Goerner v. Barnes

730 F. Supp. 767, 1990 WL 12646
CourtDistrict Court, S.D. Texas
DecidedFebruary 12, 1990
DocketCiv. A. No. H-89-2783
StatusPublished

This text of 730 F. Supp. 767 (Goerner v. Barnes) is published on Counsel Stack Legal Research, covering District Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Goerner v. Barnes, 730 F. Supp. 767, 1990 WL 12646 (S.D. Tex. 1990).

Opinion

730 F.Supp. 767 (1990)

Douglas C. GOERNER, Plaintiff,
v.
Frank BARNES, Durant Bank & Trust Co., an Oklahoma corporation, and Federal Land Bank of Wichita, a Kansas corporation, Defendants.

Civ. A. No. H-89-2783.

United States District Court, S.D. Texas, Houston Division.

February 12, 1990.

Michael L. Durham, Houston, Tex., for plaintiff.

Gregg M. Rosenberg, Houston, Tex., for Frank Barnes.

Hugh E. Tanner and Tom Wicker, Jr., Fulbright & Jaworski, Houston, Tex., for Durant Bank & Trust Co.

Barnet B. Skelton, Jr., Skelton & Skelton, Houston, Tex., for Federal Land Bank of Wichita, Kan.

ORDER

HITTNER, District Judge.

Pending before this Court is a motion to dismiss or, in the alternative, to transfer venue (Document # 5) filed by defendant Durant Bank & Trust Co. ("Durant"). After having considered the motion, the submissions of the parties, and the applicable law, this Court determines that it should abstain from hearing this action.

Plaintiff Douglas C. Goerner ("Goerner") filed the instant suit in this Court on August 18, 1989. Goerner claims that Durant and Barnes engaged in, among other things, breach of statutory and commonlaw duties of good faith and fair dealing, negligent misrepresentation, fraud, and violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C.A. §§ 1961-1968 (West 1984 & Supp. 1989), in connection with real estate and financing transactions.[1] However, on August 26, 1987, Durant filed an action *768 against Goerner, among others, in the District Court of Bryan County, Oklahoma. In that action, Durant seeks foreclosure and a deficiency judgment on a promissory note and a related mortgage executed by a partnership of which Goerner was a member. Goerner has filed a cross-petition in the Oklahoma suit that raises affirmative claims against Durant for, among other things, fraud and breach of a duty of good faith. Even though the instant suit involves some different causes of action, Durant and Goerner agree that the Texas and Oklahoma actions implicate essentially the same subject matter: the liabilities of the parties resulting from the real estate and financing transactions underlying a failed cattle operation.

Durant now requests that this Court dismiss or transfer the instant suit. In opposing this request, Goerner maintains that this Court holds both subject matter jurisdiction and proper venue for his claims against Durant.

This Court need only reach the abstention issue pressed by Durant. As Goerner points out, "[g]enerally, as between state and federal courts, the rule is that `the pendency of an action in the state court is no bar to proceedings concerning the same matter in the Federal court having jurisdiction.'" Colorado River Water Conservation District v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 1246, 47 L.Ed.2d 483 (1976) (quoting McClellan v. Carland, 217 U.S. 268, 282, 30 S.Ct. 501, 504, 54 L.Ed. 762 (1910)). However, "the circumstances permitting the dismissal of a federal suit due to the presence of a concurrent state proceeding for reasons of wise judicial administration ..., though exceptional, do nevertheless exist." Colorado River, 424 U.S. at 818, 96 S.Ct. at 1246.

In deciding whether to abstain from hearing a case due to the pendency of a similar state court action, a federal district court may consider the following factors: (1) the avoidance of exercises of jurisdiction over particular property by more than one court, (2) the inconvenience of the federal forum, (3) the desirability of avoiding piecemeal litigation, (4) the order in which jurisdiction was obtained by the concurrent forums, (5) the applicability of federal or state law to the merits of the claims at issue, and (6) the adequacy of the state court proceedings to protect the rights of the party that invoked the federal court's jurisdiction. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 15-16, 23, 103 S.Ct. 927, 936-37, 941, 74 L.Ed.2d 765 (1983); Colorado River, 424 U.S. at 818, 96 S.Ct. at 1246; Evanston Insurance Co. v. Jimco, Inc., 844 F.2d 1185, 1190 (5th Cir.1988).

When a court considers whether to exercise Colorado River-type abstention, it should "take[] into account both the obligation to exercise jurisdiction and the combination of factors counselling against that exercise." Colorado River, 424 U.S. at 818-19, 96 S.Ct. at 1246-47; see Moses H. Cone, 460 U.S. at 15-16, 103 S.Ct. at 936-37. As applied here, all six factors under Colorado River and Mose H. Cone indicate that this Court should decline to hear the instant suit.

This case brings into play the concerns underlying the first factor. If this Court declines to abstain from hearing this action, it may force Durant to add to this suit, as counterclaims under Fed.R.Civ.P. 13(a), some or all of its affirmative claims in the Oklahoma court. The judicial foreclosure that Durant seeks in part in the Oklahoma state court is an in rem proceeding. See, e.g., Epperson v. Halliburton Co., 434 P.2d 877, 880 (Okla.1967); Eufaula Bank & Trust Co. v. Wheatley, 663 P.2d 393, 394 (Okla.Ct.App.1983). If Durant were to attempt to add counterclaims regarding the property or deficiency on the promissory note at issue, its efforts would tend to accomplish, directly or indirectly, precisely what the Colorado River Court sought to avoid: the exercise of in rem jurisdiction over particular property by more than one court. See Colorado River, 424 U.S. at 818-19, 96 S.Ct. at 1246-47 (citing Donovan v. City of Dallas, 377 U.S. 408, 412, 84 S.Ct. 1579, 1582, 12 L.Ed.2d 409 (1964); Princess Lida v. Thompson, 305 U.S. 456, 466, 59 S.Ct. 275, 280, 83 L.Ed. 285 (1939); United States v. Bank of *769 New York & Trust Co., 296 U.S. 463, 477, 56 S.Ct. 343, 347, 80 L.Ed. 331 (1936)); cf. Moses H. Cone, 460 U.S. at 19, 103 S.Ct. at 938 (noting recognition by all parties that the case did not implicate the jurisdiction of the state or federal court over any res or property).

The second Colorado River factor "primarily involves the physical proximity of the federal forum to the evidence and witnesses." Evanston Insurance Co., 844 F.2d at 1191. Even considered in the light most favorable to Goerner, the only relation of this district to the underlying dispute lies in Goerner's local receipt of correspondence and phone calls concerning the transactions at issue. The contracts at issue were executed in Bryan County. Durant has its operations and documents related to this dispute in Bryan County, and Barnes resides there. Because of Durant and Barnes' location, the vast majority of documents relevant to any RICO inquiry by Goerner are likely to rest in Bryan County.

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Epperson v. Halliburton Company
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Eufaula Bank & Trust Co. v. Wheatley
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Goerner v. Barnes
730 F. Supp. 767 (S.D. Texas, 1990)

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Bluebook (online)
730 F. Supp. 767, 1990 WL 12646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/goerner-v-barnes-txsd-1990.