author: GASCH, District Judge.

text:
    REIMAN & COMPANY, Plaintiff, v. EROMANGA INVESTMENTS, N.V., Defendant.
    Civ. A. No. 83-3715.
    United States District Court, District of Columbia.
    Jan. 14, 1985.
    Christopher Sanger, Washington, D.C., for plaintiff.
    Richard A. Hibey, Washington, D.C., for defendant.
   MEMORANDUM

GASCH, District Judge.

This action was tried to the Court on September 26 and 27, 1984. Plaintiff and defendant waived a jury trial just prior to the start of the trial. The Court has considered the testimony and exhibits introduced in evidence during the trial as well as the memoranda submitted by the parties following the trial and issues this memorandum setting forth its findings of fact and conclusions of law.

Plaintiff Reiman & Company is a District of Columbia limited partnership. Richard Reiman, its sole general partner, is licensed as a real estate broker in the District of Columbia. Trial Transcript (“T.”), testimony of Richard A. Reiman at 72, 73. Eromanga Investments, N.V. (hereinafter “Eromanga”) is a Netherlands Antilles corporation named as a defendant individually and as the sole partner of defendant Connecticut Inn Partnership (“CIP”). The Court has jurisdiction over the defendant pursuant to D.C.Code § 13-423(a)(1), (5). Subject matter jurisdiction exists pursuant to 28 U.S.C. § 1332.

Plaintiff alleges that defendant Eromanga is liable for breach of a real estate commission agreement with regard to the Connecticut Inn Partnership’s sale of the Connecticut Inn, a hotel located in Washington, D.C., to Van Ness Limited Partnership (“VNLP”) on November 1, 1983. Al-tentatively, plaintiff seeks compensation on a quantum meruit basis for services he alleges he performed in connection with this sale.

Richard Reiman’s interest in the sale of Connecticut Inn began in June, 1981 when he passed the hotel and noted a “for sale” sign on the premises. T. at 73-74 (Reiman). Reiman was first authorized to act as a real estate broker on behalf of the Connecticut Inn Partnership with regard to this property in July, 1981. T. at 74-75 (Reiman) and 11-12 (testimony of Bruce D. Lyons). Reiman received this authorization from Bruce D. Lyons, President of Holland & Lyons Properties, which at the time was the managing general partner responsible for the operation of the Connecticut Inn Partnership. Lyons testified that he had agreed, on behalf of the Connecticut Inn Partnership, that Reiman was to receive a commission of $200,000 in cash at closing in the event of a sale of the Connecticut Inn “[t]o anybody that Mr. Reiman was able to procure” or if Reiman & Company procured an acceptable joint venture partner to operate the hotel with the Connecticut Inn Partnership or any of its partners. T. at 12-13 (Lyons). This commission agreement was not reduced to writing. Id. at 14 (Lyons) and 123 (Reiman). Lyons testified that this basic agreement remained in effect at all times when the property was on the market through February 25, 1983, when Holland & Lyons Properties was removed as managing partner of the Connecticut Inn Partnership. T. at 15 (Lyons).

The existence of such an oral commission agreement represented one of the most hotly disputed issues at trial. Counsel for Eromanga relied on a number of arguments in an attempt to undercut the testimony of Lyons and Reiman that they had entered into an oral agreement on behalf of their principals in July 1981. For example, defendant relies on the existence of other written agreements between the parties regarding other prospective purchases of the Connecticut Inn as well as Reiman’s own statements concerning the value of written agreements to support its contention that no oral agreement existed. In addition, defendant attempted to discredit Lyons’ testimony that he entered into an agreement with Reiman by arguing that Lyons was not a disinterested witness since Lyons admitted that he expected to receive a portion of the proceeds of plaintiff’s recovery in this litigation and Reiman characterized Lyons as a “friendly acquaintance” of his. T. at 131 (Reiman).

The decision as to whether or not to accept the testimony of Lyons and Reiman on the existence of an oral commission agreement ultimately requires the Court as the finder of fact in this action to assess the credibility of these witnesses. Of course, as counsel for defendant points out, the existence of a pecuniary interest is one factor that may indicate that a witness’ testimony should not be credited by the finder of fact. Similarly, in some cases it is appropriate to draw inferences regarding the claim of reliance on an oral agreement where the parties have seen fit to reduce other agreements to writing. However, a determination as to the credibility of a witness is not a mechanical inquiry in which his sworn statements must always be disregarded in the presence of such factors. Rather it requires consideration of a wide variety of indicia of credibility including the demeanor of the witness, the extent to which a witness’ testimony is consistent with the other evidence in the case, and the existence of evidence which rebuts that evidence offered to impeach a witness. After consideration of all these indicia of credibility and the evidence as a whole, the Court finds the testimony of Lyons and Reiman as to their having entered into an oral commission agreement entitling Reiman & Company to a $200,000 fee if it procured a buyer or joint venture partner for. the Connecticut Inn to be credible. The Court finds its own observations as to the demeanor of Lyons and Reiman to be especially persuasive in making this determination.

Between July 1981 and February 1983, Reiman engaged in extensive efforts to find a purchaser for the Connecticut Inn. On two occasions he was successful in securing contracts from prospective buyers but in neither case did the deal close. During periods when the hotel was not taken off the market in ultimately futile efforts to close these two deals, plaintiff attempted to interest the Coakley & Williams group in acquiring the Connecticut Inn. It is the extent and significance of those efforts directed at Coakley & Williams that was the second hotly disputed issue at trial.

Reiman first contacted Coakley & Williams with regard to the Connecticut Inn in August, 1981 when he telephoned Fred Williams, president of Coakley & Williams. T. at 76-77 (Reiman) and 157-59 (Williams). This contact represents the first time that Coakley & Williams became aware that the Connecticut Inn was for sale. T. at 157 (Williams). Immediately after that call, Reiman met with Brian Coakley, then manager of Coakley & Williams’ hotel division or vice president of marketing, on August 19, 1981 to provide Coakley & Williams with further information on the hotel. T. at 77-78 (Reiman) and 180-81 (Brian Coakley). At that time, Reiman presented Coakley & Williams with a detailed investment brochure which included a description of the property, floor maps, estimates as to the cost of required renovation work, and location maps detailing offices and other facilities in the area. See T. at 78-80 (Reiman) and 182 (Brian Coakley); see also Plaintiffs Exhibit No. 5. Brian Coakley promised to relay the information Reiman had provided to Fred Williams. T. at 184 (Brian Coakley).

On September 2, 1981, Reiman met with Fred Williams and took him on a thorough inspection of the hotel. T. at 81-82 (Reiman) and 157 (Williams). This tour represented the first time that representatives of the Coakley & Williams group saw the Connecticut Inn. T. at 157 (Williams).

Reiman followed up on the September 2, 1981 meeting by sending a letter encouraging Coakley & Williams to submit a contract. See T. at 82-83, Plaintiff’s Exhibit No. 4. Reiman also made several calls to Fred Williams to push the project. T. at 158-59 (Williams). Later that month, Reiman returned to Coakley & Williams and met with Fred Williams a second time, this time giving him a memorandum responding to certain questions about the project he had been unable to answer earlier. See T. at 87-88 (Reiman), Plaintiff’s Exhibit No. 6. That same month Reiman met with Williams a third time to give Williams a contract. T. at 88-89 (Reiman). During the latter part of September, Reiman met with Williams at the Connecticut Inn and this time Neil Coakley was present. T. at 90 (Reiman). This visit represented the first time Neil Coakley had seen the Connecticut Inn. Id. As part of this meeting, Reiman drove ■ Neil Coakley and Fred Williams around the area surrounding the hotel, pointing out features of the area that might represent sources of business for the hotel. Id. at 91.

Despite his efforts, Coakley & Williams did not submit a contract prior to the Connecticut Inn Partnership’s receipt of the JNC offer in October, 1981. Instead, in early October, Reiman received a letter from Brian Coakley informing him that because of other “projects and commitments” then underway, Coakley & Williams was unable to “devote the time and study necessary” to consider the matter further at that time. However, Coakley’s letter also advised Reiman that Coakley expected to pursue the matter further as soon as the firm’s work load had lessened. Coakley reassured Reiman to “[rjest assured that when that time is available, I will call you----” Plaintiff’s Exhibit No. 8, Defendant’s Exhibit R; see also T. at 95-96.

Following the failure of the JNC Enterprises deal, the Connecticut Inn was again placed on the market. Reiman again set out to interest Coakley & Williams in the Connecticut Inn. T. at 32-33 (Lyons) and 99 (Reiman). Reiman again wrote Brian Coakley and repeatedly attempted to call Fred Williams about the hotel. T. at 99-101 (Reiman), Plaintiff’s Exhibit No. 11. Reiman stressed that the Connecticut Inn Partnership’s asking price had already fallen considerably below the $5 million Reiman had told Coakley & Williams that CIP was seeking in 1981. Id. Reiman was again told that the Coakley & Williams firm was “extraordinarily busy” and therefore could not consider the matter at that time. T. at 101 (Reiman). Reiman made one final effort to interest Coakley & Williams by phone in July of 1982 just before International Hotel Group submitted a contract but was again told that the press of other business made it impossible for Coakley & Williams to devote the time needed to consider the matter. T. at 105-06 (Reiman).

Following the failure of the IHG deal, the Connecticut Inn was placed back on the market a final time. Reiman testified that he wrote Brian Coakley a letter on January 19, 1988 in a renewed effort to spark Coakley & Williams’ interest in the Connecticut Inn. T. at 108-09 (Reiman), Plaintiff’s Exhibit No. 22. Reiman also testified that he called a Coakley & Williams official to follow up on the letter. T. at 110-11 (Reiman). Reiman’s January call to Coakley & Williams apparently marked the end of his role in efforts to interest Coakley & Williams in the property. On February 22, 1983, Eromanga wrote Reiman to notify him that Reiman & Company’s authority to serve as a broker for the Connecticut Inn Partnership had been terminated. See T. at 171-72 (Precup) and Plaintiff’s Exhibit No. 44. Eromanga apparently took this action to revoke Reiman’s authority in anticipation of its decision to exercise its buyout rights and become managing general partner of the Connecticut Inn Partnership as of February 25, 1983. Eromanga barred Reiman & Company from playing any role in subsequent negotiations with Coakley & Williams. T. at 261-62 (Precup). All remaining contacts between the Connecticut Inn Partnership and the Coakley & Williams interests occurred through Eromanga as managing partner of CIP, T. at 260 (Precup), or through Calvin Frey, the broker who ultimately received a commission for the sale of the Connecticut Inn.

