General Trading Inc. v. Yale Materials Handling Corp.
| Decision Date | 22 August 1997 |
| Docket Number | 93-5307,Nos. 93-4491,94-4526 and 94-4686,s. 93-4491 |
| Citation | 119 F.3d 1485 |
| Parties | 47 Fed. R. Evid. Serv. 670, 11 Fla. L. Weekly Fed. C 349 GENERAL TRADING INCORPORATED, Plaintiff-Counterclaim-Defendant-Appellant-Cross-Appellee. v. YALE MATERIALS HANDLING CORPORATION, Defendant-Counterclaim-Plaintiff-Appellee-Cross-Appellant, Jose M. Baeza, Sr., Counterclaim Defendant-Appellant, Jose M. Baeza, Jr., Et Al., Counterclaim Defendants. GENERAL TRADING INCORPORATED, Plaintiff-Counterclaim-Defendant-Appellant, v. YALE MATERIALS HANDLING CORPORATION, Defendant-Counterclaim-Plaintiff-Appellee, Jose M. Baeza, Sr., Counterclaim Defendant-Appellant, Jose M. Baeza, Jr., Et Al., Counterclaim Defendants. GENERAL TRADING INCORPORATED, Plaintiff-Counterclaim-Defendant-Appellee Cross-Appellant, v. YALE MATERIALS HANDLING CORPORATION, Defendant-Counterclaim-Plaintiff-Garnishor- Appellant-Appellant-Cross-Appellee, Gonzalez Trading, Inc., a foreign corporation, Jose M. Jose Manuel Baeza, Sr., Jose M. Baeza, Jr., Javier Baeza, Counterclaim-Defendants- Appellees-Cross-Appellants, Power Depot, Inc., a Florida Corporation, Michele M. Baeza, Involuntary Supplemental Defendant, Encarnacion Gonzalez, Involuntary Supplemental Defendant, Garnishees-Appellees- Cross-Appellants, Ocean Bank, Ocean Bank of Miami, First Florida Savings Bank, FSB, Barnett Bank of Broward County, N.A., Joe's Rental, Inc., America Discount, Inc., G.T. Americas, Inc., Garnishees, G. T. Corp., Garnishee-Appellee-Cross-Appellant, Franchel Enterprises, Inc., Gary Gerrard, P.A., Garnishees, GTE International Inc., Compania Dominicana de Telefonso, C. Por. A., Intervenor-Defendants. GENERAL TRADING INCORPORATED, Plaintiff-Appellant-Cross-Appellee, v. YALE MATERIALS HANDLING CORPORATION, Defendant-Counterclaimant-Appellee-Cross-Appellant, Gonzalez Trading, Inc., a foreign corporation, Counterdefendant-Appellee-Cross-Appellant, Jose Manuel Baeza, Sr., Counter-defendant-Appellant-Cross-Appellee, Jose M. Baeza, Jr., Counterdefendant-Appellee-Cross-Appellant, Power Depot, Inc., a Florida Corporation, Michele M. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Edelmiro Salas-Garcia, Miami, FL, Jacqueline M. Valdespino, Coral Gables, FL Peter J. Yanowitch, Roy D. Wasson, Miami, FL, for General Trading Inc. & Baeza, Sr.
Frederick D. Page, Philip A. Allen, III, Mershon, Sawyer, Johnston, Dunwoody & Cole, Miami, FL, Leslie W. Jacobs, Robert F. Ware, Thompson, Hines & Flory, Cleveland, OH, for Yale Materials Handling Corp.
Peter J. Yanowitch, Miami, FL, for Javier Baeza, Michele Baeza, Encarnacion Gonzalez & Power Depot.
Edelmiro Salas-Garcia, Miami, FL, for Gonzalez Trading & Jose M. Baeza, Jr.
Appeals from the United States District Court for the Southern District of Florida.
Before ANDERSON and EDMONDSON, Circuit Judges, and FAY, Senior Circuit Judge.
I. INTRODUCTION
This case involves numerous parties who assert claims and counterclaims which arise out of proceedings before the district court as well as before the bankruptcy court. Appellants/counter-appellees General Trading, Inc. (GTI) and Jose Baeza, Sr. (Baeza, Sr.), GTI's president and principal shareholder, originally brought suit against appellee/counter-appellant Yale Materials Handling Corporation (Yale) for terminating a franchise agreement in which GTI acted as a dealer in forklifts and parts manufactured and supplied by Yale. Yale counterclaimed, and added additional counter-defendants, Jose Baeza, Jr. (Baeza, Jr.) and Javier Baeza, both sons of Baeza, Sr., and Gonzalez Trading, Inc. (Gonzalez Trading), a Puerto Rican corporation of which Baeza, Sr. was president and principal shareholder.
