Action Manufacturing Inc. v. Fairhaven Textile Corp.

1986 | Cited 0 times | First Circuit | May 14, 1986

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

Per Curiam. Following our opinion in this case, which we concluded by charging appellant's counsel personally with attorney's fees as costs for making an improper contention, counsel moved that we withdraw that portion of the opinion, and the assessment, and, presumably in case we did not, for a rehearing en banc.1 Out of regard for counsel, following their hearing the tape of the oral argument, we again reviewed it, and the entire record and briefs, as well as the petition itself. While we do not grant the motion to withdraw, it may be appropriate further to state our reasoning.

Without repeating the facts in detail contained in the original opinion, this was an action, tried to the court, for breach of warranty. The court found in favor of plaintiff, appellee. Paragraph 11 of the complaint had alleged, inter alia, due notice of breach. Paragraph 11 of defendant appellant's answer denied some of the other assertions, but admitted notice. The pre-trial statement of disputed issues made no reference to notice, nor did defendant's opening; nor was it adverted to at trial.

Defendant was a supplier of materials that went into plaintiff's product. The complaint sought damages for allegedly defective materials furnished in the early fall of 1979. Prior to the pretrial plaintiff expanded its damage claim to include a small amount of goods supplied the preceding spring. No objection was made by defendant that this was outside the pleadings, or that there had been tardy notice. In its post-trial argument, however, defendant asserted, for the first time, that notice had been late. The court, without discussion, found proper notice.

On appeal defendant extensively briefed that plaintiff's case must fail for lack of timely notice. This prompted the judge who ultimately wrote the opinion to review the record, and, at argument, he, and a second judge, asked detailed questions why defendant had not raised the issue of notice until after trial. This produced the response, noted at greater length in our opinion, that counsel did not want to "tip . . . our hand."

On the record, the extent of plaintiff's awareness in the spring of defects in defendant's material was so slim that we might wonder whether there could have been an issue of a duty of earlier discovery, and of consequent need of notice.2 We were disturbed, however, by quite another matter. As a general principle the presentation of claims beyond the complaint without objection is considered an informal amendment of the complaint. See Lynch v. Dukakis, 719 F.2d 504, 508 (1st Cir. 1983); F. R. Civ. P. 15(b). In the absence of notice to the contrary, it may be assumed that defendant does not choose to amend its answer. Anything else would be inconsistent with the universal principle that the issues in a case are to be made known in advance.

Defendant's claim now is that all that its answer admitted was due notice as to the fall goods, ("said defects") and was inapplicable to goods supplied earlier. Even taking this at its face value we would consider such a contention lacking in the necessary candor, but defendant's position is far more extreme. "Actions' answer to interrogatory [claiming damages for June] put all parties on notice that notice had now become an issue." "[D]espite the timely notice on the September items, Action would be barred for anv remedy," (viz., for the fall items, as well as the spring's.) (Emphasis in orig.) As a legal proposition, for which, incidentally, defendant cites no authority, this seems an extraordinary position. The spring goods, and the fall goods, were separate orders, and separate shipments. At the very least, and we cannot emphasize this too highly, if notice was considered no longer admitted as to the fall goods, this would be in flat contradiction to an answer which stood unamended.

In light of the pleadings, and the pretrial silence, it was difficult to think how defendant's counsel could have thought his position with respect to the September goods so obvious that plaintiff's counsel were on actual, as distinguished from possible legal, notice that notice as to these goods was now an issue. We accordingly inquired as to this during oral argument, and counsel conceded they maintained silence to avoid tipping their hand, in the hope that plaintiff would not try to "fool" them, viz., by offering (false) evidence to meet it. In other words, counsel was hoping to fool the plaintiff. This method of trying cases has been outlawed in the federal court by the Rules of Civil Procedure since 1940.

At the least, defendant's pursuing this matter on appeal must be characterized as frivolous. Under such circumstances we, and other circuits, have felt that counsel should be charged, whether under 28 U.S.C. § 1927, or F.R.A.P. 38. Good Hope Refineries, Inc. v. Brashear, 588 F.2d 846, 848 (1st Cir. 1978); Limerick v. Greenwald, 749 F.2d 97, 102 (1st Cir. 1984); Commonwealth Elec. Co. v. Woods Hole, etc. Steamship Authority, 754 F.2d 46, 49 (1st Cir. 1985); United States v. Potamkin Cadillac Corp, 697 F.2d 491, 494-95 (2d Cir. 1983), cert. denied, 462 U.S. 1144 (3 Justices voting to award respondent damages for frivolous appeal, Sup. Ct. Rule 49.2); Tedeschi v. Barney, 757 F.2d 465, 466 (2d Cir. 1985), cert. denied, 106 S. Ct. 147; Hughes v. Hoffman, 750 F.2d 53, 55 (8th Cir. 1984); McConnell v. Critchlow, 661 F.2d 116, 118-19 (9th Cir. 1981); In re Oximetrix, Inc., 748 F.2d 637, 644 (Fed. Cir. 1984). In Gianfriddo v. Western Union Tel. Co., F.2d (1st Cir. 3/21/86), we noted that counsel or client should determine the responsibility; here it is clearly counsel's.

Our opinion will stand, subject to pending motion for review en banc.

1. Counsel also requested permission to hear the tape of the oral argument, which we granted, and this thereafter occurred. No further response followed.

2. Plaintiff knew it had problems with its own product, but did not realize they were traceable to defendant's material.

* Of the Fifth Circuit, sitting by designation.

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