author: EDELSTEIN, District Judge.

text:
    WM. PASSALACQUA BUILDERS, INC., and Safeco Insurance Company of America and General Insurance Company of America, Plaintiffs, v. RESNICK DEVELOPERS SOUTH, INC., Jack Resnick, Burton Resnick, 90079, Inc., Jack Resnick & Sons, Inc., Sunrise Builders, Inc., Jack Resnick & Sons of Florida, Inc., Resnick of Boca, Inc., PJFAM Investments, Inc., Resnick Development Corporation, Pearl Resnick, Judith Resnick, Ira Resnick, Marilyn Katz, Stanley Katz, Susan Abrams, John Doe, John Doe, Inc., Defendants.
    No. 82 Civ. 3954 (DNE).
    United States District Court, S.D. New York.
    May 16, 1985.

      Peterson Young Self & Asselin, Atlanta, Ga., David J. Larson, of counsel, and Frank J. Franzino, New York City, for plaintiffs.

      Kronish, Lieb, Shainswit, Weiner & Hellman, New York City, Brian J. Gallagher & Richard Wynne, of counsel, for defendants.
   OPINION AND ORDER

EDELSTEIN, District Judge.

This diversity action involves the enforcement of a judgment obtained by Wm. Passalacqua Builders, Inc. (“Passalacqua”) against Resnick Developers South, Inc. (“Developers”). The defendants move for summary judgment contending that the court lacks subject matter jurisdiction, that the claims against all of the defendants except Developers must be dismissed as a matter of law, and that all of the claims are barred by the statute of limitations. The defendants’ motion is granted in part and denied in part.

BACKGROUND

Passalacqua and Developers entered into an agreement in 1972 for the construction of an apartment condominium project in Florida called Mayfair House. Construction was concluded in 1974. Disputes relating to this project were sent to arbitration. On November 24, 1979, Passalacqua received an arbitration award of $1,721,-171.00 against Developers which was judicially confirmed on June 17, 1981. Plaintiff collected $769,989.08 leaving an unpaid balance of $951,181.92. Plaintiffs brought this action to enforce the unpaid balance against Developers and the other defendants. Liability of the other defendants is based on a theory of piercing the corporate veil and voiding fraudulent transfers from Developers to various defendants.

DISCUSSION

Defendants contend that there is no subject matter jurisdiction, that this action is barred by the statute of limitations and that the action against defendants other than Developers must be dismissed because there is no basis for alter ego or instrumentality liability under the facts of this case.

I. Subject Matter Jurisdiction

In order to establish subject matter jurisdiction, there must be complete diversity — the residency of all of the plaintiffs must be different from that of all of the defendants. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806); 28 U.S.C. § 1332(a). For jurisdictional purposes, a corporation is a resident of the state of its incorporation and the state of its principal place of business at the time the suit is commenced. 28 U.S.C. § 1332(c). Passalacqua was incorporated under the laws of Ohio and qualified to do business in Florida in 1969. Defendants Developers, Jack Res-nick & Sons of Florida, Sunrise Builders, Inc., PJFAM Investments, Inc., and Res-nick of Boca, Inc. are all corporations organized under the laws of Florida.

Defendants contend that the principal place of business of Passalacqua in 1982 when this suit was commenced was Florida and therefore, there is no diversity between Passalacqua and various defendants. Plaintiffs argue that the corporation had no principal place of business because Passalacqua was an inactive corporation at the time the suit was commenced and that the corporation’s sole residence was Ohio, its state of incorporation. The court finds that Passalacqua’s principal place of business at the time the suit was commenced was Florida based on Judge Connors’ decision in Puerto Rico Maritime Shipping Authority v. Star Lines, Ltd., No. 78 Civ. 602 (WCC) (S.D.N.Y. Nov. 22, 1979) (Opinion and Order). Judge Connor held that the principal place of business for a corporation that was inactive at the time a suit is filed is the state of the corporation’s last business activity. In 1980, Passalacqua’s certificate of incorporation was cancelled on the records of the Ohio Secretary of State Florida was the last state where Passalacqua conducted any business activity other than the mere storage of corporate records or the conduct of this lawsuit.

This presents the question whether the complaint must be dismissed in its entirety or whether the claims by Passalacqua should be dismissed. A claim may not be maintained by dismissing a non-diverse party if the dismissed party is an indispensible party. Plaintiff concedes that Passalacqua is an indispensible party for Count 3. Passalacqua is certainly not an indispensible party for Counts 1 and 2 because all of its rights to enforce the judgment have been assigned to the other plaintiffs. The court has inherent power to perfect its jurisdiction and will not require the plaintiff to make a motion. See Neeld v. American Hockey League, 439 F.Supp. 459, 462 (W.D.N.Y.1977). Count 3 is hereby dismissed and Passalacqua is hereby dismissed as a plaintiff in this action for the remaining counts.

II. Statute of Limitations

Defendant contends that the action should be dismissed based on the statute of limitations. Plaintiff is suing to enforce the judgment obtained against Developers using a theory of piercing the corporate veil. The statute of limitations in New York for actions to enforce a judgment is twenty years. N.Y.Civ.Prac.Law § 211 (McKinney 1984). This action was commenced within the twenty-year period. Defendant contends that this statute of limitations is not appropriate for an action seeking to pierce the corporate veil and that the statute of limitations for the underlying action must be used. The defendant mischaracterizes Counts 1 and 2, the actions which involve piercing the corporate veil, as “alter ego and instrumentality claims.” These counts are actions to enforce a judgment against a corporation. A plaintiff may attempt to enforce a judgment against individuals or corporations allegedly controlling the judgment debtor using a theory of piercing the corporate veil. E.g., Port Chester Electrical Construction Co. v. Atlas, 40 N.Y.2d 652, 389 N.Y.S.2d 327, 357 N.E.2d 983 (1976) (claim of piercing the corporate veil denied on the merits). The defendant, presumably as a result of mischaracterizing the claims, contends that the acts comprising the claims which would permit the plaintiff to pierce the corporate veil are within the scope of the six-year statute of limitations for fraud actions, N.Y.Civ.Prac.Law § 213 (McKinney 1984). Defendant refers to Conklin v. Furman, 48 N.Y. 527 (1872) to support the contention that a suit against shareholders to enforce a judgment against the corporation is covered by the statute of limitations for the underlying claim. Conklin, however, did not involve piercing the corporate veil. The case involved a statutory right to sue the stockholders for any balance remaining after the property of the corporation has been levied upon. The cause of action was established against the shareholders as shareholders and not as the alter ego or instrumentality of the corporation. This is a significant difference. Under the alter ego and instrumentality theories the corporation and those who have controlled the corporation are treated as but one entity. Fisser v. International Bank, 282 F.2d 231, 234 (2d Cir.1960). Thus, the statute of limitations applicable to the corporation should apply to those who are using the corporation as an instrumentality. The action accrued against both the corporation and any alter egos when the judgment was entered. The action to enforce the money judgment is therefore timely.

III. Alter Ego and Instrumentality

Plaintiff asserts that the defendants other than Developers are liable under either an instrumentality or alter ego theory. Defendants claim that there may be no liability based on these theories under the undisputed facts in this case. Both the plaintiffs and defendants cite a number of cases supporting both sides of the issue. A review of these cases leads this court to one conclusion: each case must be judged on its own merits; a recitation of factors such as undercapitalization, disregard of corporate formalities, lack of corporate records, and the shuttling of funds between the corporation and the other defendants are simply not determinative on a motion for summary judgment, except in the most unusual circumstance. The determination may rest on conversations between the parties, the intent of the parties and other matters which cannot be determined on a motion for summary judgment.

In this case, there are also issues of fact regarding the factors themselves such as the payment of personal expenses by the corporation, the purchase of apartments from the. corporation by the individuals at reduced prices and the disregard of corporate formalities. Even though New York courts disregard corporate form reluctantly, Gartner v. Snyder, 607 F.2d 582 (2d Cir.1979); C.A.B. v. Scottish-American Ass’n, Inc., 411 F.Supp. 883, 887 (E.D.N.Y.1976), drawing reasonable inferences against the defendants and in favor of the plaintiffs, summary judgment is not appropriate in this ease. See Establissement Tomis v. Shearson Hayden Stone, Inc., 459 F.Supp. 1355, 1365 (S.D.N.Y.1978).

CONCLUSION

Defendants’ motion for summary judgment is granted in part and denied in part. Count 3 is dismissed and Counts 1 and 2 are to be consolidated into a single count. An amended complaint is to be filed within 10 days.

SO ORDERED.

      . The cause of action accrues at the same time for the corporation and the alter egos for all types of actions. For example, under the facts of this case, the defendants other than Developers could not be held liable under the underlying contract between Developers and Passalacqua. This action, even though based on a theory of piercing the corporate veil, would be time barred because it accrued more than six years ago, see N.Y.Civ.Prac.Law § 213 (McKinney 1984).
      The same rule would apply to the recovery of assets based on a fraudulent conveyence theory dismissed above. These claims are not based on an alter ego or instrumentality theory and do not rely on the judgment; they are direct claims against Developers and the other defendants. In this situation, the fraud statutes of limitations, N.Y.Civ.Prac.Law §§ 203, 213 (McKinney 1984), would apply.

