MANAGEMENT INVESTORS and Norman C. Reid, f/d/b/a Lewis Coal Company and James W. Brummett f/d/b/a Southern Belle Trucking Co. Inc., Plaintiffs-Appellants, v. UNITED MINE WORKERS OF AMERICA, Defendant-Appellee.
No. 78-1428.
United States Court of Appeals, Sixth Circuit.
Argued Feb. 21, 1979. Decided Oct. 25, 1979.
610 F.2d 384 | 102 L.R.R.M. (BNA) 2653 | 87 Lab.Cas. P 11,630 | 5 Bankr.Ct.Dec. 913
E. H. Rayson, James Ridley, III, Kramer, Johnson, Rayson, McVeigh & Leake, Knoxville, Tenn., Harrison Combs, Willard P. Owens, Washington, D. C., for defendant-appellee.
Before CELEBREZZE, KEITH and MERRITT, Circuit Judges.
KEITH, Circuit Judge.
James W. Brummett and Lewis Coal Company1 appeal from judgments below dismissing their claims for damages against the United Mine Workers of America (UMW) under Section 303 of the Labor-Management Relations Act,
FACTS
This action arises out of a labor dispute that occurred in Morgan and Scott Counties, Tennessee in early 1975. The parties involved in the dispute were plaintiff Lewis Coal Company,3 plaintiff James W. Brummett, a coal hauler operating under the incorporated name Southern Belle Trucking Co., Inc. (Southern Belle), and defendant United Mine Workers of America.
On February 3, 1975, a group of former employees began picketing the mine site. A UMW representative reportedly identified himself to Lewis Coal Company‘s assistant supervisor and informed him that the former employees had been told that the Company had a new crew and that the pickets were seeing to it that the new crew was not going to work. On this first day of picketing, plaintiff Brummett4 allegedly was halted at the picket line and informed that he, as well as the Company, was being picketed by the UMW. On February 11, 1975, the UMW filed a petition with the N.L.R.B. for certification as the employees’ bargaining representative.
In late February and early March, 1975, violence, both at and away from the mine site, resulted in unfair labor practice charges being filed against the UMW. In addition, a suit brought by the Company in state court resulted in injunctive relief and subsequent findings of contempt against a number of the more active pickets.
The Company terminated Brummett‘s contract in February or early March, 1975. After Lewis Coal Company terminated him, Brummett hauled coal for other operators until December, 1975. On December 30, 1976, both Brummett and Southern Belle were adjudged bankrupts.
The picketing continued and the UMW gave the pickets weekly strike benefits from February 3 to July 18, 1975. However, the violence was ended by an April 7, 1975, stipulation between the UMW and the NLRB. In July, the Union abandoned the strike and withdrew its petition for an electiоn. In June, 1976, Lewis Coal Company ceased its mining operations.5
On January 30, 1978, Brummett and Lewis Coal Company initiated the present action for damages under Section 303. Additionally, plaintiffs sought treble damages under
The trial in this case was originally scheduled to commence on June 6, 1978. Pursuant to a pretrial order, the trial was rescheduled to July 25, 1978, with trial briefs and jury charges to be filed on or before June 15, and witness lists to be exchanged by May 10, 1978.7 Pursuant to the terms of a stipulation entered into by the parties and approved by the court on June 8, 1978, trial by jury was waived; the parties were ordered to file proposed findings of fact and conclusiоns of law by July 17, 1978.8
It appears that plaintiff‘s counsel learned of the Union‘s motion purely by accident while making inquiry to the clerk on July 19 as to the status of the Union‘s overdue pretrial brief and proposed findings of fact and conclusions of law. Upon discovering that the motion and a brief in support thereof had been filed the previous day, plaintiff‘s counsel opposed the motion in a telegram delivered to the court on July 20, 1978.9 On that same day, the court entered an order granting the Union‘s motion for summary judgment and dismissed Brummett as a party plaintiff.10
When the cause came on for trial as scheduled on July 25, 1978, the court declined in its discretion to exercise pendent jurisdiction over that portion of the complaint alleging violations of state law. The court, therefore, Sua sponte dismissed Lewis Coal Company‘s claims arising under the laws of Tennessee. Following the court‘s dismissal of its state law claims, Lewis Coal Company requested and was granted a voluntary dismissal without prejudice of its Section 303 claims pursuant to
I. Summary Judgment
A
Brummett contends that the district court actеd improperly in granting the Union‘s two-day-old motion for summary judgment. We agree.
