Parmelee v. Chicago Eye Shield Co.Parmelee v. Chicago Eye Shield Co.
This is an appeal from a judgment entered on motion of the plaintiff for summary judgment. The parties will be referred to as they were designated in the trial court. The plaintiff sued the defendant on an account for goods sold and delivered between February 1, 1945, and October 1, 1945. The balance alleged to be due was $6,639.10. Defendant answerеd, admitting that plaintiff had sold and delivered to it goods of the value of $6625.50, and that the items attached to plaintiff’s complaint were correct except' for an admitted credit of $13.61. It further alleged (hat:
. “Defendant denies that defendant is indebted to the plaintiff in any amount whatsoever and alleges and avers that by reason of the claims hereinafter set forth and alleged the defendant is entitled to have and recover of the plaintiff an amount far in excess of the plaintiff’s demand; and that by reason of the matters and things hereinafter set forth defendant is not indebted to plaintiff and that by reason of the following matters, defendant’s cross-claims and counter-claims should be set off against any amount claimed to be due plaintiff and the plaintiff is not entitled to recover judgment against defendant for any amount.”
Defendant pleaded six counter-claims, the nature of which we shall hereinafter consider.
Plaintiff moved for summary judgment in the amount of $5,109.90, and in its motion recited that:
“This motion is filed under Rule 56 оf the Rules of Civil Procedure [28 U.S.C.A. following section 723c] * * * and is based upon the wording of Rule 56, as interpreted in the case of Seagram-Distillers Corporation v. Manos, D.C.,
It also recited that its complaint was filed on October 22, 1945, and that defendant on November 8, 1945, obtained an order enlarging the time for serving answer for a period of thirty days, and that on December 12, 1945, it obtained a further order enlarging the time until December 17, 1945, at which time it served its answer admitting that plaintiff had sold and delivered to defendant goods of the value of $6625.50, for which payment had not been made. It was recited in this motion that defendant in its answer set up as a counter-claim that plaintiff owed defendant thе sum of $1515.60 for goods and merchandise sold and delivered by defendant to plaintiff and that plaintiff admits that it purchased said goods and merchandise in the amount of $1515.60. This motion was filed January 2, 1946, and on January 7, 1946, it filed its reply denying liability on any of the counter-claims except the first one. By stipulation and admission on oral argument it was agreed that аll items of plaintiff’s account represented “purchases made by defendant from plaintiff pursuant to the distributorship agreement and arrangement set forth and described in the second, third, fourth, fifth and sixth counter-claims of defendant on file herein.”
On March 25, 1946, the trial court granted plaintiff’s motion and entered a judgment in its favor for $5,109.90, being the amоunt of its claim less the amount claimed by defendant in its first counter-claim. The court ordered that the remaining counterclaims, second to sixth, inclusive, be tried together in a separate trial. The court later entered an order providing that defendant might file a bond in the sum of $6,000, conditioned for the satisfaction of the judgment pending final determination of the remaining counter-claims, in which event the enforcement of the judgment should.be stayed. From the judgment as entered defendant prosecutes this appeal, urging error in the entry of the summary judgment.
While plaintiff’s motion for summary judgment was based entirely upon Rule 56, the judgment entered is defended as warranted by Rule 54(b), as well as by Rule 56. The summary judgment pro
*585
cedure prescribed in Rule 56 is designed for the prompt disposition of the action where there is no genuine issue regarding any material facts, thus avoiding a useless trial to prove facts which are not really disputed. Altman v. Curtiss-Wright Corp., 2 Cir.,
The proceeding on motion for summary judgment is not to be regarded as a trial, but for the determination of whether or not there is a genuine issue to be tried. On such a motion, if judgment is not rendered on the whole case and issues remain which must be tried, the court should determine what material facts are in issue and what are not, and should specify the facts which appear without substantial controversy and proceed with the trial as to the facts which remain in dispute. At the close of the trial on the disputed facts it should make findings of fact and conclusions of law on the whole case, if the case is a court case as distinguished from a jury case. If the case be a jury case the disputed issues should, of course, be submitted to the jury under proper instructions-. On such a motion the burden of proof is on the moving party to establish that there is no genuine issue of fact and all reasonable doubts are resolved against him. Walling v. Fairmont Creamery Co., 8 Cir.,
Plaintiff argues that it was entitled to judgment under Rule 54(b) because defendant in its answer admitted that “the plaintiff has heretofore sold and delivered to the defendant goods of the value of $6625.-50.” Defendant did not specifically allege payment but it did allege that it was not indebted to plaintiff in any amount whatever, and alleged that “the dеfendant is entitled to have and recover of the plaintiff an amount far in excess of the plaintiff’s demand.” This was based upon six counterclaims pleaded in the answer. As has been observed, the first counterclaim was recognized as pleading a good cause of action and the amount claimed was credited upon and deducted from the amount claimed by plaintiff, judgment being entered for the balance. The second, third, fourth, fifth and sixth counterclaims were recognized by the court as raising substantial issues as it set them down for trial in the future. The second counterclaim was for $328.21 for commissions on sales made by plaintiff in 1944 in the Texas and Louisiana territory of dеfendant. It appears from the stipulation that defendant’s counter-claims arose out of dealings between the parties under a distributorship agreement. Plaintiff’s cause of action while for goods sold and delivered was for goods sold and delivered pursuant to this distributorship agreement. The third counter-claim was for $10,000 for the allеged breach of the distributorship agreement. The fourth claim was for $701.00 which defendánt sought to recover as an overcharge balance for certain merchandise sold to it This again was under the distributorship agreement. The fifth counter-claim was for $25,000 for a breach of the distributorship agreement whereby plaintiff had agreed to рermit defendant to sell certain specified products of plaintiff. Defendant’s sixth counter-claim was for $75,000 for an alleged violation by plaintiff of the anti-trust laws. Whether or not this was violative of the distributorship agreement we need not determine.
