author: SELYA, District Judge.

text:
    INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFTSMEN, LOCAL #1 OF RHODE ISLAND; Rhode Island Bricklayers and Allied Craftsmen Health & Welfare Fund; Rhode Island Bricklayers and Allied Craftsmen Pension Fund; Rhode Island Bricklayers and Allied Craftsmen Annuity Fund; Rhode Island Bricklayers and Allied Craftsmen Joint Apprenticeship Fund; and Bricklayers and Trowel Trades International Pension Fund, Plaintiffs, v. MENARD & CO. MASONRY BUILDING CONTRACTORS and the Edward Nunes Corporation, Defendants.
    Civ. A. No. 85-0413-S.
    United States District Court, D. Rhode Island.
    Oct. 17, 1985.

      Abedon, Michaelson, Stanzler & Biener, Julius C. Michaelson, Providence, R.I., for plaintiffs.
    Wistow, Barylick & Bruzzi, Inc., Robert S. Bruzzi, Providence, R.I., for defendant Menard.
    Visconti & Heald, Ltd., Thomas W. Heald, Providence, R.I., for defendant Nunes.
   MEMORANDUM AND ORDER

SELYA, District Judge.

This case, in the embryonic pleading stages, raises a set of interesting thresh-hold questions. Nevertheless, the tangram is not so intricate as appears at initial blush.

I.

To put matters into proper perspective, it is necessary first to parse the complaint. The action was brought on July 3, 1985 by six separate plaintiffs, viz., the International Union of Bricklayers and Allied Craftsmen, Local # 1 of Rhode Island (the “Union”) and a quintet of employee benefit funds (hereinafter collectively the “Funds”). The complaint is inartfully drawn. It comprises a single count, which embodies what are in reality multiple statements of claim. Inasmuch as landmines dot the legal terrain, the allegations must be carefully charted.

In what amounts to a jurisdictional statement, the complaint proclaims that the action is being prosecuted under both the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1381 and § 301 of the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185(a). The plaintiffs’ jurisdictional claim is, by its terms, premised on both ERISA, specifically, §§ 1132(e)(1) and (f), and the LMRA, specifically §§ 185(a)-(c). The Funds are said to have dual personalities: each is styled as a “trust fund” established in accordance with the provisions of 29 U.S.C. § 186(c) and each is an “employee pension benefit plan” (“EBP”) as delineated by 29 U.S.C. § 1002(2).

There are a brace of defendants. The first, Menard & Co. Masonry Building Contractors (“Menard”), is a Rhode Island corporation which is allegedly a party to a collective bargaining agreement (“Agreement”) with the Union. Although the Agreement is neither appended to the complaint nor otherwise of record in this proceeding, the plaintiffs aver that it contains provisions requiring Menard (i) to make certain contributions to the Funds, depending upon the number of hours worked by employees subject to the Agreement, and (ii) to effectuate certain deductions from wages due to those employees who enjoy membership in the Union (principally in the form of a dues check-off) and to remit the retained amounts to the Union. The second defendant, The Edward Nunes Corporation (“Nunes”), is likewise a Rhode Island corporation; Nunes is alleged to be the “alter ego” of Menard. The plaintiffs say that Nnnes, as an alter ego, is bound by and subject to all of the burdens and obligations of the Agreement.

The complaint points out that, as the plaintiffs see it, the defendants have failed for the last several years in their contractual duty to tender monies to the Funds and to deduct and remit check-off sums due to the Union. (Although not alleged in so many words, the sense of the complaint seems to be that Menard has used Nunes as a subterfuge in an effort to evade these responsibilities, and that the shortfall in payments relates to hours worked by persons nominally on Nunes’s payroll — but who are, in reality, part and parcel of Me-nard’s workforce.) The Funds claim entitlement to the delinquent contributions, together with interest and associated penalties specified in the Agreement; the Union claims entitlement to the missing check-off payments, along with interest and the like as per the Agreement. And, the plaintiffs pray, inter alia, for liquidated damages under ERISA, see 29 U.S.C. § 1132(g)(2), disbursements authorized by the same legislation, id. at § 1132(g)(1), and a full audit (the cost of which should, in their view, be borne by Menard and/or Nunes).

The defendants are alleged to be jointly and severally liable to the Funds and to the Union. Both Menard and Nunes are, according to the complaint, employers engaged in an industry affecting commerce, within the collective definitions ascribed to that incantation by ERISA, 29 U.S.C. §§ 1002(5), (11), (12), and by the LMRA, 29 U.S.C. §§ 152(2), (6), (7).

II.

Following service of the complaint, Me-nard moved to dismiss for want of subject matter jurisdiction, Fed.R.Civ.P. 12(b)(1), and for the supposed failure of the real parties in interest to prosecute the action. Fed.R.Civ.P. 17(a). Nunes, through distinct counsel, filed a substantially identical motion. The plaintiffs objected. Oral arguments were heard by the court on September 18, 1985, and the matter was taken under advisement. The court now turns to the task at hand, cognizant withal that, on threshhold motions such as these, it must accept as true all facts well-pleaded in the complaint, affording to the plaintiffs the benefit of all favorable inferences reasonably to be drawn therefrom. Tuvia Convalescent Center, Inc. v. National Union of Hospital and Health Care Employees, 717 F.2d 726, 729 n. 1 (2d Cir.1983); Fricker v. Town of Foster, 596 F.Supp. 1353, 1354 (D.R.I.1984) (“the court will not dismiss a complaint for want of subject matter jurisdiction unless it clearly appears that no colorable hook exists upon which the court’s jurisdiction may be hung”).

III.

A. ERISA Jurisdiction

The plaintiffs’ initial handhold on the jurisdictional ladder is their claim that, inasmuch as the Funds fall within the definitional purview of ERISA, see 29 U.S.C. § 1002(2), ERISA confers subject matter jurisdiction over their attempt to force the defendants to disgorge omitted plan contributions. But, the matter is not as cut-and-dried as the Funds suggest.

The federal district courts possess limited, rather than plenary, jurisdiction. The boundaries of that jurisdiction are subject to the will of Congress. Federal courts should not widen the encincture of their jurisdiction without clear authority from the national legislature. Middlesex County Sewerage Authority v. National Sea Clammers Assoc., 453 U.S. 1, 13-18, 101 S.Ct. 2615, 2622-25, 69 L.Ed.2d 435 (1981); Dalehite v. United States, 346 U.S. 15, 30-31, 73 S.Ct. 956, 965, 97 L.Ed.2d 1427 (1953); Rice v. Railroad Co., 66 U.S. (1 Black) 358, 374,17 L.Ed. 147 (1861). The question thus becomes whether ERISA, fairly construed, grants jurisdiction to the district courts in a situation of this kind.

The plain language of ERISA itself militates against the plaintiffs’ position. To be sure, 29 U.S.C. § 1132(e)(1) cedes to the district courts “exclusive jurisdiction of civil actions brought by the Secretary [of Labor] or by a participant, beneficiary or fiduciary [in or of an EBP].” But, this language fails to catalyze any rights on the part of the Funds; it would take far too many liberties with ordinary meaning to consider an EBP as being among its own participants/beneficiaries/fiduciaries.

ERISA’s civil enforcement provisions deal with standing in much the same fashion. 29 U.S.C. § 1132(a) provides that civil actions may be brought by the Secretary of Labor and by participants, beneficiaries, and fiduciaries of ERISA trusts to redress ERISA violations. There is nothing in § 1132(a) which betokens any congressional intent to vest ERISA-spawned rights of action in any more broadly defined classes. And, the legislative history is barren of any such indication. See, e.g., H.R.Conf.Rep. No. 1280, 93d Cong., 2d Sess., reprinted in U.S. Code Cong. & Ad. News 4639, 5038, 5109 (1974). Where Congress has carefully catalogued a select list of persons eligible to sue in a federal forum under ERISA, it seems gratuitous— and wrong — for the courts to override that policy judgment by expanding the array.

The Funds argue, however, that the congressional roster, no' matter how precisely drawn, need not be viewed as exclusive. They find solace in Fentron Industries, Inc. v. National Shopmen Pension Fund, 674 F.2d 1300 (9th Cir.1982). In Fentron, the Ninth Circuit held that an employer— that is, a non-participant, non-beneficiary, non-fiduciary — could sue for ERISA redress. The court of appeals found that § 1132, viewed in the albedo of its legislative history, in no way “suggested] either that the list of parties empowered to sue under [§ 1132(a) ] is exclusive or that Congress intentionally omitted employers.” Fentron, 674 F.2d at 1305. See also Michigan United Food and Commercial Workers Unions v. Baerwaldt, 572 F.Supp. 943, 947 (E.D.Mich.1983) (permitting suit for declaratory and injunctive relief brought by health and welfare fund under color of ERISA jurisdiction to proceed).

Fentron, however, appears to stand logic on its head. Given the natural constraints on the scope of federal jurisdiction, see text ante, at 1459-60, the question is not whether the national legislature affirmatively intended to bar suits by employers, trust funds, and others not specifically identified in § 1132(a)’s laundry list, but whether Congress affirmatively intended that unnamed others should be permitted access to a federal forum. And, there is no cogent evidence of such an open-door policy.

