Alghanim v. Boeing Company, 71-1686

• Decision Date: 09 March 1973
• Docket Number: No. 71-1686,71-1892.,71-1686
• Citation: 477 F.2d 143
• Parties: Jassim Mohamed Thunayan ALGHANIM, Plaintiff-Appellant, v. The BOEING COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

477 F.2d 143 (1973)

Jassim Mohamed Thunayan ALGHANIM, Plaintiff-Appellant, v. The BOEING COMPANY, Defendant-Appellee.

Nos. 71-1686, 71-1892.

United States Court of Appeals, Ninth Circuit.

March 9, 1973.

Jennings P. Felix (argued), Thomas J. Kraft, of Jennings P. Felix and Associates, Seattle, Wash., for plaintiff-appellant.

Keith Gerrard (argued), Randall Revelle, of Perkins, Coie, Stone, Olsen & Williams, Seattle, Wash., for defendant-appellee.

Before HAMLEY, HUFSTEDLER, and GOODWIN, Circuit Judges.

HAMLEY, Circuit Judge:

These two appeals, consolidated for argument and disposition, present contract and tort issues concerning the scope of, and the method of terminating, a sales representative agreement and questions concerning district court procedures pertaining to discovery, amendment of pleadings and motions for summary judgment.

The litigation arises out of the efforts of The Boeing Company (Boeing) to sell its airplanes in Kuwait, Arabia, and other nations along the Persian Gulf. Boeing's prime prospect in this Middle East market was Kuwait Airways Corporation (KAC), a state-owned corporation. Yet, for years prior to 1966, Boeing had been unable to sell to Kuwait Airways or other airlines in this general area. Finally, Boeing determined that what it needed was an influential Kuwaiti citizen as its sales agent. After consultation with the American Embassy in Kuwait and Faisal Al-Fulaij (Al-Fulaij), chairman of the board of KAC, Boeing selected Jassim Mohamed Thunayan Alghanim (Alghanim) as its sales agent. Alghanim is the brother-in-law of Al-Fulaij.

In November, 1966, Alghanim and Boeing executed a written agreement by which Alghanim agreed to represent Boeing in promoting the sale of Boeing Models 707, 720, 727 and 737 type aircraft in Kuwait. Clause 6 of the agreement, defining the area covered by such representation, was later amended to include, in addition to Kuwait, the Sheikdoms of Bahrain, Doha, Dubai, Abu Dhabi and Sharja. Under clause 7, the agreement was to continue in full force and effect until terminated by either party giving sixty days written notice to the other party. Clause 11 provides that the agreement shall be governed by the laws of the State of Washington. The compensation to be paid the representative was provided for in clauses 4 and 5, the pertinent parts of which are quoted in the margin.¹

In 1967, with the assistance of Alghanim, Boeing executed a contract with KAC for the sale of three Model 707 aircraft for a sales price of approximately twenty-five million American dollars. Alghanim received full payment of his three percent commission on this sale. The twenty-five million dollar figure mentioned above did not include the substantial sum KAC paid Boeing for major component equipment, accessories, spare parts, and other items and services which Boeing delivered to KAC at the time the airplanes were delivered. Alghanim received no commission on the sale of any of these additional materials and services.

Boeing thereafter conducted further negotiations with KAC concerning the purchase of additional aircraft. According to Alghanim, during this period Al-Fulaij asked Boeing to cancel its agreement with Alghanim.² By letter of June 12, 1969, Boeing gave Alghanim sixty days notice of termination, but sent immediate notice of cancellation to KAC. KAC did not buy any additional aircraft from Boeing, nor did Boeing, at least during this sixty-day period, sell any aircraft in the expanded area covered by the representation agreement.

Alghanim filed suit against Boeing in the United States District Court for the Western District of Washington on December 19, 1969 (Civil No. 8692). He sought damages in the sum of four hundred thousand dollars "or other appropriate amount" for (1) three percent commission on spare parts sold in connection with the sale of aircraft to KAC in 1967, (2) three percent commission on any sales made or contracted to be sold by Boeing during the period of the agreement in the prescribed territory, and (3) damages for Boeing's action in assertedly wrongfully terminating the agreement.

Following rather extensive discovery, the cause was set for trial on February 10, 1971. On January 7, 1971, Alghanim filed a motion for leave to file an amended complaint. The amended complaint would expand the term "spare parts," as used in the original complaint, and add two new legal theories. These new theories were: (1) Boeing had tortiously interfered or conspired to interfere with its representation agreement with Alghanim, and (2) Boeing had defamed Alghanim by wrongfully terminating the agreement. On January 11, 1971, the trial was continued to February 16, 1971.

