*1 your $40,940 by you in return for reported January 1982. year ended
the taxable $483,918 results from adjustment of property in
early disposition of Section your corporate reorganiza
conjunction with deficiency deter
tion.” The Commissioner’s correct, and Dis presumed to be
mination is error. Edel proving
ney has the burden CIR,
son v. F.2d Tandy Corp. v. Commis relying
While
sioner,
1165,
lenges the Disney no computation, offered
missioner’s statutory the Commissioner’s
evidence incorrect, that a deficiency was
notice of have been reached had
different result would January computation been made as of record evidence with
1982. The absence Disney’s tax
respect proper amount of
deficiency affirmance of the Com mandates deficiency determination.
missioner’s
REVERSED. BRITTON, Plaintiff-Appellee,
Joseph GROUP, Defendant.
CO-OP BANKING Liebling, Defendant-Appellant.
Jeff
No. 91-16851. Appeals,
United Court of States
Ninth Circuit. April 1993 *.
Submitted Sept.
Decided * 34(a); panel unanimously Circuit Rule 34-4. finds this case suitable for argument. Fеd.R.App.P. decision without oral *2 company purchased, may
into a he later the contract’s arbitration clause. invoke Liebling may invoke We find that not (1) arbitration clause because: contract’s estopped claiming are not Plaintiffs1 standing compel no arbitra- tion; (2) Liebling not a third bene- was ficiary or successor interest to the con- tract; Although Liebling became original employee officer and party, allegedly contracting none of his wrongful of or were related to acts arose out the contract. court is af-
The decision of the district firmed. proceedings below
Facts and appeal part alleg- is of a class action This perpetuated a securities that defendants by selling a fraudulent tax fraud scheme Liebling engaged and that shelter investment activity after the initial sales. in fraudulent allegedly signed a contract for the Plaintiffs Depository securities with Gold fraudulent (“GDL”). contract Company This and Loan Liebling, provision. cоntained an arbitration later non-signatory to the contract who a GDL, bought arbitration but demanded motion to ar- plaintiffs refused. His court, by the district bitration was denied waived arbitration. which found that he had appeal appealed, and while entered a default pending, the district court discovery a sanc- judgment against him as tion. Liebling, pro Jeff se. Co-op reversed. Britton This Court Miller, Torngren, Andrea M. William P. Cir. Banking Group, 916 F.2d Bartel, Adams, Eng, Miller and David C. 1990). chronicled panel, The Britton Sacramento, CA, appellee. Torngren, ease in proceedings this the facts and detail, Liebling had not concluded that
more right compel arbitration. waived his court had panel that the district also found issue of Lie- addressed the threshold CANBY, BRUNETTI, Circuit Before: compel arbitration and bling’s Judges, and E. JONES.** ROBERT court for the case to the district remanded fact-finding further determination JONES, Judge: E. District ROBERT if that Lie- panel concluded issue. right have this appeal bling Lie- does not have the The issue on is whether Jeff arbitration, “default bling, non-signatory to a contract entered submitted to ** Jones, appellees “plaintiffs” in this United States 1. We Honorable Robert E. Dis- refer sitting by Judge Oregon, trict for the District of opinion. designation. hand, alleged proven if neither nor the court the other
judgment”
stand. On
prior position
adopted plaintiffs’
ever
be correct on the arbitra
below
Liebling proves to
employee
judgment”
that he was liable as
the “default
will
question,
tion
contrary,
granting
To the
of a
aside.
GDL.
have to be set
*3
discovery
default was a sanction for
viola-
court,
remand,
concluded
The district
tions,
allegations in
unrelated to the
the com-
standing
Liebling
under the con-
that
lacked
plaint.
right to arbitrate and that
tract to assert a
view,
minority
it is a closer
Under the
in
judgment” therefore remains
the “default
question,
argument
but the
still fails. Plain
timely appealed and we
effect.
truly
by “asserting
relief
tiffs did not
obtain
pursuant
jurisdiction
to 28 U.S.C.
have
(B).
position”
1292(a)(1)
15(a)(1)(A),
offering proof
support
to
one
§
§
and 9 U.S.C.
themselves to establish a
and then contradict
review
Standard of
second claim. Arizona v. Shamrock Foods
compel
of a motion to
arbi
The denial
(9th
Co.,
Cir.1984),
1208,
cert.
