Chicago & Northwestern Ry. Co. v. HOSPERS PACK. CO., INC.

• Decision Date: 11 September 1973
• Docket Number: No. 72-C-3004-W.,72-C-3004-W.
• Citation: 363 F. Supp. 697
• Parties: CHICAGO & NORTHWESTERN RAILWAY COMPANY, Plaintiff, v. HOSPERS PACKING COMPANY, INC., Defendant.
• Court: U.S. District Court — Northern District of Iowa

363 F. Supp. 697

CHICAGO & NORTHWESTERN RAILWAY COMPANY, Plaintiff, v. HOSPERS PACKING COMPANY, INC., Defendant.

No. 72-C-3004-W.

United States District Court, N. D. Iowa, W. D.

September 11, 1973.

Ray H. Johnson, Jr., and Frank W. Davis, Jr., of Davis, Johnson, Burt & Davis, Des Moines, Iowa, for plaintiff.

Earl T. Klay and Loren J. Veldhuizen, of Klay, Bastemeyer & Veldhuizen, Orange City, Iowa, for defendant.

ORDER

McMANUS, Chief Judge.

This matter is before the court on plaintiff's unresisted motion for summary judgment, filed July 24, 1973.

This is an action to recover certain freight charges allegedly incurred by defendant between January 8, 1969 and April 22, 1970 for transportation of defendant's products from its plant in Hospers, Iowa, to buyers in Chicago, Illinois. The charges demanded by plaintiff were not paid originally due to alleged billing errors by plaintiff, and defendant's answer denies the existence of any unpaid account, alleging that no undercharge occurred.

In moving for summary judgment under Fed.R.Civ.P. 56, plaintiff relies upon the pleadings, defendant's admissions, answers to interrogatories and the deposition of Lloyd Woudstra, former officer, director, shareholder and employee of defendant Hospers Packing Company and the party now defending this suit.

In order for summary judgment to be properly granted, it must appear that "there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."

Fed.R.Civ.P. 56. The requirement that no genuine issue be presented has been held by the Eighth Circuit to mean that summary judgment must not be entered unless the movant has shown there is not "the slightest doubt as to a factual dispute," Clausen & Sons, Inc. v. Theo Hamm Brewing Co., 395 F.2d 388, 389 (1968), or that it has a "right . . . to a judgment with such clarity as to leave no room for controversy, and . . . that the plaintiff would not be entitled to recover under any discernible circumstances," Traylor v. Black, Sivalls & Bryson, Inc., 189 F.2d 213, 216 (1951). To support his "slightest doubt" formulation in Clausen, one of the leading recent cases taking this view, Judge Lay's opinion cites only one Supreme Court decision, Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). This decision is weak authority for a broad "slightest doubt" test for two reasons: (1) That the Court in Poller actually used a "slightest doubt" standard is far from clear. Justice Clark's majority opinion quoted with approval language from Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 627, 64 S.Ct. 724, 88 L.Ed. 967 (1944) to the effect that Rule 56(c) authorizes summary judgment "only where . . . it is quite clear what the truth is . . ." Poller, supra, 368 U.S. at 467, 82 S.Ct. at 488. The opinion continues, "We look at the record on summary judgment in the light most favorable to . . . the party opposing the motion . . ." Id., at 473, 82 S.Ct. at 491. To stretch this language to mean that summary judgment may not be granted where "there exists the slightest doubt as to a factual dispute," Clausen, supra, 395 F.2d at 389, distorts Poller and derogates from the policies of Rule 56 to promote efficiencies of judicial time, effort and resources and to spare the parties the expense and delay of an unnecessary trial. (2) Poller involved a very complicated factual situation sought to be redressed under § 4 of the Clayton Act and §§ 1, 2 of the Sherman Act. The Court said:

"We believe that summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot. It is only when the witnesses are present and subject to cross-examination that their credibility and the weight to be given their testimony can be appraised." Poller, supra, 368 U.S. at 473, 82 S.Ct. 491.

