Dunn v. Koehring Co.
| Decision Date | 11 February 1977 |
| Docket Number | 75-1261,Nos. 75-1327,s. 75-1327 |
| Citation | 546 F.2d 1193 |
| Parties | Vardaman S. DUNN, Plaintiff-Appellant, v. KOEHRING COMPANY, Defendant-Appellee. HYDE CONSTRUCTION COMPANY, INC., Plaintiff-Appellee Cross Appellant, v. KOEHRING COMPANY, Defendant-Appellant Cross Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
E. P. Lobrano, Jr., Jackson, Miss., for Koehring Co.
William E. Suddath, Jr., Jackson, Miss., for Hyde Const. Co., Inc.
Vardaman S. Dunn in pro. per.
Appeals from the United States District Court for the Southern District of Mississippi.
Before GODBOLD and HILL, Circuit Judges, and SMITH, * District Judge.
This case is the latest adventure in a legal odyssey which has lasted for 15 years, fully five years longer than it took Ulysses to complete the original Odyssey. At least nine state and federal courts have been involved during the litigation between these parties, and numerous reported opinions have issued. 1
In the present controversy Hyde Construction Company and its attorney Vardaman S. Dunn sued Koehring Company for abuse of process and malicious prosecution arising out of actions Koehring took during previous phases of the dispute between these participants. The trial court found Koehring responsible in tort to Hyde and assessed actual and punitive damages. We affirm the finding with some modifications. We reverse the lower court's holding that Koehring is not liable to Dunn.
To understand the issues a survey of the facts is necessary. 2
In December 1960 Hyde, a construction company, contracted with Koehring to build a concrete plant at a Hyde job site in Oklahoma. Following the completion of the plant by Koehring, problems arose with its operation, and in August 1961 Hyde sued Koehring for breach of warranty 3 in the United States District Court for the Southern District of Mississippi (the Mississippi federal court). Dunn was employed as Hyde's attorney for this suit. Koehring moved to dismiss for lack of jurisdiction and alternatively moved to transfer the case to the United States District Court for the Northern District of Oklahoma (the Oklahoma federal court). Shortly after these motions by Koehring, Hyde filed the same action in the Chancery Court of Hinds County, Mississippi (the Mississippi state court). Hyde did this to be assured of a Mississippi forum in case the Mississippi federal court was found not to have jurisdiction. 4 Koehring elected not to remove the state court suit. This state action was set for trial at 2:00 p.m. March 11, 1964.
In September 1963 the Fifth Circuit, reversing a decision by the Mississippi federal court, ordered the federal case transferred to the Oklahoma federal court. 5 The transfer was made March 10, 1964.
On the morning of March 11, 1964, the Oklahoma federal court, upon Koehring's application, issued a temporary restraining order enjoining the proceeding in the Mississippi state court. Both Hyde's attorneys and the Mississippi state court received immediate notice of this TRO. Dunn, acting as Hyde's attorney, decided not to obey the TRO and asked the Mississippi state court to allow the trial to continue. On March 12 the request was granted and the trial continued. That same day Koehring filed a petition in the Oklahoma federal court charging Hyde and Dunn with willful defiance of the TRO.
At a show cause hearing 6 on March 14, the Oklahoma federal court found both Hyde and Dunn in civil contempt and, announcing their criminal contempt was also involved, caused an order to be issued for Dunn's arrest. Dunn was arrested in Jackson, Mississippi, on March 18, 1964, and immediately sought habeas corpus relief from the Mississippi federal court. He was released on bail. The arrest order was later ruled void by the Mississippi federal court. 7
Dunn continued with the trial of the case in Mississippi state court, and on April 8 the court found Koehring liable to Hyde in the amount of $464,450.08. Koehring appealed to the Mississippi Supreme Court. The judgment, slightly modified, was affirmed in 1965. 8
Despite the finality of the Mississippi judgment, in early 1966 Koehring began attempting to relitigate the breach of warranty action, by way of counterclaim in the Oklahoma federal court, and filed interrogatories and took depositions. Hyde's plea of res judicata was rejected by the Oklahoma federal court, but the proceedings were stayed by the Tenth Circuit and the res judicata issue was remanded to the Oklahoma federal court 9 where Koehring abandoned its counterclaim.