Summary judgment does serve a worthwhile cause. As the Fourth Circuit has noted:
Summary judgment is to avoid a useless trial. It is a device to make possible the prompt disposition of controversies on their merits without a trial, if in essence there is no real dispute as to the salient facts.
Bland v. Norfolk and Southern Railroad Company, 406 F.2d 863, 866 (4th Cir. 1969). To facilitate this purpose,
. . . that a trial judge should be slow in disposing of a case of any complexity on a motion for summary judgment, that while such a judgment wisely used is a praiseworthy and timesaving device, yet such prompt dispatch of judicial business is neither the sole nor the primary purposе for which courts have been established, and that a party should not be deprived of an adequate opportunity to fully develop his case by witnesses and a trial, when the issues involved make such procedure the appropriate one. . . .
S. J. Groves & Sons v. Ohio Turnpike Com., 315 F.2d 235, 237 (6th Cir.), cert. denied, 375 U.S. 824, 84 S.Ct. 65, 11 L.Ed.2d 57 (1963). See Smith, et al. v. Hudson, et al., 600 F.2d 60 (6th Cir. 1979); Tee-Pak, Inc. v. St. Regis Paper Co., 491 F.2d 1193, 1196 (6th Cir. 1974); Hart v. Johnston, 389 F.2d 239, 241 (6th Cir. 1968).
In choosing to act as it did on this two-day-old motion for summary judgment, the district court disposed of a complex case without even permitting plaintiffs the benefits of apрlicable procedural rules. Local Rule 12(b)13 allows a party five days after a motion is served to respond. And where the motion is determinative of the case on the merits, Local Rule 12(c)14 provides for an oral hearing upon request by either party. Under
In this case, however, the Union‘s motion was not served upon Brummett‘s counsel until July 20, the same day the district court rendered its decision granting the motion. We are of the view that these precipitous acts by the trial court denied plaintiff his due process right to be heard.16
Ordinarily, our finding here would require that we reverse and remand this cause in order that plaintiff might be permitted an opportunity to properly oppose the motion. But as the question presented here is purely one of law, we go on to decide it. And while we do not approve of the district court‘s conduct, our review of the pertinent law persuades us that the error committed here was harmless.
B
Considering the motion on the merits, the district court held that title to Brummett‘s right of action vested exclusively in the trustee of his bankrupt estate under Section 70a(6) of the (old) Bankruptcy Act,
110. Title to property. (a) The trustee of the estate of a bankrupt and his successor or successors, if any, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt as of the date of the filing of the petition initiating a proceeding under this Act (this title), except insofar as it is to property which is held to be exempt, to all of the following kinds of property wherever located . . . (6) rights of action arising upon contracts, or usury, or the unlawful taking or detention of or injury to his property . . . .
The case law in the area suggests that causes of action “arising upon contract” within the contеmplation of § 70a(6) involve actions to enforce rights created by virtue and pursuant to the terms of a contract. See Tobin v. Plein, 301 F.2d 378 (2nd Cir. 1962); Hudson v. Wylie, 242 F.2d 435, 443 (9th Cir. 1957); Moore v. Slonim, 426 F.Supp. 524, 526 (D.Conn.), aff‘d, 562 F.2d 38 (2d Cir. 1977). In other words, causes of action arising upon contract are to enforce the contractual obligations of a party to the contract.
While the claims asserted by Brummett in this action are to recover for an alleged injury to his contractual relationship with Lewis Coal Company, they clearly are not to enforce any rights which he may have had pursuant to a contract. Thus it would appear that to the extent the district court viewed Brummett‘s claims as vesting in the trustee because they arose on a contract, the court erred.
Our disposition оf the district court‘s first holding requires that we address its holding that Brummett‘s claims vested in the trustee because they arose upon an injury to his property. The crucial question here concerns whether Brummett‘s contractual relationship with Lewis Coal Company constituted “property” within the meaning of § 70a(6). We are guided here by recent Supreme Court precedent. See Kokoszka v. Belford, 417 U.S. 642, 94 S. Ct. 2431, 41 L. Ed. 2d 374 (1974).18
In Kokoszka, supra, the Court noted:
The term has never been given a precise or universal definition. On an earlier occasion in Segal v. Rochelle, 382 U.S. 375, 86 S. Ct. 511, 15 L. Ed. 2d 428 (1966), the Court noted ” ‘(i)t is impossible to give any categorical definition to the word “property,” nor can we attach to it in certain relations the limitations which would be attached to it in others.’ ” Id., at 379 (86 S.Ct. at 515,) quoting Fisher v. Cushman, 103 F. 860, 864 (CA 1, 1900). In determining the term‘s scope and its limitations the рurposes of the Bankruptcy Act “must ultimately govern.” 382 U.S. at 379 (86 S.Ct. at 515). See also Lines v. Frederick, 400 U.S. 18, 91 S. Ct. 113, 27 L. Ed. 2d 124 (1970); Local Loan Co. v. Hunt, 292 U.S. 234, 54 S. Ct. 695, 78 L. Ed. 1230 (1934).