This court rejects the reasoning and result of Fentron in favor of a stricter construction of the statute. Such a change in emphasis is best exemplified by the Second Circuit’s opinion in Pressroom Unions-Printers League Income Security Fund v. Continental Assurance Co., 700 F.2d 889, 892-93 (2d Cir.), cert. denied, 464 U.S. 845, 104 S.Ct. 148, 78 L.Ed.2d 138 (1983). Pressroom limited the potential plaintiffs in an ERISA action to those groupings specified in § 1132(a). The court of appeals held that, inasmuch as the legislative history was wholly unenlightening as to the scope of § 1132, the statute should, consistent with established principles of jurisprudence, be considered as an exclusive jurisdictional grant. Pressroom, 700 F.2d at 892.

Such an outlook seems entirely consistent with the draftsmanship of the Act. The listing at issue is not a casually mentioned aside: it informs not only § 1132(a), but several other clauses of the.statute as well. E.g., 29 U.S.C. § 1132(b)(1)(B) (“participants, beneficiaries, or fiduciaries” may request the Secretary to act); id. at § 1132(c) (“participant or beneficiary” eligible to demand information from a plan administrator); id. at § 1132(e)(1) (see text ante at 1459-1460); id. at § 1132(g) (“participant, beneficiary, or fiduciary” may recover counsel fees); id. at § 1132(h) (discussing notice to be given upon the filing of an action by “a participant, beneficiary, or fiduciary’’); id. at § 1132(k) (“administrator, fiduciary, participant or beneficiary” authorized to bring certain actions against the Secretary). In point of fact, ERISA in its totality reflects a plain congressional intention to single out “participants” and “beneficiaries” as recipients of special prophylactic protection. E.g., 29 U.S.C. § 1140 (prohibition of discrimination); id. at § 1141 (ban on coercive interference with rights accruing under EBPs); cf. 29 U.S.C. § 1137(e) (interdicting certain conflicts of interest). Viewed against the backdrop of the statutory mosaic as a whole, the reasoning of the Pressroom court takes on compelling force.

Though caselaw on the point is relatively sparse, a clear majority of the reported decisions have followed the trail blazed in Pressroom. E.g., Tuvia Convalescent Center, Inc., 717 F.2d at 729-30; Sixty-Five Security Plan v. Blue Cross and Blue Shield of Greater New York, 583 F.Supp. 380, 383 (S.D.N.Y.1984); Local 807 Labor-Management Pension Fund v. Owens Trucking, 585 F.Supp. 616, 617 (E.D.N. Y.1984); Amalgamated Industrial Union Local 44-A Health and Welfare Fund v. Webb, 562 F.Supp. 185, 188 (N.D.Ill.1983); Employees Savings Plan of Mobil Oil Corp. v. Vickery, 99 F.R.D. 138, 140 (S.D. N.Y.1983).

Pressroom appears to this court to be better reasoned than Fentron. The approach taken by the Second Circuit recognizes the inherent limitations on the exercise of federal judicial power, and is consistent with an accurate assessment of the proper interrelationship between the complementary roles of Congress and the federal judiciary in the cartography of district court jurisdiction. And, as noted above, see text ante, the statute as a whole harmonizes with the emphasis on safeguarding the pension-related rights of particular classes of persons.

The plaintiffs, however, have yet another string to their ERISA bow. They point to 29 U.S.C. § 1132(d)(1), which states that “an employee benefit plan may sue or be sued under this subchapter as an entity,” and assert that this proviso envisions the existence of a cause of action which a fund may bring to its own behoof. From this construction, the plaintiffs reason that federal jurisdiction necessarily exists for such suits. They conclude that this must mean that, notwithstanding the participant/beneficiary/fiduciary trilogy fashioned by § 1132(a), the opportunity for other parties to bring suit under ERISA in a federal forum has not been foreclosed. Indeed, the district court in Baerwaldt, 572 F.Supp. at 947, though acknowledging that § 1132(d)(1) “does not confer federal jurisdiction, and does not define the type of suits which may be brought by a plaintiff plan,” declared the entity clause sufficient to sanction the prosecution of a roughly analogous action in the federal courts. Id.

But, Pressroom and its progeny speak to a contrary conclusion. In Pressroom, the Second Circuit held that the “entity” clause, 29 U.S.C. § 1132(d)(1), merely established the right of EBPs to sue and be sued like corporations and other legal entities, thereby eliminating artificial state law capacity-to-sue barriers and authorizing suits brought by funds in situations where there would properly be jurisdiction. 700 F.2d at 893. Section 1132(d)(1) did not, however, imply that EBPs may bring actions as of right in the federal district courts under ERISA. Id. The Second Circuit met head on the riposte that, if § 1132(d)(1) was itself an inadequate basis for permitting trust funds to file ERISA actions in federal court, then the entity clause, or at least so much thereof as allowed EBPs to sue as plaintiffs, would be a nullity: the Press-room court demurred, noting, by way of illustration, that, “[i]f a fund became involved in a contract dispute, and wished to pursue a state law contract claim, § 1132(d)(1) would allow the fund to bring such an action in its own name.” Press-room, 700 F.2d at 893.

Once again, Pressroom appears to have found solid footing. Section 1132(d) is addressed in overwhelmingly large part not to EBPs qua plaintiffs, but to the mechanics of actions against EBPs. And, insofar as § 1132(d)(1) does cede to trust funds capacity to sue as entities in their own behalf, it satisfies an obvious need. Conferral of entity status on an EBP eliminates an artifical impediment to the prosecution of actions by such a fund, ef. Carpenters & Millwrights Health Benefit Trust Fund v. Domestic Insulation Company, 387 F.Supp. 144, 147 (D.Colo.1975) (“trusts themselves are not legal entities with capacity to sue ... ”), and thereby enhances an important purpose of ERISA: furtherance of the stability and integrity of EBPs.

This result is fortified by recognition of the goals of ERISA. Evidence before Congress indicated two chief abuses which the new law was designed to correct: mismanagement of funds accumulated to finance pension benefits and failure to deliver to employees the pension benefits promised. See, e.g., 120 Cong.Rec. 4279-80 (1974) (statement of Rep. Brademas), reprinted in 2 Legislative History of the Employee Retirement Income Security Act of 1974 (“Leg. Hist”) 3372-74 (Comm.Print 1976); 120 Cong.Rec. 4277-78 (1974) (statement of Rep.Perkins), reprinted in 2 Leg. Hist. 1598-1600; see also Private Welfare and Pension Plan Legislation: Hearings on H.R., 1045. H.R. 1046, and HR. 16462 Before the General Subcommittee on Labor of the House Committee on Education and Labor, 91st Cong., 1st and 2d Sess. 464, 470-72 (1970) (statement of George Shultz, Secretary of Labor). Ceding to an EBP, in its own right, direct access to a federal forum is not indispensable to the attainment of either of these goals; both objectives are satisfactorily met by conferring rights of action upon the Secretary and upon participants, beneficiaries, and fiduciaries, in conjunction with the extension of entity status to EBPs. In sum, the plaintiffs’ action, insofar as it seeks to invoke ERISA jurisdiction or to bestow upon the Funds rights not expressly granted to them under ERISA, must fail.

The Funds’ macromaniacal desire to bloat § 1132(a) to such an extent that it takes on a shape far larger than Congress intended cannot be justified. Though they strain in order to fashion a sweep for § 1132(a) beyond what Congress has explicitly decreed, they perforce labor in vain.

B. LMRA Jurisdiction

Given the amalgamation of causes of action contained in the complaint, see text ante at Part I, the absence of ERISA jurisdiction does not ring down the final curtain. The plaintiffs simultaneously postulate the existence of jurisdiction under the LMRA, 29 U.S.C. §§ 185(a)-(e), and it is clear as a general proposition that federal courts possess LMRA-derived jurisdiction over suits brought to enforce the covenants of a collective bargaining agreement. It has recently been made equally plain that such an action may be prosecuted by either the Union or the EBPs, notwithstanding the admitted fact that none of the plans are signatory to the Agreement; § 301(a), 29 U.S.C. § 185(a), affords a federal forum to redress all violations of contracts of the type and kind described in the statute, including pension and welfare fund agreements. Schneider Moving and Storage Company v. Robbins, 466 U.S. 364, 104 S.Ct. 1844, 1846 n. 2, 80 L.Ed.2d 366 (1984). And, Schneider Moving laid to rest the shibboleth that only parties to a collective bargaining agreement could sue thereon; the Schneider Court explicitly permitted trustees of EBPs, non-signatories to the collective bargaining agreement there in issue, to prosecute a civil action under the LMRA. Id. 104 S.Ct. at 1846-47. See also Smith v. Evening News Association, 371 U.S. 195, 200, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962) (§ 301 manifests a “congressional policy of having the administration of collective bargaining contracts accomplished under a uniform body of federal substantive law,” thereby permitting an individual employee to sue under § 301 to vindicate rights arising from such a contract); Nedd v. United Mine Workers of America, 556 F.2d 190, 197 (3d Cir.1977) (suit by non-party trustees in federal district court to enforce provisions of collective bargaining agreement permissible by virtue of § 301 of LMRA).

The EBPs themselves, therefore, although not parties to the Agreement between the Union and Menard, have properly invoked this court’s LMRA jurisdiction in their effort to palliate a claimed breach of the Agreement which has redounded to their detriment. And, the Union’s entitlement to this federal forum is beyond cavil: it is (i) a party to the Agreement, which (ii) contains a promise by the employer to effectuate retainages and remittances in respect to Union dues, which (iii) the Union has yet to receive. This sort of claim is undeniably actionable under § 301. E.g., United Mine Workers of America, District 22 v. Roncco, 314 F.2d 186, 187 (10th Cir.1963) (an “alleged failure to check off dues ... is a matter of direct and peculiar concern to the [union] as an organization, “and is thus within the district court’s § 301 jurisdiction”); United Steelworkers of America v. Pullman-Standard Car Manufacturing Co., 241 F.2d 547, 551 (3d Cir. 1957) (same).