Rule 54(b) provides as follows:
“When more than one claim for relief is presented in an action, the court at аny stage, upon a determination of the issues material to a particular claim and ’all counterclaims arising out of the transaction or occurrence which is the subject matter of the claim, may enter a judgment disposing of such claim. The judgment shall terminate the action with re *586 spect to the claim so disposed of and the action shall proceed as to the remaining claims. In case a separate judgment is so entered, the court by order may stay its enforcement until the entering of a subsequent judgment or judgments and may prescribe such conditions as are necessary to secure the benefit thereof to the party in whose favor the judgment is entered.”
Resting on this rule plaintiff contends tfiat the only question is whether the counter-claims alleged by defendant arise “out of the transaction or occurrence which is the subject' matter of the claim.” Confessedly, if any of the counter-claims second, third, fourth, fifth and sixth, arise out pf the transaction or occurrence which is the subject matter of plaintiff’s claim judgment should not have been entered under this' rule. The stipulation of the parties shows that the plaintiff’s claim was for ■goods sold pursuant to a distributorship agreement between the parties and that the claims set forth in some of defendant’s counter-claims were based upon purchases by defendant pursuаnt to and during the same distributorship agreement. Rule 13, pertaining to counter-claims, provides that:
r
. “(a) A pleading shall state as a counterclaim any claim, not the subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or ocсurrence that is the subject matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.
"(b) A pleading may state as a counterclaim any claim against an opposing party not arising out of the transaction or oсcurrence that is the subject matter of the opposing party’s claim.”
The determination of a defendant’s demand by counter-claim in plaintiff’s action rather than by independent action .is favored as serving to avoid circuity of action, inconvenience, expense, consumption of the court’s time, and injustice, and thе trend of judicial decision is toward a liberal extension of the right to counterclaim. North Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co.,
In the case of Story & Isham Commercial Co. v. Story,
“The plaintiff is not at liberty to select an isolated act оr fact, which is only one of a series of acts or steps in the entire transaction, and insist upon a judgment on this fact alone, if the fact is so connected with others that it forms only a portion of the transaction. The transaction which was the foundation of the cause of action set forth in the complaint herein is not limited tо the facts therein set forth, but includes the entire series of acts and mutual conduct of the parties in the business or proceeding between them which formed the basis of their written agreement.”
See, also: North Chicago Rolling Mill Co. v. St. Louis Ore & Steel Co., supra; Prescott Nat. Bank v. Head,
In passing it should be observed that this rule refers to plaintiff’s cause of action as a “claim.” The rule would seem to be limited to cases in which thе plaintiff is making more than one claim for relief. Here it is not doing so. In Reeves v. Beardall,
“The claim against respondent on the promissory note was unrelated to the claim on the contract not to change the will. Those two claims arose out of wholly separate and distinct transactions or engagements. * * * After the ’ entry of the judgment on Count II, thе claim based on the contract not to change the will was terminated and could not be affected by any action which the Court might take as respects the remaining claims.”
In the instant case, as has been observed, there could not be separate actions on different claims, counts or causes of action in рlaintiff’s complaint because there was but one claim presented. We are of the view that plaintiff was not entitled to judgment under Rule 54(b) regardless of whether the counter-claims arose out of the transaction or occurrence which is the subject matter of plaintiff’s claim.
It is insisted by plaintiff that Rule 56 did not require, as a conditiоn precedent to the entry of summary judgment, that all counter-claims arising out of the transaction or occurrence which is the subject matter of the plaintiff’s claim must be determined before the entry of such judgment on plaintiff’s claim. Rule 56 provides in part as follows:
“(a) For Gaimant. A party seeking to recover, upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the pleading in answer thereto has been served, move with or without supporting affidavits for a summary judgment in his favor upon all or any part thereof.
“(b) For Defending Party. A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory 'judgment is sought may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof.”
We have already adverted to the general purpose or design of this procedure and-to 'the'fact that the counterclaims pleaded raise substantial issues. The procеdure is generally considered as a drastic remedy and strict compliance with the provisions of the rule is required. A number of the District Courts have held that the existence of a counter-claim which presents a real issue prevents the granting of motion for summary judgment. Standard Rolling Mills, Inc. v. National Mineral Co., D.C.N.Y.,
The case of Seagram-Distiliers Corp. v. Manos, D.C.S.C.,
The judgment appealed from is therefore reversed and the cause remanded to the iower court with directions to vacate the judgment and for further proceedings consistent herewith.