Panaview Door & Window Co. v. Reynolds Metals Co.

• Decision Date: 28 April 1958
• Docket Number: No. 15059.,15059.
• Citation: 255 F.2d 920
• Parties: PANAVIEW DOOR & WINDOW CO., a corporation, Appellant, v. REYNOLDS METALS COMPANY, a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

255 F.2d 920 (1958)

PANAVIEW DOOR & WINDOW CO., a corporation, Appellant, v. REYNOLDS METALS COMPANY, a corporation, Appellee.

No. 15059.

United States Court of Appeals Ninth Circuit.

February 21, 1958.

Rehearing Denied April 28, 1958.

Macbeth & Ford, Thomas P. Mahoney, Patrick H. Ford, Los Angeles, Cal., for appellant.

Adams, Duque & Hazeltine, Henry Duque, Lawrence T. Lydick, James S. Cline, Los Angeles, Cal., for appellee.

Before FEE and HAMLEY, Circuit Judges, and CHASE A. CLARK, District Judge.

JAMES ALGER FEE, Circuit Judge.

This diversity suit involves the asserted improper use by Reynolds Metals Company of dies alleged to have been made solely for Panaview Door & Window Co. In three causes of action, alternatively pleading breach of contract, violation of a confidential relationship, and unfair competition, Panaview sought damages and injunctive relief.

After a nonjury trial, judgment was entered for defendant. On this appeal, Panaview questions the findings of fact and conclusions of law of the trial court concerning each of the causes of action.

Panaview is engaged in the business of producing and selling aluminum sliding glass doors. The company does not manufacture the component parts of these doors, but assembles the doors from parts purchased elsewhere.

In the spring of 1954, Panaview conceived and developed a sliding glass door, to which it applied the name "Panador." Construction of these doors required the use of aluminum extrusions in various sizes and shapes. An aluminum extrusion is a shape which is formed by forcing a hot billet of aluminum through a die by the use of a large press.

Panaview engineers prepared drawings of the extrusions required in the manufacture of Panadors. From these drawings, blueprints were made. In the late spring of 1954, representatives of Panaview and Reynolds discussed the manufacture of these extrusions and of the dies which would be needed. Reynolds is a large producer of aluminum in its various forms, including aluminum extrusions.

At the time of these discussions, Reynolds was furnished with the Panaview blueprints referred to above. The blueprints were then processed by the extrusion department of Reynolds, extrusion section drawings being made and special assembly tolerances being added. Final drawings were then submitted to and approved by Panaview.

Panaview placed its first order with Reynolds for Panador extrusions on April 20, 1954. Additional orders were placed in July, September and December, 1954. Panaview paid Reynolds approximately $72,670.00 for the extrusions supplied under these orders. The final shipment on the last order was made on May 31, 1955.

During 1954, Windsor Supply, Inc.,¹ was one of the best customers of Panaview, buying complete knocked-down doors, which were then sold under the Windsor label. Late that year, Windsor began negotiations with Reynolds, with a view of purchasing the aluminum components necessary to the production of sliding doors. At least one of the reasons for these negotiations was that Panaview was questioning the credit of Windsor, and, for that reason, was threatening to stop shipments.

As a part of its negotiations with Reynolds, Windsor submitted to that company samples of the various products for which extruded shapes were desired. Included in the samples so furnished was a Panador. Reynolds furnished price quotations on the basis of these samples. Windsor then placed an order with Reynolds for aluminum materials, including extrusions, to be used in manufacturing sliding glass doors similar to Panador.

When the Windsor order was received in the extrusion department of Reynolds, it was seen that the dies called for were the same as those which had been ordered by Panaview. Reynolds therefore used on the Windsor order dies which had been made in connection with the Panaview order. Windsor did not thereafter order any doors from Panaview. It purchased from Reynolds the extrusion parts for approximately five thousand doors, at a cost of $155,624.97. Panaview claims that, if it had sold this many doors to Windsor, it would have made a profit of more than $150,000.00. Reynolds argues that the evidence of Panaview as to damages is speculative and that no damages were sustained.