417 U.S. at 645, 94 S.Ct. at 2433.
Noting the twofold purpose of the Bankruptcy Act of paying off the bankrupt‘s creditors and giving the bankrupt a fresh start, 417 U.S. at 645-646, 94 S.Ct. 2431, the Court suggested that the “property” issue is to be resolved by determining whether the asset in question is ” ‘sufficiently rooted in the prebankruptcy past’ ” that depriving the bankrupt of it to pay his creditors ” ‘will not hinder his ability to make a Fresh start unhampered by the pressure of preexisting debt,’ ” 417 U.S. at 648, 94 S.Ct. at 2435.
The claims asserted by Brummett in this action are for alleged injury to a contractual relationship which presumably was, in addition to other things, generating income for the payment of then existing debts and which was terminated over 1 1/2 years before he was adjudged bankrupt. To deprive him of this asset would not appear to unduly hinder his ability to make a fresh start.
Thus, applying the Kokoszka test to the instant case, we conclude that the court below was correct in holding that Brummett‘s cause of action vested in the trustee of his bankrupt estate under § 70a(6) because it arose upon an injury to his property.19 See In re Farrell Publishing Corp., 165 F.Supp. 40 (S.D.N.Y.1958).
C
Brummett argued to the court below that upon holding that title to the claims asserted by him in this action had passed to the trustee, the proper course for the court would be to join the trustee as a party plaintiff. Noting that the bankruptcy case had been closed, the court rejected this suggestion, stating that “(f)urther action with reference to assets in the estate can only proceed in accordance with Bankruptcy Rule 515.”20 On this appeal Brummett contends that the district court‘s dismissal of his claims without prejudice was an abuse of discretion. He claims that the court should have either a) ordered notice to and joinder of the trustee in bаnkruptcy, or b) allowed him to proceed for the benefit of his creditors. We disagree.
It is true that the parties were already before the court, that the issues in the case had already been framed, and that to require the parties to go back and file an entirely new lawsuit is not the most economical use of judicial resources imaginable. See Gerr v. Schering Corp., 256 F.Supp. 572, 574 (S.D.N.Y.1966); James v. Iridyn Industries, Inc., Civil Action No. C-78-924-A (N.D.Ga., September 15, 1978). Were we considering this suggestion De novo as a trial court, we might well agree that the most reasonable solution to the problem presented by this case would be to stay the proceedings so that the bankruptcy proceedings could be reopened and the trustee made a party plaintiff.
But as the district court noted, the closing of the bankruptcy case means that the trustee had already distributed the bankrupt‘s assets to his creditors and filed an account with and been discharged by the court. At the time of this case, there was no trustee to notify or join in the present action. Re-opening the case pursuant to Rule 515 would have involved at least some delay in the prosecution of this action.
In light of these facts, we cannot say that it constituted an abuse of discretion for the district court to rule as it did. This is particularly so since the predicament in which Brummett now finds himself is the result of his never having listed this right of action as an asset of his bankruptcy estate or otherwise brought it to the trustee‘s attention.
Nor did thе district court abuse its discretion in refusing to permit Brummett to proceed for the benefit of his creditors. As the creditors themselves would have had to obtain leave from the bankruptcy court before proceeding on their own behalf, See Gochenour, supra at 517, Brummett stands in no better position. See Dallas Cabana, Inc., supra at 868. Since Brummett failed to obtain such prior authorization from the bankruptcy court, the district court was without authority to permit Brummett to proceed in this action for the benefit of his creditors.
Plaintiff Lewis Coal Company contends that the district court abused its discretion in dismissing its pendent state claims. In response, the Union argues that Lewis Coal Company, having moved for and been granted a voluntary non-suit of its Section 303 claims without prejudice, now lacks standing to appeal from the district court‘s prior order declining to exercise pendent jurisdiction over the asserted law claims. We agree.