      . Plaintiff raises the alter ego and instrumentality claims in separate counts. The court is not convinced that these are separate theories or causes of action. As Judge Mulligan noted: " '[n]o concept of separate corporate personality will suffice to solve an actual problem.’ ... 'What the formula comes down to, once shorn of verbiage about control, instrumentality, agency and corporate entity, is that liability is imposed to reach an equitable result.’ ” Brunswick Corp. v. Waxman, 599 F.2d 34, 36 (2d Cir.1979) (quoting Cary, Corporations 110 (4th ed. 1969) and Latty, Subsidiaries and Affiliated Corporations 191 (1936)). The plaintiff is therefore ordered to submit an amended complaint placing these virtually identical theories into a single count.


source: Caselaw Access Project

author: ROBERT D. POTTER, Chief Judge.

license: Public Domain

text:
    Barbara E. CURL, Plaintiff, v. Leroy REAVIS, et al., Defendant.
    No. ST-C-82-91-P.
    United States District Court, W.D. North Carolina.
    May 16, 1985.

      Louis L. Lesesne, Jr., Charlotte, N.C., for plaintiff.
    William L. Auten, Charlotte, N.C., for defendant.
   ORDER

ROBERT D. POTTER, Chief Judge.

THIS MATTER was heard before the undersigned on January 18, 1985 for a determination of the amount of back pay and related relief to which the Plaintiff is entitled. The Plaintiff was represented by Louis L. Lesesne, Jr. The Defendant was represented by William L. Auten.

The Court has previously determined that the Plaintiff is entitled to back pay for patrol duty pay, including fringe benefits and cost of living increases, less her actual earnings from June 1980 until she is placed in or declines the first available patrol deputy position. On appeal, the Fourth Circuit Court of Appeals held that the Plaintiff is entitled to instatement in the first available patrol deputy position, with back pay as a patrol deputy until that time. 740 F.2d 1323. On September 12, 1984 the Plaintiff declined a patrol deputy position. Although the Plaintiff is entitled to recover back pay the parties are unable to agree on: (1) the amount of back pay; (2) the Plaintiff's entitlement to adjustment of her pension account in the State’s retirement system; (3) the Plaintiff’s entitlement to adjustment of her sick leave balance; and (4) the Plaintiff’s entitlement to recover prejudgment interest.

After a full evidentiary hearing of the matter, the Court, having carefully considered the arguments of counsel and the testimony and exhibits, enters the following findings of fact and conclusions of law with respect to the amount of back pay to which the Plaintiff is entitled.

FINDINGS OF FACT

(1) The Plaintiff is entitled to back pay as a patrol deputy from June 1980 until September 12, 1984.

(2) The patrol deputy position the Plaintiff applied for in June 1980 was filled by Officer Mike Privette. Memorandum and Order, Finding of Fact 15, p. 5, May 24, 1983.

(3) Officer Privette was originally hired on December 19, 1978 in a position other than road deputy. When he was reclassified as a road deputy on June 26, 1980 Officer Privette went from Grade 61, Step 1 (rate of pay $9,972.00 per year) to Grade 62, Step 1 (rate of pay $11,220.00 per year).

(4) The salaries of Officers James Alston, Phillip Edward Hollar, and Stephen Eugene Wallace were the only other salaries offered for comparison in order to evaluate the amount of back pay to which the Plaintiff is entitled. The Plaintiff contends the Court should rely on Officer Alston’s pay record. The Defendant contends the Court should rely on Officer Hollar’s pay record.

(5) Officer Alston was originally hired in February 1978 as a deputy sheriff. When he was reclassified on December 26, 1979 he went from Grade 59, Step 2 (rate of pay $9,552.00) to Grade 61, Step 2 (rate of pay $10,392.00). On June 26, 1980 he received a department increment change to Grade 62, Step 1 (rate of pay $11,220.00 per year). On December 26, 1980 Officer Alston received a merit increase for his outstanding performance. When he received a merit increase he went from Grade 62, Step 1 (rate of pay $11,220.00) to Grade 62, Step 2 (rate of pay $11,712.00). Officer Alston’s merit increase was an increase that only five out of the forty-seven deputies received.

(6) Officer Hollar was hired on April 4, 1980 as a patrol deputy. He was classified as a Grade 61, Step A (rate of pay $9,972.00 per year). On June 26, 1980 he went to Grade 62, Step 1 (rate of pay $11,220.00 per year) due to the department increment change. Officer Hollar had no previous experience with the Sheriff’s Department prior to his employment as a patrol deputy.

(7) Officer Wallace was originally hired on February 7, 1978 in a position other than road deputy. When he was reclassified in December 1979 he went from Grade 59, Step 2 (rate of pay $9,552.00 per year) to Grade 61, Step 2 (rate of pay $10,392.00 per year). On February 29, 1980 he was promoted to detective. Thus, there are not any actual figures for Officer Wallace as a patrol deputy during the relevant time frame of June 1980 to September 1984. Prior to his promotion, Officer Wallace and Officer Alston were both paid at Grade 61, Step 2. On June 26, 1980 pursuant to an increment change Officer Alston went to Grade 62, Step 1. Presumably Officer Wallace would have received the same change to Grade 62, Step 1. The salary figures as a patrol deputy for Officer Wallace, however, are only a projection.

(8) In that Officers Alston, Privétte, and Hollar and presumably Wallace were all paid at the same rate on June 26, 1980 the Court finds that as of June 1980 patrol deputies hired in 1980 were classified and paid according to Grade 62, Step 1 at a rate of pay of $11,220.00 per year, regardless of the officer’s previous experience within the Sheriff’s Department. The Court further finds that had the Plaintiff been hired for the patrol deputy position she applied for in June 1980 she would have been classified and paid, as was Officer Privette, according to Grade 62, Step 1 at a rate of pay of $11,220.00 per year.

(9) In 1981 there was an across-the-board increase with a step increase in the patrol deputy position. In 1982 there were not any pay increases. In July 1983 there was an across-the-board increase with no grade or step increase. There apparently were no further increases prior to September 1984.

(10) If the Plaintiff had been hired as a patrol deputy in June 1980 at Grade 62, Step 1 and had received all of the across-the-board increases and no merit increases she would have accrued the following amount of back pay:

$ 6,441.00 for 1980 (6/1 — 12/31)
$11,610.00 for 1981
$12,000.00 for 1982
$12,300.00 for 1983
$ 9,338.57 for 1984 (1/1 — 9/12)
$51,689.57 TOTAL

(11) If the Plaintiff had been hired as a patrol deputy in June 1980 at Grade 62, Step 1 and had received all of the across-the-board increases and one of the five merit increases awarded in 1980 she would have accrued the following amount in back pay:

$ 6,832.00 for 1980 (6/1 — 12/31)
$12,120.00 for 1981
$12,528.00 for 1982
$12,840.00 for 1983
$ 9,468.00 for 1984 (1/1 — 9/12)
$53,788.00 TOTAL

(12) The Plaintiffs interim earnings since June 1980 which are deductible under Section 706(g) of Title VII from the gross entitlement to back pay are as follows:

1980
Iredell County $ 3,298.84
1981
Iredell County $ 3,864.46
Blaekwelder Furniture $ 3,867.70
1982
Blaekwelder Furniture $ 460.40
Iredell Memorial Gardens $ 62.81
Carolina Pacific Knitwear $ 704.00
Fraternal Order of Police $ 100.00
1983
Carolina Pacific Knitwear $ 3,888.35
Iredell County $ 5,592.15
1984
Iredell County (through 9/12) $ 8,019.00
TOTAL $29,857.71

(13) The net amount of back pay, if the Plaintiff had not received a merit increase is $21,831.86.

(14) The net amount of back pay if the Plaintiff had received the merit increase awarded to Officer Alston is $23,930.29.

(15) At the time of her discharge in 1981 the Plaintiff had accumulated 32.25 days of sick leave. When she was reinstated in June 1983 she was credited with the sick leave which she had already accumulated prior to her discharge. The Defendant, however, refused to credit her with the additional sick leave which she would have accumulated had she continued to be employed from April 1981 to June 1983.

The sick leave policy of the County provides that employees accrue sick leave at the rate of twelve working days per full calendar year of service. This sick leave continues to accrue without limit if not utilized. Under this policy, the Plaintiff would have accrued twenty-six sick leave days during the period between her 1981 discharge and her 1983 reinstatement. The Court, therefore, finds that the Plaintiff should be credited with the twenty-six additional sick leave days.

(16) The Defendant concedes that the Plaintiff is entitled to credit for the period between 1981 and 1983 in the North Carolina Local Governmental Employees’ Retirement System. Upon her reinstatement, however, she was not given any credit. Accordingly, the Plaintiff is entitled to an adjustment in her retirement account, for pension and retirement purposes, for the two year period between 1981 and 1983 when she was illegally denied the dispatcher position.

