E.F. Hutton & Co., Inc. v. Arnebergh, s. 83-6195

• Decision Date: 23 January 1986
• Docket Number: Nos. 83-6195,s. 83-6195
• Parties: 19 Fed. R. Evid. Serv. 1597 E.F. HUTTON & COMPANY, INC., Plaintiff-Appellee-Cross-Appellant, v. Roger ARNEBERGH, Defendant-Appellant-Cross-Appellee. /6222.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1061

775 F.2d 1061

19 Fed. R. Evid. Serv. 1597

E.F. HUTTON & COMPANY, INC., Plaintiff-Appellee-Cross-Appellant, v. Roger ARNEBERGH, Defendant-Appellant-Cross-Appellee.

Nos. 83-6195/6222.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Feb. 8, 1985.

Decided Nov. 5, 1985.

As Amended on Denial of Rehearing Jan. 23, 1986.

Robert W. Fischer, Jr., Adams, Duque & Hazeltine, Los Angeles, Cal., for plaintiff-appellee-cross-appellant.

Marcus Crahan, Jr., Los Angeles, Cal., for defendant-appellant-cross-appellee.

Appeal from the United States District Court for the Central District of California.

Before SCHROEDER, FLETCHER and FARRIS, Circuit Judges.

SCHROEDER, Circuit Judge.

These appeals stem from a sharply contested dispute, involving silver futures contracts, between a broker, E.F. Hutton & Co., Inc. ("Hutton"), and one of its customers, Roger Arnebergh. The jury rendered a verdict awarding damages to both sides. However, because of a lack of clarity in the verdict forms, the verdict was ambiguous and each side could interpret it as a net victory. That is what happened. Unfortunately, the ambiguity did not become apparent to the district court until several weeks after it had polled and discharged the jury.

How this confusion arose is worth relating in some detail. Hutton sued Arnebergh for the balance due in his account, and Arnebergh sued Hutton for breach of contract, negligence and conversion. The cases were consolidated for jury trial. The parties stipulated that Arnebergh owed Hutton an account balance of $336,614. Hutton requested that the jury verdict form include the fact that the parties had stipulated to that amount, but such a statement was omitted on the objection of Arnebergh. The jury was given a special verdict form as to Arnebergh's claims against Hutton and a general verdict form as to Hutton's claims against Arnebergh. The jury found in favor of Arnebergh on his contractual and conversion claims and found that Arnebergh and Hutton had been equally negligent in connection with Arnebergh's losses on one set of silver contracts. The jury awarded compensatory damages of $168,307 to both Hutton and Arnebergh. The amount was exactly half the stipulated debt balance in Arnebergh's account. The jury also awarded Arnebergh $100,000 in punitive damages. After the verdict came in, each side celebrated independently.

The problem with the verdict was that the forms did not provide a way for the jury to explain how it was dealing with the stipulated debt balance. When the verdict is read in the light of that balance, one cannot tell from the face of the forms which of the two possibilities was intended. One possibility, urged by Arnebergh, was that the two compensatory damage awards were to cancel each other out, leaving Arnebergh owing nothing to Hutton on his account and netting him the $100,000 punitive damage award. The other, urged by Hutton, was that the jury intended that Arnebergh would pay Hutton one-half of the account balance and that Hutton would absorb the other half. This would result, after set off of the punitive damage award, in Arnebergh owing Hutton $68,307. The only certainty about the verdict was its uncertainty.

The first indication the district court had that something was amiss was a call from a juror, about ten days after the jury had been discharged but before any judgment had been entered. The juror advised the court that Hutton's counsel had contacted the juror about the case. The court promptly and correctly scheduled an Order to Show Cause hearing regarding the jury contacts. It was at that hearing that the parties disagreed over the meaning of the verdict and that the court perceived the ambiguity.

Hutton took the position at the hearing that the district court should recall the jury and inquire which meaning it intended. Arnebergh opposed interviewing the jury because he took the position that the verdict was unambiguous and that the court should enter judgment in accordance with Arnebergh's reading of it. Arnebergh was concerned, furthermore, that Hutton's ex parte contact with the jurors and the five week span of time since discharge would taint any reconvention. Though Arnebergh preserved his position for appeal that any action beside entry of judgment as he interpreted it was error, he stipulated, subject to that reservation, that the jury could be interviewed in camera. The judge then reconvened the jury, explained the problem and asked the jury to advise which result it intended.