729 F.2d
1215
Pipe
de novo.
Trades
tration is reviewed
denied,
980,
105
83
469 U.S.
S.Ct.
Council,
Underground
v.
Local 159
Contrac
(1985).
they
Again,
obtained
L.Ed.2d 982
(9th
Ass’n,
1273
Cir.
tor’s
835 F.2d
Liebling’s
comply
relief via
refusal to
with
1987).
discovery
the
order.
plaintiffs to be
Neither do we consider
Discussion
playing “fast and loose” with the courts.
estopped
claiming
are not
characterization is reserved for more
This
from
Plaintiffs
Liebling
standing
compel
to
arbitra-
has no
egregious
just
conduct than
“threshold”
tion.
Yanez,
where,
consistency,
supra, especially
here,
preju-
complainant
has not been
argues
judicial estoppel
inconsistency.
diced
plaintiffs
denying
should bar the
standing
compel
Liebling did not have
to
complaint regarding
allegations in their
arbitration.
agent
or successor in interest of
status as
disagree.
GDL.
This circuit has de
We
Liebling contends that he has stand
adopt
majority or
clined to
either the
minori
ing
contract’s
to enforce the
arbitration
See,
ty
judicial estoppel.
e.g., Yanez
view of
(1)
clause for one or more of three reasons:
Broco,
v.
2. Was of GD obligations, defenses and liabilities the contract? L, specifically & and because USA-GDL right assignee of a contractual An lawsuits, Liebling all is agreed to defend ownership validity of his prove the must assignee in interest or an not a successor Corp. Deposit Ins. v. WH claims. Federal purposes standing of to enforce GD & (E.D.Pa.1985). Venture, F.Supp. arbitration clause. L’s contractual principles contract dic Additionally, general agree is not a successor We assignment, an effective prove to tate that purposes the contract for in interest come forth with evidence assignee must arbitration. assign rights assignor meant that the general the contracts. See obligations under agents Is within a class (Second) Contracts, ly Restatement the arbitration tended to (1981)(“[a]n 317(1) right assignment of a is benefit from § clause? assignоr’s intention manifestation (“[i]t it”); § is essential id. at transfer stronger ground. Here is on [assignor] right that the assignment an of a May He claims that from to December right intention to transfer manifest an increasing active role he had “ever *5 provision spec person”). A contract another agent corporate of & L as its activities GD intent, of such an of ifying such is evidence says an officer and director.” He and as course. work included: range arising from the a broad of tasks GDL, and contract between IBS The sales problems plaintiffs having were would in $10, purchase price of does provides a as inves- connection with the contract such could be consid- language that not contain tigating informing plaintiffs and of the fac- rights speci- assignment of ered an effective situation, legal acting tual and as liason in contracts. fied the container accounts, attorneys and [sic] with Indeed, lаnguage of the contract plain the protecting plaintiffs regarding interests just parties oppo- had the indicates that the ... and much more. IRS that would defend site intent: USA-GDL added). (Emphasis On remand district pro- the container any lawsuits related to Liebling’s sale of court restricted review gram. analyzing In whether or not Liebling’s plaintiffs and ruled investments to interest, a true successor in the district was because, theory “Liebling agency failed court considered relevant contract clauses he, agent that presented no evidence that the intent of IBM and USA- and found GDL, plaintiffs.” investments to sold defend all law- that USA would was cramped tightly. judge district his review too reads: suits. The relevant clause any have examined acts of Lie- He should agrees strictly by all abide [USA to] agent the con- bling as an that arose from obligations by in lawful made it the GDL undertake to do so because tract. nowWe 29,1985, agreement April acquisition dated no factual on this issue. there is except specifically expressly and for those mentioned, complaint the first amended As contract, especially in this assumed IBS trying by plaintiffs, who are now filed against to defend all law suits.2 GDL, agent alleged Liebling as an defrock A.) (CR Ex. “sought profit that alleged complaint in and from the events this specifies that An additional clause complaint further class members.” The “debts, any responsible for obli- will not be states: gations, and liabilities” of GDL defenses 3, he became an officer and contract. On June prior curred to the date of the sale USA-GDL, and, in INC. those director of court concluded: As the district sentence, strictly "to proper the first clause of court noted that the inter- fies 2. The district pretation phrase, "especially obligations,” to defend etc. abide all lawful