Three months after the litigation commenced, Yale filed an involuntary bankruptcy petition against GTI, which was dismissed by the bankruptcy court. Ultimately, the district court suit was referred to a magistrate judge for completion of trial and final disposition. The magistrate judge, inter alia, found the following: Yale had not wrongfully terminated the franchise agreement, GTI had breached the franchise agreement; and, Yale had wrongfully filed the involuntary bankruptcy petition. Javier Baeza and Baeza, Jr. were not found liable to Yale.
Subsequent to the magistrate judge's final judgment, the magistrate judge granted Yale's motion to implead supplemental defendants (new transferees), 1 as well as Baeza, Jr., all of whom allegedly received fraudulent transfers from GTI and Baeza, Sr. After impleading the parties and holding hearings, the magistrate judge set aside a number of fraudulent transfers made to the new transferees. The new transferees, in withdrawing their motion for a new trial, submitted a written acceptance of judgment to the magistrate judge. Subsequent to accepting the magistrate judge's judgment, the new transferees challenged the magistrate judge's authority under 11 U.S.C. § 636(c); at this time, the original counter-defendants also asserted challenges to the magistrate judge's authority.
In this opinion, we address claims on appeal raised by the original parties to the suit in the district court, as well as claims raised by the new transferees who were impleaded in the supplemental proceedings.
II. FACTS 2
Yale is a manufacturer of forklifts and lift trucks. In November, 1978, Yale and GTI entered into a Dealer Marketing Agreement (DMA), whereby GTI was authorized to act as a dealer in forklifts and parts manufactured and supplied by Yale. GTI's franchise agreement was financed in two different ways: (1) GTI was able to purchase service parts and equipment from Yale on an open account; and, (2) Heller Financing Company (Heller) agreed to provide floor plan financing for general sales inventory. 3
In December 1987, Yale canceled the franchise agreement with GTI for the following reasons: GTI was abusing Yale's special pricing practices 4; GTI regularly and repeatedly submitted false warranty claims to Yale for repair work not actually performed, or for repairs not covered by a Yale warranty; and, GTI sold Yale forklifts on several occasions to customers representing the units to be new when in fact they had been used. In response, GTI immediately stopped payment on checks issued to Heller, 5 and refused to make any further payments to Yale on the open account. GTI refused to pay despite the fact that it continued to receive proceeds from prior and subsequent sales of its inventory of Yale forklifts and parts. As a result of GTI's default on the notes and Yale's termination of GTI as a dealer, Heller declared GTI in default under the Security Agreement, and exercised its right to force Yale to take an assignment of Heller's rights under the floor financing plan.
Shortly after the termination of the franchise agreement, in December 1987, GTI and its president and principal shareholder, appellant/cross-appellee Jose Baeza, Sr. (Baeza, Sr.) filed suit in state court for, inter alia, breach of the DMA by wrongful termination. 6 Because diversity jurisdiction existed, Yale removed the case to federal court where it asserted a number of counterclaims, including breach of the DMA through submission of false pricing and warranty claims; fraudulent conveyance of corporate assets which constituted secured collateral; and, failure to pay notes and monies when due on the open account. Yale later amended its counterclaim to add counter-defendants Javier Baeza, Baeza, Jr. (also known as Manny Baeza), 7 and Gonzalez Trading, a Puerto Rican dealership owned and controlled by Baeza, Sr. which sells a competing brand of forklift. Following the filing of the lawsuit, the district court issued a prejudgment writ of replevin for Yale forklifts and parts still remaining on GTI's' premises.
In 1990, the parties' claims were tried in a non-jury trial for over 13 days before a judge in the United States District Court for the Southern District of Florida. The presiding judge resigned before the case was completed, and the case ultimately was transferred to District Judge William J. Zloch.
On August 30, 1991, the parties' attorneys attended a status conference with the new district court judge, and discussed the possibility of having the case referred to a United States magistrate judge. On November 20, 1991, the attorneys for Yale, as well as the attorneys for GTI, Gonzalez Trading, Baeza, Sr., Javier Baeza, and Baeza, Jr. attended a status conference before United States Magistrate Judge Ted. E. Bandstra, and presented a signed consent to the completion of the trial before a United States magistrate judge, pursuant to 28 U.S.C. § 636(c). At the conference, the attorneys stipulated to proceed in the manner provided by Amended Rule 63 of the Federal Rules of Civil Procedure. The preamble of the consent and stipulation listed GTI, Baeza, Sr., Javier Baeza and Yale, and the signature of these parties' attorneys appeared at the end of the document. After receiving the consent and stipulation, the magistrate judge stated that Yale's attorney responded in the affirmative; no party objected to the magistrate judge's statement regarding consent.
Gonzalez Trading was not specified in the preamble; however, that company's...
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