Moore v. Greene

• Citation: 431 F.2d 584
• Decision Date: 09 October 1970
• Docket Number: No. 23315.,23315.
• Parties: Daniel E. MOORE, Appellant, v. Frank T. GREENE, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

431 F.2d 584 (1970)

Daniel E. MOORE, Appellant, v. Frank T. GREENE, Appellee.

No. 23315.

United States Court of Appeals, Ninth Circuit.

September 1, 1970.

Rehearing Denied September 25, 1970.

As Corrected October 9, 1970.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Harold C. Nachtrieb, Thomas W. Kemp, Miller, Groezinger, Pettit, Evers & Martin, San Francisco, Cal., for appellant.

J. R. MacMahon, Freitas, Allen, McCarthy, Bettini & MacMahon, San Rafael, Cal., for appellee.

Before MADDEN,^* Judge of the Court of Claims, and CARTER and TRASK, Circuit Judges.

TRASK, Circuit Judge:

This is an appeal by Daniel E. Moore from judgments rendered against him on four counterclaims arising out of his action brought against Frank T. Greene.

Appellant, an attorney in Bisbee, Arizona, brought suit in 1965 against Greene, a resident of California and a former client of his, for non-payment of attorney fees totalling $300,000. Greene, in his answer, alleged that he had paid in full for all legal services rendered by Moore and instituted eleven counterclaims against Moore. At pre-trial conference, Moore abandoned his original complaint. Prior to trial, one of the counterclaims was settled, and the matter went to trial on the ten remaining counterclaims. After a lengthy jury trial, judgments were entered on verdicts for Greene on four of the counterclaims.¹ These may be categorized as follows:

(1) Judgment for $61,000 plus interest in the amount of $33,878.65 due on six demand, interest-bearing promissory notes signed by Moore and delivered to Greene (counterclaim five);

(2) Judgment in the amount of $1,000 general damages and $2,000 punitive damages for intentional infliction of mental distress (counterclaim four), and

(3) Judgment in the amounts of $500 general damages and $3,000 punitive damages (counterclaim one) and $500 general damages and $500 punitive damages (counterclaim three) for two counterclaims alleging libel.

Moore appeals as to each part of the judgment. We consider each separately:

(1) The promissory notes

Moore admitted the existence of the notes and that they constituted evidence of loans made to him by Greene in 1960 and 1961. He further admitted that they had not been paid, but claimed that their sum was exceeded by legal fees owed him by Greene and that it was originally agreed that the loans would be paid off by the performance of legal services. The jury chose not to believe Moore. They answered the following special interrogatory in the negative:

"Was there at any time an agreement between Mr. Moore and Mr. Greene that the $61,000 in promissory notes would be cancelled or liquidated by means of credits against earned but unbilled legal fees owing to Moore\'s law firm?

At trial, Greene could not find the original promissory notes but produced xerox copies of them which were received into evidence over Moore's objection that the copies could be used but that the originals must be produced. Some six days after completion of the trial but before judgment was entered, Greene located the originals. They were admitted into evidence eleven days later.

Moore now alleges that the district court had no jurisdiction to reopen the case to receive the original promissory notes. We find no error.

The reopening of the case for this limited purpose was a decision made within the sound discretion of the trial court, which will be disturbed on appeal only if an abuse of discretion is shown. See Alaska United Gold Min. Co. v. Keating, 116 F. 561, 565 (9th Cir. 1902); Missouri Pac. Ry. Co. v. Oleson, 213 F. 329, 332 (8th Cir. 1914); Caracci v. Brother International Sewing Machine Corp., 222 F.Supp. 769, 771 (E.D. La. 1963), aff'd per curiam, 341 F.2d 377 (5th Cir. 1965). See also Philadelphia & Trenton R.R. Co. v. Stimpson, 39 U.S. (14 Pet.) 448, 463, 10 L.Ed. 535 (1840). Under the circumstances of this case, we hold that there was no abuse of discretion. Moore does not claim that he was prejudiced by the reopening, nor can we find any prejudice. Moore on cross-examination admitted the copies appeared to be true and correct. (R.T. at 1234); that he did receive the monies evidenced by the notes (R.T. at 1234); and that none had been repaid (R.T. at 1235). The existence or amount of the notes was thus not a disputed, factual question for the jury. The tardy substitution of the original notes for the xerox copies could not possibly have affected the outcome of the case.

