McCreary Tire & Rubber Co. v. CEAT S.p.A.
| Decision Date | 08 July 1974 |
| Docket Number | No. 73-2020,73-2020 |
| Citation | 501 F.2d 1032 |
| Parties | McCREARY TIRE & RUBBER COMPANY v. CEAT S.p.A., Appellant, v. MELLON BANK, N.A. Garnishee. |
| Court | U.S. Court of Appeals — Third Circuit |
Charles Weiss, Frank J. Clements, Thorp, Reed & Armstrong, Pittsburgh, Pa., for appellee.
Clayton A. Sweeney, Stephen A. George, Buchanan, Ingersoll, Rodewald, Kyle & Buerger, Pittsburgh, Pa., for appellant.
Before STALEY, GIBBONS and WEIS, Circuit Judges.
This is an appeal in a diversity case from an order which (1) denied defendant's motion to dissolve a foreign attachment, (2) denied defendant's motion to dismiss the complaint, (3) denied defendant's motion to transfer to another venue, and (4) denied defendant's motion to stay the case pending arbitration. The case commenced with the filing of a Praecipe and Complaint in Foreign Attachment in the Court of Common Pleas of Allegheny County. The plaintiff, McCreary Tire & Rubber Company (McCreary), a Pennsylvania corporation, sued CEAT, S.p.A. (CEAT), an Italian corporation, for alleged breaches of a distributorship contract and Mellon Bank, N.A. (Mellon), garnishee. CEAT filed a petition for removal to the United States District Court for the Western District of Pennsylvania. CEAT then made three alternative motions. It moved to dissolve the foreign attachment on the ground that at the time of service of the writ Mellon had none of its property in Mellon's custody; it moved to dismiss the complaint; and it moved for an order transferring the case to the United States District Court for the District of Massachusetts, where a prior action by McCreary against CEAT is pending, and in which CEAT has made a general appearance. It also moved for a stay of the within action so as to permit arbitration of the dispute in accordance with the terms of the contract upon which McCreary sued. The court denied each motion, denied a motion for a certification pursuant to 28 U.S.C. 1292(b) and denied a motion for reconsideration. This appeal followed.
It is undisputed that a suit by McCreary against CEAT on essentially the same claims is pending in the United States District Court for the District of Massachusetts, that in the Massachusetts case CEAT has made a general appearance, that the Massachusetts district court ordered arbitration in accordance with the contract and stayed the suit pending arbitration and that the order compelling arbitration has been affirmed by the Court of Appeals for the First Circuit, McCreary Tire & Rubber Co. v. CEAT, S.p.A., No. 73-1138 (1st Cir. July 11, 1973). 1 At oral argument we were advised by counsel for McCreary and CEAT that the arbitration proceeding had actually commenced.
In this court McCreary moved to dismiss the appeal. Another panel on March 13, 1974 referred that motion to the panel which would hear the appeal on the merits. At the outset, therefore, we dispose of the motion to dismiss the appeal. The order appealed from, while embodied in a single document, embraces four separate subject matters which must be treated separately.
Paragraph one of the order provides 'Defendant's Motion to Dissolve Foreign Attachment be and hereby is denied.' The foreign attachment was made pursuant to Rules 1255 and 1258 of the Pennsylvania Rules of Civil Procedure 12 P.S. Appendix. In United States v. Estate of Pearce, 498 F.2d 847 (3d Cir. 1974), the court en banc held unanimously that an order denying a motion to vacate a sequestration pursuant to 10 Del.C. 366 was an interlocutory order unappealable under 28 U.S.C. 1291, and the other eight active judges declined my invitation to treat such an order as the functional equivalent of an injunction or appointment of a receiver appealable under 28 U.S.C. 1292(a). There is no basis for distinguishing Delaware foreign sequestration and Pennsylvania foreign attachment. Paragraph one is interlocutory and unappealable.
It is settled that denial of a motion to dismiss is unappealable. E.g., Fleming v. Bernardi, 441 F.2d 732 (3d Cir. 1973) (per curiam); Commonwealth of Pennsylvania v. Brown, 373 F.2d 771, 776 (3d Cir. 1967); see Catlin v. United States, 324 U.S. 229, 236, 65 S.Ct. 631, 89 L.Ed. 911 (1945).
