892 F.2d 1115 (1st Cir. 1989), 89-1690, Aoude v. Mobil Oil Corp.
|Docket Nº:||89-1690, 89-1696.|
|Citation:||892 F.2d 1115|
|Party Name:||Salim AOUDE, Plaintiff, Appellant, v. MOBIL OIL CORPORATION, Defendant, Appellee.|
|Case Date:||December 29, 1989|
|Court:||United States Courts of Appeals, Court of Appeals for the First Circuit|
Heard Nov. 6, 1989.
David Berman, with whom Berman & Moren, Lynn, Mass., was on brief, for plaintiff, appellant.
Robert M. Gault, with whom Andrew Nathanson, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, Mass., and Elizabeth T. Walker, Alexandria, Va., were on brief, for defendant, appellee.
Before BREYER, VAN GRAAFEILAND [*] and SELYA, Circuit Judges.
SELYA, Circuit Judge.
Plaintiff-appellant Salim Aoude rails against the involuntary dismissal of two suits which he filed against defendant-appellee Mobil Oil Corporation and others. The record of the case amply illustrates that, though the "bread of deceit is sweet to a man ... afterwards his mouth shall be filled with gravel." Proverbs 20:17. We told a part of the tawdry tale in Aoude v. Mobil Oil Corp., 862 F.2d 890 (1st Cir.1988), and now write the final chapter.
The general scenario of plaintiff's effort surreptitiously to acquire a Mobil franchise from another service station operator, John Monahan, and to force Mobil to accept the transaction, was recounted at some length in our earlier opinion. Id. at 891-92. Rather than revisit that narrative, we refer the interested reader to it, noting especially that, to gain bargaining leverage with Mobil, Aoude concocted, backdated, and persuaded Monahan to sign, a bogus purchase agreement. See id. at 891 & n. 2. The counterfeit reflected a price nearly twice what had actually been paid for Monahan's interest. When Mobil refused to bow to this artificially induced pressure, Aoude brought suit in state court, alleging, on a number of theories, that he had become the owner of Monahan's franchise, notwithstanding Mobil's refusal--as was its right--to honor the purported assignment. The complaint sought equitable relief and damages.
Plaintiff had given the ersatz agreement to his then-counsel, and it formed the complaint's centerpiece. Aoude knew that counsel had annexed the false agreement to the complaint instead of the real one; indeed, Aoude approved the filing of the suit on that basis. By his own admission, he "did not ask [his attorney] to amend the complaint" to retract the lie. Mobil, unaware that the agreement was a work of fiction, removed the case to federal district court based on diversity of citizenship and amount in controversy.
During the first four months of 1988, numerous depositions were conducted and other discovery undertaken. Aoude participated fully, plying Mobil with interrogatories and requests for document production and responding to Mobil's discovery initiatives. When Monahan's deposition was taken, the truth began to emerge. Later, during his own deposition, Aoude was confronted with Monahan's testimony and only then admitted the scheme. It was not until May 26, 1988 (almost three months after his deposition was taken) that plaintiff moved to amend his complaint to substitute the authentic purchase agreement for the bogus one. In the meantime, discovery had continued and a blizzard of legal documents had fallen. We single out four developments:
1. On February 24, Mobil threatened Monahan with franchise revocation based partly on his dealings with Aoude.
2. Aoude engaged new counsel.
3. On May 5, Aoude filed a second action in the same federal district court. The complaint in the "new" case adopted all the factual allegations made in the first case and prayed for essentially the same relief, but abandoned plaintiff's earlier reliance on the phony contract. Then, citing Mobil's February 24 letter to Monahan, the new complaint proceeded to allege violations of the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. §§ 2801-2806 (1982).
4. On May 17, Mobil moved to dismiss both actions because of Aoude's fraudulent practices.
We need not wax longiloquent as to ensuing events. On June 2, the district court granted preliminary injunctive relief in Mobil's favor; 1 the court also denied plaintiff's motion to substitute the authentic agreement for the ersatz one. Thereafter, the district court heard arguments on defendant's dismissal motions and took them under advisement. Some months later, the court filed a memorandum decision dismissing both actions. In its rescript, the court observed that "plaintiff's entire case rests on a false foundation."
These appeals, one for each of plaintiff's two suits, followed.
At the outset, we address the standard of review. We believe that the district courts must be accorded considerable latitude in dealing with serious abuses of the judicial process and that the trier's determination to dismiss a case for such a reason should be reviewed only for abuse of discretion. See, e.g., Link v. Wabash R.R. Co., 370 U.S. 626, 633, 82 S.Ct. 1386, 1390, 8 L.Ed.2d 734 (1962); HMG Property Investors, Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 916-17 (1st Cir.1988); cf. Fashion House, Inc. v. K mart Corp., 892 F.2d 1076, 1081 (1st Cir. 1989) (district court's choice of sanctions for discovery violation will only be set aside for abuse of discretion); Damiani v. Rhode Island Hospital, 704 F.2d 12, 15-16 (1st Cir.1983) (similar).
While broad, the trial court's discretion is not unlimited. The judge must consider the proper mix of factors and juxtapose them reasonably. "Abuse occurs when a material factor deserving significant weight is ignored, when an improper factor is relied upon, or when all proper and no improper factors are assessed, but the court makes a serious mistake in weighing them." Independent Oil and Chemical Workers of Quincy, Inc. v. Procter & Gamble Mfg. Co., 864 F.2d 927, 929 (1st Cir.1988); see also Anderson v. Cryovac,
Inc., 862 F.2d 910, 923 (1st Cir.1988) (to warrant reversal for abuse of discretion, it must "plainly appear[ ] that the court below committed a meaningful error in judgment").
Although dismissal need not be preceded by other, less drastic sanctions, Farm Constr. Services, Inc. v. Fudge, 831 F.2d 18, 20 (1st Cir.1987) (per curiam); Damiani, 704 F.2d at 15, it is an extreme remedy, and should not lightly be engaged. Thus, a district court may dismiss a case only "when circumstances make such action appropriate," Link, 370 U.S. at 633, 82 S.Ct. at 1390, and after "thoughtful consideration of all...
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