Darms v. McCulloch Oil Corp., 82-2453

• Decision Date: 03 November 1983
• Docket Number: No. 82-2453,82-2453
• Citation: 720 F.2d 490
• Parties: Don DARMS and Velma Darms, his wife; Edward C. Matthiesen and Vivian L. Matthiesen, his wife; William F. Miller and Violette J. Miller, his wife, Appellants, v. McCULLOCH OIL CORPORATION; McCulloch Properties, Inc.; McCulloch Recreational Properties, Inc.; Holly Development Corporation; Pratt Properties, Inc.; Cattlemens Title Guarantee Company; The Pratt Group; Holiday Island Suburban Improvement District; and Larry Stamps; Western States Publishers, Inc., James Quiggle and Lorne B. Pratt, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 490

720 F.2d 490

Don DARMS and Velma Darms, his wife; Edward C. Matthiesen

and Vivian L. Matthiesen, his wife; William F.

Miller and Violette J. Miller, his wife, Appellants, v. McCULLOCH OIL CORPORATION; McCulloch Properties, Inc.;

McCulloch Recreational Properties, Inc.; Holly Development

Corporation; Pratt Properties, Inc.; Cattlemens Title

Guarantee Company; The Pratt Group; Holiday Island

Suburban Improvement District; and Larry Stamps; Western

States Publishers, Inc., James Quiggle and Lorne B. Pratt, Appellees.

No. 82-2453.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 13, 1983.

Decided Nov. 3, 1983.

P. Terence Crebs, Audrey G. Fleissig, St. Louis, Mo., Thomas D. Ledbetter, Ledbetter & Associates, Harrison, Ark., for appellants Peper, Martin, Jensen, Maichel & Hetlage, St. Louis, Mo., of counsel.

Kenneth H. Castleberry, Epley, Epley & Castleberry, Ltd., Eureka Springs, Ark., for appellee Holiday Island Suburban Improvement Dist.

Wright, Lindsey & Jennings, Philip S. Anderson, Little Rock, Ark., Kadison, Pfaelzer, Woodard, Quinn & Rossi, Thomas J. McDermott, Jr., Howard O. Boltz, Jr., Los Angeles, Cal., for appellees.

Before HEANEY, ROSS and JOHN R. GIBSON, Circuit Judges.

HEANEY, Circuit Judge.

The plaintiffs--individual purchasers of lots within the Holiday Island residential and recreational development in Carroll County, Arkansas, and Barry County, Missouri--filed the present action in the United States District Court for the Western District of Arkansas on November 24, 1978. The defendants are the developers of Holiday Island, an Arkansas improvement district authorized to construct and maintain various improvements within the project, and past or present subsidiaries, agents, members, or associates of these parties. The district court dismissed the action with prejudice under Fed.R.Civ.P. 41(b) on October 25, 1982, for failure to prosecute. The plaintiffs appeal from the order of dismissal, and from earlier interlocutory orders and a September 21, 1982, grant of partial summary judgment in favor of the defendants on one of the plaintiffs' federal claims. We affirm.

A brief review of the long and tortuous procedural history of this action is necessary to an understanding of the plaintiffs' contentions on appeal and to a proper resolution of these contentions. On November 24, 1978, the plaintiffs, as individual lot purchasers and purported representatives of the class of all those who purchased or contracted to purchase lots from the defendants in Arkansas, Missouri, and elsewhere, sued the present defendants along with hundreds of other named and anonymous parties. On September 7, 1979, after several intervening motions, orders, and amended complaints, the district court allowed the plaintiffs to file a third amended complaint. This complaint was the subject of all further motions and orders. The plaintiff class was reduced to include only past and present lot owners at Holiday Island, numbering approximately 2,000 persons; many parties named as defendants in the first and prior amended complaints were omitted. Several state and federal officials were added as parties defendant. The complaint alleged numerous state and federal causes of action in connection with the development and maintenance of Holiday Island, including: fraud and misrepresentation, conspiracy to defraud, antitrust violations, breach of trust, negligence, breach of contract, material alteration of development plans and specifications, unjust enrichment, federal agency liability, and violation of various corporation laws. It sought alternative forms of relief, including: rescission, a formal declaration of rights and obligations, specific enforcement of contracts, damages, and preliminary and permanent injunctions.

On January 17, 1980, the district court stayed general discovery by the parties pending determination of the plaintiff class certification issue. The court denied class certification on July 15, 1980, and restricted the case to the claims of the individual named plaintiffs. In November of 1980, the case was transferred from Judge Paul X Williams to Judge George Howard, Jr. On April 20, 1981, the case was transferred back to Judge Williams by agreement of the judges. Sometime before March 17, 1982, the case was transferred to Judge H. Franklin Waters.

