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READING METAL CRAFT CO. v. HOPF DRIVE ASSOCS.

July 27, 1988

READING METAL CRAFT COMPANY, INC.
v.
HOPF DRIVE ASSOCIATES and WENAL VALLEY ASSOCIATES


Franklin S. Van Antwerpen, United States District Judge.


The opinion of the court was delivered by: VAN ANTWERPEN

FRANKLIN S. VAN ANTWERPEN, UNITED STATES DISTRICT JUDGE.

 This is a breach of contract action arising out of the construction of a shopping center known as "Spring Valley Marketplace" in Spring Valley, New York. This action was originally brought by the plaintiff in the Court of Common Pleas, Berks County, Pennsylvania, on November 23, 1987. Subsequently, the action was removed to the U.S. District Court for the Eastern District of Pennsylvania upon petition of the defendants, *fn1" pursuant to 28 U.S.C.A. § 1332(a) (West Supp. 1988).

 The plaintiff, Reading Metal Craft Company, Inc., is a Pennsylvania corporation with its principal place of business in Reading, Pennsylvania. Although described in the plaintiff's complaint as a "partnership", the defendant, Hopf Drive Associates, describes itself, in the Answer, as a New York joint venture with an office in Spring Valley, New York. Wenal Valley Associates, now known as Valley Associates, Ltd., is one of two joint venture partners in Hopf Drive Associates. Wenal Valley Associates is a Florida limited partnership with its office in Fort Lauderdale, Florida. The identity of the other joint venture partner has not been disclosed. This matter comes before the court on the motion of the defendants to have this action transferred to the Southern District of New York pursuant to 28 U.S.C.A. § 1404(a) (West 1976). The parties have offered oral argument on the issue of transfer before this court on June 9, 1988.

 Section 1404(a) reads: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." In commencing our analysis of this section, we must first consider whether this action "might have been brought" in the Southern District of New York. To answer that question, we must decide the issues of proper venue and personal jurisdiction in the proposed transferee district. Cooper v. Valley Line Co., 320 F. Supp. 483 (W.D. Pa. 1970).

 With regard to venue, 28 U.S.C.A. § 1391(a) (West 1976) provides: "A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside, or in which the claim arose." In the instant case, the plaintiff resides in the Eastern District of Pennsylvania. If venue is to be laid in the Southern District of New York, then either the defendants must reside there or the claim must have arisen there. We believe that the defendants in the instant case reside, for the purposes of venue, in the Southern District of New York.

 The defendant, Hopf Drive Associates, is a joint venture. In the answer to the complaint, it is described as a "New York joint venture with an office located at 49 Airport Executive Bypass Road, Spring Valley, Rockland County, New York." In the Motion for Change of Venue, it is described as "a New York joint venture with its principal place of business in New York." This joint venture was comprised of two joint venture partners: an unidentified joint venturer and Wenal Valley Associates, now known as Valley Associates, Limited, a Florida limited partnership.

 A joint venture is a particular form of business relationship:

 
"Assuming that the circumstances do not establish a partnership, the relation [i.e., the joint venture] is generally created when two or more persons agree to combine their money, property, or time in the conduct of some particular line of trade, or for some particular business deal, agreeing to share jointly, or in proportion to the capital contributed, in the profits and losses."

 16 N.Y. JUR.2d Business Relationships § 1581 (1981).

 The nature of a joint venture has further been described thus:

 
"A joint venture has been likened to a limited partnership - not limited in a statutory sense as to liability, but as to scope and duration. Thus, one distinction between a joint venture and a partnership is that the former relates to a single transaction (though it may be continued over several years), while the latter relates to a general business of a particular kind. Joint ventures are also distinguishable from partnerships in that the authority of one joint venturer to act as the agent of the others is more limited than the agency of a member of a partnership."

 Id. § 1578 (footnote omitted).

 New York case law has specifically said that "joint venturers are subject to the same rules as a technical partnership. Generally speaking, the principles of law of partnership apply to a joint venture, at least by analogy ( Napoli v. Domnitch, 34 Misc. 2d 237, 226 N.Y.S.2d 908, modified on other grounds, 18 A.D.2d 707, 236 N.Y.S.2d 549) . . . ." John's, Inc. v. Island Garden Center of Nassau, Inc., 269 N.Y.S.2d 231, 236, 49 Misc. 2d 1086 (1966), aff'd per curiam, C. J. Zonneveld & Sons, Inc. v. Island Garden Center, Inc., 280 N.Y.S.2d 34, 53 Misc. 2d 1021 (1967).

 
"Defendant's claim that venue is improper under 28 U.S.C. § 1391 because the residence of each of the limited and general partners is not the Southern District of New York, must also be denied. While there is opposing thought on the issue, many courts have held that, for purposes of determining venue, the 'residence' of a limited partnership, such as FSI, is the partnership's principal place of business - in this case, the Southern District of New York."

 Id. at 357.

 The court explained its decision in these terms:

 
"In effect, the partnership is regarded as a jural entity, distinct from its individual partners. Joscar Co. v. Consolidated Sun Ray, Inc., 212 F. Supp. 634 (S.D.N.Y. 1963). The domicile or residence of the individuals who make up the partnership is irrelevant for venue purposes because of the partnership's business nature, similar to that of a corporation. As stated by the Supreme Court in Denver & R. G. W. R. Co. v. Railroad Trainmen, 387 U.S. 556, 560, 87 S. Ct. 1746, 1748, 18 L. Ed. 2d 954 (1967), the modern reality of a multi-state association permits the determination of proper venue by looking to the residence of the association rather than that of its individual members. See also Penrod Drilling Co. v. Johnson, 414 F.2d 1217 (5th Cir. 1969); United Mine Workers of America v. Coronado Coal Co., 259 U.S. 344, 42 S. Ct. 570, 66 L. Ed. 975 (1922). For these reasons, the court finds that the plaintiff limited partnership has a separate residence from its members for venue purposes. Therefore, venue is proper in the Southern District of New York."

 Id.

 In the instant case, the objective of the joint venture known as Hopf Drive Associates was the construction of a shopping center in New York. To effectuate that purpose, the joint venture placed its principal place of business in Rockland County, New York. It would appear reasonable, then, to regard the joint venture as a jural entity distinct from its individual joint venture partners and to place venue in the Southern District of New York.

 The next issue to be addressed is that of personal jurisdiction. Jurisdiction over a partnership does not focus on its principal place of business; it is concerned with the residences of its component partners. Rait v. Jacobs Brothers, 268 N.Y.S.2d 750, 49 Misc. 2d 903 (1966). We do not know the "residence" of one of the joint venture partners; Wenal Valley Associates is, however, described as a Florida limited partnership. We must now look to the law of New York which pertains to jurisdiction over non-domiciliaries, since ...


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