Such relief will necessitate computations by the State Retirement System to determine the precise amount of contributions that will be required, both by the County and by the Plaintiff in. order to credit her properly with her pension account. Accordingly, the State Retirement System should be directed to make the appropriate adjustments and computations and the Plaintiff and the Defendant should be ordered to pay their respective amount of contributions determined by the State Retirement System.

(17) As to the issue of prejudgment interest, the Court finds in its discretion in light of the findings of fact and conclusions of law entered in the Memorandum and Order of May 24, 1983 that this is a case in which prejudgment interest should be awarded to make the Plaintiff whole. E.E.O.C. v. Liggett & Myers, Inc., 690 F.2d 1072, 1074 (4th Cir.1982). The Defendant’s only argument against allowing prejudgment interest is that the Plaintiff has no right to prejudgment interest because the Plaintiff contributed to the delay in securing relief because she did not apply for, or because she let it be known that she did not want, a patrol deputy position.

The Defendant’s argument is based on a factually incorrect premise. After a full trial on the merits the Court found that in June 1980 the Plaintiff requested a promotion to a then available patrol deputy position. The Defendant similarly contended the Plaintiff was not interested in road deputy work, primarily citing statements allegedly made to members of the press. The Court found the Defendant’s reliance upon these subsequent statements to be pretextual. Memorandum and Order, pp. 5, 17, May 24, 1983. The Defendant moved the Court to amend the finding as not supported by the evidence. The Court denied the motion. The Defendant appealed this finding as not supported by the evidence and the Fourth Circuit Court of Appeals denied the Defendant’s appeal, upheld the finding and increased the Plaintiff’s remedies. The Defendant’s argument against prejudgment interest is thus factually without merit and redundant.

(18) The National Labor Relation Board Rates for the relevant time are as follows:

June 1,1980 to December 31, 1981 12%
January 1, 1982 to December 31, 1982 20%
January 1,1983 to December 31, 1983 16%
January 1,1984 to December 31,1984 11%

CONCLUSIONS OF LAW

(1) The Court concludes that the Plaintiff is entitled to gross back pay in the amount of $51,689.57. In making this determination, the Court finds that the records of Officer Privette present a comparable male employee. It further is significant that all patrol deputies hired in 1980 were classified as Grade 62, Step 1, on June 26, 1980. The Court declines to rely solely on Officer Alston’s pay records in that there were only five out of forty-seven employees receiving this merit increase. Although the Plaintiff is entitled to normal salary increases, in the instant situation a comparison to a merit increase appears highly speculative and is not equitable because it would in effect “reward the plaintiff and penalize the employer for the extraordinary diligence and motivation” of Officer Alston. See, E.E.O.C. v. Liggett & Myers, Inc., 690 F.2d 1072, 1076-77 n. 3 (4th Cir.1982), citing, Syvock v. Milwaukee Boiler Mfg. Co., 665 F.2d 149, 160-61 (7th Cir.1981). (In ADEA claim, the Court rejected the argument that the Plaintiff should receive the full difference between her actual wages and the wages of the highest paid worker.)

(2) In that the Plaintiff’s interim earnings during the relevant time period were $29,857.71, pursuant to 42 U.S.C. § 706(g) the Plaintiff is entitled to back pay in the sum of $21,831.86 from the Defendants.

(3) The Plaintiff is entitled to be credited with twenty-six sick leave days and is entitled to an adjustment in her retirement account for the two year period between 1981 and 1983 in which she was illegally denied the dispatcher position.

(4) The Defendant, without citing any legal authority, contends the amount they have to pay in back pay should be reduced by the amount of the Plaintiff’s contribution to her retirement plan, state and federal income tax withholdings, as well as by deductions for social security. To order the Defendant to pay less because of the Plaintiff’s tax liability, however, would give the Defendant a benefit it has not earned. The Defendant had the entire use of the money during the litigation. The Defendant did not withhold or pay any taxes on the Plaintiff’s back pay during the litigation. If the back pay award had been paid into the Clerk’s Registry during the appeal the Plaintiff would have earned interest on the entire sum. Further the Plaintiff’s tax liability is a matter between the Plaintiff and the respective taxing authority. The calculation of the Plaintiff’s taxes would presumably included allowances for exemptions, deductions etc. that the Plaintiff will elect to take based on her particular situation and may not consist of the standard deductions and exemptions. Finally, since the Plaintiff is receiving her back pay in a lump sum rather than over the years she may incur a higher tax liability. Accordingly, the amount the Defendant has to pay the Plaintiff in back pay, including the calculation of interest, should not be reduced by deductions for the retirement plan, the federal and state income taxes, and the FICA taxes.

(5) Any finding of fact which is determined also to be a conclusion of law is so deemed, and any conclusion of law which is determined also to be a finding of fact is so deemed.

Accordingly, pursuant to the findings of fact and conclusions of law set forth above, IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that:

(1) The Plaintiff is entitled to back pay in the sum of $21,831.86 and prejudgment interest thereon at a rate of 12% from June 1980 to December 31, 1981, 20% from January 1, 1982 to December 31, 1982, 16% from January 1, 1983 to December 31,1983 and 11% from January 1, 1984 to September 12, 1984 and interest on the total back pay and prejudgment interest from this date at the rate of 8.57% per annum until paid.

(2) The Plaintiff is to be credited with twenty-six sick leave days.

(3) The Plaintiff's pension account in the State Retirement System is to be adjusted to credit her with employment between 1981 to 1983 when she was illegally denied the dispatcher position.

(4) North Carolina Local Governmental Employees’ Retirement System is to make the necessary computations and adjustments for crediting the Plaintiff's retirement account.

(5) The Defendant and the Plaintiff are to pay their respective amounts of contributions to the State Retirement System as determined by the North Carolina Local Governmental Employees’ Retirement System.


author: DAVID S. NELSON, District Judge.

text:
    Edward C. SMITH, Administrator of the Estate of John M. Smith, Plaintiff, v. UNITED STATES of America, Defendant. Edward C. SMITH, Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. A. Nos. 80-2278-N, 81-2977-N.
    United States District Court, D. Massachusetts.
    May 16, 1985.
    Albert P. Zabin, Paul F. Leavis, Schneider, Reilly, Zabin, Connolly & Costello, Boston, Mass., for plaintiff.
    Joan I. Milstein, Asst. U.S. Atty., Boston, Mass., for defendant.
   MEMORANDUM AND ORDER

DAVID S. NELSON, District Judge.

Plaintiff is suing the United States for damages for the wrongful death of his twenty-one year old son, John M. Smith, which he sustained on September 22, 1979. Plaintiff filed this action pursuant to the Federal Tort Claims Act, 28 U.S.C. § 2674 and Md.Cts. & Jud.Proc.Ann.Code §§ 3-901-04. The Court allowed the motion of the plaintiff for partial summary judgment on the issue of liability on August 3, 1983. The Court tried the issue of damages and after careful consideration finds that judgment must enter against the United States for $138,185.00.

FINDINGS OF FACT

1. The plaintiff is Edward C. Smith, Administrator of the Estate of John M. Smith, and Edward C. Smith in his individual capacity. The defendant is the United States of America.

2. John M. Smith (the “Decedent”) died in an automobile accident in Bethesda, Maryland on September 22, 1979. At that time he was twenty-one years of age, his date of birth being July 31, 1958. The Decedent was a Lance Corporal in the United States Marine Corps at the time of his death, having entered the service on September 8, 1977. The Decedent never married and had no children. He was survived by his parents.

3. The Decedent never provided monetary support to his parents.

4. The Decedent was a skilled worker and made in kind contributions to his parents and their household.

5. At the time of his death, the Decedent was an in-patient at the National Naval Medical Center in Bethesda, Maryland.

CONCLUSIONS OF LAW

This action is brought under 28 U.S.C. § 2674 and Md.Cts. & Jud.Proc.Ann.Code §§ 3-901-04. Through these statutes, the United States consents to be sued for damages that result in death, provided that the law in the place where the action occurred would recognize such a claim if brought against a private individual. There is no dispute that the Maryland Wrongful Death Statute is applicable to the instant case. Therefore, Edward C. Smith can recover against the United States, just as if the United States were a private individual.

Plaintiff contends that the total loss of value of the Decedent’s contribution to the household is $141,836.00. In support of this contention, plaintiff relies on the testimony of his expert Dr. Richard Weckstein. Dr. Weckstein arrived at this amount based on statistical descriptions of the value of work contributed by husbands with minor children such as cleaning and minor repairs, as well as considering the particular talents of the Decedent such as his skill as a carpenter and maintenance person. The data, however, makes no explicit provision for adult children who contribute to the household, does not take into account the amount of time the Decedent actually spent with his family or the possibility that, like many adults, John M. Smith might have relocated away from his family.

