Vandervelde v. Put & Call Brokers & Dealers Ass'n

43 F.R.D. 14, 11 Fed. R. Serv. 2d 725, 1967 U.S. Dist. LEXIS 11188, 1967 Trade Cas. (CCH) 72,168
District Court, S.D. New York·Decided July 24, 1967·No. No. 63 Civ. 3470·Published·Cited by 12 cases

Opinion

MOTLEY, District Judge.

This is a private anti-trust action in which the individual plaintiff, a put and call broker-dealer, and two of his companies seek $15,000,000 in treble damages and attorneys fees against Put and Call Brokers and Dealers Association, Inc., and numerous other defendants, for alleged violations of Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1, 2). The individual plaintiff had been a member of the Association but had been suspended after he failed to pay a fine for alleged violation of the Association’s rules. The complaint alleges that following the individual plaintiff’s suspension for refusal to pay the fine, he and his companies suffered damages as a result of a conspiracy by defendants to boycott plaintiffs.

This ease is now before this court on a motion by plaintiffs to substitute the representatives of two deceased defendants, Irving E. Krinski and L. P. Kahn, as defendants in this action. Rule 25 (a) (1), Fed.R.Civ.P.

The executrix of the estate of Irving E. Krinski, Sonia Krinski, objects to the substitution on the ground that:

1) decedent neither participated in any deliberations which resulted in the determination that plaintiff should be suspended nor participated in any conspiracy to boycott plaintiffs, and no such allegations are contained in the complaint or affidavit supporting the present motion;
2) that the granting of a motion to substitute is discretionary;
3) in the exercise of its discretion, this court should deny the motion since the estate is small compared to the damages sought and the pendency of the action will necessarily prolong the administration of the estate, resulting in substantial hardship to the beneficiaries of the estate;
4) in view of the continued pendency of the action against the other multiple defendants, no injury will be suffered by plaintiff if the motion is denied; and
5) at one point plaintiffs sought to secure a stipulation from the deceased defendants agreeing to the filing of the amended complaint and dropping the decedent and other defendants as parties and adding six New York Stock Exchange firms as defendants.

The death of Irving E. Krinski was not suggested on the record prior to the instant motion which was filed on January 6, 1967. Rule 25(a) (1).

Sonia Krinski admits that the deceased Irving E. Krinski was a member of the defendant Association at the time of the suspension of the individual plaintiff and during the time of the alleged conspiracy by the Association and the other defendants to injure plaintiffs in their business by refusing to deal with them. The merits of this controversy which necessarily involve, inter alia, liability of decedent for participation in any injury [17]*17to plaintiffs cannot be determined upon this motion, especially in view of the admission that decedent was not only a member but also a former director.

It does appear that membership alone in an association charged with unlawful conduct is not a sufficient basis for establishing the liability of an individual member. The plaintiff must prove that the member knew of the unlawful acts, Phelps Dodge Refining Corp. v. Federal Trade Commission, 139 F.2d 393 (2d Cir. 1943), and approved of such activity and of their unlawful objective. Riss & Co. v. Association of Am. Railroads, 187 F.Supp. 306 (I.C.D.C.1960). There are allegations in the affidavit in support of plaintiffs’ motion that pretrial discovery has produced evidence that each member of the association knew or should have known of the alleged conspiracy and evidence that each of the decedents actively participated therein. The determination of these facts, however, must await the trial.

