VIRGINIA PHILLIPS, District Judge
Plaintiff's Motion for Order Authorizing Service Through California Secretary of State came before the Court for hearing on April 29, 2005. After reviewing and considering all papers filed in support of, and in opposition to, the Motion, as well as the arguments advanced by counsel at the hearing, the Court DENIES Plaintiff's Motion.
I. BACKGROUND
Plaintiff Goodrich Corporation ("Goodrich") is a former owner of 160 acres of property in the City of Rialto. Hazardous chemicals allegedly released at that property have contaminated the land and groundwater. Goodrich seeks recovery of the costs it has incurred, and will incur, investigating and remedying the environmental contamination.
Goodrich filed a Complaint against Emhart Industries, Inc. ("EII") on May 27, 2004. This action was consolidated withRialto, et al. v. U.S. Dep't of Def., et al., Case No. EDCV 04-00079-VAP (SSx), on October 28, 2004. Goodrich submitted a First Amended Complaint ("FAC") on January 7, 2005, naming additional Defendants, including American Hardware Corporation ("AHC"). The Clerk of Court filed the First Amended Complaint on January 10, 2005.
Goodrich now moves for authorization to serve Defendant AHC through the California Secretary of State. It filed its Motion for Order Authorizing Service ("Mot.") on April 4, 2005. EII filed its Opposition ("Opp'n") on April 11, 2005. Goodrich filed its Reply on April 19.
The Court considers Goodrich's Reply although it notes the Reply was not timely.
II. DISCUSSION
Goodrich alleges that AHC is a Connecticut corporation which "merged with Emhart Manufacturing Company, forming Emhart Corporation, thereby transferring all of its assets and liabilities to Emhart Corporation. Emhart Corporation later changed its name to Defendant, Emhart Industries, Inc." [FAC ¶¶ 2, 9, 14.]
Under Federal Rule Of Civil Procedure 17(b), the "capacity of a corporation to be sued shall be determined by the law under which it was organized." Fed.R.Civ.P. 17(b). Connecticut law therefore governs AHC's capacity to be sued. According to Connecticut law, as Goodrich acknowledges, [Mot. at 6-7], in a merger, "[t]he separate existence of every corporation or other entity that is merged into the survivor ceases," and "[a]ll liabilities of the corporation or other entity that is merged into the survivor are vested in the survivor." Conn. Gen. Stat. § 33-820(a) (2)-(3). Because Goodrich's First Amended Complaint alleges that AHC merged with another corporation to become Emhart Corporation, it forecloses naming and serving AHC as a Defendant.
Goodrich brings this Motion because it understandably misconstrues EII's strained responses to its First Set of Requests for Admissions. In its Request for Admission No. 30, Goodrich requested that EII admit "pursuant to the merger between [AHC] and Emhart Manufacturing Company, [AHC] transferred all of its assets to Emhart Corporation." [Declaration of Due Diligence of Denise G. Fellers ("Fellers Decl.") Ex. C at 48.] EII denied this request. Goodrich also asked in Request for Admission No. 31 that EII admit "pursuant to the merger between [AHC] and Emhart Manufacturing Company, [AHC] transferred all of its liabilities to Emhart Corporation." [Id.] EII denied this request as well. [Id.] On Plaintiff's reading of these denials, EII maintains that AHC dissolved rather than merged and that EII therefore is not responsible for AHC's liabilities. [See Mot. at 1, 3, 6-7.]
In its Opposition, however, EII makes clear that this is not its position. EII details its relationship with AHC as follows: (1) Emhart Manufacturing Company merged into AHC, with AHC as the surviving corporation; (2) AHC changed its name to Emhart Corporation in 1964, at the same time as the merger; and (3) Emhart Corporation changed its name to Emhart Industries, Inc., Defendant, in 1976. [Opp'n at 5-6.]
The difference between Plaintiff's and Defendant's accounts of the merger is that EII emphasizes that AHC was the surviving corporation and that "Emhart Corporation" was simply a new name for AHC. [See id.] EII's account of the merger appears substantiated by the corporate documents which Goodrich has itself submitted. [See Fellers Decl. Exs E at 70, H.]
This explains EII's responses to the admissions requests. It denied that AHC transferred its assets and liabilities to Emhart Corporation because AHC, as the surviving corporation in the merger, "transferred nothing by reason of the merger." [Opp'n at 5.] AHC's simultaneous name change, of course, meant that AHC's assets and liabilities, and those of Emhart Manufacturing Company, became those of "Emhart Corporation"; again, however, they were not "transferred" because Emhart Corporation was simply a continuation of AHC by a new name.
Goodrich cites section 33-369 (c) of the Connecticut General Statutes, now superseded by section 33-820, to argue that previously in a merger under Connecticut law, "all parties to a merger `transferred' their assets and liabilities to the surviving entity." [Reply at 2-3.] Thus, Goodrich maintains, its Requests for Admissions correctly used the term "transfer," and EII's denials were improper.
Section 33-369 (c) provides that upon merger or consolidation:
[t]he surviving or new corporation shall thereupon and thereafter . . . possess all the rights, privileges, immunities and franchises, as well of a public as of a private nature, of each of the merging or consolidating corporations; and all property, real, personal and mixed, and all debts due on whatever account, and all other choses in action, and all and every other interest, of or belong to or due to each of the corporations so merged or consolidated, shall be taken and transferred to and vested in such single corporation without further act or deed. . . .
Under this provision, in a merger, the merging corporation "transfer[s] to" the "surviving corporation" its "Property" and "debts"; in a "consolidation," both disappearing corporations transfer their property and debts to the "new corporation."
Because the transaction between Emhart Manufacturing Company and AHC was apparently formally structured as a merger and name change, rather than a consolidation, under the terms of this former statute, AHC, as the surviving corporation, did not "transfer" assets or liabilities. Accordingly, Goodrich's use of the word "transfer" in the Requests for Admissions was technically improper.
Regardless of the formal structure of the transaction between Emhart Manufacturing Company and AHC, the critical point is that EII acknowledges that "[b]y reason of the 1964 and 1976 name changes, the corporate entity formerly called American Hardware is now called [Emhart Industries, Inc.]." [Opp'n at 6.]
EII, then, is the continuation of AHC and is responsible for the liabilities of AHC, which no longer exists as a separate entity. To the extent that Goodrich seeks to recover for AHC's liabilities, it must pursue such claims against EII. Accordingly, there is no basis to permit service of AHC through the California Secretary of State.
Goodrich points to EII's refusal to accept service on behalf of AHC as a contradiction of EII's concession that it is the continuation of AHC, [Reply at 5]; however, EII's refusal of service is not inconsistent with its position. EII is already served and in the action. Therefore, service on AHC effectively has been accomplished.
III. CONCLUSION
For the foregoing reasons, Plaintiff Goodrich Corporation's Motion for Order Authorizing Service is DENIED.
IT IS SO ORDERED.