Under Maryland law, a parent may recover “pecuniary loss” for the death of an unmarried child. See generally Md.Cts. & Jud.Proc.Ann.Code § 3-904. “Pecuniary loss” means the reasonable expectation of benefit from the continued life of the deceased; this would include the monetary value of labor and services to the parent. See Black’s Law Dictionary 1018 (rev. 5th ed. 1979). In addition to “pecuniary loss” the plaintiff contends that he may recover damages for “mental anguish, emotional pain and suffering” and “loss of society.” Md.Cts. & Jud.Proc.Ann.Code, § 3-904(e) (amended 1983). Although the parties stipulate that the age of majority in Maryland is eighteen, the above subsection is applicable where the unmarried child is twenty-one years old or younger. Id. at § 3-904(e)(1). The United States suggests that the plaintiff’s recovery is limited to “pecuniaryfloss’’ pursuant to the law in effect at the time of the Decedent’s death. This Court disagrees. The federal courts must apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or where there is clear statutory direction or legislative history to the contrary. Bradley v. Richmond School Board, 416 U.S. 696, 711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974); See United States v. Gennaro J. Angiulo, 755 F.2d 969, at 970 (1st Cir.1985). This section became effective on July 1, 1983. Nothing in the statute suggests that this section does not apply. As for manifest injustice, the disappointment of the government’s expectations that results from the implementation of this new rule must be balanced against public interest in the enforcement of that rule. New England Power Co. v. United States, 693 F.2d 239, 245 (1st Cir.1982). In fact, the government’s reliance is minimal since the new rule had been in effect well over a year before arguments were heard in the instant case. Thus, the plaintiff’s damages are not limited to the “pecuniary loss.”

There being no question that the plaintiff suffered injury as a result of the death of his son, judgment will enter against the United States. Plaintiff’s total loss, including compensation of $58,185.00 for the permanent loss of value of household contributions and $80,000.00 for suffering and mental anguish come to $138,185.00. Accordingly, judgment will enter against the United States for $138,185.00.

SO ORDERED.

      . This amount represents the present discontinued value of household contribution over the period 1979 to 1991.

      . Prior to 1983 recovery pursuant to the Maryland Wrongful Death Statute for a decedent who is not a minor was limited to the pecuniary loss resulting to his parents as a result of his death. § 3-904(d); Barrett v. Charlson, 18 Md.App. 80, 305 A.2d 166, 176 n. 10 (1973).


author: CONTI, District Judge.

text:
    LEVIN METALS CORPORATION, Levin-Richmond Terminal Corporation, Plaintiffs, v. PARR-RICHMOND TERMINAL COMPANY, et al., Defendants. PARR-RICHMOND TERMINAL COMPANY, et al., Counterclaimants, v. Richard LEVIN, et al., Counterdefendants. PARR-RICHMOND TERMINAL COMPANY, et al., Plaintiffs, v. Richard LEVIN, et al., Defendants.
    Nos. C-84-6273 SC, C-84-6324 SC.
    United States District Court, N.D. California.
    May 17, 1985.

      Latham & Watkins, David L. Mulliken, Robert P. Dahlquist, San Diego, Cal., for counterdefendant Montrose Chemical Corp. of California.
    Stephen B. Peck, Hanson, Bridgett, Marcus, Vlahos & Stromberg, San Francisco, Cal., for plaintiff.
    Arthur R. Albrecht, Thacher, Albrecht & Ratcliff, San Francisco, Cal., for defendants Parr-Richmond Terminal Co. and John Parr Cox.
    Kenneth E. Keller, Bronson, Bronson & McKinnon, San Francisco, Cal., for defendants Parr Industrial Corp. and Fred Parr Cox.
    John J. Murray, Law Offices of John J. Murray, Redwood City, Cal., for U.S. Gypsum.
    David Giannotti, McKenna, Conner & Cuneo, Los Angeles, Cal., Peter Gillon, McKenna, Conner & Cuneo, Washington, D.C., for R.J. Prentiss.
    Alex Heckathorn, Santa Rosa, Cal., for Heckathorn & Co.
    Leach, Biesty & McGreevy, San Francisco, Cal., for Heckathorn II.
    Nicholas Aracic, Moore, Clifford, Wolfe, Larson & Trutner, Oakland, Cal., for Levin Metals Corp.
   CONTI, District Judge.

I. INTRODUCTION

For the purposes of this order, the plaintiffs in Case No. C-84-6273-SC will be referred to as “Levin Metals” and the defendants and counterclaimants in the same case will be referred to as “Parr-Richmond.” In February, 1984, Levin Metals commenced the central action involved herein, Case No. C-84-6273-SC, in Contra Costa Superior Court, raising state claims for fraud, breach of the duty of good faith and fair dealing, negligence, nuisance, tortious breach of statutorily imposed duty, and declaratory relief and indemnity. In September, 1984, Parr-Richmond removed the Levin Metals action to this court, asserting that this court has exclusive original jurisdiction over the action, pursuant to 42 U.S.C. § 9613(b). Also in September, 1984, Parr-Richmond filed its complaint in Case No. C-84-6324-SC against Levin Metals and other parties for declaratory relief of non-liability under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq. In October, 1984, Parr-Richmond filed a counterclaim in Case No. C-84-6273-SC against Levin Metals and the other defendants named in Case No. C-84-6324-SC. The counterclaim in Case No. C-84-6273-SC is virtually identical to the complaint filed in Case No. C-84-6324-SC. Therefore, Parr-Richmond’s complaint and counterclaim will at times be collectively referred to as the “Parr-Richmond complaint.” In an order dated October 31, 1984, Case No. C-84-6273-SC and Case No. C-84-6324-SC were determined to be related cases.

The above related cases are before the court on the following motions: 1) Prentiss Drug & Chemical Company, Inc.,’s (“Prentiss,” counterdefendant in Case No. 0-84-6273-SC and defendant in Case. No. C-84-6324-SC) motion to dismiss; 2) Parr-Richmond’s motion for reconsideration of a magistrate’s order on motions to compel production of documents and answers at a deposition; and 3) Montrose Chemical Corporation of California’s (“Montrose,” counterdefendant in Case No. C-84-6273 and defendant in Case No. C-84-6324-SC) motions to strike its being impleaded in both related cases, or to dismiss, or for a more definite statement, and to sever. The court grants Prentiss’ meritorious motion to dismiss the Parr-Richmond complaint, as will be discussed below, because the complaint is legally deficient in stating a proper claim under CERCLA. Furthermore, as set out shortly, because the court lacks federal subject matter jurisdiction over the remaining state claims raised in the Levin Metals complaint, this complaint is dismissed and remanded to state court. Therefore, the court need not address the other noticed motions. This court specifically holds that Prentiss' motion to dismiss Parr-Richmond’s counterclaim in Case No. C-84-6273-SC and complaint in Case No. C-84-6324-SC is granted, and Case No. C-84-6273-SC is dismissed and remanded to Contra Costa Superior Court for adjudication of the state claims raised in the Levin Metals complaint.

II. FACTUAL ALLEGATIONS

The Levin Metals complaint, filed in state court and removed to this court by Parr-Richmond in Case No. C-84-6273-SC, makes no claim whatsoever for recovery under CERCLA. Rather, Levin Metals alleges in the complaint that it purchased certain real property located in Richmond California (“Richmond property”) from Parr-Richmond in April, 1981, and that Parr-Richmond falsely and fraudulently failed to inform Levin Metals that the Richmond property had been used for discharge, disposal or deposit of hazardous wastes which contaminated the property.

The Parr-Richmond complaint and Exhibit A attached thereto contain the following allegations: after acquiring the Richmond property, Levin Metals allegedly discovered for the first time that the property was being investigated by the California Department of Health Services (“DOHS”) for possible contamination; on or about August 10, 1983, Levin Metals made a written demand on Parr-Richmond to reimburse Levin Metals for certain costs incurred determining the extent of contamination on the property, evaluating the remedial action required, and evaluating and mitigating potential adverse effects of the contamination on persons who have been on the property, adjoining property owners and the environment. Nowhere in the Parr-Richmond complaint is it alleged that Parr-Richmond has taken any action or incurred any costs with respect to cleaning up the hazardous waste on the Richmond property. Furthermore, the Parr-Richmond complaint does not allege that any governmental enforcement action has been, or is likely to be taken against Parr-Richmond or any other party.

III. MOTION TO DISMISS

Prentiss moves to dismiss the Parr-Richmond complaint, inter alia, on the ground that the complaint fails to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6), because Parr-Richmond does not state a viable claim under CERCLA. The court is mindful that Prentiss’ Rule 12(b)(6) motion cannot be granted unless it appears to a certainty that Parr-Richmond can prove no set of facts in support of its claim that would entitle it to relief, Rae v. Union Bank, 725 F.2d 478, 479 (9th Cir.1984), and that the allegations in the complaint must be construed in favor of Parr-Richmond. De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir.1978), cert. denied, 441 U.S. 965, 99 S.Ct. 2416, 60 L.Ed.2d 1072 (1979). In light of the above strict standards, the court nevertheless finds Prentiss’ arguments in support of the above motion convincing, as set out below.