suits,” appears all law to be that it modi- early 1985 and on that resignations of the as June has carried accepted the capacities, USA-GDL, conspiracy, plan by discourag- INC. or scheme members of other board 1985, 18, formed the pursuing LIEBLING members from their class On June Restitution Cor- legal by purporting pur- Assistance and Investors remedies and (“IARC”). Later, letters he sent poration in sue their remedies when truth and soliciting monies from members to class fact he was not. copies of docu- join IARC and them to Signifiсantly, plaintiffs allege op- that the seeking indicating he was ments starting in erative time for these acts was represent class mem- firm to out a law June, Liebling presented an affidavit 1, 1986, February LIEBLING bers. On documenting an that he became officer and members in newsletter to class sent a May, director of GDL and later monies, sug-
which he solicited additional year bought company. same start or gested that class members not against salespersons whо pursue lawsuits present any evi- Plaintiffs do rebuttal in this com- securities described sold the proffer Liebling’s dence to factual and the arranged implied that he had plaint, and findings district court made no factual represent the class firm to with law director, Liebling’s contradict role as Between June members’ interests. Thus, accept employee of GDL. we February LIEBLING Liebling’s that he assertion was the class members mailed 4 letters to GDL, employee starting in officer and States; in each let- throughout the United May running through the end ter, implied that he he solicited monies and acts, any, arising if un- operative period, for Dur- acting to assist class members. der the contract. frame, ac- ing the same time LIEBLING key question: Did ownership That leads us quired of GOLD DEPOSITORY *6 agent, CO., Liebling’s alleged wrongdoing as and its assets for no & LOAN INC. consideration, 5, 1986, employee during this al- March was re- officer or leged period BANK of time relate to or arise out of CO-OP INVESTMENT tained security consulting containing provide LTD. to contract assisting purported to be services and thus clause? and some defendants at the class members only appears Plaintiffs’ contact with GDL 18, 1986, the same time On June [sic]. through the container lease to have been to LIEBLING mailed another newsletter investments, that does not answer the but soliciting more monies and class members only relevant acts key question. The failing join IARC advising that those to in the charged against are set forth 7, 1986, might rights their to July forfeit impose seek to complaint and none of them payments. On March receive restitution liability In abbreviated from the contract. a letter to LIEBLING sent similar form, allegations essentially fol- are Based on information class members. lows: members,
from newsletters and class that LIEBLING received believe (1) class members soli- He sent letters to to from members for services mоnies class join citing money to an investors’ assistance membership them and for provided be group; he formed includ- groups in several (2) suggested class members not start He IARC, Group,” Legal “The Action against salespersons who pursue law suits or Group” L and “The “The GD & Investors contract; securities under sold the Group.” Based on a letter Tax Assistance 7, 1986, LIEBLING to April dated (3) class members soli- He sent letters to LTD., BANK CO-OP INVESTMENT acting implied he citing monies and plaintiffs beliеve LIEBLING was them; assist By of his other defendants. virtue of some (4) consulting provide bought GDL to conduct, He joined participat- LIEBLING members; and class services to conspiracy, plan in or scheme as ed 748 interpreta- susceptible not of an discouraged members from clause is class He by purporting dispute. remedies tion that covers the asserted
pursuing their in fact he was remedies when of cov- pursue their should be resolved in favor Doubts nоt. erage.” allegations Technologies, T of these AT & Inc. v. Communica
