author: LATCHUM, Senior District Judge.

text:
    Kay A. CANDELORA, Plaintiff, v. Harold A. CLOUSER, Jr., and Merrill, Lynch, Pierce, Fenner & Smith, Inc., Defendants.
    Civ. A. No. 83-419-JLL.
    United States District Court, D. Delaware.
    Oct. 28, 1985.
    James F. Kipp of Trzuskowski, Kipp, Kelleher & Pearce, Wilmington, Del., and Erv D. McLain of Maloney & Danyi, Bethlehem, Pa., of counsel, for plaintiff.

      Walter L. Pepperman, Jr., of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for defendants.
   OPINION

LATCHUM, Senior District Judge.

This diversity action is presently before the Court on a renewed motion for summary judgment by the defendants, Harold A. Clouser, Jr. (“Clouser”), and his employer, Merrill, Lynch, Pierce, Fenner & Smith, Inc. (“Merrill Lynch”), pursuant'to Fed.R. Civ.P. 56. The plaintiff, Kay A. Candelora (“Candelora”), alleges fraud perpetrated by Clouser in concert with a certain James S. Ryan (“Ryan”) to defraud her of $110,000. (Docket Item [“D.I.”] 1.) She seeks judgment for that amount as well as damages for physical and emotional pain and suffering, and medical expenses caused by the alleged fraud, negligence and intentional infliction of emotional distress arising out of Candelora’s opening and maintenance of an account at Merrill Lynch. Ryan, the key figure in this case; actively appropriated and absconded with plaintiffs assets, but has been dismissed for lack of service. This Court previously denied defendant’s first motion for summary judgment on February 20, 1985 (D.I. 41), because of possible inferences arising from the relationship between Ryan and Clouser. Because the production of further evidence requested by the Court and further briefing by the parties has resolved the Court’s concern, the defendant’s renewed motion for summary judgment will be granted.

BACKGROUND

Plaintiff Candelora is a forty-seven year old woman who lives in Shamokin, Pennsylvania. (D.I. 25, 5-6.) Although plaintiff dropped out of high school in her junior year due to a “nervous condition,” she subsequently passed a GED test and received her high school diploma in 1970. (Id. at 14-15.) About a year after she left high school, plaintiff performed secretarial work for approximately two years in a department store in Shamokin. (Id. at 9-11.) After that job, she worked at different times as a shirt presser in an Arrow shirt factory in Shamokin, as an aide in the diet department at the Danville State Hospital in Dan-ville, Pennsylvania, and as a receptionist for the Pennsylvania State Welfare Department at its office in Shamokin. (Id. at 10-13.)

Plaintiff was married from 1958 to 1967. (D.I. 25, 6.) She has two children, ages 23 and 21, both of whom are currently in the Armed Services. (Id. at 7, 37.) In 1964 plaintiff had a nervous breakdown due in part to the deteriorating condition of her marriage. (Id. at 30.) As a result of the breakdown, she was hospitalized for some time at the Allentown General Hospital and received psychiatric care from a Dr. C.D. Elliott. (Id. at 30-31.) Plaintiff has remained under Dr. Elliott’s care on an off- and-on basis since 1964. (Id. at 32.) She was again hospitalized for approximately three weeks by Dr. Elliott in 1977 or 1978 at the Bethlehem Pennsylvania Hospital for depression. (Id. at 32-33.) Plaintiff was last hospitalized in 1982 in Charlottesville, Virginia, under Dr. Elliott’s care for approximately six weeks, again due to depression. (Id. at 33-35.)

In 1979, Candelora received $215,000 worth of bearer bonds as a gift from a Frederick E. Lark. (D.I. 25, 17-18.) Mr. Lark, the attorney who handled Candelora’s 1967 divorce, gave the bearer bonds as well as some gold coins and a $2,000 gold ring to Candelora for the “security” of plaintiff and her family. (Id. at 18.) Although Mr. Lark had been a friend of Candelora’s for some time, his generosity resulted in controversy. (Id. at 20-21.) Mrs. Lark demanded the return of the gifts, and there was a suggestion that criminal charges were going to be filed against Candelora in connection with these gifts. (Id. at 23.) However, no litigation ever resulted, and Candelora did not return any portion of the gifts to the Larks. Mr. Lark was institutionalized in a nursing home for a period of time after he gave Candelora the gifts. (Id. at 20-22.) In June, 1984, at the age of seventy, Mr. Lark died. (Id. at 125.)

In April 1980, Candelora, on the advice of her attorney, Thomas J. Maloney, took the bonds to the First National Bank of Palmerton (“Palmerton Bank”) (D.I. 25, 43-44), and instructed the bank to sell the bonds and establish a Certificate of Deposit (“C.D.”) with the proceeds. (Id. at 79-81; D.I. 35A at A-125, 128-29.) On May 9, 1980, Candelora purchased a $110,000 C.D. with interest in excess of $900 a month. (D.I. 25, 65.) Because Candelora had left her job with the Department of Welfare when she received the gift from Lark in 1979, the interest from the C.D. was her only source of income. (Id.)

In May of 1980, Candelora purchased a new Oldsmobile from an automobile dealer in Ashland, Pennsylvania. (D.I. 25, 47.) Approximately six weeks later, she returned the car to the dealer because it had been the object of vandalism. (Id. at 48.) Apparently, this vandalism was one incident in an ongoing series of events that began in 1978 and continued into 1980. (Id. at 35.) Candelora believed that a former boyfriend was committing the vandalism. (Id. at 26-27.)

Candelora spoke to the Oldsmobile car salesman about the vandalism she had experienced, and he suggested that she discuss the matter with a private detective named James S. Ryan (“Ryan”) from the Francis E. Ryan Agency in York, Pennsylvania. (D.I. 25, 49-50.) In the last week of June 1980, Candelora telephoned Ryan and subsequently hired Ryan to find out who was vandalizing her car. Candelora gave Ryan a $500 retainer and agreed to pay him $15 per hour for his services. (Id. at 52-53.)

Ryan began investigating on July 4, 1980. Ryan spent two weeks at Candelora’s house, “standing in the front door” and watching her cars, but he failed to discover anything concerning the vandalism. At that point, Candelora, having decided that she could no longer afford to pay Ryan, terminated his services and paid him $2,500. (D.I. 25, 181-82.) Approximately a week and a half later, Ryan telephoned Candelora “to see if everything was all right.” (Id. at 55.) Candelora told him that she had found “some tacks sprinkled around outside.” (Id.) Ryan then began stopping by to see Candelora on a regular basis “to check on things.” Ryan also began to ask Candelora a lot of questions which kept her constantly afraid. Ryan soon became Candelora’s “confidant and advisor.” She saw him on a daily basis, and in August 1980, she became personally and sexually involved with him. (Id. at 57.)

In December 1980 or January 1981, Ryan suggested to Candelora that she should cash her C.D. to prevent the Larks from getting the funds and in order to make more money. (D.I. 25, 71.) On February 9, 1981, Ryan went with Candelora to Palmerton Bank where she cashed the $110,000 C.D. (Id. at 82-83.) A $5,575 penalty was assessed against her for cashing the certificate early, leaving a balance of $104,425. Candelora received these pro-' ceeds in the form of a cashier’s check for $64,425 and $40,000 in cash which was handed to Mr. Ryan. (Id. at 83-84.) Candelora and Ryan then drove with the proceeds to Wilmington, Delaware, to the Wilmington Trust Company on February 10, 1981, where Candelora opened a checking account solely in her name and deposited into that account (a) the endorsed Palmer-ton cashier’s check for $64,425 together with cash of $75 for a total of $64,500, and (b) a second deposit of $200 in cash. (D.I. 53.) Thus, on February 10, 1981, Candelora had deposited only $64,700 with Wilmington Trust.

Afterwards, Candelora and Ryan went to the offices of Merrill Lynch in Wilmington. Ryan went into the offices alone while Candelora waited outside the building because of Ryan’s warning that she might be recognized. (Id. at 88.) This scenario would become routine. Candelora also testified at deposition that she gave Ryan a check drawn to cash for the full amount which she had deposited in Wilmington Trust. (Id. at 88-89.) Plaintiff’s recollection was again faulty as she did not draw a check for cash in the amount of $64,000 from her Wilmington Trust account until February 24, 1981. (D.I. 53.)

When Ryan entered the offices of Merrill Lynch, he met with Harold A. Clouser, a stockbroker employed by Merrill Lynch. (D.I. 36.) Ryan had met Clouser in 1980 because their wives had gone to school together. (D.I. 25, 135.) Between 1980, when Clouser first met Ryan, and February 1981, when Ryan came to see Clouser at Merrill Lynch’s offices, Clouser had seen Ryan five or six times on social occasions. As a result of those contacts, Clouser became aware that Ryan was a private detective who worked for his father’s agency in Pennsylvania. (D.I. 36, 113.) At this February 10 meeting, Ryan told Clouser that Candelora was one of his clients and that Candelora had asked Ryan to open an account for her in her name. Clouser agreed to open a non-discretionary cash account in Candelora’s name.

Although Candelora testified that it was her understanding that the purpose of Ryan’s visit to the Merrill Lynch office on February 10 was to invest the proceeds from the C.D., Ryan only gave Clouser $35,500 to open a Merrill Lynch Ready Asset Account. (D.I. 54, Ex. 7-6.) In addition to deposits in the Ready Asset Account, on that date Ryan also for $340 in cash directed Merrill Lynch to purchase 4,000 shares of Permaloy Corporation for Candelora’s account. (D.I. 54, Ex. 6.) Thus, as of February 10, 1981, a total of $35,850.00 in cash was invested by Ryan with Merrill Lynch in Candelora’s account. (D.I. 54, Ex. 6.)

When Ryan came out of Merrill Lynch’s office, he told Candelora that he had invested the money in an account in her name. (D.I. 25, 94.) They then drove back to Shamokin.