The defendants assert, however, that neither the Funds nor the Union are the real parties in interest, see Fed.R.Civ.P. 17(a), and, in a similar vein, that the plaintiffs lack standing to prosecute the LMRA claims. The core element of the defense contentions is that the respective trustees of the Funds — and the trustees alone — can be considered the proper parties to such an action. These remonstrances are singularly unpersuasive.

As noted previously, see text ante at Part III(A), 29 U.S.C. § 1132(d)(1) contemplates situations in which EBPs may sue or be sued in non-ERISA actions by bestowing entity status upon them. The Pressroom court provided one example of the utility of this grant, noting that the clause would permit an EBP to pursue a state law contract action in its own name. Pressroom, 700 F.2d at 893. But, § 1132(d)(1) did more than recognize that an EBP should be able to pursue potential state law choses in action. The statute legitimized the prosecution of any claim for relief by an EBP so long as an independent jurisdictional basis for the suit was extant. There is nothing in the language of § 1132(d)(1) which debars an EBP from suing in a federal court to enforce a plan sponsor’s obligations to make contributions if, say, the requirements of the diversity statute, 28 U.S.C. § 1332, are met. Though federal court jurisdiction cannot be hung on the ERISA hook under § 1132(a) if an action is brought other than by the Secretary or one credentialled as within the participant/beneficiary/fiduciary triad, entity status is nevertheless conferred by § 1132(d)(1), and access to the district court is available to a trust fund if some distinct basis for jurisdiction — apart from § 1132(a) — exists. So here: § 301 of the LMRA, 29 U.S.C. § 185, satisfied the Funds’ need for an invitation to enter the federal courts.

In effect, where the forum court’s underlying jurisdiction is properly laid outside of ERISA, § 1132(d)(1) negates any meaningful argument as to standing or real party in interest vis-a-vis suits brought by and in the name(s) of EBPs. In this fashion, the will of the Congress is deftly implemented: EBPs, though denied automatic entry into a federal forum, are no longer at the mercy of a bewildering variety of state laws which impinge upon their ability to enforce their rights in some (otherwise appropriate) venue.

An excellent illustration of precisely the sort of technical defense which § 1132(d)(1) undermines is to be found in perscrutation of the defendants’ flagship authority for the proposition that the trustees of an EBP are indispensable parties in an LMRA action, viz., Warshaw v. Local No. 415, International Ladies’ Garment Workers’ Union, 325 F.2d 143 (5th Cir.1963). War-shaw, a decision which antedates both the enactment of ERISA and the Court’s pronouncements in Schneider Moving, held that a health and welfare fund’s suit against a delinquent employer could not proceed in its own name, absent joinder by the plan trustees as parties plaintiff. Id. at 144-145. Section 1132(d)(1) eliminates an EBP’s dependence on the whims of its fiduciaries, and permits it to sue in its own stead whenever it has been harmed by the actionable misconduct of another. But an EBP, like any other suitor, is not thereby relieved of identifying a usable hook upon which subject matter jurisdiction can be fastened.

For these reasons, the plaintiffs’ claim of entitlement to LMRA jurisdiction is well founded.

IV.

The motions to dismiss are sustained insofar as they question this court’s ERISA-based jurisdiction, and are overruled insofar as they question the court’s LMRA-based jurisdiction. They are also denied to the extent that they challenge the Funds’ capacity to sue. (The Funds are, as to their LMRA initiative, the real parties in interest.)

The plaintiffs shall, within fifteen days from the date hereof, serve their first amended complaint, limited to their respective statements of claim cognizable under § 301. The defendants shall have fifteen days thereafter to answer or otherwise respond thereto.

So ordered.

      . The Funds comprise (i) the Rhode Island Bricklayers and Allied Craftsmen Health & Welfare Fund, (ii) the Rhode Island Bricklayers and Allied Craftsmen Pension Fund, (iii) the Rhode Island Bricklayers and Allied Craftsmen Annuity Fund, (iv) the Rhode Island Bricklayers and Allied Craftsmen Joint Apprenticeship Fund, and (v) the Bricklayers and Trowel Trades International Pension Fund.

      . This court has recently had occasion to discuss, in a state law context, the generic principles which apply when it is alleged that multiple corporations have been so controlled and operated that disregard of their individual corporate personae (and consequently, the cross-imposition of liability) is warranted. See Oman International Finance Ltd. v. Hoiyong Gems Corporation, 616 F.Supp. 351, 363-64 (D.R.I.1985).

      . Bound up in these contentions is the closely-related asseveration that the plaintiffs, individually and collectively, lack standing to bring this suit.

      . Section 502 of ERISA, 29 U.S.C. § 1132(a) (1976), provides:
      A civil action may be brought—
      (1) by a participant or beneficiary — (A) for the relief provided for in subsection (c) of this section, or (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan;
      (2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title;
      (3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan;
      (4) by the Secretary, or by a participant, or beneficiary for appropriate relief in the case of a violation of 1025(c) of this title;
      (5) except as otherwise provided in subsection (b) of this section, by the Secretary (A) to enjoin any act or practice which violates any provision of this subchapter, or (B) to obtain other appropriate equitable relief (i) to redress such violation or (ii) to enforce any provision of this subchapter; or
      (6) by the Secretary to collect any civil penalty under subsection (i) of this section.

      . The interpretation of § 1132 favored both by the Second Circuit and by this court does not result in the creation of a right benefit of a remedy. To the extent that an EBP has been damaged by acts or omissions which ERISA interdicts, the trustees of the plan are fiduciaries within the meaning of the Act, see 29 U.S.C. § 1002(21)(A), who enjoy unfettered access to a federal forum in order to redress ERISA violations, to enforce the terms of the EBP, and to obtain other appropriate relief. E.g., 29 U.S.C. §§ 1132(a)(2), (3).

      . It should be noted that Judge Feikens’s comments in Baerwaldt are obiter dicta. After oral argument in that case, but before the court's decision was handed down, the trustees of the plans were added as parties plaintiff. Baer-waldt, 572 F.Supp. at 947 n. 6. Joinder of the trustees mooted the jurisdictional question. And, though Baerwaldt was decided some two months after Pressroom, it seems likely that the Baerwaldt court was wholly unaware of the Second Circuit’s opinion; at the least, it is clear that Judge Feikens did not cite to Pressroom.

      . Inasmuch as the plaintiffs have not claimed subject matter jurisdiction under 28 U.S.C. § 1331 in their complaint or in their opposition to the motions to dismiss, this court declines to express any views as to the possible relevance of that statute. See Pressroom, 700 F.2d at 892 n. 7.

      . Section 301 of the LMRA, 29 U.S.C. § 185(a)-(c) (1947), provides:
      (a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.
      (b) Any labor organization which represents employees in an industry affecting commerce as defined in this chapter and any employer whose activities affect commerce as defined in this chapter shall be bound by the acts of its agents. Any such labor organization may sue or be sued as an entity and in behalf of the employees whom it represents in the courts of the United States. Any money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets.
      (c) For the purposes of actions and proceedings by or against labor organizations in the district courts of the United States, district courts shall be deemed to have jurisdiction of a labor organization (1) in the district in which such organization maintains its principal office, or (2) in any district in which its duly authorized officers or agents are engaged in representing or acting for employee members.

      . In formulating this line of attack, the defendants conveniently overlook the dues check-off claim which the complaint unmistakably asserts. E.g., Plaintiffs’ Complaint at fifí 13, 14. This is a claim uniquely maintainable by the Union.

      . Although not mentioned by the Second Circuit in Pressroom, the capacity-to-sue provision in § 1132(d)(1) may also have some application in ERISA actions per se. If, say, a participant elects to file suit in the district court as allowed by § 1132(a), the affected EBP could presumably join — or intervene — as a party plaintiff without divesting the court of jurisdiction. Because of the prophylaxis which § 1132(d)(1) supplies, such joinder — or intervention — would not be susceptible to assault on capacity-to-sue or standing grounds, notwithstanding the disinclination of the fund's fiduciaries to join in the fray.

      . A § 301 initiative must satisfy three requirements: there must be (i) a violation of (ii) a collective bargaining contract (iii) between an employer and a labor organization. E.g., Alvares v. Erickson, 514 F.2d 156, 161 (9th Cir.), cert. denied, 423 U.S. 874, 96 S.Ct. 143, 46 L.Ed.2d 106 (1975). The plaintiffs concede that defendant Nunes did not sign the Agreement here at issue. Nonetheless, the plaintiffs argue that a § 301 claim properly lies agaisnt Nunes on their "alter ego” theory, see n. 2 ante. Existing case authorities are divided as to the appropriateness of a § 301 action against an alleged alter ego. Compare Wilkes-Barre Publishing Co. v. Newspaper Guild Local 120, 647 F.2d 372, 380 (3d Cir. 1981), cert. denied, 454 U.S. 1143, 102 S.Ct. 1003, 71 L.Ed.2d 295 (1982) (section 301 reaches not only suits on labor contracts, but suits seeking remedies for violation of such contracts) with Aacon Contracting Co. v. Association of Catholic Trade Unionists, 276 F.2d 958 (2d Cir.1960), aff’g and adopting 178 F.Supp. 129, 130 (E.D.N.Y.1959) (contractual relationship required between parties in § 301 action). But, inasmuch as Nunes does not raise this issue in its motion to dismiss, this court can safely leave resolution of the conundrum to another day.