Although Reiman & Company, has consistently maintained that it is entitled to the broker’s commission with regard to the sale of the Connecticut Inn, Eromanga, acting on behalf of the Connecticut Inn Partnership, has refused to make any such payment to Reiman & Company. See T. at 118 (Reiman).

Because the Court has found that Lyons (on behalf of Reiman & Company) entered into a valid nonexclusive oral commission agreement, plaintiffs effort to recover pursuant to that agreement turns on whether Reiman & Company was the “procuring cause” of the sale of the Connecticut Inn that occurred on November 1, 1983. See, e.g., Frey v. Chastain, 412 A.2d 1185, 1187 (D.C.1980); Sam Blanken & Co. v. Tinos Inc., 219 A.2d 499, 500 (D.C.1966) (“It is well settled that a broker cannot recover a commission under an ordinary brokerage agreement unless he was the procuring cause of the sale.”). The determination as to whether a broker is the procuring cause of a transaction is one of fact, id., and one which requires the fact finder to consider all aspects of the broker’s role. See, e.g., 12 Am.Jur.2d Brokers § 190 at 931 (“The question as to when a broker may be considered the procuring cause of a sale depends, in the main, upon the particular facts and circumstances of each case____” (citations omitted)). Although courts have utilized a variety of formulations in efforts to express the requirement that the broker’s actions must have been the predominating cause of the transaction, it is apparent that there is no single litmus test for resolving this question that can be applied to all cases. For example, courts have characterized the question of who “first introduced” the eventual purchaser to the seller as a “significant” factor in determining whether a broker was a procuring cause of a deal but have cautioned that this question alone is not determinative. See Park Road Housing Co. v. Adas Israel Hebrew Congregation, 225 F.2d 28 (D.C.Cir.1955); Battle v. Price, 72 F.2d 377, 378 (D.C.Cir.1934). In fact, courts have in some instances concluded that brokers met the procuring cause requirement notwithstanding the fact that the brokers did not inform the buyer about the availability of the property, did not participate in negotiations toward the purchase, and did not even meet the buyer. See 12 Am.Jur.2d, supra, at 933 & nn. 9-11. Again this does not mean that these and other factors that might be envisioned are not significant but only that their presence or absence is not necessarily dispositive.

After consideration of the evidence concerning the sale of the Connecticut Inn, the Court finds that Reiman & Co. was the procuring cause of the Connecticut Inn Partnership’s deal with the Coakley & Williams interests. The Court notes a number of factors supporting this finding. Reiman was the first broker to alert Coakley & Williams that the Connecticut Inn was for sale, the first broker to set up meetings between Coakley & Williams officials and officials of the Connecticut Inn Partnership, and the first broker to take Coakley & Williams officials through the property. Reiman zealously pursued the possibility of a deal with Coakley & Williams at each point at which the property was on the market. Indeed, Reiman’s efforts were so extensive in this regard that Brian Coakley characterized Reiman as a “nuisance” — a characterization that might be read as indicating the extent to which Coakley & Williams had come to equate the possibility of acquiring an interest in the Connecticut Inn with Reiman’s advocacy of this acquisition. When the hotel was placed on the market for the final time in early 1983, Reiman again solicited Coakley & Williams, informing them again as he had on prior occasions of the continuing decline in the purchase price and of other changes that increased their interest in the property. T. at 100-01 (Reiman). Although Reiman was not involved in negotiations held after February 25, 1983, this resulted from Eromanga’s decision to exclude Reiman and not from any abandonment by Reiman. See Lady v. Realty Associates, 31 A.2d 875, 876 (D.C.Mun.App.1954). The Court also believes it to be significant that the written materials Frey presented to Coakley & Williams were originally prepared not by Frey but by Reiman.

Thus the Court finds that plaintiff Reiman & Company fully performed the requirements of the commission agreement with the Connecticut Inn Partnership. By the terms of that agreement, the $200,000 commission became due and payable in cash on November 1, 1983 when the transaction with Coakley & Williams closed. The measure of damages for breach of this commission agreement is the full amount of the agreed-upon commission, plus interest from the date of closing. D.C.Code § 15-109; Bradley, Beall & Howard v. Miller, 128 F.2d 320, 321 (D.C.Cir.1942); Giant Food, Inc. v. Jack I. Bender & Sons, 399 A.2d 1293, 1305 (D.C.1979); Crifasi v. Harris, 163 A.2d 571 (D.C.Mun.App.1960).

Because of the resolution of plaintiffs breach of contract claim, the Court need not reach plaintiffs effort to recover compensation on a quantum meruit basis.

ORDER

Upon consideration of the trial to the Court held on September 26 and 27, 1984 and of the proposed findings of fact and conclusions of law submitted by plaintiff and defendant, it is by the Court this 11th day of January, 1985,

ORDERED that judgment be, and hereby is, entered for plaintiff and against defendant in the amount of Two Hundred Thousand Dollars ($200,000.00) plus interest at the rate of 7.7 percent per annum from November 1, 1983 on plaintiffs breach of contract claim for the reasons set out in the accompanying memorandum. Because of the resolution of this claim, the Court need not reach plaintiffs alternative quantum meruit claim.

      . At the Court's request, counsel for plaintiff and defendant submitted proposed findings of fact and conclusions of law after the conclusion of the trial.

      . The Connecticut Inn Partnership was established in 1979 to acquire and operate the Connecticut Inn, located at 4400 Connecticut Avenue, N.W., Washington, D.C. Originally, CIP had four partners: 1) Holland and Lyons Properties, Inc. (“Holland & Lyons”); 2) R & D Management Company; 3) 4400 Connecticut Avenue Associates; and 4) Eromanga. On February 25, 1983 Eromanga exercised certain buyout rights contained in the partnership agreement and purchased the partnership interests of Holland & Lyons and R & D Management Company. In October, 1983, Eromanga became the sole partner in the Connecticut Inn Partnership by purchasing the interest of 4400 Connecticut Avenue Associates. See Undisputed Facts (hereinafter “Stipulated Facts”) printed in Magistrate’s Pretrial Report at 1-2.

      . The two general partners of Van Ness Limited Partnership are business trusts created, owned and controlled by Neil T. Coakley and Frederick G. Williams. These trusts also own the majority interest in VNLP. See T. at 167 (Williams). Messrs. Coakley and Williams apparently operate their business affairs as controlling shareholders of Coakley & Williams, Inc. ("Coakley & Williams”). See T. at 151 (Williams). In addition to calling Mr. Williams as a witness, plaintiff also called Mr. Brian Coakley, an executive with the Coakley & Williams firm.
      The remaining interest in the Van Ness Limited Partnership is owned by the Connecticut Inn Partnership which serves as a limited partner in VNLP. Although the deal with Coakley & Williams and VNLP was structured as a joint venture, it is clear that it constituted a “sale” of the Connecticut Inn property. See Stipulated Facts (all fee and leasehold interests of CIP "sold and conveyed" to VNLP); see also Plaintiffs Exhibits No. 39, 40, and 43.

      . The Connecticut Inn Partnership apparently decided to sell the Connecticut Inn almost immediately after it acquired the hotel in 1980. In September, 1980 CIP entered into a sale contract with Redwal Partners but in March 1981, the deal failed to close. T. at 6-7 (Lyons). The property was placed back on the market thereafter.
      The history, of CIP's ownership of the Connecticut Inn is characterized by a continuing decline in the property’s physical and financial well-being. For example, by the summer of 1981 two of the five floors that contained guest rooms had been closed and the hotel’s cash flow was becoming "increasingly inadequate to cover the operating expenses.” T. at 14 (Lyons). By early 1983, the situation had deteriorated to the point that Lyons characterized it as being “desperate.” The hotel was being threatened with a tax sale because of the failure to pay real estate taxes. T. at 35-36 (Lyons). On February 10, 1983, the mortgagee that had financed CIP's purchase of the hotel, issued a notice of foreclosure. T. at 229 (Precup). The failure of Holland & Lyons to cure the default on the mortgage allowed Eromanga to exercise its right to buy out Holland & Lyons’ interest in the Connecticut Inn Partnership. T. at 230 (Precup).

      . Robert Holland, a witness for the defendant, was secretary of Holland & Lyons but not active in Holland & Lyons after March, 1981. See T. at 6 (Lyons). Indeed, even defendant’s principal witness, Eromanga’s attorney-in-fact, testified that most of his dealings were with Bruce Lyons and that Holland was involved in dealing with Eromanga only on “rare occasions." T. at 226-27 (testimony of Ronald G. Precup). Accordingly, the Court found Holland’s testimony to have little value.

      . Holland & Lyons Properties’ responsibilities as managing general partner included responsibility for directing efforts to sell the hotel on behalf of the Connecticut Inn Partnership.
      Holland & Lyons served as managing general partner of the Connecticut Inn Partnership from the formation of CIP through February 25, 1983 when Eromanga terminated its interest in CIP by exercising its buy-out rights. See T. at 7-8 (Lyons).

      . Lyons also testified that this figure was arrived at based on his estimate of a possible sale price. Thus the fixed fee of $200,000 represented five percent of a $4 million sale price and four percent of a $5 million sale price. T. at 13 (Lyons).

      . There is no requirement that a commission agreement be in writing. See Apostolides v. Colecchia, 221 A.2d 437 (D.C.1966). Lyons and Reiman did testify, however, that there were subsequent agreements negotiated on a case-by-case basis varying their basic agreement and providing for Reiman to receive a lower commission if the hotel were sold to specified individuals at a lower price than that the CIP partners had hoped to receive. These agreements were in writing. See Defendant’s Exhibits E, F, and O. According to Lyons and Reiman, no such subsequent agreement was negotiated with regard to any sale to the Coakley & Williams interests. T. at 15-16 (Lyons) and 129 (Reiman).
      Lyons and Reiman also negotiated a subsequent written brokerage agreement which provided for Reiman & Company to have the exclusive right to serve as broker during a six month period beginning in September, 1981. However, that agreement was not renewed and plaintiff does not claim that this agreement serves as the basis for any recovery in this action. T. at 124, 128 (Reiman).

