Action Manufacturing Inc. v. Fairhaven Textile Corp.

790 F.2d 164 (1986) | Cited 5 times | First Circuit | February 20, 1986

Before Coffin, Circuit Judge, Wisdom*fn* and Aldrich, Senior Circuit Judges.

ALDRICH, Senior Circuit Judge. In this suit by Action Manufacturing, Inc., tried to the court, for breach of warranty of fabrics which were, concededly, "expressly warranted by [defendant] Fairhaven [Textile Corporation] and [third party defendant] Brawer Bros. [Inc.] to be first quality," the first ten pages of Fairhaven's brief are devoted to a claim of lack of timely notice of breach. Although, actually, this was a non-issue, it is such a conspicuous example of improper advocacy that we, too, will discuss it at the outset.

Paragraph 11 of the complaint commenced, "11. Immediately upon discovery of said defects in the nylon Plaintiff notified Defendant . . . ." Defendant's answer read, "11. As to any defects, denied. As to notification of a problem, admitted . . . ." This answer was never amended, nor sought to be amended. The pretrial statement of issues made no mention of notice, let alone alleged untimeliness. Neither did defendant's opening to the jury.

During trial evidence was introduced, with relation to another issue, which, standing alone, might support a contention that plaintiff's notice of breach was tardy. That issue was not mentioned, however, until defendant's post trial argument and requests. The court's response was a short rejection. More than half of Fairhaven's brief is now devoted to this alleged error.

Passing the fact that the court's rejection on the merits would not appear to have been error in any event,1 pressing it disregards the elementary principle that, unless by agreement, actual, or implicit from conduct, a matter once conceded is not later in dispute simply because some evidence, admitted on another issue, could be claimed to contradict it. 6 Wright & Miller, Federal Practice and Procedure § 1443, p.466 (1971); see Vargas v. McNamara, 608 F.2d 15, 18 n. 3 (1st Cir. 1979); cf. F.R.Civ.P. 15(b). Otherwise an attempted withdrawal of an admission in the pleadings after the case has closed is the unfairest kind of surprise, even, perhaps, for a court that is conducting a bench trial and might wish elucidation,2 and particularly unfair to unsuspecting counsel.

This was without excuse. During oral argument a colloquy revealed that, prior to the pretrial statement of issues, defendant had discovered grounds for claiming that its admission in its answer was incorrect, but had concluded to remain silent. Asked why, counsel said,

"We had a reason for not tipping our hand."

Court. "You wanted to fool the court?"

Counsel. "No, we did not. We did not want to be fooled by the [plaintiff.]"

It would be difficult to conceive of a more unabashed piece of sharpness. Don't change your pleading, or let the other party know what he has to meet, or he'll fool you -- with counter-evidence. Yet Fairhaven would claim that plaintiff's "implication of surprise at Fairhaven's notice argument is ironic and disingenuous." This is not even sense, let alone fair.

For defendants to pursue this matter on appeal is not merely frivolous, it is an imposition on appellee and the court. For such a severe disregard of counsel's duty it is appropriate to charge counsel personally with attorney's fees as part of appellee's costs. 28 U.S.C. § 1927; see United States v. Nesglo, Inc., 744 F.2d 887, 892 (lst Cir. 1984); Good Hope Refineries, Inc., v. Brashear, 588 F.2d 846, 848 (1st Cir. 1978).

Turning to the merits, defendants raise two principal points: that the court erred in finding their goods faulty, and in overstating the damages. Here, at least, defendants recognize settled law, that they must show the findings to have been clearly erroneous. F.R.Civ.P. 52(a). Unfortunately, they adopt the not uncommon practice of assuming the correctness, or superior quality, of their own evidence; one cannot read their briefs without a feeling of being asked to review the case de novo. For example, we are told at length how defendants' expert had higher qualifications than plaintiff's. This is not the stuff by which "clearly erroneous" is established.

Even worse is the brief of third party Brawer Bros. which, as the initial actor and party ultimately responsible, took the laboring oar as to the quality of the material. The principal defective goods were 70 denier lightweight nylon, finished by Fairhaven and supplied to plaintiff in 1979 as first quality. Plaintiff laminated the material (glued it to paper) and supplied it to shoe manufacturers, largely in Europe. When it bubbled, plaintiff, admittedly after many tests, claimed the material to have been defective. Defendants, in response, charged improper processing by plaintiff.

One of the pretrial tests ultimately conducted involved Fairhaven's 1982 material and a sample of its 1979 material. A witness for plaintiff having conceded that the later material was first quality, Brawer asserts that the witness conceded thereby that the earlier was first, as well. This concession, it says, follows from Brawer's testimony that the two materials were the same.

Brawer went even further. In its reply brief it complains vigorously that plaintiff's brief wrongly charged it with admitting the use of second-grade yarn in its 70 denier fabric. Yet Irving Brawer had testified, "[T]here is no question in my mind whatever that some fabrics were made out of yarn that was designated by DuPont as second quality." His preceding and subsequent testimony made clear that this phraseology was an admission, not a denial. The admission does not disappear because Brawer testified that this second-grade yarn was first quality, (with which compare his testimony, "[E]verything we buy from DuPont is bought without any warranties on their part except when we specifically ask for first quality yarn from DuPont to be used in some of our other operations."). Nor was the admission struck by Brawer's testimony that it is possible to make first quality goods out of second-grade yarn.

An appeal so presented does not make necessary our recitation of the evidence contained in seven volumes of transcript and many exhibits that might be due an appellant who presents supported representations of manifest error. The significant fact is that there was ample evidence supporting the court's findings, both on liability and damages. Nor did the court make any improper rulings. The court was warranted in concluding that plaintiff suffered more than the dollar loss attributable to the goods directly involved. A customer who finds the milk turned one day may look elsewhere for it another.

Plaintiff conceded at oral argument that it would not pursue its cross appeal of the court's grant of Fairhaven's counterclaim. The judgment is affirmed in all respects, with costs to Action.3 Fairhaven's counsel is charged personally with attorney's fees in the amount of $2,000. This, we may add, is punitive, see Knorr Brake Coro. v. Harbil, Inc., 738 F.2d 223, 226 (7th Cir. 1984); cf. United States v. Nesglo, Inc., ante, 744 F.2d at 892, and not a business expense. Cf. Tank Truck Rentals, Inc. v. Commissioner, 356 U.S. 30, 78 S. Ct. 507, 2 L. Ed. 2d 562 (1958).


1. Fairhaven's argument presupposes that plaintiff was engaged in self-destruction, not an easy contention.

2. See, e.g., in another connection, The Court: I want to ask you a question, because I can ask questions. I'm the one that's going to decide this.

3. Strictly, we would have assessed double costs, but Fairhaven does prevail on the minor cross-appeal.

* Of the Fifth Circuit, sitting by designation.

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