Financial Timing Publications, Inc. v. Compugraphic Corp.

• Decision Date: 09 January 1990
• Docket Number: No. 89-5024,89-5024
• Parties: FINANCIAL TIMING PUBLICATIONS, INC., successor in interest to The Money Advocate, Inc., a Minnesota corporation, Appellant, v. COMPUGRAPHIC CORPORATION, a Massachusetts corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 936

893 F.2d 936

FINANCIAL TIMING PUBLICATIONS, INC., successor in interest

to The Money Advocate, Inc., a Minnesota

corporation, Appellant, v. COMPUGRAPHIC CORPORATION, a Massachusetts corporation, Appellee.

No. 89-5024.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 11, 1989.

Decided Jan. 9, 1990.

Robert A. Brunig, Minneapolis, Minn., for appellant.

James L. Harlow, Minneapolis, Minn., for appellee.

Before BEAM, Circuit Judge, and HEANEY and HENLEY, Senior Circuit Judges.

HENLEY, Senior Circuit Judge.

In this diversity case, Financial Timing Publications, Inc. (Financial Timing) appeals the district court's order granting summary judgment for Compugraphic Corporation (Compugraphic). Financial Timing brought suit in Minnesota state court, alleging negligence, breach of express warranty, breach of implied warranty of fitness for a particular purpose, and fraud against Compugraphic in connection with Compugraphic's sale of a computerized printing system to Financial Timing's corporate predecessor. Compugraphic removed the case to federal court and later moved for summary judgment on all counts, which the district court granted. On appeal, Financial Timing contends that the district court lacked subject matter jurisdiction because Compugraphic failed to comply with the removal procedure of 28 U.S.C. Sec. 1446(a), (b) (1982). In the alternative, Financial Timing argues that even if the district court had subject matter jurisdiction, it erred in granting summary judgment for Compugraphic on the fraud claim. Financial Timing does not contest the district court's order of summary judgment on the other counts. We affirm the district court's ruling that it has subject matter jurisdiction, but reverse the summary judgment granted to Compugraphic on the fraud claim and remand for additional proceedings consistent with this opinion.

I.

Financial Timing, a Minnesota corporation, is the successor in interest to The Money Advocate, Inc. (Money Advocate), which published newsletters promoting the sale of coins. Compugraphic is a Massachusetts corporation that manufactures and sells computerized typesetting equipment.

In March of 1984, Clayton Makepeace and Mike Battis, Money Advocate employees, met with Tony Andrews, a Compugraphic sales representative, to discuss purchasing computer equipment and software to upgrade Money Advocate's publication process. Financial Timing contends that Andrews made several representations regarding the capabilities of Compugraphic's system that Makepeace and Battis relied upon in entering into purchase agreements for the system on March 28 and June 21, 1984. According to Financial Timing, the Compugraphic system did not perform as Andrews had promised, and as a result, the plaintiff incurred substantial damages.

On June 4, 1987, Financial Timing commenced this lawsuit by mailing a copy of the state court summons and complaint to Compugraphic pursuant to the state procedure for service of process by mail, see Minn.R.Civ.P. 4.05. The complaint, on its face, set forth the facts that would permit a federal district court to exercise diversity jurisdiction under 28 U.S.C. Sec. 1332 (1982). ¹ Compugraphic acknowledged receipt of the summons and complaint on June 12, 1987, and filed its petition for removal, as allowed by 28 U.S.C. Sec. 1441(a) (1982), ² on July 17, 1987. On September 15, 1988, Compugraphic filed its motion for summary judgment, which the district court granted on November 29, 1988. This appeal followed.

II.

Financial Timing argues that the district court did not have subject matter jurisdiction because Compugraphic failed to verify its removal petition, as required by 28 U.S.C. Sec. 1446(a), ³ and did not file the petition with the district court within thirty days of its receipt of Financial Timing's summons and complaint, as required by 28 U.S.C. Sec. 1446(b). ⁴ We disagree.