      . Both Reiman and Lyons testified that Lyons had allowed Reiman to use offices rented by one of Lyons’ companies, Cirrus Investment Corporation, and certain office facilities from June 1981 until March 1982. T. at 9-10 (Lyons) and 131 (Reiman). Lyons testified that Reiman had promised to compensate Lyons by paying him 25 percent of any recovery Reiman & Company might receive in this action. T. at 66, 67 (Lyons).

      . There is no indication in the record that anyone besides Lyons and Reiman was present when Reiman and Lyons met in July 1981 to discuss the terms of any agreement between the Connecticut Inn Partnership and Reiman & Company.

      . Indeed, that the Federal Rules of Evidence contemplate such a wide-ranging inquiry in determining a witness’ credibility is evident in the wide variety of types of evidence allowed with regard to this issue. See, e.g., Fed.R.Evid. 607 (credibility of witness may be attacked by any party, including party calling him); 608(a) (witness’ credibility may be attacked by reputation and opinion evidence as to character of witness for truthfulness); 608(b) (trial court, in its discretion, may allow use of extrinsic evidence of conduct of a witness for purpose of attacking or supporting his credibility); 609 (authorizing impeachment of witness’ credibility by evidence of conviction of certain crimes).

      . The Court finds unpersuasive Eromanga’s reliance on Exhibits E, F, and O to argue against the existence of an oral agreement. The Court was instead persuaded by the testimony of Lyons and Reiman that such written agreements were used to vary the terms of the basic oral agreement when it became clear that a contract with a likely purchaser would otherwise be financially unacceptable to the Connecticut Inn Partnership. See T. at 67-69 (Lyons). While it may be that the Connecticut Inn Partnership would have attempted to enter into an agreement lowering the commission in connection with the Coakley & Williams deal if Reiman & Company had been recognized as the procuring broker by the CIP, no such agreement varying the basic rate was in fact entered into regarding Coakley & Williams. Indeed, after taking over as managing partner, Eromanga agreed to pay the broker it retained $200,000 as "that was [the price] on the street.” T. at 302 (Precup).

      . In October, 1981 Reiman & Company procured a contract from JNC Enterprises but that contract failed to settle in April, 1982. T. at 24-25 (Lyons). Later in 1982 Reiman was successful in soliciting a contract from International Hospitality Group (“IHG”) but that deal failed to close in January, 1983. T. at 33-34, 36 (Lyons).

      . Reiman was scheduled to have met with Fred Williams on that date. However, Williams apparently missed the meeting because of a scheduling error on his part. T. at 181 (Brian Coakley).

      . Brian Coakley may also have been present. Reiman testified that Coakley attended the meeting on September 2, 1981. T. at 81. Brian Coakley himself did not recall touring the hotel with Reiman at that time. T. at 184 (Brian Coakley).

      . Although Fred Williams testified that he had told Reiman in this period that Coakley & Williams was not interested in the Connecticut Inn, T. at 175, Neil Coakley’s letter to Reiman indicates no such lack of interest. At a minimum, the letter gave Reiman cause to believe that Coakley & Williams might be interested in acquiring the hotel at a later point and thus prompted him to continue his efforts when the hotel again became available. See also T. at 179 (Williams).

      . After the JNC sale had failed to close, Bruce Lyons specifically authorized Reiman & Company to reactivate its efforts to locate a buyer for the Connecticut Inn pursuant to the same basic commission agreement they had established in July, 1981. T. at 26 (Lyons). Reiman confirmed this arrangement by letter to Holland & Lyons on April 7, 1982. T. at 27-28 (Lyons), Plaintiff’s Exhibit No. 12. That letter also "registered" fourteen prospective purchasers Reiman had procured for the partnership as clients. T. at 28-29, 31 (Lyons).

      . Brian Coakley testified that he received no letter from Reiman during this period. T. at 194-95 (Brian Coakley). This testimony bars reliance on the evidentiary presumption that the letter was received established by virtue of Reiman’s testimony that the letter was properly addressed, stamped and mailed and raises a question of fact as to whether or not the letter was received. See, e.g., Legille v. Dann, 544 F.2d 1, 4-7 (D.C.Cir.1976). However, regardless of whether or not the letter was received there can be no question that Reiman made a significant effort to procure a contract from Coakley & Williams in this period. Indeed, Reiman’s testimony that he called Coakley & Williams shortly after January 19, 1983 was uncontradicted. The Court can also infer from the voluminous evidence that Reiman had repeatedly solicited Coakley & Williams after the Connecticut Inn returned to the market that he did so after the JHG contract fell through. This finding is consistent with the Court’s view that Reiman had an unwavering belief throughout his tenure as broker for the Connecticut Inn that Coakley & Williams were among the hotel’s most likely buyers.

      . Reiman could not recall whether he spoke with Fred Williams or Brian Coakley. T. at 111 (Reiman).

      . Coakley & Williams participated in extensive negotiations which culminated in Van Ness Limited Partnership’s acquisition of the property on November 1, 1983. T. at 260-61 (Precup) and 167 (Williams).

      . Frey first contacted Fred Williams about the Connecticut Inn on February 16, 1983. T. at 159-61 (Williams). On February 24, 1983, Frey and Precup met with Coakley & Williams officials to discuss the Connecticut Inn. T. at 270-71 (Precup). However, Frey had no authority to act as a broker for the Connecticut Inn Partnership until February 25, 1983 when Eromanga became managing general partner and gave Frey this authorization. T. at 272-73, 274 (Precup). The letter authorizing Frey specified that Frey would be paid a $200,000 broker's commission if the deal with Coakley & Williams were consummated. See Plaintiff’s Exhibit No. 27. Precup testified that Eromanga initially agreed to pay this amount as that was the price "that was on the street.” T. at 302 (Precup). The Connecticut Inn Partnership ultimately entered into a subsequent commission agreement with Frey limiting his commission to $140,000. T. at 302-04 (Precup).

      . After learning of Frey’s involvement from Lyons on February 18, 1983, Reiman wrote a letter to Lyons (who was responsible for directing the affairs of the Connecticut Inn Partnership until February 25, 1983) asserting that Reiman & Company was entitled to a $200,000 commission in the event of a deal with Coakley & Williams. Precup was sent a copy of this letter. See T. at 38-40, 61 (Lyons), 112-13 (Reiman), and Plaintiffs Exhibit No. 25.

      . That agreement remained in force through February 25, 1983, when Eromanga became managing general partner and first had lawful authority to revoke Reiman & Company’s authority to market the Connecticut Inn. Eromanga’s actions in revoking Reiman & Company's authority at that time did not in any way affect any commission right that had accrued on the basis of work performed prior to February 25, 1983.

      . There is no indication that Lyons and Reiman varied the typical brokerage agreement to require anything less than that Reiman & Company meet this requirement to be entitled to a commission.

      . See, e.g., 12 C.J.S. Brokers § 166 at 519, 521-24 (terms "procuring cause,” “efficient cause,” and "proximate cause” used interchangeably in context of brokers’ commissions).

      . Decisions delineating the procuring cause requirement in the context of District of Columbia law have repeatedly demonstrated the need for this flexible determination of the factors that might bear on a broker’s role in procuring a deal. See, e.g., Park Road Housing Co., supra; Bergman v. Gitelson & Neff Associates, 267 A.2d 360, 362 (D.C.1970) (recognizing plaintiff as procuring broker notwithstanding fact that ultimate sale through second broker was for price below that first broker was authorized to charge).

      . Bruce Lyons attended a number of meetings on behalf of the Connecticut Inn Partnership with Coakley & Williams that were set up by Reiman. See, e.g., T. at 78 (Reiman) and 180-81 (Brian Coakley).

      . T. at 184-85 (Brian Coakley).

      . Although Reiman’s efforts had failed to result in Coakley & Williams’ submitting a contract prior to Reiman’s discharge, there seem to have been two obstacles to Coakley & Williams’ pursuing the matter that had diminished by January, 1983. First, the earlier efforts to interest Coakley & Williams had coincided with periods when the firm’s time and attention were focused on other pending deals. Coakley & Williams officials stressed this point repeatedly, particularly in Brian Coakley’s 1981 letter to Reiman. See Defendant’s Exhibit R. Second, Coakley & Williams had considered the hotel’s price to be prohibitive. Reiman had initially attempted to sell the hotel for $5 million. (Although Williams remembers the original price as $7 million, T. at 158 (Williams), this amount seems to include the cost of necessary renovation.) By early 1983, the IHG deal which had a price of $4.3 million had fallen through, T. at 34 (Lyons), the hotel’s financial condition was desperate, and the Partnership had given up hopes of achieving a profit. Reiman informed Coakley & Williams the hotel was available at a lower price than was the case prior to the IHG contract. Coakley & Williams ultimately acquired its interest in the Connecticut Inn at a price that placed the hotel’s value at approximately $4.1 million. T. at 178 (Williams).

      . In this as well as other respects, the instant case is analogous to O'Brien v. Morgan, 104 A.2d 411, 413 (D.C.Mun.App.1954), where the Court stated that "when a seller excludes the broker from the negotiations, or orders him to cease dealing with the purchaser, he cannot deprive him of his commission if a sale is made.”

      . Frey admitted in his deposition that he had had no part in preparing any part of these materials. T. at 351-52 (excerpt from Frey deposition). Reiman identified the materials in question as the materials he had prepared. T. at 358-60 (Reiman); see also T. at 78-80, Plaintiffs Exhibits No. 36 and 37.
      Defendant attempted at trial to undercut the evidence set forth above indicating Reiman’s role as the procuring broker by arguing that the deal the Coakley & Williams firm eventually reached with Eromanga (acting for CIP) was a different deal than those Reiman had attempted to procure. However, the evidence is clear that, contrary to Eromanga’s suggestions, Reiman had repeatedly suggested to prospective buyers including Coakley & Williams that a deal for the Connecticut Inn could be structured as a joint venture and that such a joint venture could be set up with any of the partners involved in the Connecticut Inn Partnership. T. at 19-20 (Lyons), 80 (Reiman), 183-84 (Brian Coakley). Although Eromanga makes much of the fact that Coakley & Williams was not interested in a joint venture with Holland & Lyons, Reiman did not limit himself to encouraging joint ventures with Holland & Lyons. In fact, on at least one occasion he drew up a contract providing for one of his prospects to enter into a joint venture with Eromanga. T. at 103-04 (Reiman); see also Plaintiffs Exhibit No. 19. This took place prior to Eromanga’s becoming the managing general partner.

