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Hudson Pak Establishment v. Shelter for the Homeless, Inc.
Citation: 224 F. App'x 26Docket: No. 05-2212-cv
Court: Court of Appeals for the Second Circuit; March 14, 2007; Federal Appellate Court
Hudson Pak Establishment (HPE) initiated a legal proceeding on August 21, 1991, against the Shelter for the Homeless (SFH) for payment on a promissory note issued to Stamford Color Photo, Inc. (SCP). The United States District Court for the District of Connecticut asserted diversity jurisdiction under 28 U.S.C. § 1332, as HPE is a Swiss company and SFH is a Connecticut corporation. On March 26, 2002, SFH filed an answer with a counterclaim for interpleader under 28 U.S.C. § 1335 and § 2361, leading to the case being converted to an interpleader action. Intervenors SCP, Paul R. Daddona, and Maxine Gaudio later joined the case. Lawrence Reuben, initially filing pro se for HPE, was allowed to proceed in that capacity after claiming HPE was a sole proprietorship. On August 31, 1993, Gaudio moved to dismiss for lack of subject matter jurisdiction, arguing no diversity existed; however, this was denied as Reuben claimed Florida residency. On appeal, Daddona and Timbers, claiming ownership of HPE, argued for dismissal due to lack of diversity, contradicting HPE's original assertion of jurisdiction. Gaudio, having won below, now contends that diversity existed. The court clarified that federal jurisdiction over interpleader requires "minimal diversity" among claimants, which is assessed at the time of filing, and is not affected by subsequent changes in parties’ citizenship. Determining a party's domicile for diversity jurisdiction involves both legal and factual considerations, and a district court's findings on this matter are typically upheld unless found to be clearly erroneous. The district court established that the "minimal diversity" requirement for the interpleader statute was met, confirming that HPE was diverse from the other claimants at the initiation of the action. The court's interpretation of Daddona's control over Stamford Color Photo and Hudson Pak as his 'alter ego' pertains to later proceedings rather than the original jurisdictional issue. The appellate court found no reason to challenge the district court's conclusions. Although Daddona and Hudson Pak attempted to dismiss the case due to alleged loss of diversity, the district court's skepticism towards their claims was evident, and Daddona's behavior indicated an awareness of the weak prospects for success, as demonstrated by his attempts to obstruct the litigation through multiple frivolous claims against various parties involved. The judgment of the district court is affirmed.