The sum and substance America, 643, 650, way attempted to de- that he in some are tions Workers U.S. pursuing their 1415, 1419, (1986), into not fraud the investors L.Ed.2d 648 106 S.Ct. originally persons who law suits quoting v. & Nav Steelworkers Warrior Gulf under the contract. These sold the securities Co., 582-83, igation 363 U.S. S.Ct. subsequent, independent acts of acts are (1960). 1347, 1353, 4 The bal L.Ed.2d 1409 fraud, interpre- any provision or unrelated presumption principle that ance of this is the They simply tation of the contract. do a matter of contract and a “arbitration is liability, vicariously impose contractual required cannot be to submit arbi such, otherwise, upon Liebling. we As any dispute agreed tration which he has not compel no find that Gulf, at to so submit.” Warrior & 363 U.S. arbitration, though even he was an 1353; at 80 S.Ct. Southern California employee during later officer and of GDL its Constr., Berry Dist. Council Laborers months of existence. 984 F.2d Conclusion presump- disregard are not free to We weigh in tion favor of arbitration and conclude that the district court was We arbitrability of this on an even scale. determining correct in lacked I in Because believe the arbitration clause standing to enforce the arbitration clause. unquestionably “susceptible this case is of an Accordingly, we affirm the district court’s interpretation that covers the asserted dis- denying Liebling’s motion to order pute,” I would fоllow the Court’s mandate arbitration. and direct the matter to arbitration. AFFIRMED. majority recognizes that the arbitra- It tion clause this case is broad one. BRUNETTI, Judge, dissenting: Circuit errs, however, ignoring the settled conse- *7 majority The holds that the acts provided quence of that breadth. The clause any allegedly committed were “unrelated to as follows: provision interpretation contract” or of the Any controversy arising or claim out of or result, it bеtween and GDL. As relating Agreement to this or the breach standing to invoke finds that lacks thereof, ... shall be settled arbitration provision in the arbitration that contract. judgment upon and the award rendered panel’s interpretation ignores contempo- The Arbitrator(s) any may be entered in rary principles federal on the issue of arbi- having jurisdiction Court thereof. trability, proves its erroneous conclusion opinion. fatal to an otherwise well-reasoned Opinion Memorandum and Order at 3. Accordingly, I dissent. majority The concludes that the arbitration emphasized Supreme The Court has re- clause does not cover the instant peatedly strong policy in favor of federal actions, Liebling’s because which formed arbitration: complaint, “subsequent, basis for the were fraud, any independent unrelated to acts of [Wjhere an the contract contains arbitra- contract,” provision interpretation of the or clause, presumption tion there is a of arbi- impose “[tjhey simply do not and because trability “[a]n in the sense that order liability, vicariously contractual or other- particular grievance should arbitrate the wise, scope upon Liebling.” The of this unless it be said with be denied clause, however, to contro- positive is not restricted assurance that the arbitration interpretation perfor- relаting to versies America, itself. of ex rel. of the contract UNITED STATES
mance RICHARDS, Inspector R. Gener James ground in Mediterrane this We travelled al, Department Interior, of Peti U.S. Ssangyong, 708 F.2d Enterprises v. tioner-Appellee, Cir.1983). explained opinion, In that we v. between broad “significant” difference clauses, direct to arbitra GUERRERO, De LEON Gover Lorenzo relating to “arising out of or disputes tion of Records for the nor Custodian agreement,” and clauses limited to dis [an] Finance, Department of Commonwealth “arising “under” or putes or controversies Islands, of the Northern Mariana Re Ssang- Id. at 1464. The out of’ the contract. spondent. difficulty” finding that had “no yong court Sablan, al., Applicants- Herman et S. cover type of clause “is intended to the latter Appellants. i.e., only scope disputes, of a much narrower interpretation per relating to the those America, ex rel. UNITED STATES itself.” Id. The of the contract formance RICHARDS, Inspector R. Gener James clause, interpret like the one we broader al, Department Interior, U.S. today, limited. is not so Plaintiff-Appellee, It majority ignores this distinction. v. we our clause the effect attributes to broad GUERRERO, Lorenzo De LEON Gover the “much nar expressly described for have of Records for the nor Custodian relating the “or clause which omits rower” Finance, Department of Commonwealth id., language. quoting agreement” See this Islands, the Northern Mariana Defen Figli Fisheries Devel Amoruso e Michele dant-Appellant. F.Supp. opment Corp., (S.D.N.Y.1980). majority’s construction 92-15884, 92-16372. Nos. Ssangyong. in the shadow cannot stand Appeals, United States Court the district court’s deter-
I would reverse Ninth Circuit. mination that lacks 14, 1993. Argued and Jan. Submitted provision in the the arbitration voke Sept. Decided grant the court to Lie- contract and direct pur- bling’s request for an order to arbitrate agreement. I would also direct
suant to that earlier order court to set aside its
the district prior our deci- in accordance with
of default Banking Co-Op in this case. Britton v.
sion *8 Cir.1990). I Group, 916 F.2d
respectfully dissent.