      . By reason of the foregoing, the Funds’ ERI-SA-gaited prayers for liquidated damages, 29 U.S.C. § 1132(g)(2), and for counsel fees, 29 U.S.C. § 1132(g)(1), are not cognizable in this action.


source: Caselaw Access Project

author: EARL E. O’CONNOR, Chief Judge.

license: Public Domain

text:
    EARTH SCIENTISTS (PETRO SERVICES) LTD., Plaintiff, v. UNITED STATES FIDELITY & GUARANTY COMPANY, Defendant.
    Civ. A. No. 84-2204.
    United States District Court, D. Kansas.
    Oct. 17, 1985.

      Jerry K. Levy, Levy, Smith Garrett & Smith, Topeka, Kan., for plaintiff.
    H.W. Fanning and Arthur S. Chalmers, Kahrs, Nelson, Fanning, Hite & Kellogg, Wichita, Kan., for defendant.
   MEMORANDUM AND ORDER

EARL E. O’CONNOR, Chief Judge.

This matter is presently before the court on defendant’s motions to dismiss and for summary judgment. This diversity action arises out of the alleged breach of an insurance policy entered into by plaintiff Earth Scientists (Petro Services) Ltd. [hereinafter Earth Scientists] with defendant United States Fidelity & Guaranty Company [hereinafter USF & G] to insure, among other things, plaintiff’s drilling rig for collapse.

Plaintiff’s complaint sets forth the following four claims: (1) breach of contract; (2) violation of the Kansas Uniform Trade Practices Act; (3) fraud; and (4) negligence, carelessness, intentional, willful, malicious and outrageous actions. Plaintiff seeks actual and punitive damages, and consequential damages in the nature of lost profits.

For purposes of this motion, the uncon-troverted material facts in this case are as follows:

Plaintiff Earth Scientists is a Kansas corporation, which, at all times pertinent to this action, was engaged in the oil and gas drilling business. A.W. Karns, President of Earth Scientists, contacted C.L. Kinnard, an insurance agent with Gilmore, Dennis and Miller Insurance, Inc., to purchase an insurance policy. Karns specifically requested coverage for collapse or overturn of the company’s drilling rigs. Previously, one of plaintiff’s drilling rigs had overturned and plaintiff’s insurance (with a company other than defendant) had not covered the loss.

Kinnard had an agency agreement with defendant USF & G, a Maryland corporation, to solicit customers and submit applications for policies to USF & G. Kinnard recommended to plaintiff that it purchase defendant’s policy (the policy involved in this action) and plaintiff did so. The policy expressly covered the peril of the derrick or mast collapsing. The policy did not, however, define the term “collapse.” Kin-nard never informed defendant of plaintiffs desire to insure loss of its rigs caused by overturns, nor did plaintiff ever tell defendant of its previous rig overturn. In turn, defendant never told plaintiff that such an overturn would be covered.

On, December 13, 1983, the insured rig fell over and was damaged. On January 16, 1984, defendant formally denied coverage of the incident. Disatisfied with defendant’s failure to pay the claim, plaintiff contacted the Kansas State Insurance Commissioner’s Office. On March 1, that office admonished defendant for denying liability when liability was “reasonably clear.” On April 11, of that same year, defendant offered plaintiff a sum between $32,500 and $35,000 to settle the claim. Plaintiff rejected the offer. Consequently, plaintiff filed this lawsuit. Defendant admits in its answer coverage of the rig’s collapse and that it owes the cost to repair or replace the rig for actual cost value.

I. Motion to Dismiss Plaintiffs Claim Under the Kansas Uniform Trade Practices Act

Defendant moves the court to dismiss plaintiff's claim for violation of the Kansas Uniform Trade Practices Act (KUTPA), K.S.A. 40-2401 to -2414 (1981 & Supp. 1984), for failure to state a claim upon which relief can be granted. Defendant maintains that the Act provides no private cause of action in favor of an individual for an insurer’s violations of KUTPA.

The court may not dismiss plaintiff’s complaint for failure to state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). In considering a motion to dismiss, the factual allegations of the complaint must be taken as true and all reasonable inferences from them must be indulged in favor of the plaintiff. Mitchell v. King, 537 F.2d 385, 386 (10th Cir.1976).

After reviewing the Kansas Uniform Trade Practices Act, the court is convinced that plaintiff’s claim for damages for defendant’s alleged violations of K.S.A. 40-2404(9) must be dismissed for the following reasons.

First, the court concludes that the overriding goal of the statute is to provide the public with the benefits that flow from a well regulated insurance industry. According to the Act itself;

The purpose of this Act is to regulate trade practices in the business of insurance ... by defining, or providing for the determination of, all such practices in this state which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.

K.S.A. 40-2401.

Second, the court concludes that the plain meaning of the statute is clear in vesting all power under the Act in the Commissioner of Insurance. The Commissioner has the sole duty to enforce the Act.

There is no language purporting to create a private cause of action. The pertinent language (with emphasis added) is as follows:

K.S.A. 40-2402(b):

“Commissioner” shall mean the commissioner of insurance of this state.

K.S.A. 40-2405:

The commissioner shall have power to examine and investigate into the affairs of every person engaged in the business of insurance____

K.S.A. 40-2406:

(a) Whenever the commissioner shall have reason to believe that any such person has been engaged or is engaging in this state in any unfair method of competition or any unfair or deceptive act or practice ... and that a proceeding by the commissioner in respect thereto would be to the interest of the public, the commissioner shall issue and serve upon such person a statement of the charges in that respect and a notice of a hearing thereon____
(d) The commissioner, upon such hearing, may administer oaths, examine and cross-examine witnesses,____

K.S.A. 40-2407(a):

[T]he commissioner ... shall issue and cause to be served upon the person charged with the violation a copy of such findings and an order requiring such person to cease and desist ... [and may order]:
(1) Payment of a monetary penalty of not more than one hundred dollars ($100)...;
(2) suspension or revocation of the person’s license ...; or
(3) redress of the injury by requiring the refund of any premiums paid by and/or the payment of any moneys withheld from, any consumer and/or appropriate public notification of the violation.

K.S.A. 40-2411:

Any person who violates a cease and desist order of the commissioner ... [may be subject to]:
(a) A monetary penalty of not more than ten thousand dollars ($10,000) • • • 1
(b) suspension or revocation of such person’s license;
(c) redress of the injury by requiring the refund of any premiums paid by and/or the payment of any moneys withheld from, any consumer and/or appropriate public notification of violation.

K.S.A. 40-2412:

The powers vested in the commissioner by this act, shall be additional to any other powers to enforce any penalties, fines or forfeitures authorized by law with respect to the methods, acts and practices hereby declared to be unfair or deceptive.

Nowhere in the Act is there a provision for the recovery of monetary damages, which the plaintiff in this case is seeking. As the above quoted sections reveal, the Act provides only for “cease and desist” orders, $100 monetary penalties, suspension of the insurer’s license, refund of any premium and public notification of the insurer’s violation, none of which the plaintiff is seeking.

In Spencer v. Aetna Life & Casualty Ins. Co., 227 Kan. 914, 611 P.2d 149 (1980), the Kansas Supreme Court discussed the provisions of KUTPA and the insured’s remedies for breach of a first party insurance contract. The court was not specifically addressing the issue of whether the Act gives rise to a private cause of action, but rather whether the tort of “bad faith” was actionable in Kansas. Nevertheless, the court’s rationale for denying a cause of action for bad faith applies equally as well to the private cause of action issue. In refusing to recognize the tort of bad faith, the court stated:

We are of the opinion the legislature has intended to provide a remedy for an insured who has problems with his insurance company. He can maintain an action on the contract for his policy benefits, with costs, interest and attorneys’ fees under arbitrary circumstances. He may also report the company to the Department of Insurance under the Uniform Trade Practices Act for improper handling of claims pursuant to K.S.A. 40-2404(9). The company’s actions are reviewable by the Department and punishable if found improper. The legislature has provided several remedies for an aggrieved insured and has dealt with the question of good faith first party claims. Statutory law does not indicate the legislature intended damages for emotional suffering to be recoverable by an aggrieved insured through a tort of bad faith. Where the legislature has provided such detailed and effective remedies, we find it undesirable for us to expand those remedies by judicial decree.

Id. at 926, 611 P.2d 149.

This language leads us to conclude that the Kansas Supreme Court would not expand KUTPA to imply a private cause of action. The Spencer court makes it clear that the aggrieved insured has only two remedies to pursue — he may file suit for breach of the insurance contract and/or he may report the insurer to the Insurance Commissioner who may proceed under the Act.

Plaintiff argues that the court in Spencer expressly left the door open for a private cause of action if the plaintiff made a definitive showing that the legislative remedies were inadequate. We believe plaintiff is misinterpreting the Spencer court’s conclusions. The court stated:

The legislature has recognized the public interest nature of the insurance industry and has also recognized policy holders require protection because of their inequitable bargaining position. The penalties, including fines and imprisonment, and imposition of attorneys’ fees are adequate to protect the public from the actions of a recalcitrant insurer in first party cases. We do not say the legislative remedy is exclusive but in the absence of a more definitive showing of inadequacy of the remedy than we have before us at this time, we hold the remedies are adequate to force compliance with the terms of insurance contracts.

Id.

This language implies that the Kansas Supreme Court might expand the Kansas common law to include a tort of bad faith, but only upon a showing that the legislative remedies were inadequate. The court is not implying, as plaintiff contends, that it would expand KUTPA to provide a private cause of action for damages.