Approximately two weeks later, on February 24, 1981, Candelora by drawing a check to cash withdrew from her Wilmington Trust account $64,000 (D.I. 53), and these proceeds were again turned over to Ryan who on February 25, 1981, deposited only $50,000 of that cash into Candelora’s Merrill Lynch account (D.I. 54, Ex. 6), bringing a total of cash deposits into Candelora’s Merrill Lynch account of $85,840. (D.I. 54, Ex. 6.)

From February 1981 to November 1981, a number of transactions occurred in Candelora’s Merrill Lynch account, each in the same manner. Ryan would contact Clouser and tell him to either purchase or sell a particular stock. In accordance with Ryan’s requests, money was transferred either to or from Candelora’s account. Each request was made in Candelora’s name but through Ryan. Both the transfer of funds to or from the account and any transactions concerning stocks were confirmed to Candelora by means of contemporaneously written transaction slips mailed to Candelora’s home address and by means of the regular monthly statements of Candelora’s general account which were mailed to her residence in Shamokin. (D.I. 54.) That monthly statement contained a complete summary of all of Candelora’s financial transactions during the previous month. (D.I. 36, 54.) In addition, a third, separate monthly statement solely for Candelora’s Ready Asset Account was also sent to her home at the end of each month which showed the account’s beginning balance, the date, the amount of all withdrawals during that month and the ending balance. (D.I. 36, 6; D.I. 54.)

At the beginning of April 1981, Ryan contacted Clouser and told him that Candelora needed $27,000 and that she wished to remove that amount from her Ready Asset Account. (D.I. 36, 5; D.I. 54, Ex. 10.) In accordance with that request, Clouser directed that a check be issued to Candelora in the amount of $27,000.84. (The 84 cents was the balance in Candelora’s general account at that time [D.I. 36, 11 21].) On or about April 2, 1981, Candelora and Ryan drove to Wilmington to pick up the check. (D.I. 25, 112, 133-34.) When they arrived at the Wilmington Merrill Lynch office, Ryan went inside, and once again Candelora waited outside pursuant to the same instructions Ryan had given her when the account was opened. Ryan came out of the office and handed Candelora a Merrill Lynch check made out to her in the amount of $27,000.84. Plaintiff and Ryan immediately went to Wilmington Trust where plaintiff endorsed the check and cashed it. {Id. at 113, 155-56.) Candelora kept $2,000 from the proceeds of that check and gave the rest to Ryan, also following his instructions. {Id. at 114.)

Ryan subsequently made seven other requests on behalf of plaintiff for withdrawals from plaintiffs Ready Asset Account. (D.I. 36, 6; D.I. 54, Ex. 10.) In each case, the requested amount was withdrawn from Candelora’s Ready Asset Account and a Merrill Lynch check was issued to her personally. (D.I. 54.) All checks were made out to Candelora only, and were mailed to Candelora at her home in Shamokin. {Id.) Each of these checks was received by Candelora, personally endorsed, and cashed by her. (D.I. 25, 155, 160-63; D.I. 54, Ex. 13-22.)

After Candelora cashed each of the Merrill Lynch checks, she gave all of the proceeds to Ryan, except for what she needed in order to pay bills. Candelora claimed that she kept only approximately $1,000 per month from the checks that were cashed, or a total of approximately $8,000 or $9,000. In addition, Candelora gave Ryan the diamond ring and gold coins she had received from Mr. Lark. Although she took those items out of a safety deposit box and gave them to Ryan for “safe-keeping,” she does not know what happened to them. (D.I. 25, 182-86.)

Candelora admits that all of the transaction slips, Merrill Lynch monthly account statements and Ready Asset Account statements were addressed to her at her correct home address in Shamokin and that Ryan “now and again” showed her statements from Merrill Lynch with certain items circled on the statement which he attempted to explain to her. (D.I. 25, 108-11, 145, 149.) Candelora also stated that she endorsed the checks from Merrill Lynch which came in the mail. {Id. at 164.)

In the fall of 1981, Candelora’s personal relationship with Ryan deteriorated to the point that it ended in September or October. (D.I. 25, 57.) Candelora became suspicious of Ryan and his dealings with her money. {Id. at 58.) Candelora “realized something wasn’t right [and that] something was going on.” {Id.) These suspicions were confirmed in November 1981 when Ryan, after questions by Candelora concerning her finances and her threats to go to Merrill Lynch, told her that she was “broke.” {Id. at 58.) At that point Ryan actually threw all the Merrill Lynch statements at Candelora.

Until the time when Ryan threw the Merrill Lynch statements at Candelora, she was unaware of Clouser’s last name because Ryan referred to Clouser only as “Harold, Jr.” (D.I. 25, 102.) However, when Candelora looked at some of the Merrill Lynch statements, she discovered Clouser’s last name. {Id.) She then called Clouser and spoke with him for the first time in November 1981 “to see if he could explain what happened,” because plaintiff “didn’t think (she) was broke.” {Id. at 103.) Plaintiff visited Clouser at his Merrill Lynch office; only then did she realize the extent of her loss. Clouser answered all her questions {id. at 119), and was “very upset.” {Id. at 133.) Plaintiff only had Permaloy stock left. (D.I. 35, 2.)

Concerning the period beginning when she met Clouser in November 1981, plaintiff admitted that she had no complaints concerning his performance with respect to her accounts. (D.I. 25, 120-21.) Plaintiff also stated that she “wasn’t doing (her) own thinking” prior to her meeting with Clouser and that Ryan was “doing everything” for her. {Id. at 130, 132.) In fact, Ryan instructed plaintiff — even threatened in some cases — not to call Merrill Lynch. {Id. at 138-39.)

LAW

A. Choice of Law

In a diversity case, a federal court sitting in Delaware must apply the substantive rules of Delaware, Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), including its choice of law rules. Klaxon Co. v. Stentor Electric Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Delaware law governs the disposition of plaintiffs claims against the defendants. The alleged torts occurred in Delaware, where the offices of the defendant are located. Delaware law is well established that the place of wrong controls (lex loci delicti). Friday v. Smoot, 211 A.2d 594 (Del.1965); see Burke v. Elliott, 606 F.2d 375 (3d Cir.1979).

B. Defendants’ Renewed Motion For Summary Judgment

In order to be entitled to a summary judgment, a moving party must demonstrate that there is no issue as to any material fact in the case and is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Adickes v. S.H. Kress & Co., 398 U.S. 144, 156, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). In ruling on this motion, the Court must draw all inferences from the existing record in a light most favorable to the non-moving party. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977).

Although the moving party bears the initial burden on the motion, the non-moving party bears the burden of producing positive, material evidence in support of its allegations and “may not rest upon the mere allegations or denials” of its pleading but must establish specific facts showing the existence of a “genuine issue for trial.” Fed.R.Civ.P. 56(e). “[A] genuine issue means that the evidence must create a fair doubt, and wholly speculative assertions will not suffice.” Jersey Central Power & Light Company v. Township of Lacey, 772 F.2d 1103, 1109 (3d Cir.1985). Although the parties in this case continue to dispute what actually occurred, there must be evidence in the record to support the varying interpretations of the events in this case that will create a “genuine issue.”

C. Plaintiffs Allegations

In her complaint, plaintiff adopts several theories to impose liability on the present defendants, Clouser and Merrill Lynch. It is obvious from all the submissions, however, that Ryan, who is unfortunately no longer a party in this action, is the sole cause of plaintiffs loss. Plaintiff has sought to tie Ryan’s undisputed wrongdoing to Clouser. Questions concerning liability based on fraud ultimately revolve around the nature of the relationship between Clouser and Ryan (D.I. 39, 1), although plaintiff has alleged other torts committed by Clouser alone.

1. Claim of Fraud

Plaintiff first alleges that Ryan acted as Clouser’s agent in defrauding her of the $110,000. The law in Delaware concerning fraud is well settled. As in other jurisdictions, intent must be established for actionable fraud. Harman v. Masoneilan International, Inc., 442 A.2d 487, 499 (Del. Supr.1982). Actionable fraud consists of “a false representation of a material fact knowingly made with intent to be believed to one who, ignorant of its falsity, relies thereon and is thereby deceived.” Id. at 499; Twin Coach Company v. Chance Vought Aircraft, Inc., 163 A.2d 278 (Del. Supr.1960) (citing Restatement [Second] of Torts § 525 (1981)). Fraud may also occur through the deliberate concealment of material facts, or by silence when there is a duty to speak. Stephenson v. Capano Development, Inc., 462 A.2d 1069, 1074 (Del. Supr.1983); Lock v. Schreppler, 426 A.2d 856, 860-61 (Del.Supr.1981).

As a complainant in federal court, plaintiff must state her allegations of fraud, as well as the circumstances constituting the fraud, “with particularity.” Fed.R.Civ.P. 9(b). Intent “may be averred generally.” Id.

Plaintiff simply has not met her burden of demonstrating the existence of a material issue of fraud. Plaintiff offered her first and only affidavit only after defendants made a renewed motion for summary judgment. (D.I. 47.) There, as in her deposition taken by defendants (D.I. 25), plaintiff’s only factual statement was that Clouser and Ryan were “close friends.” (D.I. 47, 2.) Plaintiff also has neglected to take a deposition of Clouser. Apparently, the only evidence of record — the only evidence which plaintiff would be able to introduce at a trial on the merits — would be statements by Clouser and her personal knowledge concerning the relationship of Clouser and Ryan (consisting entirely of statements to her by either Clouser and Ryan). Although offered ample opportunity both during discovery and on motions for summary judgment, plaintiff has offered no evidence whatsoever which could be tested as a matter of credibility, in open court.