      . See supra, note 12.

      . The general rule in actions for breach of contract is that interest is only available from the date of a judgment finding such breach. However, D.C.Code § 15-109 authorizes the Court to award prejudgment interest where, as here, the Court finds such interest to be necessary in order to compensate the plaintiff fully. See Edmund J. Flynn Co. v. LaVay, 431 A.2d 543, 550 n. 6 (D.C.1981). The rate for such interest is set by law at 7.7 percent per annum. See D.C.Code §§ 15-108, 28-3302(c); 28 U.S.C. § 6621; Fed.Tax Rptr. (CCH) ¶ 5519k.01 & 6477 "New Matters.”


source: Caselaw Access Project

license: Public Domain

text:
    Tyrone and Marlene BLAIR, Plaintiffs, v. NORWEGIAN CARIBBEAN LINES, A/S, et al., Defendants.
    Civ. A. No. 84-2729.
    United States District Court, District of Columbia.
    Feb. 20, 1985.

      Barbara A. Thompson, Washington, D.C., for plaintiffs.
    John H. West, III and Pamela J. White, Washington, D.C., for defendant Norwegian Caribbean Lines.
    James J. Tansey and Debbie S. Kessler, Washington, D.C., for defendant Federated Intern. Travel.
   MEMORANDUM

GASCH, District Judge.

I. BACKGROUND

Plaintiffs Tyrone and Marlene Blair, residents of the District of Columbia at the time this litigation was filed, have filed this diversity action for breach of contract, negligence, fraudulent misrepresentation, negligent misrepresentation, intentional infliction of emotional distress, and unjust enrichment against two defendants: a) Federated International Travel d/b/a A AAABCO Cruise Center (“A AAABCO”), a Florida corporation; and b) Norwegian Caribbean Lines, A/S (“NCL”), a Norwegian corporation headquartered in Florida.

Plaintiffs’ claims as set out in the complaint center on their experiences in attempting to take a one-week cruise on NCL’s “M/S Skyward” from Miami on July 1, 1984. Plaintiffs claim to have reserved an outside room with twin beds by phone call to A AAABCO after seeing an NCL advertisement that purported to show a “[t]ypical twinbed outside stateroom” on the ship in Cruise & Travel Magazine. Complaint ¶ 6. Plaintiffs further maintain that they flew to Miami from Washington National Airport to board the Skyward only to learn that the room to which they had been assigned had a double bed instead of two twin beds. Id. ¶¶ 17, 20. Plaintiffs also claim the room was deficient in other respects with only sixteen inches of space between the bed and the cabin wall; missing molding along the walls; missing veneer on the bureau drawers; and a stained bedspread. Id. TT1T 20-21.

Plaintiffs claim that they discussed these grievances with the ship’s dock supervisor but were unable to obtain relief. Id. ¶¶ 23-35. They therefore chose not to board the ship and instead stayed overnight to seek a refund from A AAABCO. Neither NCL nor A AAABCO has given plaintiffs any refund to date. Complaint 1140.

Defendants NCL and A AAABCO have filed motions to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure.

II. DISCUSSION

The facts on which the parties rely with regard to the question of jurisdiction over these defendants are not in dispute. Plaintiffs purchased the cruise tickets in question after reading advertisements for NCL and A AAABCO in Cruise & Travel Magazine. Plaintiffs then telephoned the “A AAABCO Cruise Center” in Florida from their home in Washington to make their reservations. All other interactions between plaintiffs and defendants occurred in Florida at the Skyward.

Neither of the defendants in this case is incorporated in the District of Columbia or registered to do business here. Neither has a place of business in the District of Columbia.

Plaintiffs base their claim of personal jurisdiction as to both defendants on subsections (a)(1) and (4) of the District of Columbia long arm statute which provide:

A District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person’s: (1) transacting any business in the District of Columbia;
(4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he regularly does business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia____

D.C.Code § 13-428(a)(1), (4). In making this argument, plaintiffs rely extensively on evidence relating to the actions of defendants in advertising in national publications reaching Washington, D.C. and with regard to defendant NCL, defendant’s advertisements in The Washington Post.

The burden of establishing the basis for the exercise of jurisdiction is on the plaintiffs. See, e.g., McNutt v. General Motors Acceptance Corp., 248 U.S. 178, 182, 39 S.Ct. 91, 92, 63 L.Ed. 198 (1936); Hutton v. Piepgres, 451 F.Supp. 205, 207 (S.D.N.Y.1978).

Plaintiffs’ claim that jurisdiction is proper with regard to defendant A AAABCO rests exclusively on .two considerations: a) A AAABCO lists its toll-free telephone number in the District of Columbia telephone directory; and b) A AAABCO is alleged to have advertised in national publications which could reasonably have been expected to reach the District of Columbia. Although plaintiffs sought and were granted leave to conduct discovery with regard to jurisdiction over defendant NCL, no such discovery was sought with regard to A AAABCO. As a result, the only indication of advertising by A AAABCO before the Court is the single A AAABCO advertisement that plaintiffs saw which allegedly induced them to contact A AAABCO.

Whether considered in connection with the subsection (a)(1) transacting business clause or the subsection (a)(4) soliciting business provision of the long-arm statute, these activities are simply insufficient to satisfy the due process minimum contacts test of International Shoe and its progeny. See World-Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). These activities are patently insufficient in this case to constitute purposeful availment of the privilege of conducting activities within the District of Columbia so as to invoke the benefits and protections of its laws. See Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958).

The listing of a phone number in the District of Columbia telephone directory was found insufficient to satisfy the long-arm statute in the analogous case of Cornwell v. C.I.T. Corp. of New York, 373 F.Supp. 661, 662 (D.D.C.1974); see also Ghanem v. Kay, 624 F.Supp. 23, 24-25 (D.D.C.1984). Thus plaintiffs’ claim rests "principally~orTdefendant A AAABCO’s national advertising. Plaintiffs rely in this regard on language in World-Wide Volkswagen suggesting that the use of advertising reasonably calculated to reach a particular state is one factor that may be considered in determining whether the exercise of jurisdiction would meet due process requirements. See World-Wide Volkswagen, 444 U.S. at 295, 100 S.Ct. at 566. Indeed, as plaintiffs note, a number of courts have read this language as plaintiffs do to allow jurisdiction where this factor is present. See, e.g., Southern Case, Inc. v. Management Recruiters International, 544 F.Supp. 403, 406 (E.D.N.C.1982); see also Federal Insurance Co. v. Piper Aircraft Corp., 341 F.Supp. 855, 857 (W.D.N.C.1972), aff'd, 473 F.2d 909 (4th Cir.1973). Other courts have rejected this approach. See, e.g., Hankins v. Somers, 39 N.C.App. 617, 251 S.E.2d 640, pet. discr. rev. denied, 297 N.C. 300, 254 S.E.2d 920 (1979).

However, regardless of whether there might be some cases where such advertising is constitutionally sufficient, the Court does not believe that use of a single advertisement in a publication of this nature is sufficient to effectively create the possibility of nationwide service of process. See Southern Case, 544 F.Supp. at 404 (noting that defendant “frequently” advertised in the Wall Street Journal)', Piper Aircraft, 341 F.Supp. at 856 (noting that defendant “regularly” solicits business in national magazines circulated in forum). This reasoning is reinforced by the fact that the cases cited by plaintiffs where advertising was accepted as a basis for jurisdiction involved additional activities giving rise to jurisdiction as well as more extensive advertising activities. See ' Southern Case, 544 F.Supp. at 406-07 (noting that defendant maintained contractual relationships with franchisees in forum state, receives considerable royalties from franchisees in forum, and that defendant’s representatives visited forum state) & n. 9 (“the advertisements placed in the instant situation, along with the other contacts, provide a sufficient basis for the exercise of jurisdiction” (emphasis supplied)); Piper Aircraft, 341 F.Supp. at 856 (noting that defendant maintained network of authorized service and sales facilities in forum in addition to national advertising activities). Accordingly, jurisdiction is not constitutionally proper as to defendant A AAABCO.

Plaintiffs’ claim that jurisdiction is proper with regard to defendant NCL represents a closer question as plaintiffs have obtained evidence through discovery indicating that NCL spent $115,910 on advertising last year in national publications and television commercials calculated to reach the District of Columbia and NCL spent a total of $265,000 on numerous advertising supplements appearing in The Washington Post in the last two years. However, it is well settled that regardless of the existence of in personam jurisdiction, the Court is empowered.to transfer an action where such a transfer is appropriate. Accordingly, the Court has decided to transfer this action to the United States District Court for the Southern District of Florida with regard to both defendants. Whether considered under section 1404(a) or 1406(a), this conclusion is supported by a number of factors, including that the action could have been brought in Florida, most of the records and witnesses would seem to be located there, and the defendants would appear to be subject to personal jurisdiction in that forum.

      . According to the complaint, plaintiffs saw an advertisement depicting A AAABCO as a “cruise center" through which cruises could be obtained in the same issue of Cruise & Travel Magazine. Complaint ¶ 8. these contentions in its memoranda of points and authorities.

      . The Court on November 14, 1984 issued an order granting plaintiffs’ motion for limited discovery of defendant NCL regarding the basis for jurisdiction. Plaintiffs did not seek such discovery with regard to defendant A AAABCO.
      Defendant NCL has also sought dismissal in its motion by virtue of its claim that, as a Norwegian corporation, it is not subject to service of process in this Court as well as the argument that venue is not proper here with regard to NCL. However, NCL did not address

      . It is not disputed that plaintiffs initiated the telephone call to A AAABCO in which they made their reservations. Plaintiffs’ own unilateral actions cannot provide a basis for asserting jurisdiction over a nonresident defendant. See, e.g., Daniel v. Costa Armatori, 1980 A.M.C. 2874, 2879 (D.D.C.1980).