The Kansas Uniform Trade Practices Act is patterned after the National Association of Insurance Commissioners (NAIC) model legislation. See K.A.R. 40-1-34 (1985). Since 1971, a majority of the states have enacted legislation fashioned after the model law. Houser, The Unfair Claims Settlement Practices Act, 15 The Forum 336 (1979). Most of these states have refused to imply a private cause of action. See, e.g., Scroggins v. Allstate Ins. Co., 74 Ill. App.3d 1027, 30 Ill.Dec. 682, 393 N.E.2d 718 (1979); Retail Clerk’s Welfare Fund v. Continental Casualty Co., 71 N.J.Super. 221, 176 A.2d 524 (1961); Thorp v. Wabash Life Ins. Co., No. 78-347 (D.Ore., unpublished, Aug. 23, 1978) (Oregon law); D Ambrosio v. Pennsylvania National Mutual Cas. Ins. Co., 494 Pa. 501, 431 A.2d 966 (1981); Russell v. Hartford Cas. Ins. Co., 548 S.W.2d 737 (Tex.Ct.App.1977); Wilder v. Aetna Life & Cas. Ins. Co., 140 Vt. 16, 433 A.2d 309 (1981); Tank v. State Farm Fire & Cas. Co., 38 Wash.App. 438, 686 P.2d 1127 (1984); Kranzush v. Badger State Mutual Cas. Co., 103 Wis.2d 56, 307 N.W.2d 256 (1981).

Three states have recognized a private cause of action under their laws. See Royal Globe Ins. Co. v. Superior Court, 23 Cal.3d 880, 153 Cal.Rptr. 842, 592 P.2d 329 (1975); Klaudt v. Fink, 658 P.2d 1065 (Mont.1983); Jenkins v. J.C. Penney Casualty Ins. Co., 280 S.E.2d 252 (W.Va.1981). Two of these cases rely on language similar to that found at K.S.A. 40-2408(d) to imply a private cause of action. This language is to the effect that the administrative penalties and cease and desist orders found in the Act do not prevent the imposition of liability or penalty against the insurer for violation of laws under the Act or any other law. See Klaudt, 658 P.2d at 1067 (quoting M.C.A. 33-18-1004(5)); Royal Globe, 592 P.2d at 332 (quoting Cabins. Code 790.09 (West)). We, however, do not find that this language supports a private cause of action. The Act merely allows the imposition of liability under any other existing statutes or common law grounds; it does not create an additional private cause of action from the terms of the Act.

The only other state to recognize a private cause of action implies the action not from its Unfair Trade Practices Act but from another of its state statutes. In Jenkins, supra, the West Virginia Supreme Court relied on a state statute that expressly permits the recovery of damages sustained by reason of the violation of any statute, even if the statute provides only for a penalty. 280 S.E.2d at 255, 257 (citing W.Va.Code 55-7-9). Kansas, however, has no such law and, thus, the Jenkins case is not applicable here.

It is a fundamental rule of statutory construction that all statutes must be interpreted and applied according to the plain meaning of the language used and the intent of the legislative body that enacted it. Reardon v. Krimm, 541 F.Supp. 187, 189 (D.Kan.1982); State v. Flummerfelt, 235 Kan. 609, 612, 684 P.2d 363 (1984). The plain meaning of KUTPA and the legislature’s intent in enacting it is clear; it does not provide a private cause of action. Since the statute’s language is clear and its purpose appears reasonable, there is no need to resort to further rules of construction to ascertain its meaning. Pillsbury Co. v. Atchison, Topeka and Santa Fe Ry. Co., 548 F.Supp. 28, 30 (D.Kan.1982). The court notes, however, that two other rules of statutory construction support its conclusion that the Act does not provide a private cause of action.

First, the rule expressed in the maxim expressio unius applies. Two statutes in Chapter 40 expressly provide for the award of attorneys’ fees to a private plaintiff who receives a judgment against an insurance company. See K.S.A. 40-256, 40-908 (1981). The express mention of a private remedy in these two statutes and the legislature’s failure to provide for such private remedies in the KUTPA sections of Chapter 40 imply that the legislature intended to exclude any private remedies under KUTPA. Additionally, the Kansas Legislature has specifically provided for private causes of action in similar-type statutes enacted to protect the public. See, e.g., Open Records Act, K.S.A. 45-222 (Supp.1984); Public Meetings Act, K.S.A. 75-4320 (1984); Uniform Trade Secrets Act, K.S.A. 60-3320 to 3330 (1983); Restraint of Trade Statutes, K.S.A. 50-108, -115, -137 (1983); Kansas Consumer Protection Act, K.S.A. 50-634 (1983); and Uniform Consumer Credit Code, K.S.A. 16a-5-203 (1981). It is clear that had the Kansas Legislature intended a private cause of action for KUTPA violations, it would have expressly provided for the same.

A second rule of statutory construction provides that when the Kansas Legislature adopts a statute from a uniform law, it carries with it the construction placed on that statute by the drafters, except when contrary to the Kansas Constitution or public policy. Matter of Reed’s Estate, 233 Kan. 531, 541, 664 P.2d 824, 832, cert. denied, 464 U.S. 978, 104 S.Ct. 417, 78 L.Ed.2d 354 (1983). As noted earlier, KUT-PA was patterned after model legislation drafted by the National Association of Insurance Commissioners. The NAIC has consistently argued that the legislation was not intended to create a private cause of action. Sehroer & Hulsey, Unfair Claims Settlements, 5 J. KTLA No. 4, 8, 8-9 (1982); Shernoff, Insurance Company Bad Faith Law, Trial, May 1981 at 23-24.

In light of the foregoing, the court concludes that the Kansas Uniform Trade Practices Act does not provide a private cause of action. Therefore, plaintiff’s claim against defendant for violation of section 40-2404(9) under the Act must be dismissed.

II. Motion for Summary Judgment.

Federal Rule of Civil Procedure 56(c) provides that the court grant summary judgment when the matters considered by the court disclose that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” The court must look at the record in the light most favorable to the party opposing the motion. Prochaska v. Marcoux, 632 F.2d 848, 850 (10th Cir.1980), cert. denied, 451 U.S. 984, 101 S.Ct. 2316, 68 L.Ed.2d 841 (1981). Before summary judgment may be granted, the moving party must establish that it is entitled to summary judgment beyond a reasonable doubt. Ellis v. El Paso Natural Gas Co., 754 F.2d 884, 885 (10th Cir.1985). Once the moving party has properly supported his motion, however, the opposing party must respond with specific facts that demonstrate the existence of a genuine factual issue to be tried, Otteson v. United States, 622 F.2d 516, 520 (10th Cir.1980), and may not rest upon the mere allegations or denials of his pleading. Fed.R.Civ.P. 56(e).

A. Fraud.

Defendant moves for summary judgment on plaintiffs claim that defendant fraudulently induced plaintiff to purchase its policy. Plaintiff’s claim for fraud is based upon two grounds. First, plaintiff contends that agent Kinnard misrepresented that rig overturns were covered by defendant’s policy. Second, plaintiff contends that the language of the insurance policy itself constitutes a misrepresentation.

When seeking to recover for fraud, a plaintiff must prove the following elements: (1) the statement of fact was false; (2) the party making the statement knew it was false; (3) the statement was made with the intent to deceive or made recklessly with a disregard for truth; and (4) the plaintiff justifiably relied on the statement and sustained injury. Lentz Plumbing Co. v. Fee, 235 Kan. 266, 268, 679 P.2d 736, 742 (1984); Nordstrom v. Miller, 227 Kan. 59, 65, 605 P.2d 545, 551-52 (1980).

Defendant first argues that it may not be held liable for any alleged misrepresentations by agent Kinnard because he was merely defendant’s soliciting agent. According to defendant, an insurance company is not liable for fraudulent representations of such an agent. The court disagrees. The law in Kansas provides that an insurance company’s soliciting agent binds the company by his representations when the insured relies and acts upon them. Iowa National Mutual Ins. Co. v. City of Osawatomie, 458 F.2d 1124, 1126 (10th Cir.1972); Stewart v. Commonwealth Casualty Co., 137 Kan. 919, 922, 22 P.2d 435, 437 (1933); Nichols v. Commonwealth Casualty Co., 113 Kan. 484, 488, 214 P. 1111, 1112 (1923). When the soliciting agent makes representations to the applicant for insurance as to the scope of the policy, or the risks covered by it, the company is estopped from denying such representations. Stewart, 137 Kan. at 922, 22 P.2d at 437.

Defendant relies on Rosedale Securities Co. v. Home Ins. Co., 120 Kan. 415, 243 P. 1023 (1926), in arguing that it cannot be held liable for Kinnard’s misrepresentations. This reliance on Rosedale, however, is misplaced. Rosedale deals only with independent brokers and not soliciting agents. It holds that an independent broker is the agent of the insured rather than the insurer for the purpose of obtaining the policy. Id. at 421-22, 243 P. at 1026. Thus, an insurer may not be held liable for any representations made by the broker. Rosedale defines an insurance broker as “one who solicits contracts from the public under no employment from any special company, but, having secured an order, places the insurance with a company selected by the insured, or, in the absence of any selection by him, then with the company selected by such broker.” 120 Kan. at 415 Syl. ¶ 1, 243 P. at 1023.