On January 15, 1971, a hearing was held on Alghanim's motion for leave to file an amended complaint. During the course of this hearing the district court indicated that Alghanim could amend his original complaint to expand the term "spare parts," as indicated in the margin.³ But the court stated that it would deny leave to file an amended complaint adding the two new theories referred to above. The reason orally given by the court for denying this motion was that neither of the new theories stated a claim upon which relief could be granted.⁴

On January 18, 1971, Alghanim propounded twenty-three interrogatories of Boeing. The bulk of these interrogatories were directed to discovering what spare parts were sold, the prices for them, and the supporting documents. Two days later Alghanim moved for an order requiring Boeing to answer the interrogatories within twenty days, so that the due date would fall prior to the trial set for February 16, 1971. Boeing opposed the motion for an order advancing the time for answering the interrogatories.⁵

A hearing thereon was held on January 29, 1971. The court ordered Boeing to supply Alghanim, within the twenty-day period, information as to the dollar value of the spare parts Boeing sold KAC,⁶ but denied the motion with respect to any other information requested.

In the meantime, on January 26, 1971, Boeing moved for summary judgment for defendant in the original action. Boeing made this motion on the grounds that, under the undisputed facts, (1) Boeing never agreed to pay Alghanim a commission on spare parts or accessories, (2) Boeing has not sold nor entered into a contract to sell any other aircraft in Kuwait or the Persian Gulf area, and (3) Boeing had a right to terminate its representation agreement with Alghanim.

Boeing noted this motion for hearing on February 5, 1971.⁷ Two days later, on January 28, 1971, Boeing supported this motion with a brief and two affidavits. The brief also makes reference to various depositions, cables and an affidavit which had been previously filed.

Alghanim promptly moved, pursuant to Rule 56(f), F.R.Civ.P., to postpone the hearing on this motion until the day fixed for trial (February 16, 1971), or such other date as would give Alghanim twenty-five days in which to respond. In a supporting affidavit, counsel for Alghanim alleged that plaintiff wished to have Alghanim make an affidavit in opposition to the motion for summary judgment, but since Alghanim was then in Kuwait and the one-way mailing time between Seattle and Kuwait is approximately five to seven days, this would not be possible prior to February 5, 1971. Counsel for Alghanim also asserted that plaintiff was continuing his discovery proceedings and that the depositions of two Boeing employees then scheduled for February 2 and 3, 1971, could not be transcribed and filed by February 5, 1971.

At the same time, counsel for Alghanim moved for an order postponing the date set for trial for sixty days, so that plaintiff could have the additional time he needed for discovery and trial preparation. In his affidavit supporting this motion, counsel for Alghanim called attention to the difficulties he had experienced in preparing for trial because of Middle East tension which hampered travel.

On February 1, 1971, Boeing moved to quash Alghanim's notice of depositions and subpoenas duces tecum directed to Donald McLaren and M. W. McClung. Boeing asserted that Alghanim was thereby attempting to gain information which had been denied to him in the order, described above, pertaining to Alghanim's interrogatories. Boeing also asserted that the two subpoenas had not been effectively served because a copy of the subpoena had not been delivered to M. W. McClung, and neither he nor Donald McLaren had been tendered the fee, as required by Rule 45(c), F.R.Civ.P.

On February 5, 1971, the district court denied Alghanim's motion to postpone the hearing on Boeing's motion for summary judgment. The hearing was held on that day and, at the close, the court orally announced that it would grant the motion for a summary judgment for Boeing. At the same time the court struck, as moot, Alghanim's motion to extend the trial date and Boeing's motion to quash Alghanim's notice of depositions and subpoenas. The formal order granting summary judgment for Boeing was entered on March 1, 1971. Alghanim took a timely appeal from this judgment. (No. 71-1686 in this court.)

In the meantime, on January 22, 1971, Alghanim filed a second action against Boeing (Civil No. 9455), setting out, in two claims, the substance of the two theories he had sought to advance in his proposed amended complaint in the original action. On his first claim in this new action Alghanim sought damages in the sum of two million dollars and, in his second claim, he sought damages in the sum of one hundred fifty thousand dollars.

Boeing moved to dismiss this action on the grounds that it failed to state a claim upon which relief could be granted and that the claims there asserted are barred by the doctrine of res judicata. After a hearing, the district court, on April 15, 1971, entered an order in which, treating Boeing's motion to dismiss as one for summary judgment for defendant, such motion was granted on the grounds of...