Furthermore, plaintiff, in an apparent attempt to meet the pleading requirements under the Federal Rules that the circumstances of the alleged fraud be stated “with particularity,” Fed.R.Civ.P. 9(b), alleged that Ryan in consort with Clouser, induced her to cash in her C.D. (D.I. 1, ¶ 15), and that Ryan, as the agent of Clouser, defrauded plaintiff of her C.D. (Id. at ¶ 22.) Even assuming that plaintiff has pleaded with the requisite specificity the factual circumstances of the alleged fraud, viewing her allegation in the light most favorable to the non-moving party, Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed. 748 (1977), as the Court must on a motion for summary judgment, the evidence and reasonable inference therefrom show the lack of any substance of plaintiff’s claim.

The defendants point out, and plaintiff does not dispute, that the cashing in of the C.D. occurred before the Merrill Lynch account was opened. (D.I. 51, 1.) Plaintiff admitted that she did not have any contact with Clouser or Merrill Lynch at the time she cashed in her C.D. (D.I. 25, 99.) Further, she also admitted she had no contact with either of the defendants in deciding to travel to Wilmington with the proceeds of the C.D. (Id.) The use of some of this money to open the account with Clouser does not create any legitimate inference of involvement by Clouser with the actual cashing in of the C.D. Further, there is no evidence to suggest that Clouser assisted Ryan in any way in defrauding plaintiff of the proceeds from her C.D. Plaintiff offers no substantive testimony or records to suggest any connection of Clouser with Ryan other than her blanket and non-specified allegation of collusion, based on Clouser’s acquaintance with Ryan through their wives. Plaintiff does not spell out the type of conduct, the circumstances or date, of the alleged fraud but rests her case ultimately on her speculative allegation. Most importantly, the money which plaintiff, through Ryan, ordered withdrawn from the Merrill Lynch Ready Asset Account was always drawn and issued in the form of a check by Clouser, in plaintiffs name alone; it was only afterwards, when Ryan himself convinced her to cash the cheek, that the fraudulent acts occurred. Plaintiff points to no communication between Ryan and Clouser from which one could reasonably infer collusion.

Summary judgment in favor of defendants is therefore appropriate on the issue of fraud. As the Third Circuit recently stated, “[ljegal memoranda and oral argument are not evidence and cannot by themselves create a factual dispute sufficient to defeat a summary judgment motion.” Jersey Central Power, at 1109.

2. Intentional Infliction of Emotional Distress

Plaintiff also alleges a claim for intentional infliction of emotional distress. Under Delaware law, the plaintiff must show that the defendants’ intentional conduct was extreme and outrageous and caused plaintiff to suffer severe emotional distress. Avallone v. Wilmington Medical Center, Inc., 553 F.Supp. 931, 938 (D.Del.1982). Plaintiff has produced no evidence to substantiate this claim. Only in November 1981, after the alleged acts had been committed, did plaintiff communicate directly with Clouser for the first time. Moreover, the record contains no evidence that defendants’ conduct in handling plaintiff’s account was either extreme or outrageous. Plaintiff herself agreed that her only complaint is that defendants did not contact her directly before November 1981. (D.I. 25, 169.)

3. Negligence and Breach of Fiduciary Duty

Plaintiff has pleaded the issue of negligence and breach of fiduciary duty on the part of the defendants even less satisfactorily than the issue of fraud. Nevertheless, the Court must determine if there are any inferences on the basis of the whole record which support these claims. Under both theories of liability, Delaware law requires plaintiff to establish a duty and to show that defendant has breached this duty. A court may find liability for negligent nonfeasance where there is an already existing and definite relationship between the parties “of such a character that social policy justifies the imposition of a duty to act.” Murphy v. Godwin, 303 A.2d 668, 674 (Del. Supr.1973) (citing Prosser, The Law of Torts [4th ed.] § 56 at 339). A fiduciary relationship exists “where one person reposes special trust in and reliance on the judgment of another or where a special duty exists on the part of one person to protect the interests of another.” Cheese Shop International, Inc. v. Steele, 303 A.2d 689, 690 (Del.Supr.1973).

Plaintiff, in her Complaint (see Complaint, D.I. 1, ¶ 32), alleged conclusorily that defendants had negligently handled her account, had breached a fiduciary duty and had violated certain sections of the Securities Exchange Act of 1934 (“1934 Act”), 15 U.S.C. § 78j(b) (1982), New York Stock Exchange (“NYSE”) and National Association of Stock Dealers (“NASD”) Rules. The sum of plaintiffs argument is as follows. At her November 1981 meeting with Clouser, Clouser told her that he had been “wrong” in not contacting her and in dealing with Ryan. (D.I. 47, 117.) Neither Clouser nor anyone else at Merrill Lynch personally contacted her with regard to any transaction with Merrill Lynch. (Id. at ¶ 9.) In her November 1981 visit Clouser had told her that he was supposed to have a “signature card” on file for her account but that he did not have such a card. (Id. at 1110.) Further, “numerous of the correspondence and statements” were sent directly to Ryan at his own address, not to plaintiff at her address in Shamokin. (Id. at 1111.)

Defendant admits all of these factual allegations except for the claim that many materials concerning her account were being sent directly to Ryan. The documentary record clearly shows all Merrill Lynch transactions were mailed to her personally at her home. Plaintiff, however, offered no evidence to back up this contention, and the Court agrees with defendants that this is not a material issue.

Plaintiffs account at Merrill Lynch was a non-discretionary cash account. Defendants correctly point out that in contrast to the duty arising from a discretionary account, a stockbroker has only a limited duty to a non-discretionary cash account customer. The stockbroker’s duty in the latter instance is to serve the client’s interest in connection with single transactions executed in the account. Robinson v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 337 F.Supp. 107 (N.D.Ala.1971), aff'd, 453 F.2d 417 (5th Cir.1972). In Robinson, the plaintiff maintained that the broker had a duty to communicate information to him which would affect his position in the market. Id. at 110. The court considered the broker-customer relationship to be one of agency, a “consensual” relationship, which arises only with instructions from the customer. Particularly in cash transactions, the broker’s duty arises only when an order is placed, “since defendant did not have discretionary or managerial power over plaintiff’s account and therefore had no authority to act for the plaintiff without express direction____ The broker’s office ... is simply to buy and sell.” Id. at 111. In the case at hand, Clouser promptly executed all orders he received from the plaintiff, through Ryan acting as her agent, and communicated this immediately to her. That was all he was required to do.

Concerning the other acts or omissions of the defendants, plaintiff has not elaborated what duty the defendants allegedly breached in the handling of plaintiff’s account. Plaintiff has offered only Clouser’s statement in November 1981 as evidence that the “signature card” was required for such an account. (D.I. 47, 1110.) In the November 1981 meeting, Clouser was surprised and “upset.” (D.I. 25, 133.) This Court has found no section in the 1934 Act nor the NYSE Rules from which plaintiff could claim a private cause of action; and the NASD Rules only require written confirmation to each customer upon completion of each transaction. Further, if Merrill Lynch had any internal guidelines which it may have breached in plaintiff’s case, plaintiff has made no effort to produce evidence on such guidelines by deposing, for example, Clouser or of other Merrill Lynch officers. Even assuming that the duty involved requirement of a “signature card”, the breach of that duty did not cause the loss of plaintiffs money. Plaintiff herself stated that she would endorse the checks that Merrill Lynch drew up, both Ryan and she would go to cash them, and she would give all the proceeds to Ryan, from which he would give her enough “to pay the bills.” (D.I. 25, 155-63.)

Because the Court finds that there is no issue of fraud, intentional infliction of emotional distress, negligence, or breach of fiduciary duty, the plaintiffs equitable claim of constructive trust need not be addressed.

CONCLUSION

This is an unfortunate case in which the plaintiff, unsophisticated in financial and practical matters, fell under the total domination and control of an insidious and conniving individual who systematically bilked her of her money. Unable to find this person, plaintiff turned next to Merrill Lynch and the officer who handled her account, and attempted to fit her claims to the circumstances of her dealings with Merrill Lynch. Clouser and Merrill Lynch were not served until six months after the filing of the complaint. In the two years this case has been pending, however, plaintiff has not offered any specific details of her allegation of collusion between Ryan and Clouser, other than their acquaintanceship. Indeed, Clouser came into the picture only after Ryan had convinced plaintiff to cash in her C.D. Thereafter, there exists no evidence that Clouser acted improperly with respect to plaintiff’s account; he meticulously reported to her each transaction by written confirmation. Because plaintiff has offered no evidence to show that the relationship between Ryan and Clouser is a material issue in this case, the defendants are entitled to summary judgment on all of plaintiff’s claims.

Judgment will be entered in accordance with this Opinion.

      . Jurisdiction exists under 28 U.S.C. § 1332 because the plaintiff is a citizen of Pennsylvania (Docket Item ["D.I.”] 1) while the defendant Merrill Lynch is a corporation incorporated under the laws of the State of Delaware with its principal place of business in New York (D.I. 1, 11) and defendant Clouser is a Delaware citizen (D.I. 40).

      . In the complaint filed on July 1, 1983, plaintiff named as defendants Clouser, Merrill Lynch, and Ryan, a private detective. (D.I. 1.) Although Clouser and Merrill Lynch were served, Ryan was not. On February 10, 1984, this Court issued a rule to show cause why the case should not be dismissed as to Ryan pursuant to Fed.R. Civ.P. 4(j). (D.I. 16.) On February 28, 1984, at the hearing on the rule to show cause, plaintiffs counsel informed the Court that he had been unable to find Ryan to perfect service; therefore he requested additional time to attempt to perfect service. (The attempts made to perfect service on Ryan included sending the complaint via certified mail to Ryan’s last known address, Port Jervis, New York, and Pequot Lake, Minnesota, as well as an attempt at personal service by a private investigator retained by plaintiffs counsel.) Although the Court granted plaintiff three additional months to attempt to serve Ryan, service was not made. Therefore, on August 31, 1984, this Court entered an order dismissing, without prejudice, Ryan as a defendant in this case. (D.I. 27.)