Meanwhile, the contempt proceedings against Hyde and Dunn proceeded apace in Oklahoma. In September 1964 the Oklahoma federal court enjoined Hyde from collecting the Mississippi judgment it had against Koehring, ordered the case retried in the Oklahoma federal court, and levied a civil contempt judgment against Hyde and Dunn in favor of Koehring. 10
In July 1965 the Tenth Circuit held that the Oklahoma federal court was without jurisdiction to issue the TRO or to punish for its violation and vacated the TRO and contempt judgments. 11 However, the next year the United States Supreme Court reversed the finding and said that the Oklahoma federal court had jurisdiction. 12
In June 1966 the Fifth Circuit reversed the Mississippi federal court's habeas corpus order releasing Dunn from custody. 13 In July 1966 Dunn was charged, and in August 1966 convicted, of criminal contempt. On appeal the Tenth Circuit, in January 1968, held the TRO was invalid because it violated the Anti-Injunction Act, 14 and reversed Dunn's conviction. 15 In August 1968 the Oklahoma federal court dismissed the criminal charge against Dunn.
In a related but separate opinion in January 1968, the Tenth Circuit, having found the TRO invalid, vacated the injunction which prohibited Hyde from collecting its judgment and which awarded Koehring damages in civil contempt. 16
Thus, all civil orders entered against Hyde and Dunn by the Oklahoma federal court and all criminal matters against Dunn were eventually nullified or dismissed. However, the battle was not over. In fact, not even a cease fire had gone into effect.
In April 1966, pursuant to a Koehring affidavit, a criminal contempt charge had been initiated against Hyde in the Oklahoma federal court. Nothing was done on this charge until after the Tenth Circuit's decision in January 1968 vacating the previous civil and criminal contempt convictions and the injunction. In May 1968 Koehring filed a petition in the Oklahoma federal court saying that Hyde's only asset was the unpaid Koehring judgment. Koehring paid into the Oklahoma federal court at this time the amount of the Mississippi judgment. Koehring argued that a fine in the amount of the Mississippi judgment should be imposed and paid to Koehring. The Oklahoma federal court ordered the money returned to Koehring and dismissed Koehring's petition but left the criminal contempt charge against Hyde pending. The charge was never tried and was finally dismissed in March 1969.
Hyde attempted to collect the Mississippi judgment in May 1968. On May 27, 1968, Koehring filed an interpleader action in the United States District Court for the Eastern District of Wisconsin, saying that as a judgment debtor to Hyde it was confronted with conflicting claims and that it had a potential claim to this judgment by way of an allocation of a fine upon conviction of Hyde for criminal contempt. 17 This action was dismissed by the district court, and the dismissal was affirmed by the Seventh Circuit 18 although Hyde had been enjoined from collecting its judgment until after the decision by the Seventh Circuit.
During the same period as the interpleader, the Mississippi state court, pursuant to a petition by Hyde, which had become insolvent, set up a receivership to take charge of Hyde's assets and determine the priority of its creditors. Koehring challenged this receivership in Mississippi state court, lost, and appealed to the Mississippi Supreme Court the denial of its challenge and the decree setting up the priority of creditors. Koehring gave up the appeal when the Seventh Circuit dismissed the interpleader action.
Koehring then paid the judgment to Hyde's receiver, six years after the judgment was rendered.
This suit charging abuse of process and malicious prosecution followed the payment of that judgment.
The claims of Hyde and Dunn against Koehring will be discussed separately. First, a preliminary question concerning the statute of limitations must be dealt with.
Koehring urges on appeal that the actions by Hyde and Dunn are barred by the Mississippi statute of limitations for intentional torts and that the district court erred by applying an incorrect Mississippi limitation standard. It is unnecessary to consider whether the Mississippi limitation period for intentional torts is applicable because this limitation was never properly before the district court. Statutes of limitations are affirmative defenses and must be pleaded. Fed.R.Civ.P. 8(c). Koehring did not include the defense of the Mississippi statute of limitations in any of its pleadings. Pleadings may be amended only by leave of the court, Fed.R.Civ.P. 15, and, while such leave is to be "freely given when justice so requires," it is within the discretion of the trial court. E. g., Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); Freeman v. Continental Gin Co., 381 F.2d 459 (C.A.5, 1967). Koehring moved to amend its pleadings to assert the bar of the Mississippi limitation on the morning of trial Hyde Construction Co. and Dunn v. Koehring Co., 387 F.Supp. 702 at 712 n. 17 (S.D.Miss., 1974), some five years after the action had been filed and after more than four years of extensive pretrial preparation. After a hearing, the district court, in the exercise of its discretion, denied the motion for leave to amend because of "cogent...
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