Depositors Trust Co. v. Slobusky

• Decision Date: 08 November 1982
• Docket Number: No. 82-1032,82-1032
• Citation: 692 F.2d 205
• Parties: DEPOSITORS TRUST COMPANY, etc., Plaintiff, Appellee, v. Alfred W. SLOBUSKY, et al., Defendants, Appellees. Michael Colodny, Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 205

692 F.2d 205

DEPOSITORS TRUST COMPANY, etc., Plaintiff, Appellee, v. Alfred W. SLOBUSKY, et al., Defendants, Appellees Michael Colodny, Defendant, Appellant.

No. 82-1032.

United States Court of Appeals First Circuit.

Argued Oct. 5, 1982.

Decided Nov. 8, 1982.

Howard M. Talenfeld, North Miami, Fla., with whom Joel L. Fass, and Colodny, Fass & Talenfeld, P.A., North Miami, Fla., were on brief, for appellant.

Frank G. Chapman, Augusta, Me., with whom Locke, Campbell & Chapman, Augusta, Me., was on brief, for appellee Depositors Trust Co.

John A. Mitchell, Portland, Me., with whom Robert A. Moore, and Verrill & Dana, Portland, Me., were on brief, for appellee Joseph M. Feldman.

Before PECK, ^* Senior Circuit Judge, CAMPBELL and BREYER, Circuit Judges.

LEVIN H. CAMPBELL, Circuit Judge.

Michael Colodny appeals from the district court's judgment finding him liable for $100,000 on a promissory note held by Depositors Trust Company.

In 1970 Joseph M. Feldman borrowed $900,000 from Depositors Trust Company in order to finance a joint venture undertaken by Feldman, Alfred Slobusky and several other parties. Slobusky's relationship to the loan was a question in dispute at trial. The bank claimed that Slobusky was a primary obligor on the loan; Colodny claimed that Slobusky was not obligated to the bank.

The loan was originally secured by shares of American Bankshares, Inc. When the stock declined in value, the bank sought additional collateral. In response to that request, the bank received a promissory note made by Colodny for $100,000. The note was made to Slobusky and was apparently endorsed by him to Depositors Trust.

In October 1977 the bank declared the Feldman loan to be in default and filed suit against the joint venturers and Colodny. Slobusky subsequently filed for bankruptcy, and the action was stayed as against him. Prior to trial the bank entered into some sort of agreement with Feldman and the joint venturers, the nature of which is now in dispute. According to the bank and Feldman, the agreement was an executory accord whereby the bank agreed to seek payment from Feldman only after seeking satisfaction from Colodny. Colodny, not a party to the agreement, claims that the agreement was a renegotiation of the $900,000 loan under the terms of which Feldman gave the bank new promissory notes and/or cash that discharged the Colodny note.

Whatever the actual substance of the agreement, the bank notified the district court of its version of the facts. Upon agreement of counsel, the court then ordered that the trial be limited to the bank's claims against Colodny and Colodny's cross-claim, for fraud, against Feldman. ¹

At the trial that was held before a different judge, Colodny made several attempts to introduce exhibits relating to the pretrial agreement between Feldman and the bank. One of the exhibits was an internal bank memorandum stating that Feldman gave the bank a $200,000 note "in exchange" for the Colodny note. Colodny also attempted to cross-examine the bank's witnesses about the agreement. The judge, referring to the pretrial order limiting the case to the bank's claim against Colodny and stressing that the relationship between the bank and Feldman was not before the jury, denied all of Colodny's requests.

After the presentation of the evidence the judge instructed the jury as to the relevant law and the special interrogatories that were to be put before them. One of the special interrogatories, requested by Colodny, asked "Was Slobusky a primary obligor?" In explaining to the jury the meaning of a primary obligor, the judge noted that Feldman was a primary obligor and that therefore "if you find that the Bank is a holder in due course, then Colodny's defense that the note was contingent ² is 'cut off.' Under Maine law, however, the Bank still is required to attempt to recover the money first from Feldman."

Colodny requested the special interrogatory because he maintained that so long as Slobusky was not a primary obligor, equitable principles of suretyship precluded the bank from proceeding against Colodny, who made the note out to Slobusky, before exhausting its claims against Feldman. The district court ultimately rejected this argument, finding Colodny liable on the note despite the fact that the jury found Slobusky not to be a primary obligor on the Feldman debt.

Two issues are raised on this appeal. First, did the district court commit reversible error by prohibiting the introduction of Colodny's evidence concerning the pretrial agreement between Feldman and the bank? Second, did the district court err by first instructing the jury that the bank could not proceed against Colodny until it sought payment from Feldman and then deciding the issue to the contrary? We answer both of these questions in the negative.

We first consider the court's refusal to admit Colodny's evidence concerning the agreement between the bank and Feldman. Colodny argues that the evidence was relevant because it supported the defenses of novation, accord and satisfaction, and impairment of collateral. Insofar as appears from the record, these defenses were raised as such for the first time during a conference with the judge after the jury had been impaneled. ³ The defenses were not asserted in Colodny's pleadings nor in any pretrial motion. In the circumstances, we believe that the court had discretion to exclude this evidence.

The defenses for which Colodny wished to introduce the evidence are affirmative defenses. See, e.g., Desjardins v. Desjardins, 308 F.2d 111, 116 (6th Cir.1962) (defense of payment is an affirmative defense); Marx & Co. v. Diners' Club, Inc., 400 F.Supp. 581, 585 (S.D.N.Y.1975) (accord and satisfaction), aff'd in relevant part, 550 F.2d 505 (2d Cir.), cert. denied, 434 U.S. 861, 98 S.Ct. 188, 54 L.Ed.2d 134 (1977); Charles Kahn & Co. v. Sobery, 355 F.Supp. 156, 162 (E.D.Mo.1972) (novation); cf. Me.Rev.Stat.Ann. tit. 11, Sec. 3-307(2) (1964) (once plaintiff is shown to be holder, defendant bears the burden of establishing defenses). They share the "common characteristic of a bar to the right of recovery even if the general complaint were more or less admitted to." Jakobsen v. Massachusetts Port Authority, 520 F.2d 810, 813 (1st Cir.1975).

Under Rule 8(c) of the Federal Rules of Civil Procedure certain enumerated defenses, including accord and satisfaction, and "any other matter constituting an avoidance or affirmative defense" must be pleaded by the defendant. Failure to do so ordinarily results in the waiver of the defense and the exclusion of all evidence relevant only to it. Jakobsen, 520 F.2d at 813; 5 Wright & Miller, Federal Practice & Procedure Sec. 1278 (1969 & Supp.1982). Such a failure, moreover, will serve on appeal to support the district court's exclusion of evidence even when the district court, as in this case, did not expressly allude to the defendant's failure to plead the defense. Jakobsen, 520 F.2d at 813.

To be sure, an affirmative defense may be tried with the implied consent of the parties. Fed.R.Civ.P. 15(b); Gallegos v. Stokes, 593 F.2d 372, 375 (10th Cir.1979). But this did not occur here. Both Depositors Trust and Feldman vigorously objected to Colodny's attempts to introduce the proffered evidence. Neither the proffered evidence nor the affirmative defenses were ever put before the jury. ⁴

A party may also have recourse to a late discovered affirmative defense by obtaining leave to amend his complaint. Fed.R.Civ.P. 15. Here the alleged discharge occurred some two years after the initial answer was filed, making it understandable why the defense was not included in the original answer. But, where an...