Kreisman Law Offices Professional Corporation
In a breach of contract case, the issue was whether a party defendant was a necessary defendant in this federal court case filed in Chicago. Two of the defendants, Nafeesa Moosabhoy and Aymen Tyebjee, moved to dismiss the complaint that Shabbir and Munira Nomanbhoy filed in federal court.
The court found that the complaint satisfied the requirements for diversity jurisdiction because Shabbir and Munira were residents of California. They sought relief in the amount of $1.3 million in damages. Moosabhoy and Tyebjee were residents of either Illinois or Texas. However, another obligor under the agreement, Zehra Vahanvaty, who Moosabhoy and Tyebjee alleged breached the contract, was a resident of California. Vahanvaty was claimed to be a necessary party under Rule 19 of the Federal Rules of Civil Procedure, and as a result diversity of citizenship would be destroyed. For diversity of citizenship federal jurisdiction, the plaintiff and defendant must be residents of different states.
In support of the motion by Moosabhoy and Tyebjee, they argued there was no diversity of citizenship. They relied on the Seventh U.S. Circuit of Appeals stating that, “A contracting party is the paradigm of an indispensible party.”