Appellant next alleges that the copies of the notes were not properly admitted into evidence because Greene did not make a sufficient proof of loss of the originals. Appellant suggests that this question of the sufficiency of the proof of loss affects the substantive rights of the parties and, pursuant to the rule of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), must be determined by the law of the state in which the federal court sits. Cooper v. Brown, 126 F.2d 874, 877 (3d Cir. 1942). Appellant cites Cotton v. Hudson, 42 Cal.App.2d 812, 110 P.2d 70 (1941), which states: "Where it is contended that a writing has been lost, proof of loss must be made before evidence of its contents may be given." 42 Cal.App.2d at 814, 110 P.2d at 71. That case, however, goes on to say, "The sufficiency of the proof is a question of law addressed to the sound discretion of the trial court, and unless there is an abuse of such discretion its determination will not be disturbed on appeal." And, "The exactness of proof may be relaxed in proportion to the evidentiary weight or value of the instrument, * * *" 42 Cal.App. 2d at 813-814, 110 P.2d at 71. An appellate court will not find an abuse of discretion "unless the proof is manifestly insufficient to warrant the secondary evidence or unless the evidence offered to establish the loss is inherently improbable or incredible." Wolf v. Donahue, 206 Cal. 213, 219-220, 273 P. 547, 550 (1929).

Following the cross-examination on the copies of the notes and the validity of the debt which they evidenced, the court in admitting the copies, said:

"At any rate there is no argument about the fact that the original debts were represented by promissory notes, whether they be available or not, they were written instruments which were executed at the time the money was received." (R.T. at 1241).

Under direct questioning by the court, the appellant further acknowledged that the $61,000 of promissory notes was his personal obligation to Greene and did not relate to appellant's law partnership. (R.T. at 1274).

We hold that, inasmuch as the evidentiary value of the notes was slight because their existence and amount had been agreed upon, the trial court did not abuse its discretion in finding that Greene had sufficiently proved the loss of the notes.

Appellant further argues that Greene was not entitled to judgment on the notes as he did not have possession of the notes at the time the action was commenced. This argument has no merit. Greene had relinquished the notes to a bank for collection, but received them back when the bank's demand for payment was refused. There was no evidence whatsoever that Greene had assigned or otherwise negotiated the notes to the bank or any other third party.

We affirm the judgment of the district court as to counterclaim five.

(2) Intentional infliction of mental distress

Greene's counterclaim number four alleged that Moore had intentionally inflicted mental distress upon him through five letters sent by Moore during a period of almost four years from December 5, 1959 to September 4, 1963. Two of the letters were sent to Greene at his home in California. One was sent to Carlos R. Freitas, Greene's lawyer in San Rafael, California; one to V. L. Swanner, a banker in Bisbee, Arizona, and one to A. R. Grambling, an attorney in El Paso, Texas. The jury found for Greene and awarded him $1,000 in general damages and $2,000 in punitive damages.

We think that California law is applicable. In a diversity case, a federal court must follow the substantive law of the state in which it sits. Erie R. Co. v. Tompkins, supra, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188. This includes the conflicts of law rules of that state. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Matanuska Valley Lines, Inc. v. Molitor, 365 F.2d 358, 360 (9th Cir. 1966), cert. denied, 386 U.S. 914, 87 S.Ct. 864, 17 L.Ed.2d 786 (1967). According to California conflicts law, the forum state must consider all of the foreign and domestic elements and interests involved in a tort action. Reich v. Purcell, 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727 (1967). Here, although the letters were sent from Arizona to places in California, Arizona and Texas, we consider that the significant circumstance was neither the mailing nor receipt of the letters but their effect upon Greene's state of mind. Greene is a resident of California and it is that state which is most interested in his mental and emotional well-being. Moreover, the tort took place only when Greene read or otherwise learned of the contents of the letters, and this event occurred in California.

Appellant raises the threshold argument that this counterclaim was barred by the one-year statute of limitations of Cal.Civ.Proc.Code § 340(3). Assuming arguendo that this statute is applicable to this cause of action, we disagree.

Under Cal.Civ.Proc.Code § 350,² the running of the statute is tolled so long as the defendant is out of the state. There was no showing or any contention made that Moore, a resident of Arizona, was in California a sufficient period of time in order to have the statute run against the cause of action. Cvecich v. Giardino, 37 Cal.App. 2d 394, 99 P.2d 573 (1940). Moore has contended that a brief trip by Greene to Arizona to consult attorneys was sufficient to cause the one year statute to operate against Greene and bar the claim. No authority is cited in support of such an argument and...