This court has already ruled on the objection that the administration and closing of a decedent’s estate will be unduly delayed by substituting representatives in this action. The ruling was made on a motion to substitute the representatives of Herbert Filer, another deceased defendant. This court held: “The objection that the administration of the estate will be prolonged is one that necessarily arises in every case wherein it is held that the alleged wrongful acts of a decedent survive his death, and while the situation may be deemed unfortunate the rights of plaintiffs in such cases must also be protected.” Vandervelde v. Put and Call Brokers and Dealers Association, Inc., 271 F.Supp. 697 (S.D.N.Y.1967) (63 Civ. 3470, decided June 15, 1967). The same ruling is applicable to the same objection here made to this motion to substitute Sonia Krinski. In this connection, it should be noted that there is no allegation that the estate has been distributed or that such distribution is imminent. Consequently, there is not involved here the kind of unfairness or disruption of orderly and expeditious administration of estates as will cause a court, in its discretion, to deny substitution of a decedent’s representatives. See Anderson v. Yungkau, 329 U.S. 482, 67 S.Ct. 428, 91 L.Ed. 436 (1947).

Neither the objection that plaintiffs will not be injured by a denial of the motion because there are numerous other defendants against whom the action may be continued nor the objection that plaintiffs once offered to drop decedent is a sufficient reason for denying substitution. Sonia Krinski admitted that Irving E. Krinski was a member and former director of the Association. It may be that a trial court will find that Irving E. Krinski is liable to plaintiffs in a substantial way. Plaintiffs contend that decedent rejected the opportunity to have this action discontinued against him during his lifetime when he refused to consent to the stipulation dropping him as a party and substituting others in order to impede plaintiffs in the prosecution of their case. Plaintiffs, therefore, claim, and rightly so, that the executrix cannot now complain if plaintiffs elect to exercise their right of substitution. Rights of plaintiffs to substitution or to settlement of their claim against a decedent must be protected just as the rights of decedents and their estates.

Mathilde Kahn, executrix of the estate of L. P. Kahn, also made the foregoing objections but relied on Sullivan v. Associated Billposters & Distributors, 6 F.2d 1000, 42 A.L.R. 503 (2d Cir. 1925) to support her contention that “an action for damages to property does not survive unless the decedent benefited by the acts complained of.” As this court noted in Vandervelde v. Put and Call Brokers and Dealers Association, Inc., supra, the enrichment or benefit issue has been exhaustively discussed in the opinion of Judge Levet of this court in Banana Distributors, Inc. v. United Fruit Co., 27 F.R.D. 403 (S.D.N.Y.1961). There [18]*18Judge Levet concluded that the anti-trust action survives the death of a defendant without a showing of undue enrichment. Judge Levet did say that his decision was not free from doubt, and permitted a special appeal therefrom. There has been no reversal of Judge Levet’s decision.

Mrs.

Free access — add to your briefcase to read the full text and ask questions with AI

Vandervelde v. Put & Call Brokers & Dealers Ass'n, 43 F.R.D. 14, 11 Fed. R. Serv. 2d 725, 1967 U.S. Dist. LEXIS 11188, 1967 Trade Cas. (CCH) 72,168 (S.D.N.Y. 1967).

43 F.R.D. 14 (Vandervelde v. Put & Call Brokers & Dealers Ass'n) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

United States v. Leslie Roberts
978 F.2d 17 (First Circuit, 1992)
Zeidman v. General Accident Insurance
122 F.R.D. 160 (S.D. New York, 1988)
Doherty v. Straughn
407 A.2d 207 (Supreme Court of Delaware, 1979)
Saylor v. Bastedo
82 F.R.D. 440 (S.D. New York, 1979)
Bagalay v. Lahaina Restoration Foundation
588 P.2d 416 (Hawaii Supreme Court, 1978)
In Re Four Seasons Securities Laws Litigation
493 F.2d 1288 (Tenth Circuit, 1974)
Arthur Andersen & Co. v. Bank of America
493 F.2d 1288 (Tenth Circuit, 1974)
Griffith v. George Transfer and Rigging, Inc.
201 S.E.2d 281 (West Virginia Supreme Court, 1973)
Yonofsky v. Wernick
362 F. Supp. 1005 (S.D. New York, 1973)
Vandervelde v. Put and Call Brokers and Dealers Ass'n
344 F. Supp. 118 (S.D. New York, 1972)