A private party may bring a CERCLA action against another private party pursuant to 42 U.S.C. § 9607(a)(4)(B). See Bulk Distribution Centers, Inc. v. Monsanto Co., 589 F.Supp. 1437, 1443 (S.D.Fla.1984); City of Philadelphia v. Stepan Chemical Co., 544 F.Supp. 1135, 1140-43 (E.D.Pa.1982). Section 9607(a)(4)(B) provides that any person fitting within Section 9607(a)(1), (2), (3), or (4) shall be liable for “any other necessary costs of response incurred by any other person consistent with the national contingency plan.” The court holds, as discussed forthwith, that the Parr-Richmond complaint must be dismissed because Parr-Richmond does not state that it has met the following two requirements for bringing a private suit under Section 9607(a)(4)(B): (1) that it has incurred necessary costs of response; and (2) that it has incurred any such costs that are consistent with the national contingency plan.

A. Necessary Costs of Response

The recent and developing caselaw construing Section 9607(a)(4)(B) requires that before a private party may seek declaratory relief or damages under this section the party must affirmatively demonstrate that it has incurred necessary costs of response. See Wickland Oil Terminals v. Asarco, Inc., 590 F.Supp. 72, 77-78 (N.D.Cal.1984); Pinole Point Properties v. Bethlehem Steel Corp., 596 F.Supp. 283, 289 (N.D.Cal.1984); Bulk Distribution Centers, 589 F.Supp. at 1451-52; Jones v. Inmont Corp., 584 F.Supp. 1425, 1429 (S.D.Ohio 1984); United States v. Northeastern Phram. & Chem., 579 F.Supp. 823, 850-51 (W.D.Mo.1984); D’Imperio v. United States, 575 F.Supp. 248, 253 (D.N.J.1983); City of Philadelphia, 544 F.Supp. at 1143.

The term “necessary costs of response” is not defined within CERCLA. However, 42 U.S.C. § 9601(25) defines “response” to mean “removal ... and remedial action.” Section 9601(23) defines “removal” to mean “the cleanup or removal of released hazardous substances from the environment,” and includes actions necessary “to prevent, minimize, or mitigate damages to the public health or welfare to the environment____” Section 9601(24) defines “remedial action” to mean “those actions consistent with permanent remedy taken ... to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment.” This court has interpreted the term “necessary costs of response” to exclude certain investigatory costs prior to a bona fide cleanup. Wickland Oil Terminals, 590 F.Supp. at 77-78. Nowhere in the Parr-Richmond complaint does Parr-Richmond allege that it has incurred any “necessary costs of response” that would accord with the related words defined in Section 9601(23), (24), and (25). For that matter, Parr-Richmond has not even alleged that it has incurred any investigatory costs that this court has determined would not fit within the term “necessary costs of response.”

A similar claim to Parr-Richmond’s, for declaratory relief in the form of non-liability under Section 9607(a)(4)(B), by parties that had not incurred necessary costs of response was raised in D'Imperio, 575 F.Supp. 248. The DTmperio plaintiffs sought a declaration of non-liability, and a declaration that if they were to contribute to a cleanup effort under CERCLA, their expenses would be recoverable either from Superfund or from other parties responsible for the hazardous waste. The D ’Imperio court dismissed the declaratory judgment suit as to Section 9607(a)(4)(B) by holding that: “CERCLA seems to require actual, past outlay of expenses. Here the plaintiffs have neither spent, nor do they propose to spend, funds [as necessary response costs] ‘consistent with the national contingency plan.’ ” Id. at 253. Based on all of the above, Parr-Richmond has failed to state a claim that would entitle it to maintain a private action under Section 9607(a)(4)(B), and the Parr-Richmond complaint must therefore be dismissed.

B. National Contingency Plan

Not only has Parr-Richmond failed in its complaint to allege that it has incurred necessary costs of response, it also fails to allege that it has incurred any such costs that are “consistent with the national contingency plan,” which, as the caselaw makes clear, is the second requirement to maintaining an action under Section 9607(a)(4)(B). See Wickland Oil Terminals, 590 F.Supp. at 78; Pinole Point Properties, 596 F.Supp. at 290; Bulk Distribution Centers, Inc., 589 F.Supp. at 1444; Jones, 584 F.Supp. at 1430; Northeastern Pharm. & Chem. Co., 579 F.Supp. at 850; D'Imperio, 575 F.Supp. at 253; City of Philadelphia, 544 F.Supp. at 1141. Such failure to allege incurred costs consistent with the national contingency plan provides a separate independent basis from that in the above section to warrant dismissal of the Parr-Richmond complaint. In light of this and the previous section, Parr-Richmond’s counterclaim in Case No. 84-6273-SC and complaint in Case No. 84-6324-SC are dismissed.

IV. REMAND

Having dismissed Parr-Richmond’s counterclaim in Case No. C-84-6273-SC and complaint in Case No. C-84-6324-SC, both of which seek declaratory relief of non-liability under CERCLA, all that remains before this court are the state claims raised in the Levin Metals complaint in Case No. C-84-6273-SC. As discussed below, this court thus lacks federal subject matter jurisdiction over the Levin Metals complaint.

This court received the Levin Metals complaint by virtue of Parr-Richmond’s petition of removal. The petition alleges that the state claims raised in the Levin Metals complaint really raise a private cause of action under CERCLA, vesting this court with jurisdiction, pursuant to 42 U.S.C. § 9613(b). Section 9613(b) provides that, “the United States district courts shall have exclusive original jurisdiction over all controversies arising under [CERCLA], without regard to the citizenship of the parties or the amount in controversy.” The Third Circuit, in Exxon Corp. v. Hunt, 683 F.2d 69, 73-74 (3d Cir.1982), cert. denied, 459 U.S. 1104, 103 S.Ct. 727, 74 L.Ed.2d 952 (1983), enunciated the well-taken principle that, “exclusive jurisdiction [under Section 9613(b)] is only conferred over those cases which actually present a Superfund question on the face of the complaint, not every suit in which the provisions of the Act are relevant.” Here, the Levin Metals complaint does not present a CERCLA question on its face. The complaint does not specifically allege that Levin Metals has incurred any costs that would be deemed necessary costs of response, nor that any costs incurred have been consistent with the national contingency plan. Therefore, even if the provisions of the Act are deemed to be in some way relevant to the Levin Metals complaint, see Exhibit B attached to the complaint, such does not establish federal subject matter jurisdiction.

Thus, because only state claims are currently before the court, the court will dismiss the Levin Metals complaint for lack of federal subject matter jurisdiction. See Wren v. Sletten Const. Co., 654 F.2d 529, 536 (9th Cir.1981) (per curiam) (“[w]hen the state issues apparently predominate and all federal claims are dismissed before trial, the proper exercise of discretion requires dismissal of the state claim[s]).” Furthermore, the court remands the Levin Metals state suit back to the Contra Costa Superi- or Court, so that the state claims may be pursued in the forum and on the same complaint that Levin Metals selected prior to Parr-Richmond’s removal to this court.

V. ORDER

In accordance with the foregoing, it is hereby ordered that:

(1) Prentiss’ motion to dismiss Parr-Richmond’s counterclaim in Case No. C-84-6273-SC and complaint in Case No. C-84-6324-SC, for failure to state compliance with 42 U.S.C. § 9607(a)(4)(B), is granted; and

(2) the Levin Metals complaint in Case No. C-84-6273-SC is dismissed for lack of federal subject matter jurisdiction, and is remanded to the Contra Costa Superior Court.


author: LOUIS H. POLLAK, District Judge.

text:
    Delores CARROLL, Administratrix of the Estate of Henry Carroll and Delores Carroll in her own right and Gladys Johnson v. Adrian COLON.
    Civ. A. No. 84-3408.
    United States District Court, E.D. Pennsylvania.
    May 20, 1985.

      Ivan J. Feiner, Coco, Feiner & Citron, P.C., Philadelphia, Pa., for plaintiffs.
    Edwin F. McCoy, LaBrum and Doak, Philadelphia, Pa., for defendant.
   MEMORANDUM

LOUIS H. POLLAK, District Judge.

On July 16, 1984, plaintiffs Delores Carroll, the widow of Henry Carroll and the administratrix of his estate, and Gladys Johnson filed a suit in this court against Adrian Colon. Federal jurisdiction was alleged on the basis of diversity of citizenship — plaintiffs being citizens of Pennsylvania while defendant is a citizen of New Jersey. The complaint alleges that Henry Carroll and Gladys Johnson were injured on July 17, 1982 when the defendant’s car struck the vehicles which they were driving. Gladys Johnson sought to recover directly for her injuries while Delores Carroll brought suit in her capacity as administratrix of Henry Carroll’s estate to recover the damages which he could have recovered for his injuries had he survived to bring suit. Delores Carroll also sought to recover expenses which she had incurred as a result of Henry Carroll’s injuries and death.

The complaint was served on defendant on October 29, 1984 and defendant filed a motion to dismiss the complaint on November 19, 1984. The motion contended that the complaint had failed adequately to allege a claim under either the Pennsylvania Wrongful Death Act or the Survival Act for the injuries to Henry Carroll. The motion did not address the sufficiency of the claims asserted by plaintiff Gladys Johnson but the attached proposed order would have dismissed the entire complaint.

