INB Banking Co. v. Iron Peddlers, Inc.

• Decision Date: 19 May 1993
• Docket Number: No. 92-1908,92-1908
• Citation: 993 F.2d 1291
• Parties: INB BANKING COMPANY, Plaintiff-Appellee, v. IRON PEDDLERS, INCORPORATED, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1291

993 F.2d 1291

INB BANKING COMPANY, Plaintiff-Appellee, v. IRON PEDDLERS, INCORPORATED, Defendant-Appellant.

No. 92-1908.

United States Court of Appeals Seventh Circuit.

Submitted Jan. 5, 1993.

Decided May 19, 1993.

Joseph A. Hammer, Hammer & Associates, New Albany, IN, for plaintiff-appellee.

W. Duvall Spruill, Michael S. Church, Turner, Padget, Graham & Laney, Columbia, SC, Douglas W. Langdon, Brown, Todd & Heyburn, New Albany, IN, for defendant-appellant.

Before BAUER, Chief Judge, MANION, Circuit Judge, and EVANS, Chief District Judge. ^*

MANION, Circuit Judge.

Iron Peddlers, Inc., appeals from the district court's grant of INB Banking Company's (the Bank) Motion in Limine. We affirm.

I. Facts

The Bank leased two trucks to B & P Excavating, Inc. (B & P), and filed a UCC financing statement evidencing its security interest in the equipment. B & P traded the leased trucks to Iron Peddlers for two other trucks. Since the Bank held title, Iron Peddlers obviously did not acquire title to the trucks it received. Nor did Iron Peddlers file a UCC financing statement to evidence its interest in the trucks it traded. B & P then ceased operations; it was heavily indebted to the Bank at the time. To recoup its debt, the Bank reclaimed several pieces of equipment it had leased to B & P. It also sold all equipment on the property of B & P not subject to a security interest. Consequently, the Bank sold the two trucks which Iron Peddlers had traded to B & P. The Bank then filed this conversion action, seeking to recover possession of the two trucks which Iron Peddlers had received from B & P in consideration for the traded trucks.

In its Answer, Iron Peddlers alleged that the Bank was unjustly enriched by selling the two trucks which Iron Peddlers had traded to B & P. Iron Peddlers also alleged that the Bank implicitly waived its conversion action, or somehow agreed to a substitution of the trucks, by selling the trucks which Iron Peddlers had traded to B & P. These allegations were not couched as an independent claim. They were simply presented as defenses to the conversion action. Prior to trial, the Bank filed a Motion In Limine to preclude evidence that it was unjustly enriched, or that it waived its conversion action or agreed to the trade between Iron Peddlers and B & P. The district court granted that motion, finding irrelevant the evidence Iron Peddlers sought to introduce.

The court's decision on the Motion In Limine effectively left Iron Peddlers without a defense to the conversion action. Iron Peddlers then consented to a judgment in favor of the Bank, and indicated to the district court that it wished to preserve its right to appeal the decision on the Motion In Limine. The district court allowed Iron Peddlers to proffer the precluded evidence on the record, and then entered judgment in favor of the Bank. The Bank agreed to this procedure. The court noted that it rendered judgment "without waiving the right of the defendant to appeal the exclusion of the above evidence and argument." As anticipated, Iron Peddlers appeals the judgment.

II. Analysis

As we have recently recognized, "[t]here appears to be a split among the circuits with respect to whether a stipulated judgment may be appealed." Hudson v. Chicago Teachers Union, Local No. 1, 922 F.2d 1306, 1312 (7th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991). The Eleventh Circuit quotes 15 Charles A. Wright, Arthur L. Miller, and Edward H. Cooper, Federal Practice and Procedure § 3902 at 408 (1976), to describe the state of this conflict:

Parties who have consented to entry of a judgment are at times said to lack standing to appeal, unless they can show facts that would justify nullifying the consent.... The true principle, however, appears to be properly explained in one of the early Supreme Court decisions as resting on waiver of error, leading to affirmance rather than dismissal: 'If, when the case gets here, it appears that the decree appealed from was assented to by the appellant, we cannot consider any errors that may be assigned which were in law waived by the consent, but we must still receive and decide the case. If all the errors complained of come within the waiver, the decree below will be affirmed, but only after hearing.' [Quoting Pacific Railroad v. Ketchum, 101 U.S. 289, 295, 25 L.Ed. 932 (1880).]

Shores v. Sklar, 885 F.2d 760, 764 n. 7 (11th Cir.1989), cert. denied, 493 U.S. 1045, 110 S.Ct. 843, 107 L.Ed.2d 838 (1990). In Shores, the Eleventh Circuit adopted the principle suggested by the commentators, holding that a party who consents to judgment while explicitly reserving the right to appeal preserves that right. We follow the same rule. See Hudson, 922 F.2d at 1313; accord Coughlin v. Regan, 768 F.2d 468, 470 (1st Cir.1985) ("While it is possible for a party to consent to a judgment and still preserve his right to appeal, he must reserve that right unequivocally, as it will not be presumed.").

The next issue, then, is whether Iron Peddlers explicitly preserved its right to appeal. The record is sketchy on this point. At a hearing held immediately prior to a scheduled trial, Iron Peddlers agreed to the judgment, but expressed its desire to later appeal the district court's decision on the Motion in Limine. The Bank expressed indifference to Iron Peddlers' desire to appeal, and emphasized its desire to execute the judgment immediately. Eventually, the court entered judgment in favor of the Bank as the parties agreed, with the caveat that the judgment was rendered "without waiving the right of the defendant to appeal the exclusion of the above evidence and argument." It is questionable whether this scenario constitutes an unequivocal reservation of the right to appeal. However, the Bank does not argue waiver. Instead, the Bank concentrates its defense of the appeal solely on the issue raised by Iron Peddlers: whether the district court erred in granting the Motion in Limine. That is the issue we consider.

Iron Peddlers initially argues, without explanation, that the appropriate standard of review "is the same as that for decisions made on the pleadings under Rule 12(b)(6) and Rule 12(c)." The Bank does not respond to this argument. It argues simply that the district court did not err in precluding the...