      . The $215,000 figure was the value of the bonds at maturity. (D.I. 25, 64.)

      . At her deposition, Candelora stated that she and Lark had been friends for "quite some time” but that she did not have a "sexual relationship” with him. (D.I. 25, 20, 22.)

      . Candelora stated that Maloney had been her attorney since 1977 or 1978 and that, to her knowledge, Maloney had no professional connection or affiliation with Lark. (D.I. 25, 43-44.)

      . On April 22, 1980, the Palmerton Bank received from Candelora bonds in the amount of $150,000. (D.I. 35A, A-125.) When the bank cashed the bonds, the proceeds ($122,195.96) were deposited in Candelora’s savings account at the Palmerton Bank. (D.I. 25, 81.) On May 9, 1980, $110,000 was withdrawn and put into a C.D. Although Candelora testified at deposition that the full proceeds of the bonds were used to purchase the C.D., there was $12,195.96 remaining in the account which was withdrawn by the plaintiff in four installments in the succeeding three months. (D.I. 35A, A-129.)

      . Candelora owned two cars, a VW and a Chevette, in addition to the Oldsmobile, that were also vandalized. (D.I. 25, 47.)

      . During this period Ryan was married and living in Ashland, Pennsylvania. (D.I. 25, 47.) At no time did Ryan and Candelora live together in Shamokin. (Id. at 57.)

      . Candelora testified at her deposition that she had deposited the entire sum of $104,425 received from the Palmerton Bank in Wilmington Trust Co. (D.I 25, 85.) The Wilmington Trust records show her testimony to be totally incorrect because of the $40,000 received from the Palmerton Bank in cash, only $275 cash was deposited to her Wilmington Trust Company account. (D.I. 53.) Apparently $39,725 of the cash received from the Palmerton Bank was retained by Ryan.
      In her deposition, Candelora also claimed that she and Ryan drove to Wilmington and made the deposit in Wilmington Trust on the same day that she withdrew the proceeds from the Palmerton Bank. (D.I. 25, 84.) However, here, too, her memory must have failed her because the bank statements show that she withdrew the money from the Palmerton Bank on February 9, and deposited the $64,700 in Wilmington Trust on February 10. (D.I. 53.)

      . Candelora contends that she did not enter the offices of Merrill Lynch because Ryan told her that she "should not be seen going in there.” (D.I. 35, 91.) Candelora also argues that she "couldn’t" go in because ”[h]e [Ryan] made the decisions what I was going to and what I was not going to do [and] he said it would be better that [sic] nobody could ever describe me or recognize me if I walked in there at some other time.” (Id. at 93.) Ryan’s statements to Candelora were apparently a "suggestion" that the Larks would find out where the proceeds of the C.D. were being invested.
      Again, plaintiffs confused testimony on the dates of her deposits and withdrawals is incorrect. The Merrill Lynch statements (D.I. 54, Ex. 5) show that the account was opened on February 10, not on the next day, as plaintiff recounts in her deposition. (D.I. 25, 87.)

      . The $35,500 cash deposit in Candelora’s Ready Cash Account undoubtedly was part of the $39,725 cash retained by Ryan (see footnote 9) which came from the $40,000 in cash received from the Palmerton Bank.

      . After the cash check for $64,000 was withdrawn from her Wilmington Trust account, Candelora then had a balance in that account of $833.92. (D.I. 53.)

      . Initially, a total of $85,840 was placed in Candelora’s Ready Asset Account in February, 1981. Although $13,799 had been taken out of the account to purchase stock, the balance, as well as all the dividends earned and credited to her account (approximately $75,000) was gradually withdrawn from the Ready Asset Account between April 2, 1981 and October 5, 1981, with checks payable to Candelora. (D.I. 54.)

      . Candelora described how Ryan played on her nervous state and attempted to increase her apprehensions. The main reason she never called up Merrill Lynch before hex break-up with Ryan was Ryan himself. Plaintiff "couldn’t use the phone.” Ryan called constantly if he was not at her house, and the line "better have not been busy.” (D.I. 25, 138-39.) When she threatened to go to Merrill Lynch, Ryan’s response was that she “better not.” (Id. at 139.) In effect, Ryan exerted nearly total domination over plaintiff, as she revealed in her own words:
      "I was very upset and very nervous and frightened when I hired him. And instead of him starving the fear, he fed it. He made it almost — I couldn’t go out of the house. I couldn’t go anywhere. I couldn’t do anything. I couldn’t talk to anybody. He just added more fuel to the fire.”

        (Id. at 140.)
      This fear was combined with her dependence on on Ryan in all plaintiffs financial dealings. Plaintiff stated in deposition that she had believed that Ryan was looking out for her best interests. (Id. at 140-41.)

      . This Court denied defendants’ initial motion for summary judgment in order to allow plaintiff opportunity to substantiate her allegation of collusion between Clouser and Ryan. The inference of intent to defraud (which can be averred generally under the Federal Rules, Fed. R.Civ.P. 9(b)) arising out of Ryan’s relationship with Clouser remain pure speculation, even after this Court warned plaintiff to demonstrate some substance to this speculation. Documentary evidence of the Merrill Lynch and Wilmington Trust accounts, and a supplemental affidavit by Clouser, have dispelled the “slight inferences" concerning the relationship which plaintiff in her affidavit could not contradict. (D.I. 47, 53 & 54.)

      . Based on the records from Wilmington Trust and further affidavits, the Court finds that all seven checks were made out to plaintiff alone. (D.I. 25, 155-63.)

      . In its previous order denying summary judgment to the defendants, the Court indicated its concern that the issue of collusion involved some question of credibility. (D.I. 41, 2.) However, that concern originated from the lack of evidentiary material in this case which the plaintiff would hopefully produce that would create issues which only oral examination could resolve. Since Ryan is not an available witness, the only source of information concerning Clouser’s relationship with him is Clouser. Plaintiff, who is not acting pro se in this case, was extremely neglectful to elicit any direct testimony from Clouser during the discovery phase; the Federal Rules are extremely liberal in facilitating discovery; so as a policy matter alone — beyond any consideration of the substantive aspects of this case — the Court does not wish to grant plaintiff a second chance to rectify its missed opportunity in a costly court proceeding. It is possible plaintiff did not depose Clouser simply because she recognized the consistency and honesty of his statements.
      The long and the short of this is that plaintiff is resting her claim of fraud on mere allegations; and the defendants have come forward with additional evidence in support of its motion — unrebutted, uncontradicted testimony of Clouser concerning five or six innocent, social meetings with Ryan. (D.I. 45, ¶ 5.) The Court is convinced that no question of credibility exists with respect to the issue of fraud which should be addressed at a trial.

      . In deposition, plaintiff also conceded that the statements were mailed to her address, but that Ryan would “intercept" them. (D.I. 25, 148-49, 155.)

      . The NASD Rules state, in pertinent part:

        Disclosure on Confirmations. A member at or before the completion of each transaction with a customer shall give or send to such customer written notification disclosing (1) whether such member is acting as a broker for such customer, as a dealer for his own account, as a broker for some other person, or as a broker for both such customer and some other person; and (2) in any case in which such member is acting as a broker for such customer or for both such customer and some other person, either the name of the person from whom the security was purchased or to whom it was sold for such customer and the date and time when such transaction took place or the fact that such information will be furnished upon the request of such customer, and the source and amount of any commission or other remuneration received or to be received by such member in connection with the transaction.
      Section 12, ¶ 2162, NASD Manual — Rules of Fair Practice (1985). Another section of the NASD Manual requires communication with a customer only upon the request of such customer:

        Disclosure of Financial Condition, (a) A member shall make available to inspection by any bona fide regular customer, upon request, the information relative to such member’s financial condition as disclosed in its most recent balance sheet prepared either in accordance with such member’s usual practice or as required by any State or Federal securities laws, or any rule or regulations thereunder, (b) As used in paragraph (a) of this rule, the term “customer" means any person who, in the regular course of such member's business, has cash or securities in the possession of such member.
      Section 22, ¶2172, NASD Manual — Rules of Fair Practice (1985) (emphasis added). Finally, the NASD Manual establishes a fiduciary capacity to act with respect to a customer’s account only at the request of such customer:

        Use of Information Obtained in Fiduciary Capacity. A member who in the capacity of paying agent, transfer agent, trustee, or in any other similar capacity, has received information as to the ownership of securities, shall under no circumstances make use of such information for the purpose of soliciting purchases, sales or exchanges except at the request and on behalf of the issuer.
      Section 9, ¶ 2159, NASD Manual — Rules of Fair Practice (1985).


source: Caselaw Access Project

author: CURTIN, Chief Judge.

license: Public Domain

text:
    Samuel L. TAVANO, Plaintiff, v. The COUNTY OF NIAGARA, NEW YORK, and Glenn S. Hackett, as County Attorney for the County of Niagara, Defendants.
    No. CIV-83-650C.
    United States District Court, W.D. New York.
    Oct. 29, 1985.

      Miles A. Lance, North Tonawanda, N.Y., for plaintiff.
    Hurwitz & Fine (Theodore J. Burns, of counsel), Buffalo, N.Y., for defendants.
   CURTIN, Chief Judge.

Plaintiff was terminated from his position as Assistant County Attorney of Niagara County on February 18, 1983. Relying on Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980); Mt. Healthy City Board of Education v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977); and Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976), plaintiff brought this action against the County and the County Attorney seeking damages and reinstatement.

A non-jury trial was held on plaintiffs claim from December 4, 1984, until December 7, 1984. Post-trial briefs were then filed, and summations were heard. The court has carefully considered the evidence and the arguments of counsel and makes the following findings of fact and conclusions of law.