Thus, even admitting Poller does state a "slightest doubt" approach, it does so in a context involving complicated facts, numerous witnesses of uncertain reliability and a difficult and protean area of the law.¹ It is not surprising that such a setting should constrict the normal and proper ambit of summary procedures.² The instant case is not so constricting.

This "slightest doubt" or "no room for controversy" approach has been the subject of widespread disagreement in the Circuit Courts of Appeal,³ has been criticized by commentators⁴ and was rejected by the Supreme Court in Adickes v. S. H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The approach employed by the Court there is that the evidence presented is to be construed in favor of the nonmoving party, who is to be given the benefit of all the reasonable doubts and inferences in determining whether a genuine issue exists as to a material fact.

It is clear that this test of the propriety of summary judgment is both better supported by authority and more consonant with the purposes of Rule 56 than the "slightest doubt" standard. This approach is becoming more widely-accepted in recent Circuit Court decisions. 10 C. Wright and A. Miller, Federal Practice and Procedure, § 2725, at 510, and § 2727, nn. 59-60. It avoids the danger inherent in the "slightest doubt" standard, that summary judgment will be rendered unusable in most cases because at least a slight doubt can be developed as to practically all human conduct or communication. DeLuca v. Atlantic Refining Co., 176 F.2d 421, 423 (CA 2 1949), cert. den. 338 U.S. 943, 70 S.Ct. 423, 94 L.Ed. 581. Clark, Special Problems in Drafting and Interpreting Procedural Code and Rules, 3 Vand.L. Rev. 493, 504 (1950). The Eighth Circuit has itself in several cases eschewed the "slightest doubt" standard in favor of the approach which gives the opposing party the benefit of all reasonable doubts and inferences. See U. S. v. Farmers Mutual Insurance Ass'n of Kiron, Iowa, 288 F.2d 560, 562 (1961). McSpadden v. Mullins, 456 F.2d 428, 430 (1972). Bryan v. Aetna Casualty and Surety Co., 381 F.2d 872 (1967). Caylor v. Virden, 217 F.2d 739 (1955). Against this background, the "slightest doubt" test appears as a deviation from this more relaxed but sufficiently careful standard, appropriate only in unusually complex cases like Poller, involving witness credibility, motive, intent and complicated facts, or in cases where an issue of substantial public or constitutional importance is presented. In these extraordinary cases it is clearly best to err on the side of caution by employing the "slightest doubt" test because of the unusual difficulty or importance of the decision to be made. The instant case is not such a one, however. Here there are no credibility problems, no intent issues, no conspiracy, and the facts are clear and simple. Of course, the decision is of vital concern to the parties, but its public import is minimal. No constitutional questions are raised. With all reasonable doubts resolved and inferences drawn in favor of the nonmoving defendant here, this matter is ripe for summary judgment.⁵

Defendant contends that Hospers Packing Co., Inc. has been dissolved, and the pretrial stipulation reflects that defendant disputes the court's jurisdiction over the defendant because of its alleged nonexistence. Defendant contends that dissolution was effected either by filing a statement of intent to dissolve with the Secretary of State on June 24, 1970, this being a voluntary dissolution by consent of all stockholders pursuant to Iowa Code § 496A.80, or by the disposition of substantially all of its property and assets on July 2, 1970 under § 496A.76.

These contentions must fail. Iowa Code § 496A.83, Effect of Statement of Intent to Dissolve, provides:

"Upon the filing by the secretary of state of a statement of intent to dissolve, whether by consent of shareholders or by act of the corporation, the corporation shall cease to carry on its business, except insofar as may be necessary for the winding up thereof, but its corporate existence shall continue until a certificate of dissolution has been issued by the secretary of state or until a decree dissolving the corporation has been entered by a court of competent jurisdiction as in this chapter provided."

Defendant's answers to plaintiff's interrogatories 4 and 5 show that neither has a certificate of dissolution been issued nor a decree entered ending defendant's corporate existence. Additionally, defendant's answer to plaintiff's interrogatory # 9 shows that defendant's certificate of incorporation has not been cancelled pursuant to § 496A.130, for failure to file an annual report. Finally, § 496A.76 is entirely...