Hyde Construction Company v. Koehring Company

• Decision Date: 10 December 1969
• Docket Number: Civ. A. No. 4478,4524.
• Citation: 321 F. Supp. 1193
• Parties: HYDE CONSTRUCTION COMPANY, Inc., Plaintiff, v. KOEHRING COMPANY, Defendant. Vardaman S. DUNN, Plaintiff, v. KOEHRING COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Mississippi

321 F. Supp. 1193

HYDE CONSTRUCTION COMPANY, Inc., Plaintiff, v. KOEHRING COMPANY, Defendant.

Vardaman S. DUNN, Plaintiff, v. KOEHRING COMPANY, Defendant.

Civ. A. Nos. 4478, 4524.

United States District Court, S. D. Mississippi, Jackson Division.

December 10, 1969.

COPYRIGHT MATERIAL OMITTED

William E. Suddath, Jr., Watkins & Eager, Vardaman S. Dunn, Cox & Dunn, Jackson, Miss., for plaintiffs.

Scott Tennyson, Tennyson & Britt, Dan H. Shell, Jackson, Miss., for defendant.

MEMORANDUM OPINION ON MOTIONS OF DEFENDANT TO DISMISS FOR LACK OF JURISDICTION OR IN LIEU THEREOF TO QUASH PROCESS AND TO TRANSFER CAUSE OF ACTION

NIXON, District Judge.

These two separate cases, being considered together on these Motions by agreement of counsel and with the consent of the Court, are suits for damages filed by the plaintiffs against the defendant based upon what plaintiffs contend was defendant's abuse of process of the United States District Court for the Northern District of Oklahoma.

In order to fully understand the positions of the parties in support of and in opposition to these motions it is necessary to review in some detail the history of the protracted litigation which "hatched" these suits. The plaintiff in Civil Action No. 4478, Hyde Construction Company, Inc., hereinafter referred to as "Hyde" is a Mississippi Corporation domiciled in Jackson, Hinds County, Mississippi. The plaintiff in Civil Action No. 4524, Vardaman S. Dunn, is a resident citizen of Jackson, Hinds County, Mississippi and a practicing attorney at law, who during the periods of time hereinafter referred to, was acting as attorney of record for Hyde in its litigation against the defendant, Koehring. The defendant in both actions, Koehring Company, hereinafter referred to as "Koehring" is a corporation organized and existing under the laws of the State of Wisconsin with its domicile and principal place of business located at Milwaukee, Wisconsin. The parties agree that Koehring was licensed to do business in Mississippi on January 9, 1964 and that it appointed the C. T. Corporation System as its resident agent for service of process in accordance with Mississippi law;¹ furthermore, that it remained licensed to do business in Mississippi having transacted business therein until September 12, 1968 at which time it withdrew in compliance with Section 5309-234, Miss.Code of 1942, Rec., having applied for and received a Certificate of Withdrawal from the Secretary of State of the State of Mississippi. In accordance with Para. (d) of 5309-234, the defendant in its application revoked the authority of its resident agent in this State to accept service of process and consented "that service of process in any action, suit or proceeding based upon any cause of action arising in this state during the time the corporation was authorized to transact business in this state may thereafter be made on such corporation by service thereof on the Secretary of State."

The plaintiff, Hyde, during the times referred to herein was engaged in the construction of public roads, dams, levees and spillways, and the defendant, Koehring, was in the business of manufacturing and selling construction equipment of various types, including concrete mixing and processing plants. In the latter part of 1959 Hyde was awarded a contract with the United States for the construction of a spillway for Keystone Dam on the Arkansas River in the State of Oklahoma and the performance of this contract required the acquisition and installation of a large concrete mixing and cooling plant for production of the necessary concrete to perform the construction work. On February 5, 1960, a contract of sale and purchase was entered into between Hyde as purchaser and Koehring as manufacturer and seller for the required mixing and cooling plant. In this sales contract Koehring gave certain guarantees concerning the operation of the plant and its production capacity. On September 27, 1961 Hyde filed suit in the United States District Court for the Southern District of Mississippi against Koehring for recovery of damages for breach of the above contract, alleging malfunction of the concrete mixing and cooling plant.

Koehring filed a Motion to Dismiss the above action for lack of jurisdiction and moved to transfer the cause to the United States District for the Northern District of Oklahoma. From an Order of the United States District Court for the Southern District of Mississippi denying the Motion to Dismiss and the Motion to Transfer, Koehring appealed to the United States Court of Appeals for the Fifth Circuit which reversed the District Court and remanded the case with instructions that it be transferred to the Northern District of Oklahoma, pretermitting a decision on whether the trial court below had personal jurisdiction over the defendant.² In the meantime, subsequent to the time that Koehring filed Motions to Dismiss and to Transfer and prior to a ruling thereon, Hyde filed the same action against Koehring in the Chancery Court of Hinds County, Mississippi.