Before his termination, plaintiff Samuel Tavano had a long association with Niagara County as County Attorney and then as an Assistant County Attorney. He held that post at the time of his termination. Mr. Tavano, who is a Republican, was appointed County Attorney in 1966 when the legislature changed from Democratic to Republican control. At that time, Branti and Elrod were not the law, and when he took office, Mr. Tavano replaced the Democratic Assistant County Attorneys with Republicans. During the trial, Mr. Tavano testified that he wanted Assistants working for him whose abilities were known to him, who were loyal to him, and who would carry out his instructions and enjoy his confidence. Mr. Tavano continued to serve as County Attorney until 1976. At that time, the Democrats again became the majority party in the legislature, and they appointed John Simon, a Democrat, to replace Mr. Tavano.

On September 28, 1978, Mr. Tavano returned to County service when he was appointed by Mr. Simon as an Assistant County Attorney for Family Court duties only. From the time of his appointment in 1978 until his discharge, plaintiff’s sole responsibility was as an attorney in the Family Court, handling some support cases, juvenile cases, persons in need of supervision, and paternity proceedings. The disposition of the cases assigned to him in Family Court were, for the most part, left to his discretion. It was up to him to determine whether pleas should be taken or whether cases assigned to him should be tried. There were no oral or written guidelines given to him by the County Attorney. He worked in court two days a week. On the remaining days, he was free to conduct his practice. His status remained the same when Mr. Hackett, a Democrat and defendant in this case, became John Simon’s successor in office, in January of 1982. Neither County Attorney designated him pursuant to section 502, subdivision 5, of the County Law to take over any of the duties of the County Attorney in the event of his sickness or other disability.

Mr. Tavano was not called upon to advise anyone in the County legislature or any department heads on matters of governmental policy. He did not oversee any other employees. Nor was he closely supervised in his duties by either John Simon or his successor, Glenn Hackett.

Mr. Hackett testified that he retained Mr. Tavano, although he did so with reservations. He knew Tavano had been a County employee for some time and had much experience, but he described him as “somewhat laid back ... probably didn’t push things to the ultimate in handling matters____” (Item 29, Vol. IV, p. 39.) Mr. Tavano was not dismissed until February of 1983, 13 months after Mr. Hackett became the County Attorney.

As of January 1, 1982, Mr. Tavano and other Assistant County Attorneys were put on the payroll of the Social Services Department. This was done to obtain reimbursement from the State of New York for their work in Family Court. This was not available from the State unless this bookkeeping transfer was made. Although Mr. Tavano was paid through the Social Services Department, he remained an Assistant County Attorney until his termination (Exh. 9).

Several months after Mr. Tavano left his position, there was a major reorganization. In August and September of 1983, new positions were created in the Department of Social Services for Assistant Social Services attorneys who were Civil Service employees appointed directly by the Commissioner of Social Services, not the County Attorney. Several Assistant County Attorneys were transferred to the Department of Social Services (Item 29, Vol. IV, p. 113). James Rodgers, who was Mr. Tavano’s replacement, eventually served in the Department of the Social Services.

On September 1, 1982, Louis Scozzafava, a Democrat, was appointed the Commissioner of Social Services. In reviewing his department’s procedures, he became aware of criticism by several of his caseworkers concerning a lack of cooperation by all of the Assistant County Attorneys handling their cases in Family Court, including Mr. Tavano. Scozzafava testified that he came to the conclusion that there had been lack of preparation by Assistant County Attorneys, perhaps improper handling of some cases, and lack of cooperation and communication between caseworkers and the attorneys (Item 29, Vol. IV, pp. 100-01, 136-38). He informed Mr. Hackett of these concerns. As Hackett understood Scozzafava, the goal was to create a more “business-like atmosphere.” The Social Services Department was to be realigned, legal representation was to be improved, and the attorneys were to spend more time reviewing files with caseworkers (Item 29, Vol. IV, pp. 28-29).

A series of meetings was then scheduled between the caseworkers, Mr. Scozzafava, County Attorneys, and, on a few occasions, Family Court judges. ' These meetings were to seek solutions to the problems raised by Mr. Scozzafava. There is some dispute in the record as to whether Mr. Tavano was invited to all the meetings. Mr. Tavano claims he was not. However, Mr. Hackett’s secretary testified that, as part of her duties, she notified plaintiff and the others to attend staff meetings (Item 29, Vol. III, p. 21). Mr. Hackett told his secretaries to notify- all Assistant County Attorneys from Family Court of these meetings (Vol. III, p. 30). Mr. Tavano attended only one meeting.

Mr. Hackett testified that Scozzafava complained to him repeatedly about Tavano’s performance. “No specific complaints about his in court procedures, but basically complaints about his failure to kind of adapt to the new policy that Mr. Scozzafava was attempting to institute with regard to communication between his caseworkers and the Assistant County Attorneys.” (Vol. IV, p. 34.) Hackett said Scozzafava also had complaints about some of the other attorneys, specifically Democrats Scirto and Heim (Vol. IV, p. 95).

Hackett testified that he began to think of terminating Tavano in the fall of 1982 after hearing of the criticism by Mr. Scozzafava (Item 29, Vol. IV, pp. 40-41). At that time, he had not discussed the possible termination with anyone else. He decided to terminate plaintiff in December of 1982 and informed Scozzafava of his decision at that time (Vol. IV, p. 134). Once he had made the decision, Mr. Hackett said he discussed the problem with Anthony Quaranto, a Democrat who was then Chairman of the Niagara County legislature, and another Democratic legislator, possibly James Sacco. Hackett advised the legislators about Scozzafava’s complaints and told them he intended to fire plaintiff as of the first of the year (Vol. IV, pp. 42-43). Hackett asked Quaranto to take his decision to terminate Tavano before the Democratic Caucus in the County legislature.

Mr. Quaranto took the matter before the caucus and notified Hackett that the caucus approved. Hackett believed that Quaranto had personal objections to firing plaintiff (Vol. IV, pp. 42 and 58). Mr. Hackett testified that he would not have terminated Tavano if the legislators had been opposed. Once Hackett had secured their approval for firing Tavano, he sought clearance from the caucus tó hire James Rodgers, former Democratic Chairman and plaintiffs eventual replacement (Vol. IV, p. 59).

At trial, there were other reasons which Hackett gave for terminating Tavano. He had urged all of his attorneys to develop a program to clean up the case backlog in Family Court. He said Tavano, whom he told to look into the problem, never made any suggestions (Item 29, Vol. IV, p. 38). Family Court Judge John Halpin testified that, due to the amount of cases and the lack of judicial time to attend to the problem, it was his opinion that it was almost impossible to get caught up on the backlog. Nevertheless, it was the impression of Scozzafava and Hackett that Tavano, among others, simply did not attempt to deal with the backlog.

Hackett was also dissatisfied with the way in which Tavano handled a case contrary to Hackett’s instructions. Mr. Hackett learned from Richard Doherty, attorney for the Niagara Falls Board of Education, that a case was pending in Family Court against a student charged with assaulting a teacher. Because of the circumstances, Doherty urged that the student defendant not be permitted to plea bargain. Hackett told Tavano not to permit a plea bargain (Item 29, Vol. IV, p. 36). Although Mr. Tavano did not recall receiving this instruction, I find Mr. Hackett’s version credible. In Tavano’s absence, another Assistant County Attorney allowed the student to plead to a lesser offense.

In Mr. Hackett’s view, it was Mr. Tavano’s responsibility to make sure that his instruction was communicated to the other Assistants. His failure to do so lent support to Hackett’s position that Tavano’s handling of his job was too relaxed.

During the trial, there was testimony from former County Attorney John Simon, who had found plaintiff’s work to be quite satisfactory. Also, the two Niagara County Family Court judges testified that Mr. Tavano performed well in court.

Plaintiff contends that he was terminated because of the urging of James Rodgers, who had been a Chairman of the Democratic Party and was, in the summer and fall of 1982, seeking a job either with the County Attorney’s Office or with the Niagara Frontier Transportation Authority. Mr. Hackett testified that Rodgers called him twice about such a position and that a Democratic legislator from North Tonawanda had also asked him to find a spot for Rodgers on his staff (Item 29, Vol. IV, pp. 60-61). At some point in the fall of 1982, Richard Shanley, then a Democratic legislator, and now Chairman of the County legislature, warned plaintiff that there was talk of replacing him (Item 29, Vol. 3, p. 47).

Mr. Quaranto testified that Hackett told him in December of 1982 that he did not want to fire Tavano but was receiving pressure to do so from certain Democratic legislators (Item 29, Vol. 1, p. 36). I find that the main reason for Mr. Tavano’s termination was not Hackett’s conversations with certain legislators but the problems which he and Mr. Scozzafava were having with Mr. Tavano.

At some point, Mr. Scozzafava was called into the Democratic caucus to discuss the changes in his department and the problems he was having with some of the attorneys, including Mr. Tavano. Exactly when this occurred, before or after plaintiff’s firing was approved, is unclear from the record (Item 29, Vol. I, pp. 33 and Vol. IV, p. 46).

In January or February of 1983, Mr. Hackett told plaintiff that he would have to fire him. His decision to terminate plaintiff appears to have been a reluctant one. Hackett said he was under pressure to fire Tavano, although he did not like to fire people (Item 29, Vol. IV, p. 44). Mr. Quaranto had sought to place Tavano in another post, but that position went to another candidate (Item 29, Vol. IV, p. 43; and Vol. I, p. 39).

Throughout this time, Mr. Tavano was in the non-competitive class of the New York State Civil Service Law. Those in the noncompetitive class are appointed to their positions and are not required to take any Civil Service examination because they have special qualifications. Members of the non-competitive class who are veterans of United States military service are entitled to a hearing before dismissal. Mr. Tavano, a veteran, never made any request for a hearing.

