Scot Lad Foods, Inc. v. Ames Food Market, Inc.

• Decision Date: 07 April 1986
• Docket Number: INC,REDT-FRO
• Citation: 791 F.2d 935
• Parties: Unpublished Disposition NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. SCOT LAD FOODS, INC., a Delaware corporation and its subsidiary corporations, LAKE END SALES, INC.; CUSTOM MERCHANDISERS, INC., EVANSVILLE FOOD DISTRIBUTORS, INC., GARDEN CITY FOODS, INC., and, Plaintiffs-Appellees, v. AMES FOOD MARKET, INC.; KENNETH C. AMES, Individually and as President of AMES FOOD MARKET, INC.; BETTY E. AMES, Individually and as Secretary of AMES FOOD MARKET, INC.; CHARLES L. AMES, and THERESA AMES, Jointly and Severally, Defendants-Appellants. 85-1203
• Court: U.S. Court of Appeals — Sixth Circuit

Page 935

791 F.2d 935

Unpublished Disposition

NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.

SCOT LAD FOODS, INC., a Delaware corporation and its subsidiary corporations, LAKE END SALES, INC.; CUSTOM MERCHANDISERS, INC., EVANSVILLE FOOD DISTRIBUTORS, INC. GARDEN CITY FOODS, INC., and REDT-FROZ, INC., Plaintiffs-Appellees, v. AMES FOOD MARKET, INC.; KENNETH C. AMES, Individually and as President of AMES FOOD MARKET, INC.; BETTY E. AMES Individually and as Secretary of AMES FOOD MARKET, INC. CHARLES L. AMES, and THERESA AMES, Jointly and Severally Defendants-Appellants.

85-1203

United States Court of Appeals, Sixth Circuit.

4/7/86

AFFIRMED

E.D.Mich.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

BEFORE: ENGEL, CONTIE and MILBURN, Circuit Judges.

PER CURIAM.

Defendants Ames Food Market, Inc., et al. ('Ames') appeal the jury verdict for plaintiffs Scot Lad Foods, Inc., et al. ('Scot Lad') in this diversity action to collect on a judgment. Finding no reversible errors by the district court, we affirm.

I.

Scot Lad is a Delaware corporation engaged in the sale of groceries wholesale. In July, 1977, Ames began purchasing groceries from Scot Lad for resale and gave Scot Lad a security interest in its inventory. Ames also obtained equipment from Scot Lad pursuant to a five-year lease. After rectifying arrears in its payments to Scot Lad for purchased groceries in March, 1978, Ames became delinguent to Scot Lad under the equipment lease.

Thereafter, the parties entered into an agreement for the entry of a consent judgment in which Ames acknowledged that its payments were delinguent and agreed to accelerate payments such that the total amount due under the lease, $142,150.12, would be paid in just over two years. Ames also agreed to maintain specified minimum inventory levels in order to secure the debt. The consent judgment agreement specifically provided that the agreement did not supercede the prior security agreement, and, further, Scot Lad had the right to enforce the judgment 'in any lawful manner' upon Ames' default.

Although originally presented in a different form to the district court for entry on or about May 25, 1979, the judge refused to enter the proposed judgment at that time because a representative of Ames was not present. On June 21, 1979, the revised consent judgment agreed to by the parties was approved by the district court, and on June 25, 1979, the clerk entered the judgment.

In the meantime, having discovered that Ames' inventories had fallen significantly below the required minimum levels, Scot Lad filed an affidavit of default with the court on June 25, 1979, under the consent judgment and secured a Writ of Execution. Later that day, Scot Lad agents, accompanied by sheriff's deputies, entered Ames' stores and seized its inventory which was subsequently sold.

Thereafter, Scot Lad brought this action seeking as damages the unsatisfied portion of the consent judgment. Ames raised verious counterclaims including breach of contract, malicious prosecution, and tortious interference with a business relationship. At the conclusion of a ten-day trial, the jury returned a verdict of $71,096.44 in favor of Scott Lad and recommended a verdict of no cause of action on Ames' counterclaims. Judgment was entered on the basis of the jury's verdict and recommendation.

II.

Ames first argues that the district court erred in refusing to instruct the jury that execution by Scot Lad less than ten days after entry of the consent judgment was unlawful as a matter of law under Federal Rule of Civil Procedure 62(a). Rule 62(a) provides:

Except as stated herein, no execution shall issue upon a judgment nor shall proceedings be taken for its enforcement until the expiration of 10 days after its entry.

'Judgment' for purposes of the federal rules is defined to include 'a decree and any order from which an appeal lies.' Fed. R. Civ. P. 54(a). Scot Lad argues the district court correctly held Rule 62(a) inapplicable to the instant case because consent judgments are not appealable. We disagree.

In Swift & Company v. United States, 276 U.S. 311, 324, 48 S. Ct. 311, 314 (1928), the Supreme Court stated:

Decrees entered by consent have been reviewed upon appeal or bill of review where there was a claim of lack of actual consent to the decree as entered . . .; or fraud in its procurement . . .; or that there was lack of federal jurisdiction because of the citizenship of the parties. . . . But 'a decree, which appears by the record to have been rendered by consent, is always affirmed, without considering the merits of the cause.' (citations omitted; emphasis supplied).

Thus, although the review of a consent judgment is severely limited, such a judgment is, in fact, appealable. Accordingly, Rule 62(a) is applicable. This conclusion furthers the purposes of Rule 62(a), which is to allow the party against whom the judgment is entered to either attack the judgment in the trial court or seek a stay pending appeal. See C. Wright and A. Miller, Federal Practice & Procedure, Sec.2902 (1973). A party against whom a consent judgment is entered is entitled to the protections of Rule 62(a).

Any error in this regard, however, is harmless. Ames has never claimed the consent judgment was invalid due to lack of consent, fraud, or lack of federal jurisdiction. Moreover, Ames has set forth no credible argument that it was injured in any manner designed to be protected by Rule 62(a) by the loss of the ten-day automatic stay. Therefore, the jury could not have awarded Ames any damages on this basis. Accordingly, the failure to give the proffered instruction was harmless. See C. Wright and A. Miller, supra, at Sec.2886.

Ames next argues that the default affidavit filed by Scot Lad was insufficient as a matter of law because it did not...