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TRINSEY v. PAGLIARO, (E.D.Pa. 1964)
Factual and Procedural Background
This case arises from a dispute concerning the ownership interest of the plaintiff, John S. Trinsey, Jr., in a tract of approximately 47.6 acres known as "Rebel Hill" in Gulph Mills, Pennsylvania. On April 29, 1960, an agreement was made whereby title to the land was taken by Trinsey and defendant Frank J. Pagliaro. Subsequently, on May 9, 1960, title was transferred to a trustee-straw party, Howard Richard, Esq., for the benefit of Trinsey and Pagliaro.
On May 13, 1960, Pagliaro and his attorney, Albert Foreman, Esq., procured a blank deed from the straw party and his wife. The plaintiff initiated this civil action to nullify that blank deed.
Later, on November 29, 1962, the straw party executed a deed conveying the land to Trinsey and Pagliaro as tenants in common, which was recorded in Montgomery County.
In December 1962, Pagliaro commenced a civil action in Montgomery County Court of Common Pleas against Trinsey and Richard, alleging breach of trustee duties by Richard. That action resulted in a mistrial. Trinsey petitioned for arbitration pursuant to the arbitration clause in the April 29, 1960 agreement. The state court granted this petition, and Pagliaro appealed to the Pennsylvania Supreme Court, which has not yet decided the appeal. Arbitration proceedings have not yet commenced.
Defendants moved to dismiss the federal action, citing the pending state court proceedings and arbitration appeal, mootness of the action because the deed is held by the state court, and potential lack of federal jurisdiction if arbitration is upheld. The court maintains federal jurisdiction based on diversity and the amount in controversy, distinguishing the in rem nature of the federal action from the in personam state action.
Legal Issues Presented
- Whether the federal court has jurisdiction to hear an action seeking to nullify a blank deed and clarify ownership interests in real property despite concurrent state court proceedings and pending arbitration.
- Whether the defendants' motion to dismiss should be granted based on alleged mootness and pending state and arbitration proceedings.
- Whether arbitration proceedings affect the federal court's ability to adjudicate title to the land.
Arguments of the Parties
Defendants' Arguments
- The federal action should be dismissed due to the pendency of related litigation in Montgomery County and the arbitration appeal before the Pennsylvania Supreme Court.
- The action is moot because the blank deed is under control of the Montgomery County Court and not in the defendants' possession.
- If the Pennsylvania Supreme Court upholds arbitration, the federal court will lack jurisdiction over the matter.
- The motion to dismiss is supported by facts outside the record, but these were not properly submitted under Federal Rules of Civil Procedure 12(b)(6) and 56(c).
Plaintiff's Arguments
- This information was not available in the provided opinion.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Penn General Casualty Co. v. Pennsylvania, 294 U.S. 189 (1935) | Permitting parallel federal and state court actions where both courts have jurisdiction over the parties. | The court relied on this precedent to hold that the federal court may proceed with the in personam aspects of the case despite related state proceedings. |
| Mach-Tronics, Inc. v. Zirpoli, 316 F.2d 820 (9th Cir. 1963) | Supporting the principle that concurrent jurisdiction of federal and state courts is permissible. | Used to reinforce the court's conclusion that the federal and state actions do not conflict and both may proceed. |
Court's Reasoning and Analysis
The court distinguished the federal action as partly in rem, seeking to nullify a blank deed and remove a cloud on title, which does not conflict with the in personam state action or arbitration. The federal court held jurisdiction based on diversity and the amount in controversy, noting that the state proceedings do not preclude federal jurisdiction over the property interests. The court found no indication that arbitration proceedings would resolve the title dispute, as the arbitration concerns trustee compensation and collateral matters, not land title. The defendants’ motion to dismiss was denied because it relied on facts outside the record not properly submitted, and statements by counsel are insufficient for dismissal or summary judgment. The court emphasized the permissibility of parallel state and federal litigation under established precedent.
Holding and Implications
The defendants' motion to dismiss is denied without prejudice.
The direct effect of this decision is that the federal action seeking to nullify the blank deed and clarify ownership interests will proceed despite related state court and arbitration proceedings. No new precedent was established; the ruling reaffirms the principle that federal courts may exercise jurisdiction concurrently with state courts when jurisdictional requirements are met and the actions concern distinct legal interests.