The general rule is to be that a plaintiff who has requested and been granted or agreed to a voluntary dismissal of his action without prejudice cannot maintain or prosecute an appeal from the order of dismissal. Le Compte v. Mr. Chip, Inc., 528 F.2d 601, 603 (5th Cir. 1976); Scholl v. Felmont Oil Corp., 327 F.2d 697, 700 (6th Cir. 1964); Kelly v. Great Atlantic & Pacific Tea Company, 86 F.2d 296 (4th Cir. 1936); Annot. 23, A.L.R.2d § 2, p. 664; 5 Moore‘s Federal Practice P 41.05(3), at 41-79 (2d ed. 1978). Accord, 9 C. Wright & A. Miller, Federal Practice & Procedure: Civil § 2376, at 247 (1971). As the court stated in Kelly, supra:
It is well settled that, from a judgment of involuntary nonsuit, an appeal lies by the party aggrieved, as such a judgment is not only a final determination of the action but has been rendered without the consent and over the objection of the plaintiff who complains of it. . . . But, although a voluntary nonsuit is a final termination of the action, it has been entered at the request of plaintiff, and he may not, after causing the order to be entered, complain of it on appeal. For this reason, it is well settled in the federal courts that no appeal lies from a judgment of voluntary nonsuit.
86 F.2d at 296-297 (citations omitted). In explaining the rationale underlying the rule, the court in Le Compte, supra, stated:
This can easily be understood since the plaintiff has acquired that which he sought, the dismissal of his action and the right to bring a later suit on the same cause of action, without adjudication of the merits. The effect of this type of dismissal is to put the plaintiff in a legal position as if he had never brought the first suit. Maryland Casualty Co. v. Latham, 41 F.2d 312, 313 (5th Cir. 1930); Humphreys v. United States, 272 F.2d 411, 412 (9th Cir. 1959).
After the district court dismissed Lewis Coal Company‘s pendent state claims, the Company requested and was granted a voluntary dismissal of its Section 303 claim. The above-cited authority makes clear that it cannot now appeal the order of dismissal.
Plaintiff tries to side-step the above conclusion by arguing that the appeal here is only from that portion of the July 25 order dismissing its pendent state claims and not from that portion of the order wherein the trial court approved a voluntary dismissal of the federal claims under
It does not help plaintiff to say that his complaint is of the order refusing remand of the cause and not of thе judgment of nonsuit, which is relied upon merely as a final order from which appeal may be taken. Even in those rare jurisdictions . . . which permit appeal from an order of voluntary nonsuit where there is a ruling of the court which strikes at the heart of the case and precludes recovery by plaintiff, appeal from such order does not lie to review rulings which do not have the effect of determining the case against plaintiff. . . . The order refusing to remand the case did not, of course, determine it; and it cannot be said that, when plaintiff refused to proceed, there was nothing for the court to do but to dismiss the case and that it was therefore virtually ended. If plaintiff, after refusing to proceed, had nоt taken a voluntary nonsuit, defendant could have insisted on a verdict and judgment of the merits, which would have been determinative of the rights of the parties and would not have left plaintiff at liberty to commence another action for the same cause, as is his right under the voluntary nonsuit. The crux of the matter is that an order refusing to remand is not a final or appealable order, and plaintiff cannot make it in effect appealable by the simple expedient of taking a voluntary nonsuit and appealing.
86 F.2d at 297 (citations omitted).
But while often dubbed a Rule 41(a) voluntary dismissal, the procedure followed in Suscy, supra, is more properly viewed as a Rule 15 amendment to the complaint. See 5 Moore‘s Federal Practice P 41.06-1, at 41-92-93;22 Smith, Kline & French Laboratories v. A. H. Robins Co., 61 FRD 24, 28-29 (E.D.Pa.1973). See also Fastener Corp. v. Spotnails, Inc., 291 F.Supp. 974, 976 (N.D.Ill.1968).
Viewed in this light, it becomes clear that while this procedural difference may be of no consequence when claims of equal footing are involved, it makes a great deal of difference in a case such as the prеsent. For to say that plaintiff‘s dismissal of the federal claims constituted an amendment of the complaint is also to say that there remains no federal claims to which the state claims may be appended.
We note that while the dismissal of the state claims precluded their adjudication on the merits in this lawsuit, it did not preclude their adjudication in a state court. And as the court‘s decision to dismiss the pendent claims was without prejudice, this judgment has no Res judicata effect even in a subsequent suit filed in federal court.
Having determined that the Company‘s voluntary dismissal of its Section 303 claims precludes it from complaining of the district court‘s dismissal of the pendent state claims, we need not address whether the сourt‘s dismissal of those claims constituted an abuse of discretion.
Accordingly, the judgment of the district court holding that title to Brummett‘s claims vested exclusively in the trustee of his bankrupt estate and dismissing Lewis Coal Company‘s pendent state claims is affirmed.