Before turning to the law and its application to these facts, I note the many ironies inherent in this case.

As noted earlier, Mr. Tavano was appointed County Attorney in 1966 when the legislature changed from Democratic to Republican control. When he took office, Mr. Tavano promptly replaced all the Democratic Assistant County Attorneys with Republicans.

During oral argument, plaintiff’s attorney observed that Mr. Tavano believed the Democrats would find a new position for him after he was terminated. However, this job went to a Democrat. Plaintiff, willing to secure a job through politics, sued to get his old post back only after certain legislators were unsuccessful in finding him another job.

Recent cases have established that the first amendment protects, in many circumstances, public employees from dismissal based on political affiliation. Branti v. Finkel, 445 U.S. 507 (1980); Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976). Under Elrod, the initial question was whether a public employee held a “confidential” or “policy-making” position. Employees who had such positions were deemed not to be protected from the vagaries of political life, while those who performed ministerial duties could not be ousted from their jobs for political reasons. See Paradise v. O’Laughlin, 621 F.Supp. 694 (W.D.N.Y.1984).

In Branti, the court expanded the scope of protection from political discharges. See Visser v. Magnarelli, 530 F.Supp. 1165, 1171 (N.D.N.Y.1981). Even an employee with policy-making power may be immune from political terminations:

[T]he ultimate inquiry is not whether the label “policy maker” or “confidential” fits a particular position; rather, the question is whether the hiring authority can demonstrate that party affiliation is an appropriate requirement____

Branti, 445 U.S. at 518, 100 S.Ct. at 1294-95.

I find that plaintiff was not a policymaker. It is true that he had considerable latitude in handling his own caseload. There was little day-to-day supervision by the County Attorney and no guidelines as to case management.

Yet, the scope of plaintiff’s discretion was limited to traditional legal representation. In Layden v. Costello, 517 F.Supp. 860, 861-62 (N.D.N.Y.1981), the court found that while plaintiff, an attorney with the Department of Social Services, had independence in making legal judgments, he had no authority to set policy. His contact with the Commissioner, the actual policymaker, had been limited. Although plaintiff in the instant case worked for the County Attorney, not the Department of Social Services, the range of duties was similar. Plaintiff had little contact with Hackett or Scozzafava, and no supervisory authority over any other attorneys.

Even if plaintiff were considered to be a policymaker, defendants have failed to show that political affiliation or party loyalty is relevant to the effective discharge of the office of an attorney in Family Court. Branti, 445 U.S. at 518, 100 S.Ct. at 1294-95.

The next inquiry is whether politics played a “substantial” or “motivating” factor in plaintiff’s discharge. Mt. Healthy City School Board of Education v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1977). If plaintiff can demonstrate this, then the burden shifts to defendants to show, by a preponderance of the evidence, that there were legitimate, non-political reasons for Mr. Tavano’s dismissal. Visser, 530 F.Supp. at 1169.

In many cases, whether a decision to terminate someone is or is not politically motivated is clear. For example, a new party assumes power, and employees who are affiliated with the other party are almost immediately dismissed (Visser, 530 F.Supp. 1165), or defendants virtually admit that the firing is politically motivated. (Paradise, 621 F.Supp. 694 and Layden, 517 F.Supp. 860).

In this case, Mr. Tavano was not summarily dismissed because of his Republican affiliation. He was appointed by Simon, a Democrat, and was retained by Simon’s successor, Hackett, also a Democrat, for more than one year. Although plaintiff maintains that he was eventually fired to make room for a Democrat, this is disputed by defendants. On the facts of this case, the question of political motivation is uncomfortably close and almost inextricably interwoven with the issue of whether the reasons offered by defendants were legitimate.

Throughout the fall of 1982, two separate but related events were unfolding: 1) some Democratic legislators were urging that James Rodgers be given a position in the County Attorney’s Office, and 2) Mr. Scozzafava, in attempting to reorganize his department, was becoming increasingly disenchanted with plaintiff and was letting Mr. Hackett know the full measure of his displeasure. Hackett also had reason for being displeased with Tavano’s performance. While Mr. Tavano’s dismissal may have been politically expedient, the issue is whether it was politically motivated.

In reviewing the testimony of all the witnesses, I have come to the conclusion that Hackett was truly concerned about the Tavano performance because of the many criticisms of Mr. Scozzafava. Clearly, Tavano did not get along well with the new Social Services head, Scozzafava, who was appointed in September of 1982. Scozzafava wanted the office to be administered in a more business-like fashion and wanted better communication between his caseworkers and the attorneys. There may have been lack of communication and difficulties with other Assistants as well, but unfortunately for Tavano, he became the main cause of concern by Hackett and Scozzafava. In my judgment, the reason for the termination was this, and not political motivation.

Even if the firing had been predominantly prompted by political motives, defendants have shown legitimate reason for plaintiff’s termination. Although Tavano’s performance was acceptable and even good in the opinion of the Family Court judges, Hackett had the right to take into account more than his court performance. Plaintiff’s attitude, his willingness to expand his role as required by the new Social Services director, and his approach to his job were all legitimate concerns. Plaintiff’s dismissal did not violate his rights under the first amendment.

During the trial, plaintiff claimed for the first time that he was entitled to a hearing after he was dismissed under New York Civil Service law. This position was never asserted in the complaint, nor during the pretrial hearings. It was certainly an unusual position for plaintiff to take. His attorney explained that it was not brought up earlier because, “It didn’t cross my mind until we got into this business of non-competitive class.” This statement was made even though Mr. Tavano had been County Attorney for ten years and Assistant County Attorney for four years. Plaintiff may not rely upon this argument in this trial.

The complaint is dismissed. Judgment shall be entered for the defendant.

So ordered.


author: TELESCA, District Judge.

text:
    Brian J. BURROUGHS, Plaintiff, v. The HOLIDAY INN, Rochester, New York; the City of Rochester, New York; Strong Memorial Hospital; and the Rochester Psychiatric Center, Defendants.
    No. CIV-85-33T.
    United States District Court, W.D. New York.
    Oct. 29, 1985.
    Brian J. Burroughs, pro se.
    Nixon, Hargrave, Devans & Doyle (Mary Anne Rodgers, of counsel), Rochester, N.Y., for Holiday Inn.
    Osborn, Considine, Reed, Van de Vate & Burke (Jeffrey M. Wilkins, of counsel), Rochester, N.Y., for Strong Memorial Hosp.
    Louis N. Kash, Corp. Counsel, (Michael J. Looby, of counsel), Rochester, N.Y., for City of Rochester.
    Carlos Rodriguez, Rochester, N.Y., for Rochester Psychiatric Center.
   SUPPLEMENTAL DECISION and ORDER

TELESCA, District Judge.

“In 42 U.S.C. § 1988, Congress quite clearly instructs federal courts to refer to state statutes when federal law provides no rule of decision for actions brought under Section 1983.” Board of Regents of the University of the State of New York v. Tomanio, 446 U.S. 478, 484, 100 S.Ct. 1790, 1795, 64 L.Ed.2d 440 (1980) (internal quotations and brackets omitted). The question presented in this case is whether a federal action brought under 42 U.S.C. § 1983 is subject to the provisions of New York State law which require the service of a “Notice of Claim” within ninety (90) days after the claim arises as a condition precedent to any tort action against a municipality. New York General Municipal Law §§ 50-e and 50 — i. In my previous decision and order dated April 17, 1985, I held that those provisions are not applicable to federal civil rights actions, and accordingly denied a motion by the City of Rochester to dismiss this § 1983 complaint for plaintiffs failure to file a timely notice of claim. Burroughs v. Holiday Inn, 606 F.Supp. 629 (W.D.N.Y.1985). The City of Rochester (“The City”) now argues vigorously for reconsideration of that holding, chiefly on the authority of a decision reached by the United States Supreme Court on the same day, Wilson v. Garcia, — U.S. -, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), which also concerned the role of § 1988 in federal civil rights actions.

DISCUSSION

I.

In Wilson v. Garcia, the Supreme Court never directly addressed the applicability of state notice of claim requirements to federal civil rights actions. The only legal issue actually decided by the Court in that case was the challenge of determining the most appropriate State statute of limitations to apply to claims brought under § 1983. Nevertheless, the City of Rochester now argues that the Wilson decision implicitly requires compliance with General Municipal Law § 50 — i in § 1983 actions, and the reversal of this Court’s previous decision and order. The City’s argument in this respect is unpersuasive, and is ruled out by the Wilson decision itself.

In Wilson v. Garcia, the United States Supreme Court held that all § 1983 claims should be characterized for statute of limitations purposes as actions to recover damages for injuries to the person. In light of that holding, the City of Rochester submits that plaintiff’s § 1983 claims are governed by the limitations period set forth in New York General Municipal Law § 50 — i for personal injury actions against a city or its employees, including the notice of claim requirement in § 50-e. That argument is untenable, and was rejected by the Supreme Court itself in Wilson, 105 S.Ct. at 1949:

Finally, we are satisfied that Congress would not have characterized § 1983 as providing a cause of action analogous to state remedies for wrongs committed by public officials. It was the very ineffectiveness of state remedies that led Congress to enact the Civil Rights Acts in the first place. [Footnote omitted.]

Accordingly, the Court chose to analogize § 1983 to what it described as “general personal injury actions”. Id. That factor alone compels the rejection of the City’s proposed application of the limitations period for actions against municipal defendants in § 50 — i.

II.

For the foregoing reasons, it is clear that Wilson v. Garcia does not require any amendment to my previous decision and order in this case. In the alternative, however, the City of Rochester also argues that this Court erred in both its interpretation and its adoption of the holding in Brandon v. Board of Education of Guilderland Central School District, 635 F.2d 971, 973-74, n. 2 (2d Cir.1980), cert. denied, 454 U.S. 1123, 102 S.Ct. 970, 71 L.Ed.2d 109 (1981), which I described as “the unambiguous and controlling decision of the Second Circuit Court of Appeals on this question”. 606 F.Supp. at 630. On its motion for reconsideration of that decision, the City of Rochester now argues — for the first time— that Brandon was neither unambiguous nor controlling. After careful reconsideration of my decision, I must disagree.