With regard to the verification issue, it is not clear that Compugraphic failed to meet 1446(a) requirements. The statute does not define what is necessary for a petition to be verified, see 1A Moore's Federal Practice p 0.168[3.-4], at 570-71 (2d ed. 1989), and some courts have determined that the verification requirement is satisfied if the attorney simply signs the removal petition, as occurred in this case, see Greenspun v. Schlindwein, 574 F.Supp. 1038, 1040 n. 2 (E.D.Pa.1983); Border City Sav. & Loan Ass'n v. Kennecorp Mortgage & Equities, Inc., 523 F.Supp. 190, 192 (S.D.Ohio 1983); cf. City of Owatonna v. Chicago, Rock Island & Pac. R.R., 298 F.Supp. 919, 920 n. 3 (D.Minn.1969) (holding that defense counsel's statement in open court certifying truthfulness and accuracy of petition cured defect of failure to verify petition); H.R.Rep. No. 889, 100th Cong., 2d Sess. 71, reprinted in 1988 U.S.Code & Admin.News 5982, 6032 (noting that the 1988 amendment to 1446(a), which eliminated the verification requirement, "is in keeping with general modern distaste for verified pleading"). Even if more than the attorney's signature is required for the petition to be verified, Financial Timing nevertheless cannot prevail on the verification issue because it has waived any objection to this alleged defect by not raising the issue before the district court.

Financial Timing did raise below the issue of Compugraphic's failure to file its petition within the thirty-day period specified in 28 U.S.C. Sec. 1446(b), but the district court ruled that the plaintiff's prior actions constituted a waiver of this procedural defect. The evidence showing a waiver includes a letter dated July 14, 1987, from a Compugraphic attorney to Financial Timing's counsel confirming a telephone agreement that Financial Timing would not object to the removal on timeliness grounds. Also, the removal petition itself, filed two days later, states that Financial Timing agreed not to contest the timeliness of the petition. After receiving both the letter and the petition, Financial Timing failed to communicate to Compugraphic any disagreement with the letter and did not raise any objection before the district court regarding the statement in the petition that mentioned the prior agreement. Financial Timing participated without objection in a pretrial conference, engaged in discovery pursuant to the Federal Rules of Civil Procedure for over a year, subjected itself to the authority of a federal magistrate, and invoked the authority of the district court by appealing a magistrate's order. It was not until after Compugraphic had served and filed its motion for summary judgment that Financial Timing finally registered an objection to the timeliness of the petition. Given these circumstances, we find that the district court acted clearly within its broad discretion in holding that Financial Timing had waived its timeliness objection. See, e.g., Lanier v. American Bd. of Endodontics, 843 F.2d 901, 905 (6th Cir.) (holding that district court did not abuse its discretion in finding that plaintiff had waived any objection to the untimeliness of the removal petition when she had engaged in affirmative activity in the district court), cert. denied, --- U.S. ----, 109 S.Ct. 310, 102 L.Ed.2d 329 (1988).

Financial Timing in fact acknowledges that its actions would constitute a waiver if the procedural requirements of section 1446 are waivable, but argues that these requirements are mandatory and thus preclude the district court from having subject matter jurisdiction notwithstanding the plaintiff's acquiescence in Compugraphic's late filing. Financial Timing's argument is without merit, for we have recognized that "[p]rocedural removal requirements ... are not jurisdictional, and thus a party may waive the right to object to removal on these grounds." Nolan v. Prime Tanning Co., 871 F.2d 76, 78 (8th Cir.1989); see also, e.g., Lanier, 843 F.2d at 904.

Financial Timing also contends that because the district court was obligated to "examine the petition [for removal] promptly," 28 U.S.C. Sec. 1446(c)(4) (1982), the obligation was on the district court, not the plaintiff, to take notice of procedural defects. The Supreme Court disposed of this argument long ago: "the court will not, of its own motion, inquire as to the regularity of the issue or service of the process, or indeed, whether there was any process at all, since it could be waived, in whole or in part, either expressly or by failing seasonably to object." Mackay v. Uinta Dev. Co., 229 U.S. 173, 176, 33 S.Ct. 638, 639, 57 L.Ed. 1138 (1913).

Because Financial Timing, by its actions, waived its objections to Compugraphic's alleged failure to verify its removal petition and failure to file that petition within thirty days of receiving the complaint, we find that the district court properly exercised subject matter jurisdiction.

III.

We next consider whether the district court erred in granting summary judgment for Compugraphic on the fraud claim. In support of the district court's decision, Compugraphic argues that (1) the manner in which Financial Timing submitted its supporting evidence did not satisfy the requirement of Federal Rule of Civil Procedure 56(e) that the party opposing summary judgment "set forth specific facts showing that there is a genuine issue for trial," (2) Financial Timing failed to present admissible evidence establishing a genuine issue of material fact concerning the reliance element of its fraud claim, and (3) the fraud claim was barred by a provision in the sales contracts limiting the period of time for bringing causes of action. We address each of these arguments in turn.

A.

In response to Compugraphic's motion for summary judgment, Financial Timing submitted a nine-page memorandum of law citing only the complaint and sales contracts, which were attached as exhibits to the complaint. At the hearing on the motion, the district court commented that the memorandum was inadequate support for Financial Timing's position and granted the...