      . In contrast, the discovery materials obtained by plaintiffs with regard to defendant NCL indicate that NCL spent a total of $265,000 on advertising in The Washington Post over the past two years as well as $115,910 on advertising last year in other national publications and television commercials calculated to reach the District of Columbia.

      . In addition the Court notes that plaintiffs themselves sought transfer if the Court found that defendants were not subject to personal jurisdiction. Thus, there is less concern with disturbing the plaintiffs’ original choice of forum.
      Finally, the Court notes that defendant NCL also sought dismissal on venue grounds. Since 28 U.S.C. § 1406(a) recognizes transfer as a more appropriate remedy than dismissal where venue is improper, transfer of this action regardless of the question of personal jurisdiction with regard to NCL does not impose an undue hardship on NCL.

      . Nevertheless, as discussed infra, this finding does not mandate that the Court dismiss the action where transfer would be appropriate.

      . See, e.g., Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82 S.Ct. 913, 915, 8 L.Ed.2d 39 (1962); Taylor v. Love, 415 F.2d 1118, 1120 (6th Cir.1969), cert. denied, 397 U.S. 1023, 90 S.Ct. 1257, 25 L.Ed.2d 533 (1970); Mayo Clinic v. Kaiser, 383 F.2d 653, 655-56 (8th Cir.1967); Volk Corp. v. Art-Pak Clip Art Service, 432 F.Supp. 1179, 1181 (S.D.N.Y.1977).
      Courts have apparently disagreed as to whether such a transfer is authorized by 28 U.S.C. § 1404(a), § 1406(a) or on a reading of these two provisions together. See generally Corke v. Sameiet M.S. Song of Norway, 572 F.2d 77, 79-80 (2d Cir.1978). Cases in this District have not been uniform in this regard. See LaBrier v. AH. Robins Co., 551 F.Supp. 53, 56-57 (D.D.C. 1982) (denying transfer pursuant to section 1406(a) but granting transfer pursuant to section 1404(a)); Mitchell Energy Corp. v. Mary Helen Coal Co., 524 F.Supp. 558, 564-65 (D.D.C. 1981) (authorizing transfer under section 1406(a) where defendant’s activities insufficient to meet long-arm statute but action could have been brought in transferee court); Textile Museum v. F. Eberstadt & Co., 440 F.Supp. 30, 33 (D.D.C.1977) (transfer granted pursuant to section 1406(a) where plaintiff had “reasonable but erroneous” belief that defendant was subject to jurisdiction in District of Columbia); Norair Engineering Associates v. Noland Co., 365 F.Supp. 740, 743 (D.D.C.1973) (granting transfer pursuant to section 1404(a)). However, given the broad scope of sections 1404(a) and 1406(a), this Court’s decision to transfer this action with regard to both defendants to the Southern District of Florida would be the same regardless of which provision is controlling. •


author: LEVAL, District Judge.

text:
    In the Matter of the Arbitration between TRANSATLANTIC BULK SHIPPING LTD., Petitioner, and SAUDI CHARTERING S.A., Respondent.
    No. 84 Civ. 3054 (PNL).
    United States District Court, S.D. New York.
    April 16, 1985.
    Poles, Tublin, Patestides & Stratakis, New York City, for petitioner.

      Burlingham, Underwood & Lord, New York City, for respondent.
   MEMORANDUM AND ORDER

LEVAL, District Judge.

Petitioner, Transatlantic Bulk Shipping Ltd., moves, pursuant to 9 U.S.C. § 207, for confirmation of an arbitration award rendered in London against respondent, Saudi Chartering S.A.

Background

Transatlantic is a corporation organized in Liberia engaged in ocean carriage. Saudi, a Panamanian corporation with its principal place of business in Greece, made a time charter party on January 27, 1984, with Transatlantic for transport of Saudi’s cargo from the Gulf of Mexico to the Middle East on Transatlantic’s vessel. Clauses 17 and 72 of the charter party provided for arbitration of disputes in London. On May 80, 1984, Transatlantic notified Saudi of its intention to arbitrate for Saudi’s failure to pay the charter hire. Saudi sent a telex to the arbitration panel admitting liability for the claim. On August 1, 1984, the London arbitrators made a written award in favor of Transatlantic of $476,218.04 plus 12% interest and costs. Saudi has not paid any part of this award.

Transatlantic moves to confirm the arbitration award under the provisions of the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 201 et seq. Saudi argues in opposition on three grounds: 1) the court lacks personal jurisdiction over Saudi; 2) Transatlantic is not the proper party to enforce the award; and 3) the imposition of attorneys fees and the rate of prejudgment interest under the award was improper.

Discussion

Transatlantic contends that jurisdiction is conferred by the Convention on Recognition and Enforcement of Foreign Arbitral Awards and the implementing legislation, 9 U.S.C. §§ 201 et seq. It is not disputed that this arbitration agreement falls under the Convention. Concerning actions to enforce or recognize arbitral awards arising from such agreements, Section 203 provides:

“An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States ... shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.”

Section 207 provides:

“Within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.”

Although not disputing that the district court is empowered by the statutes quoted above to hear such actions affecting parties that are before the court, Saudi argues that the court has no personal jurisdiction over it. It acknowledges that process was served on it in Greece pursuant to Rule 4(e), F.R.Civ.P., but argues that its conduct furnishes no basis for a federal court in New York to exert power over it. It has no office, bank account, employee, agent or person authorized to receive process in New York. It does not transact business in New York, nor has it committed tortious acts in New York. The vessel did not call in New York. The charter party was not negotiated or made in New York nor does it consent to New York jurisdiction or adopt New York law.

I find that Transatlantic’s reliance on the statutes implementing the Convention is misplaced and confuses two distinct issues of the court’s power, both confusingly described by the word “jurisdiction.”

The Act adopting and enforcing the Convention, in particular §§ 203 and 207, gives the district courts “original jurisdiction over such an action or proceeding.” In this respect it is comparable to 28 U.S.C. §§ 1330, 1331 and 1332 which authorize federal courts to act in certain suits against a foreign state, in “actions arising under the Constitution, laws or treaties of the United States,” and in actions between “citizens of different States ... etc.” When a plaintiff seeks to invoke the court’s power in such a case, a separate question arises whether the defendant, as a person, is properly subject to the court’s power. The fact that the court can hear suits between “citizens of different states” does not mean that the court may issue judgments against any defendant in any suit between citizens of different states. The defendant must either reside within the court’s power or have acted in such fashion as to bring himself within the court’s power before it may issue judgments over him. See International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

Similarly, as to the Act implementing the Convention, it authorizes the court to hear a new category of action not previously within its subject matter jurisdiction. It does not, however, give the court power over all persons throughout the world who have entered into an arbitration agreement covered by the Convention. Some basis must be shown, whether arising from the respondent’s residence, his conduct, his consent, the location of his property or otherwise, to justify his being subject to the court’s power.

Bergesen v. Joseph Muller Corp., 548 F.Supp. 650 (S.D.N.Y.1982) (Haight, J.), aff'd, 710 F.2d 928 (2d Cir.1983) (Cardamone, J.) and Sumitomo Corp. v. Parakopi Compania Maritima, 477 F.Supp. 737 (S.D.N.Y.1979) (Werker, J.), aff'd, 620 F.2d 286 (2d Cir.1980) are not to the contrary for in those cases the parties had agreed to arbitrate in New York, supporting an inference of consent to the New York court’s enforcement of the award. See also Reed & Martin, Inc. v. Westinghouse Electric Corp., 439 F.2d 1268 (2d Cir.1971) (Clarie, J.); Chicago Bridge & Iron Co. v. Islamic Republic of Iran, 506 F.Supp. 981 (N.D.Ill.1980).

Since I conclude that the petition must be dismissed for lack of jurisdiction over the person of the respondent, it is unnecessary to deal with Saudi’s other contentions.

Petition dismissed.

SO ORDERED.


author: ROVNER, District Judge.

text:
    Florence EISENBRANDT, et al., Plaintiffs, v. COMMISSIONER OF INTERNAL REVENUE SERVICE, Defendant.
    No. 83 C 3791.
    United States District Court, N.D. Illinois, E.D.
    April 30, 1985.
   MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

Plaintiffs brought this action on behalf of their decedent, William F. Eisenbrandt, against the Commissioner of Internal Revenue (“Commissioner”) for the refund of estate taxes paid in the amount of $15,989.83. The decedent died on April 15, 1975. On October 16, 1978, William H. Eisenbrandt, as Executor of the estate, signed Internal Revenue Service Form 890-AD which is known as “An Offer of Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment.” By signing that form, the executor agreed that a deficiency tax of $46,003.56 was due and owing based on an evaluation of farm property at issue at $350,000. Prior to that time, the Executor’s position was that the farm property was worth $190,000, whereas the government’s position was that the property was worth $450,000.

The Commissioner filed a motion for summary judgment in this case on March 5, 1984 when it was pending before Judge Bernard M. Decker on the grounds that Form 890-AD estopped plaintiffs from challenging the tax assessment. On May 24, 1984, Judge Decker denied the motion because the plaintiffs challenged the Commissioner’s acceptance of the waiver as the Form 890-AD attached to the Commissioner’s motion did not reflect the signature of a person with authority to sign the form. The plaintiffs had asserted that they never received the signed form.

On March 18, 1984, the government filed a second motion for summary judgment, now attaching a Form 890-AD signed by R.J. Skendzel on November 28, 1978 as Acting Associate Chief of the Chicago Appeals Office accepting plaintiffs’ offer on behalf of the Commissioner. The government asserts by affidavit that this signed Form 890-AD was only recently discovered.

The primary issue on this second motion for summary judgment is whether the doctrine of collateral estoppel bars the plaintiffs from challenging the tax assessment because a Form 890-AD was executed in compromise of the tax liability. Plaintiffs argue first that the case law establishes that the mere filing of Form 890-AD does not preclude a suit for a refund by a taxpayer, citing primarily the case of Unita Livestock Corp. v. United States, 355 F.2d 761 (10th Cir.1966). This Court agrees with the government, however, that the decision of the Seventh Circuit in General Split Corporation v. United States, 500 F.2d 998 (7th Cir.1974) is controlling here. There, the court held that the taxpayer was collaterally estopped to challenge a settlement agreement evidenced by signing a Form 890-AD, even though it was not a formal closing agreement, because the government acted to its detriment in reliance on the agreement by foregoing its right to appeal a Tax Court judgment. Such is also the case here.