At the time Judge Waters received the case, numerous requests for discovery, responses to discovery requests, motions to compel discovery, and other motions were part of the file. Many of the motions had been ruled upon; others had not. Judge Waters immediately requested the parties to summarize their claims and defenses, and to make or renew any motions necessary to move the case along. From his earliest contact with the attorneys for both parties, he made clear his intent to resolve the case by the end of 1982. As early as May 5, 1982, he informed counsel for the plaintiffs that he would set a trial date for the week of August 16, 1982. In subsequent correspondence, he informed both parties through counsel that the trial would be pushed back to October 25, 1982.

On August 2, 1982, after the parties filed briefs and memoranda and made or renewed several motions, Judge Waters issued an order reducing the number of defendants to eleven. He also stated that he had considered all motions relative to discovery which had been made or renewed pursuant to his requests, and he denied all such motions in light of the reduction in the number of issues and parties since the motions were presented. On August 3, 1982, the plaintiffs served interrogatories and a request for the production of documents and other evidence to the defendants. The defendants responded, with objections, on August 27, 1982. On September 10, 1982, the plaintiffs moved to amend their third amended complaint under Fed.R.Civ.P. 15(a), in order to add claims under the Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 U.S.C. Secs. 1961-1968 (1976 & Supp. V 1981) (as amended). Judge Waters denied this motion on September 21, 1982.

On September 23, 1982, the plaintiffs filed a motion to compel discovery and for sanctions, alleging general insufficiency of the defendants' responses to interrogatories and requests for production. At a hearing on October 20, 1982, Judge Waters denied the motion, making clear that the plaintiffs continually failed to specify the alleged deficiencies in the defendants' discovery responses. On October 22, 1982, the plaintiffs informed the court that they would not put on any witnesses or evidence at the trial three days later. They also moved for a voluntary nonsuit, which Judge Waters denied. On October 25, 1982, the plaintiffs moved for a continuance and for the production of documents. Judge Waters dismissed the action with prejudice for failure to prosecute on the same day.

The plaintiffs appeal, alleging that Judge Williams and Judge Waters abused their discretion in issuing two orders with regard to the scope of their action. They also allege error in Judge Waters' September 21, 1982, order granting partial summary judgment in favor of the defendants on one federal claim and in his October 25, 1982, order of dismissal.

The plaintiffs first assert that Judge Williams erred in denying the certification of a plaintiff class on July 15, 1980. We disagree. ¹ The trial court has broad discretion in ruling on a plaintiff's request for class certification, and its decision on the issue will not be disturbed on appeal absent an abuse of that discretion. Shapiro v. Midwest Rubber Reclaiming Co., 626 F.2d 63, 71 (8th Cir.1980), cert. denied, 449 U.S. 1079, 101 S.Ct. 860, 66 L.Ed.2d 802 (1981), and cases cited therein. Judge Williams denied plaintiff class certification because the named plaintiffs failed to meet the requirement of "fair and adequate representation" of the class, found in Fed.R.Civ.P. 23(a)(4), and because they also failed to satisfy any of the three alternative prerequisites of Fed.R.Civ.P. 23(b)(1)-(3). We find no abuse of discretion in his action.

With regard to Rule 23(a)(4), the record clearly shows that the named plaintiffs could not agree among themselves as to the bases for the defendants' liability, much less on the types of relief which would be fair to themselves and potential class members. Furthermore, Judge Williams recounted uncontroverted evidence that at least one of the named plaintiffs had "negligently misapplied" funds collected from potential class members to support the litigation. In addition, the record at least raised a question as to the desire and financial ability of the named plaintiffs to vigorously pursue the interests of 2,000 potential class members.

Even if the "fair and adequate representation" requirement of Rule 23(a)(4) were met, Judge Williams did not abuse his discretion in holding that none of the alternative prerequisites of Rule 23(b) were present in this case. On appeal, the plaintiffs assert that "questions of law [and] fact common to the members of the class predominate[d]" and that "a class action [would be] superior to other available methods for the fair and efficient adjudication of the controversy." Fed.R.Civ.P. 23(b)(3). The record reveals that each purchase of land at Holiday Island was a separate transaction, and that totally separate oral and written representations by the defendants allegedly caused the injuries to each plaintiff. The named plaintiffs also admitted to divergent degrees of reliance upon the numerous promotional materials disseminated by the defendants which purportedly were the common element to most purchasers' claims. Moreover, the potential class of purchasers would include many parties with claims totally unrelated to the defendants' promotional and operational activities, and the defenses raised in the case would necessarily vary based on the circumstances of each purchase. Therefore, we cannot accept the plaintiffs' claim on appeal that Judge...