World of Sleep, Inc. v. La-Z-Boy Chair Co.

• Decision Date: 04 March 1985
• Docket Number: Nos. 82-1694,82-1818,LA-Z-BOY,Z-B,s. 82-1694
• Citation: 756 F.2d 1467
• Parties: 1985-1 Trade Cases 66,455, 1 Fed.R.Serv.3d 629, 17 Fed. R. Evid. Serv. 852 WORLD OF SLEEP, INC., a Colorado corporation, Plaintiff-Appellee, Cross-Appellant, v.CHAIR COMPANY, a Michigan corporation; Defendant-Appellant, Cross-Appellee, Montgomery Ward & Co., an Illinois corporation; Arthur Mark Mauldin; Jeff D. Mauldin, individually and d/b/a La-oy Showcase Shoppe; Mauldin Corporation, a New Mexico corporation; Defendants-Appellees, Thomas E. Hanson, Counterdefendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1467

756 F.2d 1467

1985-1 Trade Cases 66,455, 1 Fed.R.Serv.3d 629,

17 Fed. R. Evid. Serv. 852

WORLD OF SLEEP, INC., a Colorado corporation, Plaintiff-Appellee, Cross-Appellant, v. LA-Z-BOY CHAIR COMPANY, a Michigan corporation;

Defendant-Appellant, Cross-Appellee,

Montgomery Ward & Co., an Illinois corporation; Arthur Mark

Mauldin; Jeff D. Mauldin, individually and d/b/a La-Z-Boy

Showcase Shoppe; Mauldin Corporation, a New Mexico

corporation; Defendants-Appellees,

Thomas E. Hanson, Counterdefendant-Appellee.

Nos. 82-1694, 82-1818.

United States Court of Appeals, Tenth Circuit.

March 4, 1985.

Rehearing Denied April 9, 1985.

Donald B. Gentry, Denver, Colo. (Julia O. Robinson, Denver, Colo., with him on the brief), of Grant, McHendrie, Haines & Crouse, P.C., Denver, Colo., for plaintiff-appellee/cross-appellant.

Gregory L. Curtner, Detroit, Mich. (Larry J. Saylor of Miller, Canfield, Paddock & Stone, Detroit, Mich., and James E. Hautzinger of Sherman & Howard, Denver, Colo., with him on the briefs), of Miller, Canfield, Paddock & Stone, Detroit, Mich., for defendant-appellant/cross-appellee, La-Z-Boy Chair Co.

Mark Crane, Chicago, Ill. (Glen H. Kanwit and Roxane C. Busey of Hopkins & Sutter, Chicago, Ill., and John E. Walberg, Denver, Colo., with him on the briefs), of Hopkins & Sutter, Chicago, Ill., for defendant-appellee Montgomery Ward & Co.

David J. Richman and Susan M. Rogers of Coghill & Goodspeed, P.C., Denver, Colo., on the briefs for defendants-appellees Arthur Mauldin and Mauldin Corp.

Before SEYMOUR and McWILLIAMS, Circuit Judges, and BROWN, District Judge. ^*

SEYMOUR, Circuit Judge.

In this antitrust action, plaintiff World of Sleep, Inc. alleged that defendants La-Z-Boy Chair Company, Montgomery Ward & Co., and Art Mauldin d/b/a La-Z-Boy Showcase Shoppe had conspired to maintain the retail price of La-Z-Boy chairs in violation of section 1 of the Sherman Act, 15 U.S.C. Sec. 1 (1982). The district court granted summary judgment for Mauldin, finding no admissible evidence linking him to the alleged conspiracy. After a four week trial, the jury found in favor of the remaining defendants on this claim.

World of Sleep also alleged that La-Z-Boy had discriminated in its advertising allowances in violation of section 2(e) of the Robinson-Patman Act, 15 U.S.C. Sec. 13(e) (1982). La-Z-Boy counterclaimed against World of Sleep, alleging that it had violated a provision of the Colorado Unfair Practices Act, Colo.Rev.Stat. Sec. 6-2-105 (1973). The jury found in favor of World of Sleep on the Robinson-Patman claim and awarded damages of $40,000 against La-Z-Boy, which the trial court trebled pursuant to 15 U.S.C. 15(a) (1982). The jury found against La-Z-Boy on its counterclaim.

On appeal, World of Sleep contends that the trial court erred by refusing to submit the Sherman Act claim to the jury under the per se rule, and by granting summary judgment for Mauldin on that claim. World of Sleep further asserts that a new trial is required due to the prejudice resulting from the instructions taken as a whole, several evidentiary rulings, and the deliberate misconduct of opposing counsel. Montgomery Ward counters that the appeal is not timely, and that in any event the evidence is insufficient to establish a conspiracy involving it. La-Z-Boy also appeals, contending that it is entitled to a new trial on its state law counterclaim, that the

court erred in submitting the Robinson-Patman claim to the jury, and that the award of attorney fees was excessive. We affirm in part and reverse in part.

I. TIMELINESS OF THE APPEAL

As an initial matter we address Montgomery Ward's argument that the appeal in this case is not timely. World of Sleep's amended complaint asserted a request for attorneys fees along with claims for monetary and injunctive relief. The trial court entered judgment on the jury verdict on February 11, 1982, but did not address the outstanding request for attorneys fees. On March 17, 1982, the court ruled on the parties' post trial motions for new trial, and directed the parties to attempt to settle the attorneys fees claim and to brief any unsettled issues. On June 3, 1982, the court entered its order awarding attorneys fees of $64,708 against defendant La-Z-Boy. La-Z-Boy filed its notice of appeal on June 4, 1982, and World of Sleep filed on July 2, 1982. These notices of appeal were filed within thirty days of the order awarding attorneys fees but not within thirty days of the order denying the motions for new trial.