Second, plaintiffs contend that material questions of fact exist as to “whether the signature of R.J. Skendzel was authorized or merely a rubber stamp applied by an employee.” Plaintiffs also challenge Mr. Skendzel’s legal authority as Acting Associate Chief to sign the form 890-AD and bind the United States. Neither contention is well-founded in light of the fact that the government has produced evidentiary material by way of affidavit substantiating the Form 890-AD it has submitted. The Court has examined the Form and finds that the only portion of the signature of Mr. Skendzel which is stamped is his title as Acting Associate Chief. Moreover, plaintiffs argument that as Acting Associate Chief, Mr. Skendzel did not have authority to bind the government is meritless in light of the Delegation Order No. 97 attached to the government’s motion which even the plaintiffs concede grants such authority to the Associate Chief. Fed.R. Civ.P. 56(e) provides that “[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.” When the adverse party fails to “so respond, summary judgment, if appropriate, shall be entered against him.” Id. If they honestly felt they had a good faith basis, plaintiffs had the obligation to challenge the signature and authority of Mr. Skendzel by appropriate evidentiary submissions, not merely by argument in their motion for summary judgment. At the very least, they could have requested that a ruling on the summary judgment motion be deferred until they could obtain such material, by deposition or otherwise. Given the confines of Rule 56, unsupported assertions are not sufficient to raise material questions of fact.

Accordingly, the Commissioner’s motion for summary judgment is hereby granted, and the plaintiffs’ complaint is dismissed.


text:
    Robert G. WAGNER, et al., Plaintiff, v. OWENS-ILLINOIS, INC., et al., Defendant.
    No. 83 C 5461.
    United States District Court, N.D. Illinois, E.D.
    May 6, 1985.
   MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

The plaintiffs are eleven truck drivers represented by the defendant Chicago Truck Drivers, Helpers and Warehouse Workers Union (“CTDU”) and formerly employed by the defendant Owens-Illinois, Inc. (“Owens”). The plaintiffs bring this action for breach of the collective bargaining agreement against the defendant Owens under Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185. Section 301 also confers jurisdiction on this Court over the breach of contract claim. The plaintiffs also bring this action against the CTDU for breach of its duty of fair representation. This Court has subject matter jurisdiction over the claim for breach of the duty of fair representation action under 28 U.S.C. § 1331.

Presently before the Court are the defendants’ motions, pursuant to Fed.R.Civ.R. 56, for summary judgment against the plaintiffs. For the reasons set forth below, the defendants’ motions are denied. Factual Background.

The eleven plaintiffs were truck drivers employed by Owens to deliver cartons manufactured at Owens’ Chicago plant. The plaintiffs were represented by the CTDU. They worked under a collective bargaining agreement negotiated in 1982 and in force at the relevant time. The agreement contained two provisions relevant to this case. The first provision, Article 13, Section 2, provided:

For the purpose of preserving work and job opportunities for the Employees covered by this Agreement, no work or services presently performed or hereafter assigned to the collective bargaining unit will be subcontracted, transferred, leased, assigned, or conveyed in whole or in part, outside of the jurisdictional area of the Union or to any other plant, person, or non-unit employee, unless otherwise provided in this Agreement. The Employer may subcontract work when all of his Employees are working, except that in no event shall work presently performed or runs established during the life of this Agreement be farmed out.

The second relevant provision is Article 3, Section 1, which fixed the plaintiffs’ hourly salaries at $13.43.

On March 3, 1983, the plaintiffs were informed by Owens’ plant manager, Preston Meisel, that Owens’ Chicago plant was “getting out of the trucking business.” Meisel explained that the company’s trucks were old and that the company did not want to replace them. Meisel also stated that all of the plaintiffs would be laid off or terminated on March 9, 1983. Owens refused to negotiate with the CTDU on the terminations, and a strike ensued on March 10 to force Owens to the bargaining table. After two days, Owens agreed to meet with the union, and the strike ended.

On March 11, a union representative told the plaintiffs that they had “won” the strike and would be returned to their jobs at Owens. One week later, however, Owens terminated the plaintiffs and hired a cartage company, Dolphin Cartage, Inc. (“Dolphin”), to deliver the cartons produced at the plant. Owens then liquidated its trucking operation and sent the trucks for use at its other facilities.

On March 18, the CTDU entered into an agreement with Dolphin whereby Dolphin agreed to hire the plaintiffs after they were terminated from Owens. Dolphin, whose employees also were represented by the CTDU, agreed to pay the plaintiffs $11.43 per hour. The CTDU agreed that the plaintiffs would be placed on a seniority list separate from that of Dolphin’s regular employees.

On March 25, Mike Keegan, executive director of the CTDU, entered into a letter of understanding with Owens, releasing the company from its obligations under the collective bargaining agreement. Keegan also agreed that, in the event that Owens ceased doing business with Dolphin, Owens would re-employ the employees.

The plaintiffs thereafter filed a grievance, pursuant to the collective bargaining agreement between the CTDU and Owens, alleging that Owens had violated the contract provision that prohibited the company from subcontracting its trucking work. The CTDU denied the grievance, stating that the matter already had been settled between the CTDU and Owens through the March 25th letter of understanding.

On May 12, however, at the plaintiffs’ insistence, the union convened a Grievance Committee hearing to allow the plaintiffs to fully state their position concerning the grievance. Paul Glover, the union’s general counsel, presided as hearing officer, and John Johnson, a CTDU field representative, represented the plaintiffs. A few days after the hearing, Keegan advised the plaintiffs that the denial of their grievance was final.

In their complaint, plaintiffs allege that the CTDU breached its duty of fair representation by failing to pursue an obviously meritorious grievance. According to the plaintiffs, Owens clearly had violated the contract by subcontracting its trucking work to Dolphin. In addition, plaintiffs contend that the CTDU conspired with Owens to violate the plaintiffs’ rights under the contract in order to enrich itself through the CTDU Pension and Welfare Fund. Plaintiffs assert that the union acted arbitrarily and in bad faith by failing to pursue their grievance and by inadequately representing them at the Grievance Committee hearing.

Discussion.

To show breach of the duty of fair representation, plaintiffs bear the heavy burden of showing that the defendant union deliberately and unjustifiably refused to represent them. Graf v. Elgin, Joliet and Eastern Railway Co., 697 F.2d 771 (7th Cir.1983). Proof of negligence or poor judgment by a union in handling a grievance is not sufficient to support an action for unfair representation. Hoffman v. Lonza, 658 F.2d 519 (7th Cir.1981). The action based on a breach of the duty fairly to represent cannot be grounded on some action or omission by the union that results in an employee not receiving a “fair” hearing on the merits of the grievance. The legal action based on the union’s duty fairly to represent might be more properly labeled as an action for the union intentionally causing harm to an employee involved in a grievance proceeding. Hoffman, supra at 522. Thus, to survive the defendants’ motions for summary judgment, plaintiffs must show that the defendant CTDU intentionally caused them harm by improperly handling their grievance.

Plaintiffs contend that the union’s denial of their grievances is, by definition, arbitrary and in bad faith. In Hoffman, the court interpreted the terms “arbitrary” and “bad faith” to mean intentional wrongdoing by the union. Hoffman, supra at 521. A union may deny a grievance that it honestly believes is without merit. Dober v. Roadway Express, 707 F.2d 292 (7th Cir.1983); Graf at 779. Thus, the denial itself does not, by definition, constitute intentional wrongdoing. The relevant question is whether the CTDU honestly and in good faith believed that the plaintiffs’ grievance was meritless. If it had some other hostile or discriminatory motive for not pursuing the grievance, then the CTDU will have breached its duty to fairly represent the plaintiffs.

The union’s honest belief in the merit of the grievance is an issue of material fact that is in dispute between the parties. Plaintiffs and Owens both indicate in their memoranda that the union originally perceived Owens’ termination of the plaintiffs as a violation of the contract’s subcontracting provision. Plaintiffs claim that CTDU representatives told them that Owens was violating the provision and that the union intended to get the plaintiffs’ jobs back at Owens. (Plaintiffs’ Affidavits at 5.) Similarly, Owens concedes that the union’s position during negotiations after the strike was that Owens had violated the subcontracting provision of the 1982 agreement. (Owens’ Statement of Material Facts at 10.) The CTDU, however, states that “[i]t was never the Union’s position that the Company had violated the subcontracting provision of the Collective Bargaining Agreement____” (CTDU Reply Memorandum at 2. ) Thus, the union’s honest belief in the merit of the grievance remains in dispute.

Plaintiffs also contend that the CTDU was motivated to breach its duty of fair representation by its desire for financial gain. According to the plaintiffs, the CTDU intentionally mishandled the plaintiffs’ grievance in exchange for Owens’ enrichment of the CTDU Pension and Welfare Fund. The plaintiffs allege that, through its conspiracy with Owens, the CTDU was able, to obtain statutorily required withdrawal payments from Owens and regular contributions to the fund from Dolphin. The plaintiffs claim that this “double contribution” to the pension fund benefited the CTDU because of its “close connection” with the fund. As proof of this allegation, the plaintiffs point to the fact that the union’s executive director is also trustee of the pension fund. The defendants, however, deny any improper connection between the fund and the CTDU. Thus, an issue of material fact exists as to whether the union intentionally mishandled the plaintiffs’ grievance in order to enrich itself improperly through the pension fund. If this Court accepts plaintiffs’ version of the facts, as it must for purposes of defendants’ motion for summary judgment, plaintiffs’ allegations demonstrate that the CTDU breached its duty to fairly represent the plaintiffs.

Conclusion.

This Court finds that issues of material fact are in dispute that preclude summary judgment. Specifically, plaintiffs and CTDU disagree as to whether the CTDU honestly and in good faith believed that the plaintiffs’ grievance lacked merit. Additionally, the question remains as to whether the CTDU’s motive for the intentional mishandling of their grievance was to enrich its pension fund. For these reasons, the defendants’ motions for summary judgment are denied.