Plaintiffs did not respond to this motion until January 31, 1985. On that same day, a status conference was held in this case at which time the parties were informed that the motion to dismiss would be granted and that plaintiffs would have until February 5, 1985 to file an amended complaint which corrected the substantial pleading defects identified by defendant’s motion. This ruling was memorialized in an Order dated February 1, 1985.

Plaintiffs filed an amended complaint on February 4, 1985. This was met by another motion to dismiss. Plaintiffs responded to that motion and defendant has since filed a reply brief.

The current motion to dismiss contends (1) that the pleading defects identified in the first complaint have not been corrected fully in the amended complaint and (2) that the statute of limitations has expired on plaintiffs’ claims because the limitations period was not tolled by the filing of the original complaint.

Defendant first argues that the amended complaint is inadequate in that it confuses the elements of a claim for wrongful death and those for a survival action and in that it fails to allege certain essential elements of such claims. Pennsylvania recognizes two distinct causes of action which may accrue following the death of an individual when such death is caused by the wrongdoing of another. A wrongful death claim may be brought by the spouse, children or parents of the deceased to recover “for the death of an individual caused by the wrongful act or neglect or unlawful violence of another.” 42 Pa.Cons.Stat.Ann. § 8301. A survival action may be brought by the administrator of the estate of the deceased to recover the damages which the decedent could have recovered for injuries sustained by him during his life. 42 Pa.Cons.Stat.Ann. § 8302.

Count I of the amended complaint appears to join these two types of claims into a single count. It contains allegations of injury to Henry Carroll which caused him to lose earnings and earning capacity and which caused him to sustain pain and suffering. Such damages are only recoverable in a survival action. In addition, Count I contains claims for recovery of damages suffered by the decedent’s estate. Those damages are alleged to have accrued as a consequence of his death and would generally be recoverable solely through a wrongful death action.

It appears, however, that the allegations of Count I contain all of the elements necessary for a survival claim. For example, that count alleges injuries to Henry Carroll caused by an automobile accident which was allegedly the result of defendant’s negligence. The complaint also states that no action was brought to recover for these injuries during Henry Carroll’s life. Furthermore, the complaint cites to the Pennsylvania Survival Act as the basis for the cause of action alleged in Count I. Therefore, I conclude that although Count I contains allegations which are unnecessary to a valid survival claim, it contains sufficient allegations to state such a claim and should not be dismissed merely because it includes extraneous allegations.

But the amended complaint does not contain allegations sufficient to state a claim under the Wrongful Death Act. In particular, the amended complaint fails to allege that Henry Carroll’s death (as opposed to the injuries occasioned by the automobile accident) was in any manner caused by the alleged negligence of defendant. Consequently, I will dismiss the amended complaint to the extent it seeks to recover under the Pennsylvania Wrongful Death Act. Hereinafter, the allegations in Count I will be treated solely as allegations in support of a survival claim and only such damages as would be recoverable in a survival action will be available to plaintiffs under this count.

Defendant's motion also contends that the statute of limitations bars all of the claims set forth in the amended complaint. In support of this position, defendant cites to the “well settled” principle that a complaint dismissed without prejudice is to be treated as if it had never existed for purposes of the statute of limitations. E.g., Dupree v. Jefferson, 666 F.2d 606 (D.C.Cir.1981); Moore v. St. Louis Music Supply Co., Inc., 539 F.2d 1191 (8th Cir.1976); Sabo v. Parisi, 583 F.Supp. 1468 (E.D.Pa.1984); DiSabatino v. Mertz, 82 F.Supp. 248 (M.D.Pa.1949). Therefore, defendant argues, since the claims presented through the survival action accrued on the date that Henry Carroll was injured by defendant’s allegedly negligent actions— July 17, 1982 — the filing of the amended complaint on February 4, 1985 was the first date on which the statute of limitations would have been tolled. Because this date is more than two years after the date of the injury to Henry Carroll, defendant asserts, the survival claim is barred by the' statute of limitations. 42 Pa.Cons.Stat.Ann. § 5524(2) (two-year statute of limitations for personal injury action).

Plaintiffs’ response to the most recent motion to dismiss does not address this aspect of defendant’s motion. However, dismissal of a claim on the ground that the statute of limitations has expired should not occur unless it is clear from the face of the complaint that the statutory period has elapsed and that there was no basis for tolling the running of the limitations period.

The Court of Appeals for the Third Circuit recently addressed the issue raised by defendant’s motion in Cardio-Medical Associates v. Crozer-Chester Medical Center, 721 F.2d 68 (1983). In an opinion by then Chief Judge Seitz, the court concluded that an amended complaint filed after a Sherman Act claim was dismissed without prejudice due to deficiencies in its jurisdictional allegations could not present a jury demand when no jury demand was made in the original complaint. The court noted:

a well recognized principle that a statute of limitations is not tolled by the filing of a complaint subsequently dismissed without prejudice. As regards the statute of limitations, the original complaint is treated as if it never existed.

721 F.2d at 77.

However, the court distinguished their case from the cases in which that rule had been applied. In the case before the court, the order of the district court dismissing the Sherman Act claim without prejudice specifically stated that the plaintiffs would have sixty days in which to file an amended complaint which corrected the deficiencies noted.

The court found that such an order was not final and that this lack of finality was apparent from the procedures followed when the new complaint was filed.

The amended complaint asserted identical claims under the Sherman Act. It was given the same docket number as the original complaint, and it was assigned to the same district judge. No new filing fees were paid, and no new summons was served on the defendants.

721 F.2d at 77. In contrast, those cases in which courts have found the dismissal of a complaint to nullify the original complaint for purposes of the statute of limitations concerned dismissals which constituted final orders. For example, many of them involved (a) voluntary dismissal of a complaint without prejudice by a plaintiff, or (b) a complaint dismissed in a state forum which was renewed in a federal court, or (c) a substantial period of time between the dismissal and the amendment. The distinction between final and nonfinal dismissals was deemed significant by the Court of Appeals which concluded that the rule that the limitations period is not tolled by the filing of a complaint which is later dismissed is not to be applied in cases where there was no final order of dismissal. Id.

Although this conclusion was not essential to the ruling in Cardio-Medical Associates, it is quite persuasive authority that the general principle relied upon by defendant should not be applied in the present case. The distinction which the court discussed between final and nonfinal orders of dismissal has significant and logical force. While a final order dismissing a case without prejudice could result in a significant period of delay prior to the filing of a new action, a nonfinal order such as the order in the present case and in Cardio-Medical Associates establishes a time limit within which the complaint must be amended at pain of the dismissal becoming final. Therefore, in the latter case, the plaintiff may not indefinitely extend the limitations period by filing a complaint which is, in some manner, deficient and will therefore be dismissed.

Upon review of the decisions which have applied the principle discussed in defendant’s motion to dismiss and the analysis of this issue in Cardio-Medical Associates, I conclude that the statute of limitations should be deemed tolled by the filing of a complaint which is later dismissed in a nonfinal order and amended within the time for amendment provided in such an order. Consequently, the statute of limitations in the present case would have been tolled on July 16, 1984, when the original complaint was filed which is within the two-year limitations period from the date of the alleged automobile accident.

In an accompanying Order, I will deny defendant’s motion to dismiss to the extent it seeks to dismiss the survival action for the injuries sustained by Henry Carroll and the direct action by Gladys Johnson.

      . The original complaint suggests that Henry Carroll was driving one vehicle while Gladys Johnson was driving another. However, the amended complaint states that Gladys Johnson was a passenger in the automobile driven by Henry Carroll.

      . This statute of limitations would apply to the personal injury claims of Gladys Johnson as well. Although the February 1, 1985 order stated that the entire complaint was dismissed, the claims of Gladys Johnson were not challenged in the first motion to dismiss. Therefore, those claims should not have been dismissed on February 1. Accordingly, defendant’s statute of limitations argument should not apply to her claims.


author: La PLATA, District Judge.

text:
    Norman Z. FLICK, Plaintiff, v. R.A. LARUE and John Nevins, Defendants.
    No. 84-CV-4516-DT.
    United States District Court, E.D. Michigan, S.D.
    May 20, 1985.

      Karl Overman, Asst. U.S. Atty., Detroit, Mich., for defendants.
    Norman Z. Flick, pro se.
   OPINION AND ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

La PLATA, District Judge.

On September 28, 1984, Plaintiff, Norman Z. Flick, an inmate at Milan Federal Correctional Institute, filed a civil rights lawsuit against Defendants, R.A. LaRue and John Nevins. On January 11, 1985, Defendants filed a motion for summary judgment, under Fed.R.Civ.P. 56(b), premised on an affirmative defense of qualified immunity.

The gravamen of Plaintiff’s complaint is that he was wrongfully placed in administrative segregation at the prison for a two-day period in August, 1984. Defendant LaRue, a correctional lieutenant, having considered information that Plaintiff interfered with the orderly operation of the prison by encouraging inmates not to comply with the urine surveillance program, ordered that Plaintiff be confined in administrative detention.