The jurors retired, discussed the matter for less than five minutes, and returned to inform the court that they had intended the meaning urged by Hutton. The court then entered a judgment reflecting a net compensatory damage award of $168,307 to Hutton and awarding Arnebergh $100,000 in punitive damages. Both sides filed timely appeals. Arnebergh, in his appeal, asks that the judgment be reversed and a new judgment be entered awarding him net damages of $100,000. In the alternative, he asks that the district court's judgment be affirmed to the extent it awarded him $168,307 in compensatory damages and $100,000 in punitive damages and that there should be a new trial limited to Hutton's claim of $336,614 against him.

The threshold issue in Arnebergh's appeal from the award of compensatory damages is whether Arnebergh is correct in his assertion here, and before the district court, that the verdict was unambiguous and that judgment should have been entered with offsetting compensatory damage amounts for each side. We agree with the district court's conclusion that the verdict was ambiguous, and that it should not have entered judgment as requested by Arnebergh. The verdict simply did not explain how the balance in the account was to be treated. In these circumstances, the district court correctly declined to enter judgment on the basis of an ambiguous verdict. Cf. 5A J. Moore & J. Lucas, Moore's Federal Practice p 49.04, at 49-44 & n. 15 (2d ed. 1985) and 6A J. Moore, J. Lucas & G. Grotheer, Jr., Moore's Federal Practice p 59.08, at 59-128 & n. 70 (2d ed. 1984) (court should refrain from entering judgment if jury's special verdicts are inconsistent either with each other or the general verdict; jury should be instructed to deliberate further or a new trial ordered). This situation can be best analogized to an inconsistent verdict. Cf. Dickerson v. Pritchard, 706 F.2d 256, 258-59 (8th Cir.1983); Rowe International, Inc. v. J-B Enterprises, 647 F.2d 830, 835 (8th Cir.1981).

From our holding that the district court acted correctly in refusing to enter the ambiguous judgment, it does not necessarily follow that the court acted in accordance with applicable rules in reconvening the jury, five weeks after it was discharged, to interview it about the verdict. Fed.R.Evid. 606(b) forbids the receipt of juror testimony concerning matters occurring during the course of deliberations or concerning the jury's reasoning process in reaching a verdict. ¹ Traver v. Meshring, 627 F.2d 934, 941 (9th Cir.1980). The only exceptions the rule expressly creates are with respect to juror testimony concerning whether the verdict was affected by "extraneous prejudicial information" or "any outside influence." Fed.R.Evid. 606(b). These circumstances were not present here. Hutton, however, argues that there is an additional exception for clarification of "clerical errors" within which this case falls. See, e.g., Woodworkers Tool Works v. Byrne, 191 F.2d 667, 676 (9th Cir.1951); Allied Materials Corp. v. Superior Products Co., 620 F.2d 224, 225-26 (10th Cir.1980); Myrtle v. Checker Taxi Co., 279 F.2d 930, 934 (7th Cir.1960); Mount Airy Lodge, Inc. v. Upjohn Co., 96 F.R.D. 378, 381 (E.D.Pa.1982); cf. University Computing Co. v. Lykes-Youngstown Corp., 504 F.2d 518, 547 n. 43 (5th Cir.1974) (clerical error exception recognized in dicta). But see People v. Romero, 31 Cal.3d 685, 646 P.2d 824, 828-30, 183 Cal.Rptr. 663 (Cal.1982). See generally 3 J. Weinstein & M. Berger, Weinstein's Evidence p 606 at 606-32 & n. 38 (1982 & Supp.1984); Annot., 18 A.L.R.3d 1132 (1968).

We do not need to reach that issue in this case, however, because both sides, for reasons which are understandable, preferred to have the district court question the jury rather than to risk the consequences of a new trial. If a Rule 606(b) violation had occurred when the court reconvened the jury weeks after discharge to...