      . In order to prevail on a motion for summary judgment, a defendant has the burden of establishing that there is no genuine issue of material fact. Korf v. Ball State University, 726 F.2d 1222 (7th Cir.1984). Any inferences to be drawn from the underlying facts must be viewed in the light most favorable to the non-moving party. Hermes v. Hein, 742 F.2d 350 (7th Cir.1984). The existence of a factual dispute, however, only precludes summary judgment if the disputed fact is outcome-determinative. Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir.1984).

        . Unless the union has breached its duty of fair representation, an employee may not sue for breach of a collective bargaining agreement. Graf v. Elgin, Joliet and Eastern Railway Co., 697 F.2d 771 (7th Cir.1983). Therefore, this Court does not address the question of whether Owens violated the subcontracting provision of the collective bargaining agreement.

      . Plaintiffs also allege that they were not properly represented at the Grievance Committee meeting. They contend that their CTDU representative, Johnson, failed to meet with them before the day of the hearing, did not prepare them, and said nothing during the hearing. Plaintiffs further contend that the hearing was biased because the union’s general counsel served as the hearing officer. Plaintiffs contend that the union’s performance at the hearing constitutes a failure of the duty of fair representation. The Seventh Circuit, however, has held that while a union representative’s lack of preparation and silence during a hearing may "mark his as the antithesis of the prudent and skillful advocate,” it does not prove a breach of the duty of fair representation. Dober v. Roadway Express, Inc., 707 F.2d 292, 295 (7th Cir.1983). Further, the court was not disturbed by the fact that a union official presided at the grievance hearing. Id.


text:
    ENTRUST MANAGEMENT COMPANY, Plaintiff, v. Richard B. GOLD and Rich Gold Co., Defendants.
    No. 84 C 7029.
    United States District Court, N.D. Illinois, E.D.
    May 28, 1985.
   MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

Plaintiff Entrust Management Co. (“Entrust”) is an Illinois corporation engaged in the business of managing commercial and residential real estate. Defendant Rich Gold Co. (“Gold Co.”) is a California corporation engaged in the business of real estate brokering, and defendant Richard B. Gold (“Gold”) is a California citizen who is a licensed real estate broker in the State of California and an officer and agent of Gold Co. Entrust leased an office complex to Attorney’s Office Management, Inc. (“AOMI”) on the personal guarantee of Paul Fegen (“Fegen”), AOMI’s chief executive officer. Gold Co. negotiated the lease on behalf of AOMI and was paid a broker’s commission of $256,844 by plaintiff. One month after defendants received the final commission installment, AOMI and Fegen filed for bankruptcy. The tenants never occupied the premises, despite the fact that the plaintiff expended over $650,000 in improvements thereon. Plaintiff never collected any rent. In addition to the return of the unearned broker’s commission, plaintiff seeks damages in excess of $7 million. In a seven count complaint, Entrust alleges that in the course of the lease transaction, Gold and Gold Co. violated the Illinois Real Estate Brokers and Salesman Act, committed fraud, conversion, negligent misrepresentation, breach of quasi-contract, and that there was failure of consideration of a third-party beneficiary contract. Presently pending before this Court is the motion of the defendants to dismiss the complaint for failure to state a claim upon which relief can be granted and for failure to plead fraud with particularity as required by Rule 9 of the Federal Rules of Civil Procedure.

Defendants’ motion to dismiss is denied. This Court has carefully examined the complaint and finds that it pleads with sufficient particularity the time, place, and manner of the alleged fraudulent and deceptive misrepresentations and omissions that give rise to this action. The gist of the plaintiff’s complaint is that defendants induced plaintiff to enter a ten-year lease with AOMI on Fegen’s personal guarantee by presenting both AOMI and Fegen as “ready, willing, and able” to perform all lease obligations and that they were not in fact “ready, willing, and able” to do so. According to the allegations of the complaint, which this Court must accept as true for purposes of the motions, defendants repeatedly, falsely, and fraudulently assured plaintiff, in response to its direct inquiries, that AOMI and Fegen were not experiencing any financial difficulty. Plaintiff also alleges that defendants had material knowledge of AOMI’s and Fegen’s inability to perform under the terms of the lease. Although it is true that the complaint alleges superior knowledge upon information and belief, pleadings on “information and belief” are permissible on matters peculiarly within the defendants’ knowledge. Rule 9(b) “does not preclude allegations based upon information and belief, ... but merely requires that the ‘circumstances’ constituting the fraud shall be stated with particularity.” MSL Industries, Inc. v. Airtrol Corp., 21 F.R.Serv.2d 477, 478 (N.D.Ill.1976). Particularly in light of plaintiff’s allegations that Gold shared office space with AOMI, this Court concludes that the circumstances constituting the fraud have been pleaded with sufficient particularity in this case.

This conclusion necessitates a finding as well that Count II adequately states a cause of action for violation of the Illinois Real Estate Brokers and Salesman Act. That Act obligates brokers to disclose “all material knowledge [they] may have as soon as practicable.” The allegations of Count II are to the effect that defendants knew that AOMI and Fegen could not perform their lease obligations but did not so disclose that material information to plaintiff. The Act also requires that a broker must be registered with the Illinois Department of Registration and Education or work in conjunction with a broker registered in Illinois to be entitled to receive a commission. Plaintiff has alleged on information and belief that defendants are not registered in Illinois and were not working in conjunction with an Illinois broker. Defendants do not dispute this allegation. Accordingly, Count II of the complaint states a claim upon which relief can be granted.

Similarly, under the Illinois law of conversion as enunciated in Hayden Stone, Inc. v. Brode, 508 F.2d 895, 896 (7th Cir.1974), and Marcano v. Northwestern Chrysler-Plymouth Sales, Inc., 550 F.Supp. 595, 603 (N.D.Ill.1982), the complaint adequately states a cause of action for conversion. The complaint alleges that defendants wrongfully induced plaintiff to pay commissions to them even though defendants knew that AOMI and Fegen were not capabable of performing their lease obligations, that plaintiff had a right to the return of the commission, and that plaintiffs demand for that return was rejected. This Court cannot accept the defendants’ contention that they properly received the commission because the plaintiff voluntarily mailed the commissions to them. Conversion depends not on how property is obtained but on whether the defendants’ possession or retention of the property wrongfully deprives the rightful property owner of its use. To the extent that plaintiff was defrauded into sending the commission to defendants, plaintiff did not “voluntarily” send the commissions.

This Court finds that the complaint adequately states a cause of action for negligent misrepresentation in Count VI under the standard set forth in Penrod v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 68 Ill.App.3d 75, 81-82, 24 Ill.Dec. 464, 469, 385 N.E.2d 376, 381 (3d Dist.1979) and Rozny v. Marnul, 43 Ill.2d 54, 250 N.E.2d 656 (1969). Counts V and VI also state causes of action for breach of an implied in law and quasi-contract respectively, although they are redundant of one another. There is no substantive difference between a cause of action based on an implied in law contract and a cause of action based upon quasi-contract, and plaintiff has pointed to no case law or authority indicating that there is such a substantive difference. Accordingly, Count VI of the complaint is dismissed because it adds nothing.

Finally, this Court concludes that plaintiff has adequately pleaded a claim in Count VII for failure of consideration of the third-party beneficiary contract. Plaintiff has alleged that defendants’ failure to produce a tenant who was ready, willing, and able to perform the lease obligations resulted in a failure of consideration of the third-party beneficiary contract between plaintiff and AOMI and Fegen in favor of defendants. Plaintiff alleges that it received nothing of value whatsoever from either AOMI, Fegen, or the defendants. This Court cannot accept as true the defendants’ contention that AOMI and Fegen were in fact able to perform. For purposes of the motion to dismiss, the plaintiff’s allegation that they were unable to perform at the time that they entered into the lease must be accepted as true.

Accordingly, defendants’ motion to dismiss the complaint for failure to state a cause of actior^ and for failure to plead fraud with particularity is denied except as to Count VI of the complaint which is dismissed as redundant. It is so ordered.


author: LEIGHTON, District Judge.

text:
    Clifford STEWART, Jr., Plaintiff, v. CITY OF CHICAGO, et al., Defendants.
    No. 84 C 4951.
    United States District Court, N.D. Illinois, E.D.
    May 31, 1985.

      Susan E. Loggans, Susan E. Loggans & Associates, Chicago, 111., for plaintiff.
    Gregory Kulis, Sharon Sullivan, James D. Montgomery, Chicago, 111., for defendants:
   MEMORANDUM

LEIGHTON, District Judge.

This cause is before the court on plaintiff’s motion to reconsider the court’s order dismissing defendants, City of Chicago (the “City”) and Fred Rice (“Rice”), from this action. The City and Rice move the court for attorneys’ fees and costs incurred in achieving dismissal of the claims against them.

This court, on February 1, 1985, dismissed the second amended complaint as to the City and Rice on its own motion, stating, “it is plain from the face of the second amended complaint that plaintiff states conclusory allegations only against these defendants, and can prove no set of facts which would entitle him to relief against them.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957).

Another review of the complaint convinces the court of the correctness of its ruling. It is true, as plaintiff states, that well plead facts are taken as true for purposes of a motion to dismiss, but conclusory allegations are inadequate. Coates v. Illinois State Board of Education, 559 F.2d 445, 447 (7th Cir.1977). The allegations here are conclusory only. Plaintiff alleges that the policies of the City and Rice proximately caused the unlawful police conduct complained of, but pleads no facts to support his charges, apart from those surrounding his own physical injury. The Seventh Circuit has recently held that such allegations will not support a civil rights claim against a municipality. See Strauss v. City of Chicago and John Doe, 760 F.2d 765, 768 (7th Cir.1985), where the court stated:

Plaintiff here has set out no grounds upon which his claim rests, an omission that is fatal. To allow otherwise would be tantamount to allowing suit to be filed on a respondeat superior basis. Plaintiffs could file claims whenever a police officer abused them, add Monell [v. Department of Social Services of the City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978) ] boilerplate allegations, and proceed to discovery in the hope of turning up some evidence to support the “claims” made. Id. (Emphasis in original.)

Having carefully reviewed the complaint, the court concludes that plaintiffs allegations against these defendants are inadequate to state a claim, and must be dismissed. Accordingly, plaintiffs motion for reconsideration is granted, and upon reconsideration the court adheres to its earlier ruling.