During the period from December, 1954, through May, 1955, Reynolds was selling aluminum extrusions made with these dies to both Panaview and Windsor. While the trial court made no findings thereon, it is conceded that Panaview was receiving short and unbalanced deliveries from Reynolds during this period. There is evidence, however, that Reynolds' shipments to Panaview had always been short, delayed and unbalanced, and that shipments to Windsor were no more complete or timely. Reynolds also produced evidence countering the charge of Panaview that extrusions originally manufactured for Panaview were sometimes diverted to Windsor.

Reynolds has moved this Court for an order striking certain parts of the transcript of record.

The motion to strike from the record an exhibit attached to Panaview's trial court memorandum of points and authorities, consisting of a letter dated April 28, 1955, and to strike the reference in this memorandum to such letter, is granted. The letter in question was not received in evidence. The fact that the trial court denied, without prejudice, a similar motion, does not preclude us, proceeding under Rule 75(f), Federal Rules of Civil Procedure, 28 U.S.C.A., from correcting the record to exclude exhibits admittedly not received in evidence.

The motion to strike from the record a document, which had been marked plaintiff's exhibit 14 for identification, is also granted, and for the same reason. It is immaterial that it was the moving party, Reynolds, which designated this purported exhibit for incorporation in the record. Matters which were not before the trial court will be stricken on motion, even if they have been included in the record on appeal by stipulation. Heath v. Helmick, 9 Cir., 173 F.2d 156.

Proceeding now to the merits of the appeal, we consider, first, the cause of action based upon breach of contract. It is the contention of Panaview that Reynolds was contractually obliged to use the dies solely on orders submitted by Panaview. If this be true, then, as Reynolds readily concedes, the use of these dies in filling orders for Windsor constituted a breach of contract.

The trial court, however, found and concluded that Reynolds had no such contractual obligation.

The orders, together with the acknowledgments of them by Reynolds, comprise the contract between the parties. The acknowledgments are on a printed form drafted by Reynolds. On the back of this form are seventeen printed paragraphs of "Terms and Conditions." Included among these is Paragraph 11, which reads:

"Equipment: Any equipment (including jigs, printing plates or cylinders, dies and tools, etc.) which Seller constructs or acquires specifically and solely for use on Buyer\'s order shall be and remain Seller\'s property and in Seller\'s sole possession and control. Any charges made by Seller therefor shall be for the use of such equipment only * * *."

Specifically, the language above quoted is a part of a printed form which appears on the reverse of an acknowledgment to Panaview of an order for Reynolds to make certain quantities of extrusions for the construction of the doors in question. Reynolds sent out a form of acknowledgment of this order, which had on its reverse side printed terms and conditions which included Paragraph 11, while on the face the extrusions ordered were listed and also an itemization of nine different extrusion dies. For these the document lists an itemized charge to Panaview designated as a "die charge" on the order. The amount of each "die charge" is entered in a column bearing the printed designation "Price." The total of the die charges is $1,430.00.

Paragraph 11, standing alone, does not evidence an agreement of the kind asserted by Panaview. It contains no words of promise. The purpose of the paragraph is not to specify what equipment shall be held for the sole use of the buyer. It provides only that, as to any equipment which Reynolds may have agreed to use "specifically and solely" on a buyer's order, Reynolds retains title, possession and control, despite the payment of a charge therefor.

But, of course, Paragraph 11 does not stand alone. In order to determine its full significance and to ascertain whether Reynolds, by these documents, did assume an obligation to hold the dies for the sole use of Panaview, we must examine the whole contract.²

There is no provision in any of the documents which specifies that Panaview obtained any rights as to the dies by paying the "die charge." The proper inference, from the language of the documents, is that such charges were made for the dies because of the use of them on the orders of Panaview for extrusions. There is no direct promise anywhere that these dies will not be used on the work of other customers. The entire balance of the documents contains no reference to printed Paragraph 11. None of these contains a promise by Reynolds that the specific dies for which the charge was made would be used specifically and solely upon orders of Panaview. Paragraph 11 itself deals only with the title of dies which Reynolds has made "specifically and solely for use on Buyer's order" and the disposition of such dies when the customer has furnished no further order for extrusions. But, in order to put this clause into effect, there must be a promise by Reynolds to make such exclusive use, which none of these documents contains. The contest here is not over the title to or disposition of the dies for which a charge was made to Panaview.

The cardinal point is that the documents as a whole contain no engagement or agreement that Reynolds will use any of these dies solely and exclusively on the work of Panaview. It is equally clear there was no such promise by...