Audio-Visual Marketing Corp. v. Omni Corp.
| Decision Date | 29 November 1976 |
| Docket Number | AUDIO-VISUAL,Nos. 75-1553,75-1554,s. 75-1553 |
| Citation | 545 F.2d 715 |
| Parties | MARKETING CORPORATION et al., Appellants and Cross-Appellees, v. OMNI CORPORATION et al., Appellees and Cross-Appellants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Timothy T. Tierney, Los Angeles, Cal. (de Krassel & Tierney and Robert E. Melton of Miller & Melton, Ltd., Albuquerque, N. M., on the brief), for appellants and cross-appellees.
George A. Dubois, Albuquerque, N. M. (Frank P. Dickson, Jr. of Dickson & Dubois, P. A., Albuquerque, N. M., on the brief), for appellees and cross-appellants.
Before LEWIS, Chief Judge, McWILLIAMS, Circuit Judge, and ZIRPOLI, * District Judge.
This is a dispute between a manufacturer and its erstwhile sole and exclusive distributor. John P. Cline, an electrical engineer, invented a machine designed to drill children in arithmetic. Cline called the device a Multiputer, and he described its operation as follows:
It's a teaching device. One could liken it to flash cards. We are all familiar with flash cards that teachers use to drill students in arithmetic. The Multiputer is an electronic way of doing that so that random numbers are presented to the student, like the machine will indicate "Three plus five equals what?" Then there's a keyboard where the student can enter a response. The machine then determines whether the student's answer was correct or incorrect.
Omni Corporation, a New Mexico corporation, was formed by Cline for the purpose of manufacturing the Multiputer. Omni entered into a contract with Audio-Visual Marketing Corporation (AVMC), a California corporation, whereby the latter became the sole and exclusive distributor for the Multiputer. AVMC thereafter sold the Multiputer to various dealers, and others, and Omni, at the direction of AVMC, shipped the machines directly to the purchaser. However, Omni billed AVMC for the machines thus sold, and AVMC in turn made periodic remittances to Omni.
About the end of March 1974, Omni notified AVMC that it had decided to discontinue production of the Multiputer and Omni at that time ceased selling Multiputers to AVMC. Some short time thereafter AVMC came out with a machine which it called a Digitor, which Omni thought bore a striking resemblance to the Multiputer. In the meantime Cline formed Cybernetic Systems, Inc., another New Mexico corporation, which took over both the manufacture and distribution of the Multiputer.
It was in this general setting that Omni brought suit against AVMC in the United States District Court for the District of New Mexico for Multiputers sold to AVMC for which Omni had not been paid. Later, on the same day that this suit was filed in New Mexico, AVMC instituted proceedings in the United States District Court for the Central District of California against Omni and Cybernetic for unfair competition. The district court in California stayed further proceedings in the case before it, and AVMC asserted its claim based on unfair competition in the present proceeding by way of counterclaim.
Cybernetic was added to the present proceeding as a party plaintiff, and by way of an amended complaint, Omni and Cybernetic asserted four claims against AVMC. Count one, as indicated, was based on AVMC's failure to pay for certain merchandise shipped by Omni to AVMC on what was said to be an open account. The jury returned a verdict for Omni on count one in the sum of $60,000. Count two was a claim by Omni and Cybernetic for damages based on breach of contract and unfair competition. The trial court granted a directed verdict in favor of AVMC on count two. Count three was withdrawn by the plaintiffs at trial. Count four was an action for damages based upon alleged interference by AVMC with the business relationship between Omni and Cybernetic and the Fidelity National Bank, located in Albuquerque, New Mexico, which bank had been financing the plaintiffs in their development of the Multiputer. The jury returned a verdict in favor of AVMC on count four. As concerns AVMC's counterclaim based on unfair competition, the jury returned a verdict in favor of Omni and Cybernetic.
Judgment was entered in favor of Omni on count one in the amount of $60,000. Judgment was entered against Omni and Cybernetic on their remaining claims, and in favor of Omni and Cybernetic on AVMC's counterclaim. Omni and Cybernetic, as well as AVMC, appeal the judgment of the trial court.