Also before the court is the motion of the City and Rice for an order granting attorneys’ fees and costs against plaintiff and/or his attorney, pursuant to Fed.R.Civ.P. 11, or, alternatively, against plaintiff’s attorney, pursuant to 28 U.S.C. § 1927, for having to file motions to dismiss with supporting memoranda on two occasions, in response to plaintiff’s multicount and deficient complaints.

Rule 11 provides that the signature of an attorney to a pleading is a certification that he has made reasonable inquiry which to base a belief that the allegations of it are well grounded in fact and law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. The Rule provides for an appropriate sanction upon violation, which may include a reasonable attorney’s fee. In a similar case, where defendants had to repeatedly answer baseless charges, a court has awarded fees and costs under the Rule. Van Berkel v. Fox Farm and Road Machinery, 581 F.Supp. 1248 (D.Minn.1984). The case at hand presents a different situation, however, because the pleading in question, the second amended complaint, is not signed by plaintiff’s attorney. It would seem inappropriate, therefore, to impose fees and costs under Rule 11.

Another ground on which fees and costs may be awarded is 28 U.S.C. § 1927, which provides in part that:

[a]ny attorney ... who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.

Section 1927 has been construed as requiring a finding of bad faith before sanctions can be imposed for its violation. McCandless v. Great Atlantic and Pacific Tea Co., Inc., 697 F.2d 198, 201 (7th Cir.1983). “Bad faith may be found, not only in the actions that led to the lawsuit, but also in the conduct of the litigation.” Roadway Express, Inc. v. Piper, 447 U.S. 752, 766, 100 S.Ct. 2455, 2464, 65 L.Ed.2d 488 (1980) (quoting Hall v. Cole, 412 U.S. 1, 15, 93 S.Ct. 1943, 1951, 36 L.Ed.2d 702 (1973)).

Under the facts of this case, where plaintiff’s attorney persisted in pressing the same deficient allegations regarding the City and Rice up to and including the second amended complaint, the court concludes that she has unreasonably and vexatiously multiplied these proceedings, within the meaning of 28 U.S.C. § 1927, and that defendants are entitled to an award of attorneys’ fees, costs and expenses occasioned by such conduct. The award is assessed against Susan E. Loggans personally, as attorney of record for plaintiff.

As alluded to above, plaintiff’s attorney has failed to sign the operative pleading, the second amended complaint. (The first amended complaint is also unsigned.) This is a glaring and serious omission. Under Rule 11, the failure of an attorney to sign a complaint warrants the striking of it. U.S. ex rel. Sacks v. Philadelphia Health Management Corp., 519 F.Supp. 818, 826 (E.D.Pa.1981). The court, therefore, on its own motion, orders the second amended complaint stricken.

In reviewing this file, the court notes a recurring and disturbing error and takes this opportunity to point it out to the firm of Susan E. Loggans and Associates. It is that papers and pleadings, when signed at all, are signed “Susan E. Loggans and Associates.” This firm “signature” is a clear violation of Rule 11, which requires that:

Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated, (emphasis added)

In summary, plaintiffs motion to reconsider is denied; defendants’ motion for fees and costs is granted, and they are to submit a schedule of fees and costs for the court’s approval. Additionally, the second amended complaint is ordered stricken on the court’s own motion.

So ordered.


author: FRYE, District Judge.

text:
    Kenneth A. BROWN, Plaintiff, v, SHEARSON/AMERICAN EXPRESS, INC.; David Eckerdt, Mgr., Salem Br.; Bruce Holoubek, Acc. Executive; Defendants.
    Civ. No. 85-602-FR.
    United States District Court, D. Oregon.
    June 3, 1985.
    Kenneth A. Brown, Gervais, Or., pro se.
    James Hamers, Aiken and Hamers, Salem, Or., for defendants.
   OPINION AND ORDER

FRYE, District Judge.

Plaintiff, Kenneth A. Brown, brought this action pro se, contending that defendants violated the Securities and Exchange Act of 1934 in improperly selling plaintiff a stock option. Plaintiff seeks compensatory and punitive damages.

The matter before the court is defendants’ motion to dismiss. Fed.R.Civ.P. 12(b) provides that if matters outside the pleadings are presented to the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56. Since matters outside the pleadings have been presented by the defendants, their motion to dismiss shall be treated as one for summary judgment.

Defendants also move the court for an order granting them their costs and disbursements incurred in a previously dismissed action.

DEFENDANTS’ MOTION TO DISMISS

Undisputed Facts

In August, 1984, plaintiff filed a complaint against defendants in the Circuit Court for the State of Oregon, County of Marion, Case No. 150,903, seeking compensatory and punitive damages for a violation of the Securities and Exchange Act of 1934 in that defendants improperly sold to plaintiff a stock option. Defendants filed a motion to place the matter in abatement and requested the state court to order plaintiff to proceed through arbitration. Plaintiff failed to comply with the court’s order and plaintiff’s claim was dismissed with prejudice.

Plaintiff thereafter brought this action in federal court. The only difference between the two complaints is the amount of damages requested.

Law

The rule of res judicata as stated by the Supreme Court is as follows:

[Wjhen a court of competent jurisdiction has entered a final judgment on the merits of a cause of action, the parties to the suit ... are thereafter bound not only as to every matter which was offered and received to sustain or defeat the claim ..., but as to any other matter which might have been offered. The judgment puts an end to the cause of action, which cannot again be brought into litigation between the parties upon any ground whatever. Commissioner v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 719, 92 L.Ed. 898 (1948) (emphasis added).

Res judicata applies when there is a valid, final judgment on the merits. 18 C. Wright & A. Miller, Federal Practice and Procedure, § 4432 (1981). The rule operates to bar a party from bringing a subsequent action on the same operative facts.

The requirement that the “judgment be on the merits” is satisfied in this case. When plaintiff failed to proceed through arbitration, the state court judge dismissed plaintiff’s claim with prejudice. Dismissal for failure to comply with any court order operates as an adjudication on the merits. 18 C. Wright & A. Miller, Federal Practice and Procedure § 4435 (1981).

. Defendants’ motion to dismiss is hereby granted.

DEFENDANTS’ MOTION FOR COSTS AND DISBURSEMENTS

Defendants also move the court for an order granting them their costs and disbursements incurred in the previously dismissed state court case pursuant to Fed.R.Civ.P. 41(d), which provides:

[I]f a plaintiff who has once dismissed an action in any court commences another action on the same claim against the same defendant, the court may require the payment of costs in the prior action before proceeding with the second action.

Rule 41(d) by its terms is applicable only when the plaintiff has dismissed an action. Thus, Rule 41(d) does not cover cases in which there was an involuntary dismissal of the prior action by the court. 9 C. Wright and A. Miller, Federal Practice and Procedure § 2375 (1981). Defendants’ motion for costs and disbursements as to the prior case is hereby denied.

NOW THEREFORE, IT IS HEREBY ORDERED that:

1. Defendants’ motion to dismiss is GRANTED.

2. Defendants’ motion for costs and disbursements as to the prior case is DENIED.


author: NICKERSON, District Judge.

text:
    Ex parte DECIOUS, et al. In re “SEARCH WARRANTS”.
    85 C 1654.
    United States District Court, E.D. New York.
    June 7, 1985.
    Daniel P. Foster, P.C. (Kit Conelly Decious, of counsel), New York City, for movants.
    Raymond J. Dearie, U.S. Atty. (John Gallagher, Asst. U.S. Atty., of counsel), Brooklyn, N.Y., for the government.
   MEMORANDUM AND ORDER

NICKERSON, District Judge.

Movants seek an order quashing the warrants executed upon them on or about February 17, 1984 within the Eastern District of New York and directing the return of all property seized thereunder pursuant to to Rule 41(e) of the Federal Rules of Criminal Procedure. The government represents that it intends to return voluntarily all the property seized from this district and that the motion is moot.

Rule 41(e) provides that a “person aggrieved by an unlawful search and seizure may move the district court for the district in which the property was seized for the return of the property on the ground that he is entitled to lawful possession of the property which was illegally seized.” If the court grants the motion to restore the property, “it shall not be admissible in evidence at any hearing or trial.” Id. Rule 41(f) provides that a “motion to suppress evidence may be made in the court of the district of trial as provided in Rule 12.”

Rule 41(e) clearly permits the court to entertain this motion for the return of property seized in this district, even though no trial is pending here. However, the rule does not give aggrieved parties the absolute right to have their motions decided in the district of seizure. See Application of Herr, 473 F.Supp. 1304 (S.D.N.Y.1979); United States v. Lester, 21 F.R.D. 30 (S.D.N.Y.1957). When the court is not the trial court, it is more appropriate to exercise jurisdiction under this rule only where declining to do so would cause the moving party irreparable harm. See In re Grand Jury Proceedings, 466 F.Supp. 863, 866 (D.Minn.1979).

Since the government represents that it will voluntarily return all the property taken from the Eastern District, the movants do not suffer any harm by the court’s declining to exercise jurisdiction. The only “harm” suffered is that movants will not obtain a ruling at this time on whether the property itself, or any “fruits” of that property, would be admissible at a trial. The policy of Rules 41(e) and (f), however, expressly favors that motions to suppress evidence be made in the trial court, so that all pretrial motions can be disposed of in a single court appearance. See 1972 Advisory Committee Notes.

A consideration other than that of judicial economy counsels against the court’s ruling on the admissibility of evidence in this action. No indictment has been handed down in this district, no trial is pending here, and the government is willing to return the property. Declining to exercise jurisdiction will avoid the risk of prematurely and inadequately determining the admissibility of evidence at a trial, see United States v. Lester, 21 F.R.D. 30 (S.D.N.Y.1957), and will ensure that such a determination is made only after a proceeding that is properly adversarial.

The court is informed that a criminal trial is pending before the District Court for the Middle District of North Carolina, United States v. Amanda Reid, in which the government might seek to introduce this property or fruits thereof as evidence. If the government intends to do so, it will be most appropriate for the court fully familiar with the litigation to determine whether the evidence is admissible in that action, where the parties are clearly adversaries and the issue is ripe for resolution. Movants’ arguments as to why that court is inappropriate are unpersuasive.

The court exercises its discretion to decline jurisdiction on the condition that the government return movants’ property. Nothing in this decision shall be deemed to prejudice or waive any rights the movants have to make a suppression motion in any district court where a trial is pending. So ordered.