An order transferring an action pursuant to 28 U.S.C. 1404(a) or refusing to make such a transfer is interlocutory and unappealable under 1291. All States Freight v. Modarelli, 196 F.2d 1010, 1011 (3d Cir. 1952). Limited review may be available by way of mandamus to review a transfer motion which the district court could not properly have made, Solomon v. Continental American Life Insurance Co., 472 F.2d 1043, 1045-1046 (3d Cir. 1973), and a discretionary appeal pursuant to 1292(b) may be available, see Katz v. Carte Blanche Corp., 496 F.2d 747, at 752-756 (3d Cir. 1974). But appellant does not contend that its appeal should be treated as a petition for mandamus, and 1292(b) certification was denied by the district court.
The order denying a stay pending arbitration is not a final order appealable under 1291. But McCreary's complaint seeks recovery of money damages and no other relief. Since this suit would, prior to the merger of law and equity, have been an action at law, the motion for a stay pending arbitration is treated as a motion for an injunction against continuing the action at law. It is appealable pursuant to 1292(a)(1) as an order denying an injunction. Ettelson v. Metropolitan Life Insurance Co., 317 U.S. 188, 63 S.Ct. 163, 87 L.Ed. 176 (1942); Enelow v. New York Life Insurance Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440 (1935); Kirschner v. West Co., 300 F.2d 133, 134 (3d Cir. 1962). Compare Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 75 S.Ct. 249, 99 L.Ed. 233 (1955), with Merritt-Chapman & Scott Corp. v. Pennsylvania Turnpike Commission, 387 F.2d 768 (3d Cir. 1967). Thus we have appellate jurisdiction to consider whether the action should have been stayed pending arbitration.
Attached to McCreary's complaint as Exhibit A is a copy of a contract dated November 16, 1970 whereby CEAT appointed McCreary its exclusive distributor in the United States of pneumatic tires and tubes manufactured by CEAT in Italy bearing the CEAT label or having the same tread design as tires bearing that label. Section 3 of the contract also provides, in relevant part:
'(b) During the period this agreement is in effect, CEAT shall not appoint any other distributor or any other agent for the sale of Products in the Territory, and CEAT shall not it self otherwise sell or distribute the Products directly or indirectly in the Territory . . ..
(i) CEAT warrants that all Products delivered by it to or for the account of the Distributor shall be free from defects in material or workmanship (which phrase as used in this Agreement shall include ply and tread separation resulting from any such defects, and substantial visual defects) and shall conform to all safety and other standards established by the United States Department of Transportation or any other Federal governmental agency having jurisdiction over the Products.'
Count I of the complaint alleges that CEAT has breached the exclusivity clause quoted above by selling to Duddy's Inc., a Massachusetts corporation, radial tires bearing a different trade name but having the same tread design. This count seeks $2,000,000 in damages. Counts III and IV allege breaches of the express warranty quoted above, and of an implied warranty of merchantable quality. Each of these counts seeks $250,000 in damages. The allegations of Counts I, III and IV relate to disputes which quite plainly fall within the arbitration clause in section 7(b) of the agreement:
'This agreement shall be governed by the laws of the Republic of Italy. Any controversy arising out of or in connection with this agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce, by three arbitrators appointed in accordance with said Rules. The arbitration shall be held in Brussels, Belgium, and shall be conducted in English. Judgment upon the award rendered may be entered in any court having jurisdiction for a judicial acceptance of the award and an order of enforcement, as the case may be.
Count II of the complaint realleges the existence of the November 16, 1970 exclusive distributorship contract, Exhibit A. It then refers to Exhibit B, a letter dated November 5, 1970 from CEAT to McCreary, which provides:
'As you know, CEAT tires are manufactured in India by a corporation partly owned by us. We will give that Indian corporation a copy of the proposed Distributor Agreement under which you are made the exclusive distributor in the United States for CEAT passenger car and truck tires. We will use our best efforts to obtain the agreement of the Indian corporation that if it should ever export passenger car or truck tires to the United States, it will appoint you the exclusive distributor for such tires on the same terms and conditions (other than minimum quantities) as the terms and conditions specified in the Distributor Agreement between us. If you do not receive the agreement of the Indian corporation specified above, and if thereafter, at a time that the Distributor Agreement between us is in force, it seeks to sell tires (other than in a nominal or negligible amount) intended to be delivered or sold in the United States, we agree that we will use our best efforts to prevent the importation into the United States or sale there under the trademark CEAT owned by us.
We represent that except in India, CEAT tires are not made outside of our plants in Italy. We agree that if at any time we manufacture CEAT tires outside of Italy...
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