Perhaps the principal matter urged in this court concerns the refusal of the trial court to award Omni attorney's fees in connection with the $60,000 judgment entered in its favor on count one of the complaint. A New Mexico statute authorizes the allowance of reasonable attorney's fees in a civil action based on an open account. In this regard Omni argues first that as a matter of law the claim asserted in count one was based on open account, and that therefore, under New Mexico statutory law, it was entitled to an award of attorney's fees. Alternatively, Omni argues that the question as to whether the claim asserted in count one is one based on open account depends upon the intent of the parties, and that under the circumstances, the issue should have been submitted to the jury. AVMC argues to the contrary that the claim in question was, as a matter of law, not based on open account, and that hence under the New Mexico statute attorney's fees could not be allowed. The argument in this court relating to attorney's fees is mainly concerned with the question as to whether the claim in count one is on open account. In thus arguing, we think both of counsel have misconceived the effect of the New Mexico statute.
At the outset it is agreed that the allowance of an attorney's fee in the instant case is a matter to be resolved under New Mexico law. Toland v. Technicolor, Inc., 467 F.2d 1045 (10th Cir. 1972). Looking, then, to New Mexico law, N.M.Stat.Ann. § 18-1-37 (1953) provides as follows:
Collection of open accounts Attorney fees. In any civil action in the district court, small claims court, or magistrate court to recover on an open account, the prevailing party may be allowed a reasonable attorney fee set by the court, and taxed and collected as costs. (Emphasis added.)
It is at once apparent that the aforesaid statute is discretionary in nature, not mandatory, even assuming that the claim be one to recover on an open account. It would also appear from a reading of the statute that the awarding of an attorney's fee is a matter for the court, and not one to be resolved by a jury.
Trujillo v. Romero, 82 N.M. 301, 481 P.2d 89 (1971) sheds light on the present controversy. In Trujillo the New Mexico Supreme Court refused to be drawn into an argument as to whether a particular obligation was, or was not, an open account. Instead, the New Mexico Supreme Court held, in effect, that even assuming, arguendo, that the obligation there in question was an open account, it was still discretionary with the court as to whether an attorney's fee should be allowed. In this latter regard, the New Mexico Supreme Court went on to note that "we are cited no authority holding it to be an abuse of discretion to fail to make such an award for attorney's fees." So, on appeal, the New Mexico Supreme Court in Trujillo affirmed the action of the trial court disallowing attorney's fees. We believe Trujillo to be sufficient authority to hold that even assuming that the claim in count one was based on open account, the allowance of attorney's fees was still a discretionary matter. Like the New Mexico Supreme Court in Trujillo, we have been cited no authority indicating that there was an abuse of discretion by the trial court in the instant case when it declined to allow attorney's fees.
Prior to submission of the case to the jury, AVMC moved for a directed verdict in its favor on count one based on the argument that Omni was not the real party in interest. After the return of the verdict awarding Omni $60,000 on its first claim for relief, AVMC moved on...
To continue reading
Request your trial
-
K-B Trucking Co. v. Riss Intern. Corp.
...(1982); American Triticale, Inc. v. Nytco Services, Inc., 664 F.2d 1136, 1141 (9th Cir.1981); see also Audio-Visual Marketing Corp. v. Omni Corp., 545 F.2d 715, 718-19 (10th Cir.1976); Hoeppner Construction Co. v. United States, 287 F.2d 108, 111 (10th Cir.1961); cf. Harris v. Illinois-Cali......
-
Resolution Trust Corp. v. Scaletty
...Federal Practice & Procedure § 1555, at 412-14. This approach has been approved by the Tenth Circuit in Audio-Visual Marketing v. Omni Corp., 545 F.2d 715, 719 (10th Cir.1976). In that case, the defendant raised at trial the objection that the plaintiff had not prosecuted the action in the ......
-
Resolution Trust Corp. v. Federal Sav. and Loan Ins. Corp.
...a waiver. Harris v. Illinois-California Express, Inc., 687 F.2d 1361, 1373-74 (10th Cir.1982) (citing Audio-Visual Marketing Corp. v. Omni Corp., 545 F.2d 715, 718-19 (10th Cir.1976)). The Agencies assert that they did not waive the issue because they raised it before the court entered an a......
-
The Knit With v. Knitting Fever Inc., Array
...deemed waived.’ ” Nikimiha Secs. Ltd. v. Trend Group Ltd., 646 F.Supp. 1211, 1224 (E.D.Pa.1986) (quoting Audio–Visual Mktg. Corp. v. Omni Corp., 545 F.2d 715, 719 (10th Cir.1976)), “ ‘Otherwise, the court may conclude that the point has been waived by the delay and exercise its discretion t......