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MICHEEL v. HARALSON

August 9, 1983

Richard J. MICHEEL
v.
Daniel B. HARALSON



The opinion of the court was delivered by: SHAPIRO

 SHAPIRO, District Judge.

 This action has been filed by plaintiff, Richard J. Micheel, a Pennsylvania resident. Defendant Daniel B. Haralson, an Alabama resident, has moved to dismiss the complaint or in the alternative to transfer to Alabama pursuant to 28 U.S.C. § 1404(a). For the reasons that follow, the motions are denied.

 On or about October 25, 1979, plaintiff entered into an agreement with defendant and several other persons and corporations *fn1" to purchase the shares of common stock of an Alabama corporation, Leedy, Inc. *fn2" Micheel filed this suit against Haralson after the sale was consummated on the grounds that (1) certain covenants in the contract were breached by misrepresentations made regarding Leedy's loans and holdings; (2) Haralson's conduct violated federal securities law; and (3) his misrepresentations were fraudulent.

 Haralson moved to dismiss the complaint under Fed.R.Civ.P. 12(b)(1), (2), (3), (5), (6) and (7), or in the alternative to transfer the action to the Northern District of Alabama pursuant to 28 U.S.C. § 1404(a). After oral argument the court held there is subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1332, that sufficient minimum contacts exist to confer in personam jurisdiction, and that venue exists under 28 U.S.C. § 1391 and 15 U.S.C. § 78aa.

 The motion under Rule 12(b)(6), considered as a motion for summary judgment because defendant relied on matters outside the pleadings, was denied without prejudice. The motion under Rule 12(b)(7) and the motion to transfer under § 1404(a) were held under advisement to allow supplemental briefing. Those briefs having been filed and considered, the motions to dismiss under Rule 12(b)(7) or to transfer under 28 U.S.C. § 1404(a) are denied for the reasons that follow. *fn3"

 The first consideration is whether the other signatories of the agreement are indispensable parties under Fed.R.Civ.P. 19. Rule 19 provides in part:

 
(a) Persons to be Joined if Feasible. A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and his joinder would render the venue of the action improper, he shall be dismissed from the action.
 
(b) Determination by Court Whenever Joinder not Feasible. If a person as described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable. The factors to be considered by the court include: first, to what extent a judgment rendered in the person's absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.

 Analysis should focus first on whether the parties are indispensable under Rule 19(a), for "Rule 19(b) itself is applicable only if a person who should be joined under the provisions of Rule 19(a) cannot be made a party for some reason." Field v. Volkswagenwerk AG, 626 F.2d 293, 300 (3d Cir.1980).

 Ivana Field was the driver of the motor vehicle and it was claimed that her dismissal "would force VWAG to defend the same claim in two different actions." 626 F.2d at 299. The Court held this was not controlling in part because of the difference between compulsory joinder under Rule 19 and permissive joinder under Rule 20. If Ivana's presence were required:

 
. . . simply because VWAG might later have to defend against a separate action brought by Ivana in her individual capacity, the same shortcoming would exist in practically every case of permissive joinder, and the distinction between Rules 20 and 19 would be rendered practically meaningless. For in just about every case of permissive joinder under Rule 20 the proper party in ...

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