Infusaid Corp. v. Intermedics Infusaid, Inc., 84-1804

• Decision Date: 28 February 1985
• Docket Number: No. 84-1804,84-1804
• Citation: 756 F.2d 1
• Parties: INFUSAID CORPORATION and Metal Bellows Corp., Plaintiffs, Appellants, v. INTERMEDICS INFUSAID, INC., and Intermedics, Inc., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 1

756 F.2d 1

INFUSAID CORPORATION and Metal Bellows Corp., Plaintiffs, Appellants, v. INTERMEDICS INFUSAID, INC., and Intermedics, Inc.,

Defendants, Appellees.

No. 84-1804.

United States Court of Appeals, First Circuit.

Argued Dec. 5, 1984.

Decided Feb. 28, 1985.

Harvey E. Bines, Boston, Mass., with whom Louis A. Rodrigues, Margaret H. Raymond, Cynthia M. Clarke and Sullivan & Worcester, Boston, Mass., were on brief, for appellants.

Edwin A. McCabe, Boston, Mass., with whom Sydelle Pittas and McCabe, Gordon, P.C., Boston, Mass., were on brief, for appellees.

Before CAMPBELL, Chief Judge, and COFFIN and BREYER, Circuit Judges.

BREYER, Circuit Judge.

This appeal concerns a remedial order that the district court entered after our decision in Infusaid Corporation v. Intermedics Infusaid, Inc., 739 F.2d 661 (1st Cir.1984). That case arose out of claims of each of two parties to a joint venture agreement that the other had breached the agreement. We held, in essence, that both had violated the agreement, but that Intermedics' violation was minor and technical, while Infusaid Corp.'s was major and important. In respect to remedy, we noted that the parties had agreed to treat the venture as a partnership. We quoted with approval the statement of Infusaid Corp.'s counsel at oral argument that

[t]he innocent partner has the right to damages for the breach of the partnership contract up to and including delivery of the partnership assets and the right to carry on the partnership business.

Id. at 670. We suggested that the district court, as a possible remedy, could award Intermedics, the innocent partner, the right to carry on the venture's business, though Intermedics would then have to pay Infusaid Corp. the value of its interest less (goodwill and) damages. Id. See Mass.Gen.Laws ch. 108A, Sec. 38(2).

On remand, the district court followed this suggestion and entered an injunction giving Intermedics control of the venture's assets. It also required Intermedics to post a $5 million bond to secure the value of Infusaid Corp.'s rights to payment, pending further hearings to determine that value. Infusaid Corp. now challenges the district court's order on several grounds.

First, Infusaid Corp. claims that the entire injunction is invalid because the district court did not issue separate findings of fact and conclusions of law. Fed.R.Civ.P. 52(a). The record makes clear and obvious, however, that the district court issued the injunction in response to this court's statement that such an injunction would constitute appropriate legal relief in respect to the legal wrongs set forth in our opinion. There was no further factual issue for decision in respect to the general question of appropriate relief. Moreover, given the record before us, further factual or legal findings about why the district court entered this type of relief would not help us on review. Therefore, Rule 52(a) findings are not legally required. Boston & Maine Corp. v. First National Bank of Boston, 618 F.2d 137, 143 (1st Cir.1980); Swanson v. Levy, 509 F.2d 859, 861 (9th Cir.1975).

Second, Infusaid Corp.'s more significant objections focus upon key language in the court's order, specifically that of paragraph 7 of the injunction, which prohibits Infusaid Corp. from interfering with Intermedics' right to take possession of

all assets, real, personal, or mixed, tangible or intangible, wherever situated, now or at any time involved in conducting any aspect of the business of the joint venture.

Infusaid Corp.'s objections to this language come down to the claim that it is overly broad, potentially entitling Intermedics to certain assets that, under the basic venture agreement, belong to Infusaid Corp., not to the venture. Infusaid Corp. does not, however, suggest other general language, better suited to the task of giving Intermedics the venture's assets. Rather, it simply objects to the potential inclusion of certain specific items that it claims as its own. Infusaid Corp. adds that the ambiguity of the order means that it will render itself liable to contempt proceedings if it exercises various rights to which it is entitled (such as exercising certain patent rights).

Infusaid Corp.'s worry about contempt proceedings is overstated, however, for, when in doubt about the lawfulness of a proposed course of action, it can ask the district court for guidance about whether, say, its use of assets or technology will violate the injunction. McComb v. Jacksonville Paper Co., 336 U.S. 187, 192, 69 S.Ct. 497, 500, 93 L.Ed. 599 (1949). Moreover, the district court can decide specific disputes about individual assets. When asked to resolve an individual dispute about the inclusion of specific items, the court can consider the merits, decide which party is correct, and support its conclusions with appropriate findings. In the unlikely event that meritorious disputes threaten to become complex or if they arise with frequency, the court is free to appoint a master, or with the consent of the parties, it can refer the matter to a magistrate. Fed.R.Civ.P. 53(b). Cf. MCI Communications v. American Tel. & Tel. Co., 708 F.2d 1081, 1169 n. 125 (7th Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 234, 78 L.Ed.2d 226 (1983). See generally, Kaufman, Masters in the Federal Courts: Rule 53, 58 Colum.L.Rev. 452, 458 (1958).

Third, Infusaid Corp. argues that the $5 million bond that the district court required as a guarantee that it will receive the value of its interest (less damages) is too low. See Mass.Gen.Laws ch. 108A, Sec. 38(2)(b) (conditioning the transfer of the business upon providing a bond to secure the payment of the value of the interest of the party who wrongfully dissolved the venture). Here, contrary to our view of the injunctive order considered as a whole, we believe further specific district court findings are needed. We cannot tell from the record how the district court arrived at the $5 million figure.

On the one hand, the court's decision may reflect the court's response to the parties...