In Brandon, 635 F.2d at 973 n. 2, the Second Circuit Court of Appeals affirmed the holding of the District Court that compliance with New York notice of claim requirements is not mandatory in civil rights actions brought pursuant to 42 U.S.C. § 1983. The City of Rochester now submits that the notice of claim discussion in Brandon is “dictum”, since it is confined to a brief footnote at the outset of a lengthy opinion on the Establishment Clause of the First Amendment. That argument is without merit. “Dictum” generally refers to an observation which appears in the opinion of a court which was “unnecessary to the disposition of the case before it”. IB Moore’s Federal Practice, 110.402[2] at 40 (2d Edition, 1984). As the district judge observed in Brandon, 487 F.Supp. 1219, 1223 (N.D.N.Y.1980) discussion of the notice of claim question was warranted before consideration of the merits, since a contrary ruling would have required dismissal of the action and rendered determination of the constitutional issues raised in the lawsuit unnecessary. In light of the “settled federal practice” of reaching constitutional questions only when a case cannot be decided on statutory grounds, New York City Transit Authority v. Beazer, 440 U.S. 568, 582, 99 S.Ct. 1355, 1364, 59 L.Ed.2d 587 (1979), there is no merit to defendant’s suggestion that the notice of claim discussion in Brandon, however brief, was “dictum” unnecessary to the disposition of the case.

The City next argues that the position taken by the Second Circuit in Brandon is “non-binding”, and not a controlling precedent, particularly since the decision was considered and rejected by the more recent and more thorough decision of the New York State Court of Appeals in Mills v. County of Monroe, 59 N.Y.2d 307, 464 N.Y.S.2d 709, 451 N.E.2d 456, cert. denied, 464 U.S. 1018, 104 S.Ct. 551, 78 L.Ed.2d 725 (1983). That position is incorrect. “The doctrine of stare decisis compels district courts to adhere to a decision of the Court of Appeals of their Circuit until such time as the Court of Appeals or the Supreme Court of the United States sees fit to overrule the decision.” Owens-Illinois, Inc. v. Aetna Casualty and Surety Company, 597 F.Supp. 1515, 1520 (D.C.D.C.1984). Accord, IB Moore’s Federal Practice, 110.402[1] at 12-14. As the Second Circuit Court of Appeals has recently stated, “a decision by this court, not overruled by the United States Supreme Court, is a decision of the court of last resort in this federal judicial district[,]” and is therefore binding on all inferior courts in the Circuit. Ithaca College v. N.L.R.B., 623 F.2d 224, 228 (2d Cir.1980), cert. denied, 449 U.S. 975, 101 S.Ct. 386, 66 L.Ed.2d 237 (1980), quoting Allegheny General Hospital v. N.L.R.B., 608 F.2d 965, 970 (3rd Cir.1979). This conclusion is unaffected by the subsequent contrary decision by the State Court of Appeals in Mills. The decision to borrow state procedural rules for the enforcement of § 1983 is a matter of federal rather than state law, and the opinion of the highest court of the state on such questions is therefore not controlling. Wilson v. Garcia, supra, 105 S.Ct. at 1944.

III.

The final argument offered by the City of Rochester in support of its motion for reconsideration is, in effect, that the Brandon case was incorrectly decided by the Court of Appeals. In taking that position, the City has forcefully renewed its original argument that the notice of claim requirements of the General Municipal Law are not “inconsistent” with federal law or policy. The City notes that its position on this issue was recently adopted in Cardo v. Lakeland Central School District, 592 F.Supp. 765 (S.D.N.Y.1984).

I still hold my original opinion that state law notice of claim requirements are inapplicable here, regardless of whether they are “consistent” with the Civil Rights Acts, simply because they are not necessary to fill any void or deficiency in federal law. 606 F.Supp. at 630-31. The United States Court of Appeals for the District of Columbia Circuit reached the same conclusion on the basis of identical reasoning in Brown v. United States, 742 F.2d 1498 (D.C.Cir.1984) (en banc), cert. denied sub nom, District of Columbia v. Brown, — U.S. -, 105 S.Ct. 2153, 85 L.Ed.2d 509 (1985), where the Court explained:

[T]he issue presented by the [borrowing doctrine of § 1988] is neither how to incorporate into federal law as much state law as a federal action will tolerate, nor how best to further state policies and goals in the litigation of a federal action. The issue is how to best effectuate the federal policies embodied in a federal action when the action does not itself supply the complete legal framework necessary to the effectuation of those policies.

Id., 742 F.2d at 1504. Accord, Wilson v. Garcia, supra, 105 S.Ct. at 1943-44, and n. 22. The D.C. Court of Appeals decided the case on this point, since it could not view the lack of a notice of claims provision as a “deficiency” in the federal scheme for adjudicating constitutional torts. 742 F.2d at 1504. On the basis of that reasoning, I would concur in the judgment reached by the Second Circuit Court of Appeals in Brandon on the notice of claim issue.

CONCLUSION

For the reasons set forth above, I continue to adhere to my original view that the holding of the Second Circuit Court of Appeals in Brandon is both clear and controlling, despite the subsequent decisions by the New York Court of Appeals in Mills, the District Court in Cardo, and the Supreme Court in Wilson. After careful reconsideration of my original decision and order, therefore, the City of Rochester’s motion to vacate that order and dismiss the complaint, on the grounds of plaintiff’s failure to file a notice of claim, must be denied.

However, the City’s request for certification of an interlocutory appeal is granted, provided that the City applies to the Court of Appeals within ten (10) days after the entry of this order, pursuant to Fed.R. Appellate Pro. 5. I share the City’s view that the issues treated in this opinion are worthy of careful re-examination by the Court of Appeals in this Circuit because of the tension between Brandon, Mills and Wilson. This order involves a controlling question of law as to which there is substantial ground for difference of opinion and a clarification of the law of this Circuit may “materially advance the ultimate termination of [this] litigation ...”. 28 U.S.C. § 1292(b).

ALL OF THE ABOVE IS SO ORDERED.

      . Two days later, an identical conclusion was reached by the Honorable Caleb M. Wright, who held that “There is no basis under federal law to require a plaintiff seeking to maintain a claim under § 1983 to adhere to notice provisions as provided under state law". Meding v. Hurd, 607 F.Supp. 1088, 1103 (D.C.Del.1985). Accord, Waller v. Butkovich, 584 F.Supp. 909, 946 (M.D. N.C.1984).

        . In this respect, as the City of Rochester correctly observes, the Wilson decision has unquestionably overruled the holding of Pauk v. Board of Trustees of City University of New York, 654 F.2d 856 (2d Cir.1981), cert. denied, 455 U.S. 1000, 102 S.Ct. 1631, 71 L.Ed.2d 866 (1982), in which the Second Circuit Court of Appeals held that the appropriate statute of limitation for § 1983 actions brought in New York is New York Civil Practice Law and Rules § 214(2), which specifies a three (3) year limitations period for actions to recover upon a liability created or imposed by statute. (However, the Supreme Court in Wilson expressly rejected the suggestion that § 1983 claims might be governed by a state’s "catchall period[ ] of limitations for statutory claims”. 105 S.Ct. at 1948.)
      Contrary to defendant’s suggestions, however, that aspect of the holding in Pauk was completely irrelevant to my original decision in this case. I relied only on that portion of the Pauk decision in which the Court refused to subject § 1983 claims to "a state policy restricting remedies against public officials”, 654 F.2d at 862, including § 50-i of the General Municipal Law. That aspect of the Pauk decision, which was later quoted with approval by the Supreme Court in Burnett v. Grattan, 468 U.S. 42, 104 S.Ct. 2924, 2932, fn. 18, 82 L.Ed.2d 36 (1984), was clearly reaffirmed by the Court in Wilson v. Garcia when it emphatically rejected any analogy between § 1983 and "state remedies for wrongs committed by public officials”. 105 S.Ct. at 1949.

      . Alternatively, the City argues that the applicability of § 50 — i is also compelled by the Wilson court’s emphasis on the federal interest in "uniformity [and] certainty, 105 S.Ct. at 1947, since all lawsuits against public corporations would then be subject to the same procedural requirements, regardless of whether they were state tort actions or federal civil rights claims. That argument rests on a complete distortion of the Supreme Court’s reasoning. On the contrary, the Wilson court insisted on "unformity” within each state as to the characterization of all § 1983 claims, Id., 105 S.Ct. at 1947 and fn. 35 (citing Pauk, supra, 654 F.2d at 866), even though such a rule will often have the consequence of exposing public officials to a different limitations period under § 1983 than is provided under comparable state remedies. Id., at 1949.

      . Although the Brandon case involved a three (3) month notice of claim requirement under New York Education Law § 3813(1), there is no question that its reasoning is equally applicable here, since the Court of Appeals based its decision on a line of prior cases involving the application of § 50-e of the New York General Municipal Law. The City of Rochester has not attempted to distinguish the case on that basis.

      . City of Rochester’s Memorandum in Support of Motion for Reconsideration at 4, 7, and 8.