A soliciting agent, on the other hand, is defined as one who takes applications for insurance, forwards them to the company that issued the policy, collects the premiums and delivers the policies to the insured. Pettijohn v. The Saint Paul Fire and Marine Ins. Co., 100 Kan. 482, 485, 164 P. 1096, 1097 (1917). A soliciting agent is not, however, a general agent of the insurer and has no authority to accept notices, make agreements, or waive provisions in the contract. Id.

Therefore, it is clear that if Kinnard is a soliciting agent of defendant, then defendant will be imputed with knowledge of his representations. If Kinnard made the representation that rig overturns would be covered, knowing that the defendant would not in fact cover them, then defendant may be held vicariously liable for Kinnard’s misrepresentation. Conversely, defendant may be held liable in its own right for misrepresentation if it entered into the contract with the intent not to cover overturns when its soliciting agent had informed plaintiff of such coverage.

Plaintiff has clearly raised genuine issues of material fact with respect to whether Kinnard was a soliciting agent. In a written agency agreement between the defendant and Kinnard, defendant granted “authority to the Agent (Kinnard) ... to solicit and submit applications, ... to issue and deliver policies ... to collect and receipt for premiums thereon and to retain [commissions] out of premiums collected and paid over to the Company____” Exhibit B, Plaintiffs Memorandum. The Company also agreed to indemnify Kinnard for any liability caused by the Company. Id. Furthermore, defendant itself claims that Kinnard is a soliciting agent in one portion of its memorandum and an independent agent in another.

To prevail against defendant’s motion for summary judgment, however, plaintiff must also set forth circumstances that would support an inference of wrongful intent at the time of making the representation. Young v. Hecht, 3 Kan.App.2d 510, 515, 597 P.2d 682, 688, pet for review denied, 226 Kan. 793 (1979). Mere nonperformance of the contract is not enough. Id. See also Edwards v. Phillips Petroleum Co., 187 Kan. 656, 660, 360 P.2d 23, 26 (1961). The court concludes that defendant has shown sufficient facts to raise the issue of whether defendant had the necessary fraudulent intent. The fact that defendant now admits coverage under the policy for overturns is not determinative of whether defendant had the intent to cover overturns when it entered into the contract. The court will therefore deny defendant’s motion for summary judgment with respect to plaintiff’s claim of fraud.

B. Negligence, Carelessness, Intentional, Willful, Malicious and Outrageous Actions.

Defendant moves for summary judgment on plaintiff’s fourth claim for negligence and intentional, willful, malicious and outrageous conduct. The court first concludes that summary judgment is proper against plaintiff’s claim of negligence. In Guarantee Abstract & Title Co. v. Interstate Fire & Cas. Co., 232 Kan. 76, 652 P.2d 665 (1982), the Kansas Supreme Court held that an insured may not bring an action for negligence in addition to its breach of the insurance contract when the insurer failed to settle and appeal a third-party action. The court stated that “a claim that an insurer acted negligently in performing its contractual duty to defend on behalf of the insured does not create a tort action or alter the measure of damages which may be recovered.” Id. at 81, 652 P.2d at 669.

The court also concludes that summary judgment is proper against plaintiff’s claims for intentional, willful or malicious conduct. As discussed earlier, the Kansas Supreme Court rejected the tort of bad faith and claims for these kinds of damages in Spencer v. Aetna Life & Cas. Ins. Co., 227 Kan. 914, 611 P.2d 149 (1980).

This court, however, has interpreted Spencer as leaving open the possibility that a plaintiff might recover damages for outrage. See Reese v. State Farm Fire & Cas. Co., No. 83-2445 (D.Kan., unpublished, Jan. 2, 1985). The elements that must be established to constitute the tort of outrage are:

(1) The conduct of the defendant must be intentional or in reckless disregard of plaintiff;
(2) the conduct must be extreme and outrageous;
(3) a causal connection must exist between defendant’s conduct and plaintiff’s mental distress; and
(4) plaintiff’s mental distress must be extreme and severe.

Hoard v. Shawnee Mission Medical Center, 233 Kan. 267, 280, 662 P.2d 1214, 1223 (1983) (citing Roberts v. Saylor, 230 Kan. 289, 292, 637 P.2d 1175, 1179 (1981).

As a threshold requirement, the court must determine that the conduct was extreme and outrageous and that the plaintiff suffered such severe emotional distress that the law must intervene. Roberts, 230 Kan. at 292-93, 637 P.2d at 1180. The court concludes that in this case the tort of outrage is inapplicable because the plaintiff is a corporation. A corporation cannot suffer severe emotional distress. See Wilson v. Colonial Penn Life Ins. Co., 454 P.Supp. 1208, 1212, n. 9 (D.Minn.1978) (plaintiff bank was incapable of suffering emotional distress and thus had no cause of action for bad faith or malicious insurance settlement). The court therefore concludes that summary judgment in favor of defendant on plaintiff’s fourth claim of negligence, carelessness, intentional, willful, malicious and outrageous actions is proper.

C. Consequential Damages.

Plaintiff’s fourth claim also contains a claim for consequential damages. Although the court will enter summary judgment in favor of defendant on plaintiff’s fourth claim for negligence and intentional conduct, the court will allow plaintiff to retain its claim for consequential damages in terms of lost profits. The pre-trial order states that, among other damages, plaintiff is seeking damages for loss of profits. Since the lost profits claim is not tied specifically in the pre-trial order to the above-mentioned fourth claim, summary judgment against the claim for lost profits is not required. Plaintiff will be allowed to retain its claim for lost profits only in conjunction with its breach of contract claim.

Defendant argues that, as a matter of law, lost profits are not recoverable for breach of an insurance contract. Defendant relies on the following language in Spencer v. Aetna Life & Cas., supra:

Does Kansas recognize the tort of “bad faith”? ... In jurisdictions where bad faith has been adopted, it applies only as a remedy for an insured who feels mistreated at the hands of his insurance carrier. It has been noted that:
“Traditionally insurance policies were regarded as contracts for the payment of money upon the occurrence of specific contemplated risks. In an action for breach of an insurance contract, the plaintiff’s recovery was limited to the benefits due under the contract plus interest. He could not recover damages for economic loss, emotional distress, or punitive damages regardless of injury to his health, feelings, reputation, or property; such damages were considered too remote.” Murphy, The Emerging Fiduciary Obligations and Strict Liability in Insurance Law, 14 Cal.W.L.Rev. 358 (1978).
The traditional rule limited an insured to contract remedies which are the face amount of the policy plus interest. The growing public awareness, however, of abusive delays by insurance companies in paying legitimate claims has given rise to the demand for a vehicle to recompense the injured for his damages. See Savage, The Availability of Excess Damages for Wrongful Refusal to Honor First Party Insurance Claims — An Emerging Trend, 45 Fordham L.Rev. 164, 166 (1972).

227 Kan. 914, 916, 611 P.2d 149, 151 (1980).

We disagree with defendant’s interpretation. Taken in context of the Spencer court’s discussion of the tort of bad faith, we conclude that the court was merely referring to a general, traditional rule and not necessarily to the rule in Kansas. The court goes on to state the rule in Kansas: “Let us now turn to Kansas law. We have traditionally held that only contractual damages are available for breach of an insurance contract____” Id. at 920, 611 P.2d at 153. The court cites with approval Moffet v. Kansas City Fire & Marine Ins. Co., 173 Kan. 52, 244 P.2d 228 (1952), in which a plaintiff sued its insurer who wil-fully refused to pay him for damages sustained. The Spencer court quotes: “As a general rule, damages for breach of contract are limited to pecuniary loss sustained.” 227 Kan. at 920, 611 P.2d at 153 (quoting 173 Kan. at 57, 244 P.2d at 233).

A review of other Kansas cases reveals that the general rule in Kansas is clearly that the damages recoverable for a breach of an insurance contract are the same as those available for breach of contract. See, e.g., Guarantee Abstract & Title Co. v. Interstate Fire & Casualty Co., 232 Kan. 76, 79, 652 P.2d 665 (1982); Hass v. Preferred Risk Mutual Ins. Co., 214 Kan. 747, 752, 522 P.2d 438, 442 (1974); Hoch-man v. American Family Ins. Co., 9 Kan. App.2d 151, 153-54, 673 P.2d 1200, 1202-03 (1984).

In Kansas State Bank v. Overseas Mo-tosport, Inc., 222 Kan. 26, 563 P.2d 414 (1977), the Kansas Supreme Court stated the general rule for determining damages available in an action for breach of contract:

Vie have long followed the rule of Had-ley v. Baxendale [9 Exch. 341, 156 Eng. Reprint 145, 5 Eng. Rule Cas. 502 (1854) ] Simply stated, the rule is that damages recoverable for breach of contract are limited to those damages which may fairly be considered as arising, in the usual course of things, from the breach itself, or as may reasonably be assumed to have been within the contemplation of both parties as the probable result of the breach.

222 Kan. at 27, 563 P.2d at 415 (citations omitted).

Thus, under this rule, consequential damages may be recovered. In only one case, however, has a Kansas court specifically addressed the issue of consequential damages for breach of an insurance contract. In Hochman v. American Family Ins. Co., 9 Kan.App.2d 151, 154, 673 P.2d 1200, 1203 (1984), the Kansas Court of Appeals held that, in an action against an insurance company to recover the cost of repairs to an insured’s combine, interest incurred by the insured on money borrowed for repairs was recoverable as consequential damages. In Hochman, the defendant insurer had breached its insurance contract by refusing to pay for repairs on the damaged combine. The plaintiffs were farmers who needed their combine for farming. Because the defendant refused to pay on the policy, plaintiffs were forced to borrow money for the repairs from the bank, thereby incurring interest. The court held that the interest debt arose in the usual course of things and directly from the breach, and, thus, was recoverable as consequential damages. Id.