WOOD, District Judge.
This case arises out of a dispute over the extent of the plaintiff's ownership interest in a tract of land of approximately 47.6 acres located in Gulph Mills, Pennsylvania, known as "Rebel Hill." By an agreement, dated April 29, 1960, title to the land was taken by the plaintiff and the defendant Pagliaro. On May 9, 1960, pursuant to a second agreement between the parties title was transferred to a trustee-straw party, Howard Richard, Esq., for the benefit of Trinsey and Pagliaro.
Thereafter, on May 13, 1960, Pagliaro and his attorney, Albert Foreman, Esq., procured a blank deed from the straw party and his wife. It is this blank deed that the plaintiff by his civil action filed with this Court seeks to have nullified.
Following the delivery of the blank deed, the straw party, Richard, executed a deed on November 29, 1962, conveying "Rebel Hill" to Trinsey and Pagliaro as tenants in common. This deed was recorded in the Office of the Recorder of Deeds for Montgomery County.
A civil action was commenced by Pagliaro in Montgomery County in December 1962 against Trinsey and Richard as defendants in the Court of Common Pleas on the ground that Richard at the instance of Trinsey violated his duties as Trustee when Richard executed the November 29, 1962 deed in favor of Trinsey and Pagliaro. This action resulted in a mistrial and Trinsey filed a petition to have the case referred to arbitration before the American Arbitration Association. The Montgomery County Court granted this petition and Pagliaro appealed the order to the Pennsylvania Supreme Court which is awaiting decision at this time. The arbitration has not reached the hearing stage.
Paragraph 17 of the April 29, 1960 agreement between Trinsey and Pagliaro provides for the settlement of any disputes by arbitration.
The defendants Pagliaro and Foreman have filed a motion to dismiss the action in this Court because of the possibility of further action in the Montgomery County Court and the arbitration appeal before the Supreme Court. Also, the defendants contend in their motion that this action is moot because the deed is in the control of the Montgomery County Court, having been offered in evidence in the original action, and not in the possession of Pagliaro. Finally, the defendants argue that if the State Supreme Court sustains the order for arbitration, this Court will lack jurisdiction to decide the matter.
This Court has jurisdiction because of diversity and the amount involved. The Montgomery County in personam action attacking the acts of the Trustee and which resulted in a mistrial, as aforesaid, does not preclude this Court from taking jurisdiction of this in rem action. This Court, if the facts warrant such a determination, could nullify the blank deed of May 13, 1960, as prayed for, and declare the recorded deed creating ownership as tenants in common between the parties valid or render such other relief as might be proper insofar as the land itself is concerned.
On the record before us the arbitration proceedings on appeal concern plaintiff Trustee's claims for back pay and collateral matters under an agreement between the parties. There is nothing before us which would warrant a determination that the arbitration proceedings will in any way determine title to the land involved, notwithstanding the statement at argument that a counterclaim had been filed in the arbitration proceedings by defendant which raised the questions previously before the Montgomery County Court, and furthermore, no mention was made of the May 13, 1960 blank deed in this counterclaim insofar as we are able to determine from the oral argument or the record.
The action before this Court being partly in rem because it seeks to nullify an outstanding deed and remove a cloud on the title of the premises is not in conflict with the in personam action before the State Court or the Arbitration Board. Insofar as this action is in personam in that it seeks to restrain the defendants from executing the blank deed in favor of anyone other than the plaintiff, the Federal Court may proceed with the litigation because there is no bar to parallel Federal and State actions where each Court has jurisdiction over the persons. Penn General Casualty Co. v. Pennsylvania, 294 U.S. 189, 195, 55 S.Ct. 386, 79 L.Ed. 850 (1935).
Mach-Tronics, Inc. v. Zirpoli, 316 F.2d 820 (9 Cir. 1963).
The defendants' motion to dismiss for failure to state a claim unsupported by affidavits or depositions is incomplete because it requests this Court to consider facts outside the record which have not been presented in the form required by Rules 12(b)(6) and 56(c). Statements of counsel in their briefs or argument while enlightening to the Court are not sufficient for purposes of granting a motion to dismiss or summary judgment.
ORDER
And now, this 28th day of May, 1964, the defendants' motion to dismiss is denied without prejudice.
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