After conducting an investigation, Lieutenant LaRue concluded that insufficient evidence existed to support a claim that Plaintiff transgressed a disciplinary regulation. Thereupon, he ordered that Plaintiff be released from the administrative segregation.

Regarding Plaintiff’s claim against the second Defendant, John Nevins, a captain at the Correctional Institute, Plaintiff asserts that Nevins refused to speak to him concerning the administrative detention.

Under 42 U.S.C. § 1983, a party deprived of a federal constitutional or statutory right by a public official may seek redress in federal court. The civil rights statute serves three functions: (1) it operates to deter public officials from violating citizens’ constitutional rights; (2) it affords compensation to victims of unconstitutional official behavior; and (3) it serves as a vehicle for the development of federal constitutional rights. Carey v. Piphis, 435 U.S. 247, 253-57, 98 S.Ct. 1042, 1046-49, 55 L.Ed.2d 252 (1978).

In a lawsuit based on the foregoing statute, a public official may invoke the affirmative defense of qualified immunity, which shields an official who acted in good faith from liability. Gomez v. Toledo, 446 U.S. 635, 640, 100 S.Ct. 1920, 1923, 64 L.Ed. 572 (1980); Wright & Miller, Federal Practice and Procedure 3654-3659 (1976). To be successful in his employment of the qualified immunity defense, a defendant-official must establish that he acted in good faith, namely, that he reasonably believed that his actions were lawful. Pierson v. Ray, 386 U.S. 547, 555, 87 S.Ct. 1213, 1218, 18 L.Ed.2d 288 (1967).

In Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982), the Supreme Court modified the structure of the qualified immunity defense. Stating that bare allegations of malice are inadequate to prevent a summary judgment in favor of a public officer, the Court held that where a government official in performing a discretionary function has not violated clearly established statutory or constitutional rights of which a reasonable person would be aware, that official can defeat a constitutional tort claim by interposing the qualified immunity defense. Id. at 818, 102 S.Ct. at 2739. Thus, a governmental official can prevail on a motion for summary judgment if he shows that a reasonable person would not have known that the official’s actions were in violation of the plaintiff’s constitutional rights.

Applying the law of governmental immunity to the case at bar, this Court concludes that summary judgment should be granted in favor of Defendants. When he placed Plaintiff in administrative detention for a limited period of time while investigating an allegedly serious violation of the prison’s rules, Lieutenant LaRue did not violate a clearly established constitutional or statutory right of Plaintiff. Similarly, Captain Nevins’ alleged refusal to discuss the events with Plaintiff does not amount to a cognizable cause of action under 42 U.S.C. § 1983.

Plaintiff further claims that the Defendants violated various prison policies by placing him in administrative detention. Even if Plaintiffs averments in this regard are accurate, they are insufficient to overcome the defense of qualified immunity. This issue recently was decided adversely to Plaintiff in Davis v. Scherer, 468 U.S. -, -, 104 S.Ct. 3012, 3019-20, 82 L.Ed.2d 139, 149 (1984), where the Court held:

On its face, appellee’s reasoning is not without some force. We decline, however, to adopt it. Even before Harlow [v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982)] our cases had made clear that, under the “objective” component of the good faith immunity test, “an official would not be held liable in damages under 1983 unless the constitutional right he was alleged to have violated was ‘clearly established’ at the time of the violation.” Officials sued for constitutional violations do not lose their qualified immunity merely because their conduct violates some statutory or administrative provision.

Plaintiff’s complaint discloses that the Defendant LaRue exercised discretionary, rather than ministerial, functions in placing him in administrative detention while investigating an apparent violation of the disciplinary rules. The allegations against Captain Nevins are, at best, frivolous.

Plaintiff has failed to demonstrate that Defendants violated a clearly established constitutional or statutory right of his in their undertaking of discretionary acts regarding the incident. Additionally, this Court determines, as a matter of law, that Defendants acted in good faith. Plaintiff was advised of the nature of the charges against him. In view of the patently insufficient allegations in Plaintiff’s complaint, this Court grants Defendants’ motion for summary judgment.

IT IS HEREBY ORDERED that Defendants’ motion for summary judgment is granted.

Action Dismissed.


author: GENE CARTER, District Judge.

text:
    FISHERMEN’S NET, INC., et al., Plaintiffs, v. Stephen R. WEINER, et al., Defendants.
    Civ. No. 84-0347 P.
    United States District Court, D. Maine.
    May 21, 1985.

      Jeffrey D. Curtis, Pierce, Atwood, Scribner, Allen, Smith & Lancaster, Portland, Me., for plaintiffs.
    Michael A. Nelson, Jensen Baird Gardner & Henry, Portland, Me., for defendants.
   ORDER DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

GENE CARTER, District Judge.

Plaintiffs in this case operate a seafood restaurant in space leased from Defendants at the Maine Mall. In addition to leasing space for their business, Plaintiffs also agreed under the lease to pay for, and did pay for, common area seating in the Food Court of the Mall, promotional and advertising services, and decorations for the Mall. In Counts I, II and III Plaintiffs seek declaratory relief, rescission of the lease and damages, alleging that Defendants violated various provisions of both the Maine Business Opportunities Act, 32 M.R.S.A. §§ 4691-4700-B, and the Maine Unfair Trade Practices Act, 5 M.R.S.A. §§ 206-214.

Defendants moved for summary judgment on Counts I and III on the grounds, inter alia, that the Maine Business Opportunities Act does not apply to shopping center leases which also include charges for services and other items. In his Recommended Decision, the United States Magistrate indicated, without deciding, that he thought the Act did not apply. Instead, he determined that even if the Act did apply, it provides no private right of action for Plaintiffs, either express or implied. Thus, he concluded that no damages are available. Because Plaintiffs have no private right of action under the Business Opportunities Act, the Magistrate also found that they were not entitled to declaratory relief under that statute. The Magistrate, therefore, recommended that summary judgment be granted in favor of Defendants on Counts I and III. He also found that Plaintiffs had no private right of action under the Maine Unfair Trade Practices Act and was, therefore, not entitled to the declaratory relief sought in Count II. The case is before the Court on Plaintiffs’ objections to the Recommended Decision of the Magistrate.

The Business Opportunities Act requires all sellers of business opportunities, except those maintaining a permanent place of business in Maine, to obtain either a surety bond or an escrow account of at least $30,000. 32 M.R.S.A. § 4695. Section 4695 also provides that any person who is damaged by a violation of any provision of this chapter may bring an action against the bond or escrow account to recover damages suffered. Defendants in this case are exempt from the bond or escrow requirement because they maintain a permanent place of business in Maine. The Magistrate found that the statute provided an express right of action only against Defendants who have established an escrow account or a surety bond. He declined to imply a right of action when no bond or escrow is available, finding an already comprehensive remedial scheme and no plain language or legislative history suggesting that the Legislature intended such an action.

The Magistrate correctly performed his analysis of the private right of action issue. See Larrabee v. Penobscot Frozen Foods, Inc., 486 A.2d 97, 101 (Me.1984). The result he reached, however, makes little sense when examined in the context of the whole statute, for it distinguishes between plaintiffs on no other basis than whether or not plaintiff's seller happens to have its permanent place of business in Maine, allowing damages only to those plaintiffs suing out-of-state defendants for injuries caused by violation of the Act. The Court suspects that the statute is poorly drafted. The cognitive dissonance engendered by the Magistrate’s result, however, is enough to prompt the Court to let the Maine courts be the first to construe this as yet unexplained legislation.

Since the Court cannot agree definitively with the Magistrate that there exists no private right of action for plaintiffs like the instant one, who are suing in-state sellers who have not established a bond or escrow, it is necessary to determine whether the Business Opportunities Act applies to shopping center leases which contain provisions for equipment and services in addition to the leased space. This, also, is a question which has not yet been addressed by the Maine courts. The language of the statute is ambiguous and the parties strenuously disagree as to the Legislature’s intent in enacting it. Because this issue could have a broad impact, affecting many segments of Maine’s economy, the Court thinks that its resolution is best left to Maine’s highest court.

The Law Court has made clear that certification of questions of Maine law by this Court should be made only on a complete record. See White v. Edgar, 320 A.2d 668 (Me.1974); In re Richards, 223 A.2d 827 (Me.1966). The Court, therefore, will deny Defendants’ Motion for Summary Judgment on Counts I and III. Upon its own motion, or upon request of a party at the close of trial, the Court will consider certifying to the Law Court the question of the applicability of the Maine Business Opportunities Act to shopping center leases like Plaintiffs’. See In re All Maine Asbestos Litigation, 589 F.Supp. 1571 (D.Me.1984). If necessary at that time, the Court will also ask the Law Court to determine whether a private right of action exists under that statute against in-state sellers who do not have the statutorily required surety bonds or escrow accounts.