It follows, then, that an insured is entitled to state a claim for recovery of lost profits if he can show that the lost profits arose in the usual course of things and directly from the defendant’s failure to pay on the policy. As a general rule, to recover such losses, a plaintiff must prove the lost profits with “reasonable certainty” and show that they “may reasonably be considered to have been within the contemplation of the parties.” Vickers v. Wichita State University, 213 Kan. 614, 618, 518 P.2d 512, 515 (1974). Furthermore, “[rjecovery for loss of profits caused by a breach of contract depends upon the facts and circumstances of each particular case.” Id.

The plaintiff in this case claims that because of defendant’s failure to cover the loss of its rig, plaintiff lost income from its scheduled drilling contracts and consequently was forced to close down its operations. Plaintiff claims it was not in a position to buy a new rig and that a rental rig was not available. The court concludes that there are material issues of fact to be resolved on this issue and that with respect to plaintiff’s claim of breach of contract, plaintiff is entitled to present the issue of whether its lost profits were a consequence of the alleged breach and were within the parties’ contemplation.

IT IS THEREFORE ORDERED that defendant’s motion for summary judgment with respect to plaintiff’s claims of negligence, carelessness, intentional, willful, malicious and outrageous actions be and hereby is granted. Plaintiff, however, will be permitted to retain its claim for lost profits with respect to its breach of contract claim.

IT IS FURTHER ORDERED that defendant’s motion to dismiss for failure to state a claim with respect to plaintiff’s claim for violation of the Kansas Uniform Trade Practices Act be and hereby is granted.

IT IS FURTHER ORDERED that defendant’s motion for summary judgment with respect to plaintiff’s claim of fraud be and hereby is denied.

      . K.S.A. 40-2404 provides:
      The following are hereby defined as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance:
      (9) Unfair claim settlement practices. Committing or performing with such frequency as to indicate a general business practice of any of the following: ’
      Plaintiff claims that defendant violated the following subsections:
      (a) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
      (d) refusing to pay claims without conducting a reasonable investigation based upon all available information;
      (f) not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear; and
      (g) compelling insureds to institute litigation to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in actions brought by such insureds.


author: JOHN GARRETT PENN, District Judge.

text:
    Maurice A. RAPOPORT, et al., Plaintiff, v. REPUBLIC OF MEXICO, et al., Defendants.
    Civ. A. No. 84-2054.
    United States District Court, District of Columbia.
    Oct. 17, 1985.
    Maurice A. Rapoport, pro se.
    Geo. R. Kucik and Samuel C. Schwab, Michael M. Maney and Marge K. Pfeiffer, Washington, D.C., for defendants.
   MEMORANDUM

JOHN GARRETT PENN, District Judge.

This matter comes before the Court on the defendants’ motion to dismiss. It is well-established law that a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). All well-pled allegations in the plaintiffs complaint must be accepted as true at this stage. Miree v. DeKalb County, 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 2492 n. 2, 53 L.Ed.2d 557 (1976); Phillips v. Bureau of Prisons, 591 F.2d 966, 969 (D.C. Cir.1979). Applying these standards to the instant action, and for the reasons stated herein, the Court finds that the motions to dismiss must be granted.

I

On July 9, 1984, pro se plaintiff, Maurice Rapoport, filed a fifty-three page complaint naming thirty-five defendants, in which he alleged causes of action for various commercial and intentional torts (including kidnapping and torture). The defendants filed motions to dismiss in November 1984. Ra-poport later sought leave to file an amended complaint, adding additional claims under the federal securities laws, and dropping all but four defendants: Banco Mexi-cano Somex, S.A. (“Somex”); Nacional Fi-nanciera, S.A. (“Nafinsa”); the United Mexican States (“Mexico”) and Sociedad Fi-nanciera de Industria y Descuento (“So-fides”). On May 20, 1985, the Court granted leave to file the amended complaint.

Concluding that all of the issues raised in the amended complaint are substantially the same as those raised in the original complaint, on April 1, two of the remaining defendants, Nafinsa and Somex, filed supplemental memoranda in support of their pending motions to dismiss the original complaint. On April 16, 1985 Mexico also filed a supplemental memorandum which adopted the arguments set forth in the Nafinsa and Somex memoranda. The plaintiff was ordered to respond to the motions to dismiss by April 29, 1985. Ra-poport filed his responses on May 1, 1985.

The defendants move to dismiss on the following grounds: sovereign immunity under the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1330, 1602-1611; non-justicia-bility under the Act of State doctrine; the doctrine of res judicata and the estoppel effect of the previous adjudications in New York and Mexican courts; the absence of indispensable parties, the doctrine of forum non conveniens, due process considerations, and the District of Columbia statute of limitations. A recitation of the facts as reflected in the record, and plaintiffs litigious history concerning the ownership of various promissory notes issued by So-mex Bank, is helpful for an understanding of the Court’s decision.

The plaintiff, Maurice Rapoport, a naturalized American citizen, has spent a considerable amount of time living and working in Mexico. While there, he acquired an interest in a Mexican corporation (“Con-structora”) and married Teresa Solorzano Rocho, a Mexican citizen. The action evolves around certain funds deposited by Rapoport, and Ms. Solorzano, into two Mexican bank accounts.

Commencing in 1969, Constructura invested funds in Mexican promissory notes. Those notes were issued by Sociedad Mexi-cana de Crédito Industrial, S.A., a credit institution now known as Banco Mexicano Somex, S.N.C. (Somex). The investments were payable in Mexican currency at So-mex’s Mexico City office. During 1977 and 1978, Rapoport also made a series of peso deposits into another account entitled “Maurice Rapoport and/or Diane Rapoport, his daughter,” which were payable to Ra-poport or his daughter.

Rapoport married Ms. Solorzano on December 15, 1976. However, he was expelled from the country in 1977. In the ensuing months, deposits and withdrawals were made by Ms. Solorzano, in connection with the Constructora account. Rapoport returned to Mexico in September 1978. Upon re-entry, Rapoport was arrested by Mexican authorities for violation of the immigration laws.

During that period, Ms. Solorzano instituted divorce proceedings against him in the 4th Family Court of the Federal District of Mexico. On December 7, 1978, Somex Bank was served with an Order from the 4th Family Court, directing it to withhold 20,000 pesos per month, out of the interest on Rapoport’s investments, to be paid to Ms. Solorzano as alimony.

While incarcerated, Rapoport became anxious about his account funds. With the assistance of two prison comrades, Carlos Herrera Crespo and Louis Barragan Levya, and notwithstanding the alimony order, Ra-poport devised a scheme to overcome his inability to withdraw all of the money from his account. He concocted a plan in which Herrera and Barragan would withdraw Ra-poport’s funds from Somex, return the funds to him, and receive a fee for their participation in the plan. Accordingly, the plaintiff executed promissory notes in favor of Barragan and Herrera, aggregating the full amount of his deposits in the Rapo-port account. They in turn, executed notes in favor of Rapoport for identical amounts less ten percent (their fee for “services rendered”.)

The plan backfired, and in March 1979, Herrera and Barragan filed suit against Rapoport on the promissory notes in the 40th Civil Court of the Federal District of Mexico. By Court Order dated March 15, 1979, and with Rapoport’s consent, Somex Bank was directed to pay 4,514,190 pesos to Herrera and Barragan in satisfaction of their claims. The Family Court nonetheless directed Somex to continue its monthly payments to Rapoport’s ex-wife.

Thus, as of March 1979, Somex Bank was in receipt of conflicting orders from the 4th Family Court and the 40th Civil Court, regarding the disbursement of the funds held in the Rapoport account. Accordingly, Somex commenced a “de consig-nación” proceeding in the 28th Court of Civil Justice of the Federal District of Mexico, in an effort to resolve the conflict. In a consignation proceeding (in the nature of our interpleader action), a bank deposits funds in the Court, and as certain instruments due the account mature, the bank continues to make such deposits. Mr. Ra-poport, Ms. Solorzano, Ms. Diana Rapoport, Mr. Herrera, and Mr. Barragan all appeared in this suit. During that proceeding, in August 1979, Somex deposited 2,940,572 pesos with defendant Nacional Financiera, S.A. (Nafinsa), the official Government depository bank for consignation proceeds. Somex, thereafter, deposited the proceeds of every certificate of deposit it held in Rapoport’s name on a regular basis as the certificates matured. When the process was completed, in October 1981, the Civil Court decreed that So-mex was freed from its obligation to Rapo-port and other claimants to the fund. (Pena Gomez Affidavit, Exhibit 1 at 3.)

Meanwhile, another dispute had arisen during the pendency of the divorce proceedings. Somex Bank began to receive conflicting instructions from the Rapoports as to the rightful payee of the Constructora account (and authority to withdraw funds). For purposes of clarification, on August 25, 1978, Somex Bank instituted another con-signation proceeding in the 7th Civil Court of Justice of the Federal District of Mexico. In June 1980, that Court decreed that So-mex’s deposit of the Constructora funds with Nafinsa had freed the bank of its obligations to Rapoport and the corporation.

The funds became further subject to dispute when Mana Erbe commenced an action against Rapoport for 2,940,572 pesos in the 30th Civil Court of Mexico City, claiming to be the assignee of the promissory notes which Rapoport had executed in favor of Herrera and Barragan for the full value of his personal account. Mr. Erbe obtained an attachment of the funds in that amount held by the 28th Civil Court in the interpleader action. The 28th Civil Court then transferred such amount to the 30th Civil Court pending resolution of Mr. Erbe’s claim.