In Gurule v. Wilson, 635 F.2d 782, 788 (10th Cir.1980), a civil rights action brought under 42 U.S.C. Sec. 1983 (1982), this court held that a judgment on the merits is not a final order for purposes of appeal if it does not address a prior request for attorneys fees made pursuant to section 1988. In Black Gold, Ltd. v. Rockwool Industries, Inc., 666 F.2d 1308, 1309 (10th Cir.1981), we applied the Gurule rationale in an antitrust action and held that a decision on the merits which does not dispose of an outstanding request for attorneys fees is not final for purposes of appeal. Under these decisions, the notices of appeal were timely filed in the present case after the judgment on attorneys fees.

On March 2, 1982, however, shortly before the court denied the motions for new trial in the instant case, the Supreme Court ruled that a post-judgment application for attorneys fees is not a Rule 59(e) motion to alter or amend a judgment subject to the ten-day rule. See White v. New Hampshire Department of Employment Security, 455 U.S. 445, 451-52, 102 S.Ct. 1162, 1166-67, 71 L.Ed.2d 325 (1982). "[A] request for attorney's fees under Sec. 1988 raises legal issues collateral to the main cause of action--issues to which Rule 59(e) was never intended to apply." Id. at 451, 102 S.Ct. at 1166 (footnote omitted). Subsequently in Cox v. Flood, 683 F.2d 330 (10th Cir.1982), which was rendered after the instant appeals were filed, we expressly overruled Gurule and Black Gold in light of White.

Montgomery Ward argues that White directly overruled Gurule, and that under the holding in White the March 17 ruling was a final order from which World of Sleep and La-Z-Boy failed to take timely appeals. We recently considered and rejected this argument in EEOC v. Gaddis, 733 F.2d 1373, 1375-76 (10th Cir.1984). We there held that White was a narrow opinion factually distinguishable from Gurule, and that Gurule was not overruled until we extended the rationale of White to it in Cox.

Montgomery Ward alternatively argues that Cox should be applied retroactively to preclude our review of the merits in this case. We considered a similar argument in Gaddis, 733 F.2d at 1376. Based on the analysis and authorities set out there, we decline to apply Cox retroactively to this case. The merits of the appeals are properly before us.

II. BACKGROUND

The trial of this case consumed four weeks, and the record on appeal consists of over 3000 pages and hundreds of exhibits. Nonetheless, the pertinent background World of Sleep is a closely held corporation controlled and operated by Thomas Hansen. In 1965 it began the business of retailing bedding products in Denver. World of Sleep was a high-volume price discounter and advertised extensively. In April 1974, Hansen began ordering La-Z-Boy chairs for retail sale at World of Sleep. Montgomery Ward, La-Z-Boy's largest national purchaser of chairs for resale, also retailed La-Z-Boy chairs in Denver during the relevant time.

facts, although subject to some dispute, are not complicated. ¹

In the summer of 1975, World of Sleep ran a series of television commercials in which it mentioned its competitor Montgomery Ward by name, comparing the La-Z-Boy prices in Ward's catalogue with its own lower prices. Montgomery Ward complained to La-Z-Boy about the ads. Hansen testified that Gary Schroeder, executive vice president of sales and marketing for La-Z-Boy, told him to stop the ads. Schroeder did not remember talking to Hansen about the television ads although he did recall being told of Montgomery Ward's complaint by his right-hand man, Robert Rall.

In March 1976, the Mauldin Corporation, a family business, opened a La-Z-Boy Showcase Shoppe in Littleton, Colorado. A "Showcase Shoppe" is an independently owned retail store which sells only La-Z-Boy products and is licensed by La-Z-Boy to use the La-Z-Boy trade name. In late March, Hansen began running a series of newspaper ads undercutting both Mauldin's Showcase Shoppe and Montgomery Ward in the price of La-Z-Boy chairs, specifically referring in the ads to the Showcase Shoppe and Montgomery Wards by name. The ads continued until August.

In late April and early May 1976, La-Z-Boy notified World of Sleep of amounts past due on its account and requested a current financial statement. Hansen did not provide one. He testified that as a matter of policy he never released that information and that he had not provided it to La-Z-Boy when he began buying chairs. Although Hansen did not deny that World of Sleep's account with La-Z-Boy was delinquent, he testified that it was due to a mix-up in deliveries by La-Z-Boy. On May 8, 1976, La-Z-Boy notified World of Sleep that its account was being placed on credit hold. The circumstances and motivation surrounding the imposition of the credit hold are the subject of conflicting evidence.

Hansen had telephone conversations with Robert Rall of La-Z-Boy on June 16 and June 23, 1976, concerning the newspaper ads in which Hansen compared World of Sleep's prices with those of Montgomery Ward. Hansen tape recorded those conversations and the tapes were admitted into evidence. In the June 16 tape, Rall said that Montgomery Ward had complained to him about the ads. Rall also told Hansen,

"we're all very concerned about pricing at any time--you know, and I knew, of course, I was going to hear from Montgomery Ward, but I extracted a promise from Mr. Mauldin that he'd get his prices up and...