In Count II Plaintiffs seek a declaratory judgment that Defendants have violated the Unfair Trade Practices Act. The Magistrate found that Plaintiffs were not entitled to declaratory relief because they had no private right of action under that statute. Plaintiffs argue that declaratory relief is available because they have a common law right to rescind a contract that is void, and that their lease with Defendants is void because it was effected in violation of the statute. In seeking to rescind the lease with Defendants as void, Plaintiff has alleged a protectable interest sufficient as the basis for declaratory relief. In Lehigh v. Pittston, 456 A.2d 355 (Me.1983), the Law Court affirmed a declaratory judgment that an option agreement was null and void, basing its affirmance on the grounds that the agreement both violated a federal statute and contravened public policy. See also A.S. Abell Co. v. Chell, 412 F.2d 712 (4th Cir.1969). Whether or not Defendants conduct actually violated the Unfair Trade Practices Act is a genuine issue of material fact. Thérefore, summary judgment is inappropriate on this count.

Accordingly, on de novo review of the Magistrate’s action, it is ORDERED that Defendants’ Motion for Summary Judgment on Counts I, II and III be, and is hereby, DENIED.

So ORDERED.

      . To the extent that Count II seeks declaratory relief based on the Business Opportunities Act and only derivatively on the Unfair Trade Practices Act, it is first necessary to know whether the Business Opportunities Act applies to leases of this sort. Therefore, summary judgment on this theory, too, must be denied and resolution of the issue of the availability of the requested declaratory relief must await certification of the predicate questions to the Law Court.


author: LUONGO, Chief Judge.

text:
    John E. WASHINGTON v. Margaret M. HECKLER, Secretary of Health and Human Services.
    Civ. A. No. 82-3712.
    United States District Court, E.D. Pennsylvania.
    May 22, 1985.

      James M. Lafferty, David A. Searles, Philadelphia, Pa., for plaintiff.
    Edward T. Ellis, Asst. U.S. Atty., Philadelphia, Pa., for defendant.
   OPINION

LUONGO, Chief Judge.

This case is before me on remand from the Third Circuit Court of Appeals’ decision in Washington v. Heckler, 756 F.2d 959 (3d Cir.1985). Pursuant to the court of appeals’ mandate, I must now determine the “appropriate fee” to be paid to plaintiff’s counsel. Id. at 968. In addition to plaintiff’s original attorney’s fee petition for time spent litigating the underlying merits of the case (the “original petition”), plaintiff has filed a supplemental motion for fees and costs in connection with his appeal of my earlier attorney’s fees decision (the “supplemental petition”). I conclude that plaintiff’s request for $2,118.75 accurately reflects the reasonable value of services rendered in the merits litigation. Because I conclude that plaintiff’s supplemental motion is properly addressed to the court of appeals, I will dismiss that motion as premature.

I.

This Social Security case was originally filed on August 26, 1982. I granted plaintiff’s motion for summary judgment on May 12,1983, and remanded the matter for reinstatement of plaintiff’s SSI benefits. Plaintiff then filed a motion for attorney’s fees under the Equal Access to Justice Act “EAJA.” I denied the motion on November 9,1983, 573 F.Supp. 1567. The court of appeals reversed that decision on March 6, 1985. Now before me are plaintiff’s original motion for attorney’s fees in the amount of $2,118.75, and his supplemental motion for fees and costs.

II.

With respect to plaintiff’s original fee request, the Secretary contests only charges for five hours devoted to a motion filed by plaintiff before I granted his motion for summary judgment. In that motion, plaintiff requested that the Secretary be ordered to pay interim benefits for the length of time necessary to produce the administrative record. The Secretary argues that fees should not be awarded for that activity because the motion was denied as moot. Plaintiff points out, however, that the motion for interim benefits during remand was caused by the Secretary’s temporary inability to locate plaintiff’s file. Indeed, the government first requested that the case be remanded for reconstruction of the agency’s file. I conclude that an award of fees is proper as to the five hours spent on the remand and interim benefits motion. The subject matter of the motion, a response to the government’s earlier motion, was closely related to the merits of the dispute, and the motion was reasonably advanced after the Secretary had failed to produce the administrative record. I will therefore approve plaintiff’s original fee request of $2,118.75.

III.

Plaintiff’s supplemental request for fees in connection with appellate representation presents a more difficult question. The Secretary argues that I should decline to award fees because (1) the court of appeals is the appropriate court to rule upon a request for fees in connection with appellate representation and (2) on the merits plaintiff’s request for appellate counsel fees should be denied.

The EAJA does not specify whether the district court or court of appeals should entertain fee requests in connection with appellate representation. I must therefore examine other sources to determine whether the court of appeals would require that district courts consider such petitions in the first instance.

As the Secretary points out, strong evidence that the court of appeals would give initial attention to fee requests is found in Rule 27 of the Third Circuit’s Rules. Rule 27 establishes a procedure by which prevailing parties can make their EAJA request directly to the appellate court. The Rule requires that fee petitions contain a detailed statement of the “nature and extent of services rendered,” a declaration of time and expenses, and a statement of the position of the United States which the prevailing party claims was not substantially justified. 3d Cir.R. 27(2). It is thus apparent from the very text of the Rule that the court of appeals will itself be determining the appropriate fee in some cases before it.

Plaintiff contends, however, that Rule 27 should be interpreted as a mechanism for assessing fees in cases in which the appellate court reviews directly the merits of an administrative agency action. In such cases, plaintiff argues, there is no intervening action in the district court, and thus it would be inappropriate to “remand” a related fee request. Plaintiff contends that in cases where, as here, the merits were initially decided by the district court, the Third Circuit’s practice has been to remand the entire fee petition to the district court to fix an award for both district court and appellate representation. See, e.g. Prandini v. National Tea Company, 585 F.2d 47, 54 (3d Cir.1978).

The Secretary also argues that the court of appeals should initially consider plaintiff’s appellate EAJA petition because the appellate court is in a superior position to determine the appropriateness and amount of an award of fees. In this regard, the Secretary reiterates that the EAJA mandates an award of fees only where the government’s position was not “substantially justified.”

Some support for the Secretary’s latter argument is found in the Eighth Circuit’s decision in Cornella v. Schweiker, 741 F.2d 170 (8th Cir.1984). In Cornelia, the court denied a petition for appellate attorney’s fees in connection with a successful appeal of a district court’s denial of an EAJA petition. See Cornella v. Schweiker, 728 F.2d 978 (8th Cir.1984), rev’g Cornella v. Schweiker, 553 F.Supp. 240 (D.S.D.1982). Although the court did not specifically address the appropriate forum for resolution of the petition, it is evident from the opinion that the appellate court — indeed the same panel of judges — considered the request in the first instance.

In my view, the appropriate court for resolution of an EAJA attorney’s fees petition is the court before which the attorney performed the work sought to be recompensed. Although the court of appeals has, in other contexts, assigned to district courts the task of calculating the reasonable value of appellate representation, an award of fees under the EAJA reflects a judgment that the government’s position was not substantially justified. For a district court to make such a determination, the district judge would often have to assess the merits of the government’s arguments on appeal. This, in turn, would require a review of appellate briefs which are not generally made part of the district court file, and then an evaluation of those briefs in light of the court of appeals’ opinion. Such a process would involve needless duplication of the court of appeals’ consideration of the government’s briefs, and it would require the district court to search the court of appeals’ opinion for indicia of the appellate panel’s evaluation of the position taken by government attorneys.

The case at bar well demonstrates the wisdom of appellate court treatment of EAJA petitions relating to work performed on appeal. Although unanimous in its judgment, the appellate panel that decided this case set forth its rationale in a majority and two concurring opinions. Whether the Secretary’s appellate position was substantially justified in the view of the panel’s opinions should be decided by the court of appeals. I am satisfied that this disposition of plaintiff’s supplemental motion will not prejudice his rights: I am informed by counsel that plaintiff has submitted an EAJA petition to the court of appeals. Should the court of appeals decide that I should consider the petition in the first instance, the appellate court can simply refer that petition to this court.

In short, I find that plaintiff’s original request for attorney’s fees was reasonable, and I will approve it. I hold that plaintiffs EAJA petition for appellate representation should be addressed to the court of appeals. I will therefore dismiss as premature plaintiff’s supplemental petition for fees and costs.

      . 3d Cir.R. 27(2) provides:
      Contents of Application
      An application to this Court for an award of fees and other expenses pursuant to 28 U.S.C. § 2412(d) shall be filed within thirty (30) days after the entry of final judgment in the action and shall identify the applicant and the proceeding for which the award is sought. The application shall show that the party seeking the award is a prevailing party and is eligible to receive an award.
      The application shall also show the nature and extent of services rendered and the amount sought, including an itemized statement from any attorney representing the party or any agent or expert witness appearing on behalf of the party, stating the actual time expended and the rate at which fees are computed, together with a statement of expenses for which reimbursement is sought. The specific position of the United States which the party alleges was not substantially justified shall be identified. The United States shall reply to the application within thirty (30) days.

      . Plaintiff also seeks interest on the amount awarded. As authority for that request, plaintiff cites only precedent authorizing an award of post-judgment interest. See Institutionalized Juveniles v. Secretary of Public Welfare, 758 F.2d 897 (3d Cir.1985). See also 28 U.S.C. § 1961. Until the filing of the order accompanying this opinion, however, no judgment as to attorney’s fees had been entered in plaintiff’s favor.