Rapoport was released from prison in March 1980, and expelled from Mexico. Subsequent to his return to the United States, Rapoport instituted a series of actions against Somex and Nafinsa.

Rapoport is no stranger to the United States courts. He first filed an action against Somex in the Supreme Court of the State of New York, Ulster County, in May 1980, alleging claims for breach of contract and loss of income. Somex removed the action to the United States Court for the Northern District of New York. After dismissing Manufacturers Hanover as a defendant, Judge McCurn transferred the action to the Eastern District of New York. Rapoport v. Banco Mexicano Somex, S.A., No. 80 Civ. 3465 (TCP) (E.D.N.Y.). In view of the absence of indispensable parties, namely, the other Mexican claimants to the disputed funds, defendant Somex moved to dismiss. Judge Platt granted the motion on May 7, 1981. Rapoport appealed the dismissal, and the Second Circuit affirmed. Rapoport v. Banco Mexicano Somex, 668 F.2d 667 (2d Cir.1982).

First, Mrs. Rapoport, Ms. Diane Rapo-port, Mr. Herrera, Mr. Barragan, and Mrs. Erbe all should be joined as parties. Under Rule 19(a)(2), all claim an interest relating to the subject of this action, and all may be impeded in their ability to protect their interest should this action go forward. Furthermore, the Bank [So-mex] would be subjected to substantial risk of incurring multiple liability by reason of the claims of the absentees. Second, at least four of those persons are Mexican citizens and are beyond the jurisdiction of this Court.

Rapoport v. Banco Mexicano, Somex, S.A., 80 Civ. 3465, slip op. at 5-6 (E.D.N.Y. May 7, 1981). Judge Platt noted that a United States court could not adequately protect the interests of the absent Mexican parties; “in equity and good conscience,” therefore, the action could not proceed without them. Rapoport, slip op. at 6.

Thereafter, Rapoport commenced picketing at Somex’s New York Office, wielding a sign denouncing Somex as a “crooked Mexican Bank.” In an attempt to enjoin the picketing, Somex commenced an action before the Supreme Court of the State of New York, New York County. Rapoport had the action removed to the Southern District of New York and filed an answer and cross-complaint, reasserting the breach of contract claims, adding allegations of fraud and false imprisonment, and adding Nafinsa as a party-defendant.

Among the papers filed during the course of the action, was an affidavit setting forth Rapoport’s theory of a conspiracy involving Judge Platt’s law clerk and other court personnel. Rapoport argued that the addition of the tort and conspiracy claim distinguished the Southern District suit from the action decided by Judge Platt, allowing him to escape the bar of res judi-cata. However, Judge Brieant disagreed and dismissed Rapoport’s cross-claims on June 23, 1982. Banco Mexicano Somex, S.A. v. Rapoport, 82 Civ. 0980-CLB (S.D. N.Y. June 23, 1982). It should be noted that the claims against Nafinsa were dismissed for lack of jurisdiction, as the court found that Nafinsa did nothing in the United States with respect to the subject matter of the action. As to Somex, the court adopted Judge Platt’s earlier ruling that Rapoport’s claims could not be fairly adjudicated without the presence of the Mexican claimants to the contested pesos accounts. Rapoport appealed Judge Brieant’s dismissal and the Second Circuit affirmed in an unpublished opinion dated March 7, 1983. Rapoport v. Banco Mexi-cano Somex, S.A., 729 F.2d 1442 (2d Cir. 1983).

While the appeal from Judge Briearit’s decision was still pending, Rapoport filed two additional actions against Somex. The first action, filed in the Civil Court of the City of New York, County of New York, Small Claims Court, was dismissed for lack of jurisdiction by order dated September 13, 1982. Rapoport v. Banco Mexicano Somex, S.A., Index No. 8525/82 (N.Y.Civ. Ct., Sept. 13, 1982). The second action against Somex, which Rapoport filed in the Supreme Court of the State of New York, New York County, was removed by Somex to the Southern District of New York, and assigned to Judge Weinfield. Judge Wein-field dismissed the action, February 2, 1983, on the basis of res judicata. Con-structora República, S.A. v. Banco Mexi- cano Somex, S.A., 82 Civ. 7200 (S.D.N.Y. Feb. 2, 1983). However, after the dismissal, Rapoport continued to file frivolous motions and other papers.

Judge Weinfield again addressed the action on May 17, 1983:

Plaintiff is advised that continued abuse of the process of the court by filing repeated and frivolous motions may bring into play the Court’s power to enjoin such filings, to strike redundant and scandalous matter and to impose sanctions.

Order, Constructora Republica, S.A. v. Banco Mexicano Somex, S.A., 82 Civil 7200 (S.D.N.Y. May 17, 1983). (Eg. Notice of Motion for a Mistrial proposing another conspiracy theory, this one between Judge Weinfield’s law clerk and opposing counsel.)

An appeal was dismissed for want of prosecution. Rapoport then turned his attention to the District of Columbia, filing the present action in July 1984. The claims are the same as those presented in the prior New York actions, with the exception of the securities and 18 U.S.C. § 371 claims. The present action constitutes the fifth action against Somex.

II

The Court notes that the Act of State doctrine may well foreclose inquiry concerning the legality of alleged governmental acts of the United Mexican States upon which the plaintiff bases his claim. Moreover, the defendants’ arguments for immunity under the Foreign Sovereign Immunities Act are well-taken. However, the Court need not address these issues as no justiciable issues have been presented in the complaint.

In the amended complaint, Rapoport alleges violations of Section 12(1) of the Securities Act of 1933, 15 U.S.C. § 111 in that ‘defendants sold through the mails of the United States various unregistered securities, including promissory notes, certified bonds, and debentures.” The alleged sales occurred between 1960 and 1979. The notes held maturity dates through 1981. Defendants have moved to dismiss these claims on the grounds that they are time-barred.

Rapoport’s principal reliance upon Garcia v. Chase Manhattan Bank, N.A., 735 F.2d 645 (2d Cir.1984) is misplaced. In Garcia, the plaintiffs sought to recover amounts due on two certificates of deposits. Resolution of the action involved the application of the six year New York limitations period governing breach of contract actions. However, it is clear that the instant securities violations claims are subject to a one year statute of limitations under Section 13 of the 1933 Act., 15 U.S.C. § 77m. Braka v. Multibanco Comerex S.A., 589 F.Supp. 802, 805 (S.D.N.Y.1984). As the plaintiff admits that he made demands for payment of the securities in March of 1980, his contentions that the statute should be tolled do not cure the delinquency in bringing the claims. The securities claims are barred by the statute of limitations.

Rapoport also alleges a cause of action in that “he has constantly and consistently demanded that these securities be registered with the Securities and Exchange Commission, and [that] Mr. Beteta has willfully refused, in a deliberate conspiracy to defeat the laws of the United States.” This claim must also fail, as it is clear that no private right of action can exist under 18 U.S.C. § 371. Lamont v. Haig, 539 F.Supp. 552, 558-59 (D.S.D.1982).

The remaining claims for commercial and intentional torts are barred by the doctrine of res judicata and collateral estoppel. Judge Platt held that such claims could not be brought in the absence of the other potentially adverse claimants, four of whom are Mexican citizens beyond the jurisdiction of the Court. Rapoport v. Banco Mexicano Somex, S.A., 80 Civ. 3465 (E.D. N.Y. May 7, 1982) (memorandum and order at 1-5), aff'd 668 F.2d 667 (2d Cir.1982) (per curiam). The Second Circuit agreed that:

(1) the absent claimants could be prejudiced by a judgment rendered in their absence, and the bank could be prejudiced by incurring multiple liability if the Mexican courts do not recognize the United States judgment; (2) the court could not protect the rights of the Mexican non-parties; (3) the court’s judgment would not be adequate without accurate factfinding, which would require witnesses, documentary evidence, and court transcripts all located in Mexico; (4) Ra-poport would have an adequate remedy in the consignación action, where the rights of all parties could be protected.

Rapoport, 668 F.2d at 669.

With respect to defendant Nafinsa, an instrumentality of the Mexican government comparable to the Federal Reserve system in this country, Judge Brieant found that “[Nafinsa] undertakes no commercial acts in the United States, and did nothing in the United States with respect to the subject matter of the action.” Constructora República, S.A. v. Banco Mexicano Somex, S.A., 82 Civ. 7200 (S.D.N.Y. Feb. 2, 1983). Judge Brieant noted that although Nafinsa has an office in New York, the office has diplomatic status for purposes of engaging in treasury activities for the government of Mexico. Id. This Court also finds that it lacks in personam jurisdiction over Nafinsa with respect to the commercial and intentional tort claims.

In light of the above considerations, the motions to dismiss are granted.

An appropriate order has been issued.

      . The plaintiff moved for leave to file the amended complaint on April 24, 1985.

      . The additional defendant, Sociedad Financie-ría de Industria y Descuento, was not named in the original complaint. There is no indication that this new defendant has ever been served.

      . The Braka Court noted that a threshold question [was] whether the CDs are "securities” regulated by securities law. Although the CDs were sold by a foreign bank and were not regulated as a similar CD from a United States Bank would be regulated, the Court assumed for the purposes of the motion that they are securities under Title 15. This Court will make a similar assumption.

      . Amended Complaint, at 6, 9 and 10.

      . Defendants’ requests for sanctions, attorney’s fees and cost will be addressed in a separate order.