The above suit in the Chancery Court of Hinds County began on March 11, 1964 after Koehring had appeared generally and answered the Complaint therein and had utilized the process of that Court for gathering evidence by prepounding interrogatories to Hyde. The Chancellor overruled the defendant's Motion for a Continuance. In the meantime, Koehring took what is alleged by plaintiffs in these cases to be the first step constituting an abuse of process, namely, on March 11, 1964 it applied for and obtained a restraining order from the Oklahoma District Court which purported to command the state court parties and their attorneys to refrain from proceeding with the trial of the suit in the Chancery Court. This Order was served as a Writ of Injunction. Despite the service thereof on the parties within the State of Mississippi, the Chancery Court and the plaintiffs ignored the Temporary Restraining Order. The trial in the Chancery Court of Hinds County, Mississippi was concluded on March 25, 1964, when Hyde was awarded a judgment against Koehring for over $486,000.00. This Decree of the Chancery Court was affirmed in part and reversed in part by the Mississippi Supreme Court which rendered judgment in favor of Hyde against Koehring in the sum of $409,560.61 plus 6% interest thereon from April 1, 1963.³ The Chancery Court of Hinds County also entered a Decree enjoining Koehring from proceeding in the Oklahoma Federal Court, but this Decree was reversed by the Mississippi Supreme Court.⁴

On March 12, Koehring petitioned the Oklahoma U. S. District Court to cite the plaintiffs herein, Hyde and Dunn, for contempt; and that Court issued an Order directing both of the plaintiffs, Hyde and its attorney, Dunn, to appear before the Federal Court in Tulsa, Oklahoma on March 14, 1964 to show cause why they should not be found in contempt of court and punished therefor. Process issued pursuant to this show cause order and was served on both plaintiffs within the State of Mississippi by United States Marshals. At the contempt hearing, other counsel briefly appeared for Hyde, but Dunn did not appear. The Court nevertheless entered findings holding Hyde and Dunn in civil contempt and on that same date signed an "Order of Arrest" directed to the United States Marshal commanding the arrest of plaintiff herein, Vardaman S. Dunn. and his transportation forthwith before the United States District Court for the Northern District of Oklahoma in Tulsa, Oklahoma. This Order was received by the United States Marshal in Jackson, Mississippi on March 16, 1964 on which date it was served on the plaintiff, Dunn, who was arrested in Jackson and released only when an Order and Writ of Habeas Corpus was issued by United States District Judge S. C. Mize for the Southern District of Mississippi in order that Mr. Dunn might continue with and conclude the Chancery Court trial in progress. Plaintiffs further allege that since the above mentioned processes did not succeed in interrupting and delaying the state court trial of the above controversy, which they were intended to accomplish, that the defendant Koehring in order to "delay or completely frustrate the State Court trial, sought to use other Federal processes to require certain witnesses then known to be standing by to testify in the State Court to appear as witnesses in the State of Oklahoma, a distance of over 500 miles from Jackson, Mississippi; that this forced plaintiffs to seek and obtain temporary relief both in the U. S. District Court in Mississippi, and in the State trial court, in order that the trial in the Chancery Court might proceed." On April 10, 1964 Judge Mize entered an opinion in which he found that plaintiff, Dunn, had not acted out of contempt or lack of respect, and held, inter alia, that Koehring failed to establish a prima facie case entitling it to injunctive relief in the Oklahoma District Court; and further, that the U. S. District Court in Oklahoma was prohibited by 28 U.S.C. sec. 2283 from enjoining the Mississippi state court proceedings. On April 21, 1964 the U. S. District Court in Mississippi entered an Order declaring the temporary restraining order and the Order of Arrest issued by the Oklahoma District Court to be void and discharging Mr. Dunn from the custody of the U. S. Marshal. Thereupon the Marshal appealed to the United States Court of Appeals for the Fifth Circuit which reversed the lower court declaring that the Oklahoma Federal Court had jurisdiction and that the Mississippi District Court's Order was appealable.⁵ In reversing the Mississippi U. S. District Court the Fifth Circuit held that the "Show Cause Petition" charged a wilful violation of the Restraining Order, indicating an intention to prosecute for criminal contempt, inasmuch as the affidavit accompanying the petition set forth in detail the acts of Dunn which were alleged to constitute a deliberate violation of...