Condit Chemical & Grain Co., Inc. v. Helena Chemical Corp., 86-1025
| Decision Date | 08 May 1986 |
| Docket Number | No. 86-1025,86-1025 |
| Citation | 789 F.2d 1101 |
| Parties | CONDIT CHEMICAL & GRAIN COMPANY, INC. and Paul Condit, Plaintiffs-Appellants, v. HELENA CHEMICAL CORPORATION, Defendant-Appellee. Summary Calendar. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Thomas W. George, Austin, Tex., Johnny Roy Phillips, Seminole, Tex., for plaintiffs-appellants.
Brad Crawford, Jr., Cecil Kuhne, Lubbock, Tex., for defendant-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before CLARK, Chief Judge, WILLIAMS and HIGGINBOTHAM, Circuit Judges.
This is an action to set aside a United States District Court agreed judgment, dated June 4, 1984. It was brought by Condit Chemical and Grain Company, Inc., and Paul Condit individually, against Helena Chemical Corporation. In the agreed judgment Condit Chemical and Paul Condit were adjudged jointly and severally liable to Helena in the amount of $277,131.19 for goods received from Helena. The judgment also provided that the post-judgment interest would be 11.74% compounded annually until the judgment was paid and that all court costs were to be taxed to the Condit interests. Finally, it provided: "The parties are allowed such writs and processes as may be necessary in the collection or enforcement of this Judgment."
The Condit interests brought this suit to set aside the agreed judgment on the ground that Helena had breached an oral agreement when it commenced execution to enforce the judgment. The oral agreement which the Condit interests claim induced them to enter the agreed judgment was to the effect that if Paul Condit made a "reasonable effort" to pay the judgment and Condit Chemical bought all of its chemical products and supplies from defendant on a cash basis, Helena would not execute the judgment.
The grounds asserted to justify setting aside the agreed judgment were a breach of the oral agreement, promissory estoppel, that the judgment was obtained by fraud, that Helena had instituted wrongful garnishment proceedings, and that the Condit interests should have relief under Fed.R.Civ.P. 60(b) because the agreement was obtained by fraud.
By a memorandum and order dated November 19, 1985, the district court denied appellants' relief. In an additional memorandum order dated December 23, 1985, the district court denied appellants' motion for reconsideration.
After a careful review of the record we affirm the decision of the district court, basing our affirmance upon the two thorough memoranda submitted by that court in support of its decision. We add to those memoranda two brief statements by way of support for the decision which was reached by the district court.
First, appellants claim that the district court relied upon a procedural rule, Rule 11 of the Texas Rules of Civil Procedure, in reaching its decision in this diversity case. It is asserted that this is contrary to the fundamental principles of Erie R.R. Co. v. Thompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). The Texas rule provides that no agreement between attorneys or parties "touching any suit pending" is to be enforced unless it is in writing, signed and filed with the papers as part of the record, or made in open court and entered in the record.
This oral agreement clearly touched upon the subject matter of the agreed judgment and it was not in writing nor entered into the record in accordance with Rule 11. The claim, of course, is that in diversity cases, just as in choice of law cases, the substantive law applicable is established by the usual principles of conflict of laws, but procedural rules are the rules of the forum. If this contention prevails it means that the Texas rule cannot apply in this federal court.
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