second action is brought by defendants against plaintiff in the Southern District of Florida.

Defendants contend that the New York action should be dismissed. Their main reason is that, since it was brought as a declaratory judgment suit, the action was initiated improperly to anticipate the more substantial action brought by defendants in Florida. Thus, defendants move to dismiss or stay the New York action. Plaintiff opposes that motion and cross-moves to enjoin defendants from prosecuting the Florida action.

  Since the making of these motions, plaintiff has filed an amended Page 2 complaint, asserting causes of action seeking compensatory damages for breach of contract and tortious interference with contract, as well as declaratory relief.

  Defendants' motion is denied. Plaintiff's cross-motion is also denied. The court believes that plaintiff should be permitted to maintain the New York action. The court further believes that there is no purpose to be served by enjoining the Florida action. The courts will undoubtedly cooperate to prevent unnecessary duplication of effort and expense.

  A full recital of the complex and contradictory allegations on the merits of the litigation is unnecessary. The litigants are surely familiar with those contentions. It is sufficient to say that plaintiff alleges that a contract was negotiated and made in New York, under which defendants invested $500,000 in a project, which was to involve (to the extent it went forward) obtaining an investment banker to issue $300 million in notes for the financing of certain motion pictures. Plaintiff was to arrange for the financing and was also to take steps to gather together a group to produce the motion pictures. The $500,000 was to be used by plaintiff toward the cost of plaintiff's efforts. The contract provided that, within the relatively short time specified, defendants would receive a payment of $2.5 million, if certain conditions were fulfilled.

  Defendants paid the $500,000. Plaintiff used $200,000 of this for Page 3 expenses. For reasons which are hotly disputed, the project did not come to fruition. Defendants demanded their $50p,000 back. Plaintiff refunded $300,000 and has declined to refund the other $200,000.

  As described above, litigation ensued with the first suit filed in New York and the second in Florida.

  In view of the issues presented by the litigation, and on the basis of the relevant case law, the court concludes that a dismissal of the first-filed New York case is not justified. At the same time the court will riot take the drastic step of enjoining the Florida action. The two courts can coordinate to achieve the efficient handling of the litigation. The motions are disposed of as announced above.

  SO ORDERED. Page 1

20040319

© 1992-2004 VersusLaw Inc.



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