      . Even if there were such a deficiency, it appears that the balancing of legislative interests struck in Mills on the question of "inconsistency” has been implicitly overruled by the Supreme Court’s subsequent decision in Burnett v. Grattan, 468 U.S. 42, 104 S.Ct. 2924, 82 L.Ed.2d 36 (1984). In Mills, the State Court of Appeals found that notice of claim requirements were not antithetical to the civil rights laws, and further served the important state interest of "protect[ing] municipalities against fraudulent and stale claims for injuries to persons and property". 59 N.Y.2d at 310-11, 464 N.Y.S.2d 709, 451 N.E.2d 456 quoting 10th Annual Report of New York Judicial Council, 1944, pg. 265. One year later, in Burnett, when the State of Maryland offered a virtually identical purpose for a six month administrative statute of limitations (to afford public officers "some reasonable protection from the seemingly endless stream of unfounded, and often stale, lawsuits brought against them”), the United States Supreme Court held that such a policy was "manifestly inconsistent with the central objective of the Reconstruction-era civil rights statutes, which is to ensure that individuals whose federal Constitutional or statutory rights are abridged may recover damages or secure injunctive relief'. 104 S.Ct. at 2932.
      It is noteworthy that no federal court in this Circuit has followed the Mills decision since the Supreme Court’s holding in Burnett.


author: JOYCE HENS GREEN, District Judge.

text:
    Sylvia Y. CHRISTMAS, Plaintiff, v. WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY and District of Columbia, Defendants.
    Civ. A. No. 85-2271.
    United States District Court, District of Columbia.
    Oct. 29, 1985.

      Jeffrey G. Ashin, Hyattsville, Md., for plaintiff.
    Maria Merkowitz, Asst. Corp. Counsel, Washington, D.C., for Dist. of Col.
    Jordan Himelfarb, Washington, D.C., for WMATA.
   MEMORANDUM OPINION AND ORDER

JOYCE HENS GREEN, District Judge.

Before the Court is defendant District of Columbia’s motion to dismiss plaintiff’s suit against it for lack of subject matter jurisdiction. Plaintiff Sylvia Y. Christmas concedes that there is no diversity between herself and defendant, but urges the Court to exercise pendent jurisdiction over her claims. For the reasons set forth below, the Court grants defendant’s motion and dismisses the case in its entirety.

This case arises from an automobile collision involving plaintiff and a District of Columbia police vehicle. Ms. Christmas alleges that on the morning of October 14, 1983, a police vehicle driven by Officer Stanley Wigenton, an employee of defendant, ran a stop sign at the intersection of Webster and 9th Streets, N.W., and struck her car, causing her severe and permanent injury. She brought suit in this Court on July 16, 1985, against the District of Columbia and the Washington Metropolitan Area Transit Authority (“WMATA”), claiming that Officer Wigenton operated his vehicle negligently, and that a WMATA employee had contributed to the accident by parking a bus near the intersection of 9th and Webster, thereby blocking Wigenton’s view of the stop sign.

Plaintiff, a resident of the District of Columbia, acknowledges that there is no diversity between herself and the District of Columbia government. States are not “citizens” for purposes of federal diversity jurisdiction under 28 U.S.C. § 1332, see Moor v. Alameda County, 411 U.S. 693, 717, 93 S.Ct. 1785, 1799, 36 L.Ed.2d 596 (1973), and the diversity statute itself provides that the District of Columbia is to be treated as a state. 28 U.S.C. § 1332(d) (1982). Thus, “[sjection 1332(a) simply fails to include the District of Columbia within its sweep,” and does not confer jurisdiction upon this Court to hear a case brought by a resident against the city. District of Columbia v. L.B. Smith, Inc., of Virginia, 474 F.Supp. 894, 899 (D.D.C. 1979).

Plaintiff nevertheless argues that because this Court has jurisdiction over defendant WMATA under D.C. Code § 1-2439 (1981), it may exercise ancillary jurisdiction over plaintiff’s claim against the city. Plaintiff, however, misconceives the scope of ancillary and pendent jurisdiction. “Ancillary jurisdiction generally refers to the exercise of federal jurisdiction over state law claims between non-diverse parties, when those claims are brought ... in an action already properly within a federal court’s jurisdiction. ” United States ex rel. Small Business Administration v. Pena, 731 F.2d 8, 11 (D.C.Cir.1984) (emphasis supplied); see also Fulton Bank v. Hozier, 267 U.S. 276, 280 (1925) (“when a federal court has properly acquired jurisdiction over a cause, it may entertain ... dependent or ancillary controversies”) (emphasis supplied). In other words, original jurisdiction must exist over each defendant before a federal court may exercise ancillary jurisdiction over nonfederal claims asserted against a given defendant. That is not the case here. Plaintiff’s state law negligence claim is not ancillary to other claims against the city over which the Court does have jurisdiction. Rather, plaintiff’s negligence claim is the sole controversy before the Court. This case is quite unlike United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), therefore, where the plaintiff sued a non-diverse defendant asserting both violations of a federal statute and a state law claim for unlawful conspiracy. There, the federal court had federal question jurisdiction under 28 U.S.C. § 1331 to hear plaintiff’s statutory claim against the defendant, and the Supreme Court recognized the court’s authority to hear the state law claim as well, since it was based on the same common nucleus of operative fact as the statutory claim. Here, there is no independent basis of jurisdiction over the city. The mere fact that the Court has jurisdiction over plaintiff’s claim against WMATA, and that this claim is based on the same operative facts as plaintiffs claim against the city, is insufficient to confer upon the Court jurisdiction over the city.

Indeed, if plaintiff’s argument were accepted, the limitations of diversity jurisdiction would become largely meaningless. If plaintiff, for example, had collided with a citizen of Virginia and a resident of the District of Columbia, it is clear that she could not sue the District of Columbia resident for lack of diversity. But under plaintiff’s theory of ancillary jurisdiction, she could sue the Virginia citizen and then maintain suit against the District of Columbia resident as ancillary to the diversity suit. This clearly is not the law. In Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978), the Supreme Court emphatically rejected the notion that a finding that non-federal and federal claims derived from a common nucleus of fact was by itself sufficient to warrant the exercise of federal jurisdiction over the non-federal claim. Id. 374-75, 98 S.Ct. at 2402-03. The Court stated that “diversity jurisdiction is not to be available when any plaintiff is a citizen of the same State as any defendant,” noting that in the case before it, “respondent could not originally have brought suit in federal court naming [the appellants] as codefendants, since citizens of Iowa would have been on both sides of the litigation.” Id. at 374, 98 S.Ct. at 2403. So too, here, plaintiff is attempting to sue two parties, one of whom is not a diverse citizen under the diversity statute. Owen Equipment makes clear that this Court may not entertain such a suit against the non-diverse party.

In essence, plaintiff has advanced a “pendent party” theory of jurisdiction. Whatever the merits, or lack thereof, of this theory generally, see Wright, Law of Federal Courts 142-43 & n. 36 (1983), it is not applicable here. In Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976), the Supreme Court considered whether a plaintiff who had brought a federal civil rights claim against county officials could also bring a state law claim against the county itself. There was no independent basis of jurisdiction over the county, as it was not diverse from plaintiff and fell outside the reach of the Civil Rights Act of 1871, as that Act was then interpreted. Refusing to formulate a general jurisdictional rule, the Court looked to the statute that conferred jurisdiction over the main action to see if Congress had intended to confer jurisdiction over pendent parties involved in the common nucleus of operative facts but not otherwise within the federal court’s jurisdiction. The Court concluded Congress had no such intent when it passed the Civil Rights Act, and indeed, had intended to exclude counties from its reach.

In the present case, the Aldinger analysis lends further support to the city’s claim that it may not be sued by plaintiff in this Court. Section 1-2439 of the D.C.Code confers jurisdiction on federal district courts, as well ,as the courts of Maryland and Virginia, to hear cases involving WMA-TA, a creature of the Washington Metropolitan Regional Transportation Compact, which includes Virginia, Maryland and the District of Columbia. See D.C. Code § 1-2411 (1981). Were it not for section 1-2439, WMATA could not be sued in federal court by those most likely to come in contact with it — the citizens of Virginia, Maryland and the District of Columbia— since the authority is an instrumentality of those states and thus would not be diverse from such plaintiffs. Section 1-2439, therefore, is designed to overcome the obstacles to diversity jurisdiction posed by WMATA’s unique character. It is thus an exception to the normal requirements of the federal diversity statute, and as such should be narrowly construed. It is inconceivable that Congress intended through section 1-2439, to grant federal courts jurisdiction over the District of Columbia in cases where the city and WMATA are involved in automobile collisions with private parties. If this were Congress’ aim, it could simply have altered the federal diversity statute to permit suits against the city directly. Instead, the diversity statute expressly provides that the District of Columbia is to be treated like states for purposes of diversity, and of course states are not “citizens” within the meaning of the statute. 28 U.S.C. § 1332(a), (d) (1982). Nothing in section 1-2349, which is addressed to the narrow jurisdictional problems raised by an interstate compact, suggests that it supersedes the provisions of the federal diversity statute. The Court therefore concludes that it lacks jurisdiction over the District of Columbia and must dismiss plaintiff’s claim against it.

Having dismissed the District of Columbia from the case, the Court must determine whether the city is an indispensable party within the meaning of Rule 19(b) of the Federal Rules of Civil Procedure, and whether, in equity and good conscience, the action should proceed in its absence. Plaintiff alleges that the city’s employee, Officer Wigenton, operated his vehicle negligently, failed to keep a lookout, and ran a stop sign, thereby causing the collision with plaintiff. Plaintiff also alleges that a WMATA employee negligently parked a bus near the intersection blocking Officer Wigenton’s view of the stop sign and thereby proximately causing him to collide with plaintiff. Complaint at 2-3. A recitation of the alleged facts makes clear that the case cannot be tried without the city. Its employee is one of two principal alleged tortfeasors in the case, and a judgment rendered in its absence would likely prejudice one or all of the parties. If the case is dismissed, on the other hand, plaintiff may file suit in the District of Columbia Superior Court where jurisdiction is proper for all parties. Thus it is clear plaintiff has an adequate remedy if her suit is dismissed.

For all the foregoing reasons, the case is hereby dismissed.