Moore v. Telfon Communications Corp.

• Decision Date: 09 June 1978
• Docket Number: 76-2134 and 77-1466,Nos. 75-3704,s. 75-3704
• Citation: 589 F.2d 959
• Parties: Thomas W. MOORE, Plaintiff-Appellant, v. TELFON COMMUNICATIONS CORPORATION et al., Defendants-Appellees. Thomas W. MOORE, Counterclaimant-Appellant, v. TELFON COMMUNICATIONS CORPORATION and Bear, Stearns & Company, et al., Counterdefendants, and Broad, Khourie & Schulz, a Professional Corporation, Appellee. Thomas W. MOORE, Counterclaimant-Appellant Cross-Complainant-Appellant, v. TRANSAMERICA INSURANCE COMPANY, Great American Insurance Company and Maryland Casualty Company, et al., Cross-Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 959

589 F.2d 959

Thomas W. MOORE, Plaintiff-Appellant, v. TELFON COMMUNICATIONS CORPORATION et al., Defendants-Appellees.

Thomas W. MOORE, Counterclaimant-Appellant, v. TELFON COMMUNICATIONS CORPORATION and Bear, Stearns &

Company, et al., Counterdefendants,

and

Broad, Khourie & Schulz, a Professional Corporation, Appellee.

Thomas W. MOORE, Counterclaimant-Appellant Cross-Complainant-Appellant, v. TRANSAMERICA INSURANCE COMPANY, Great American Insurance

Company and Maryland Casualty Company, et al.,

Cross-Defendants-Appellees.

Nos. 75-3704, 76-2134 and 77-1466.

United States Court of Appeals Ninth Circuit.

June 9, 1978.

Rehearing Denied June 26, 1978.

Thomas W. Moore in pro. per. (argued).

D. Ford Howe (argued), Broad, Khourie & Schulz, Edward J. McFetridge (argued), of Hauerken, St. Clair, Zappettini, San Francisco, Cal., for defendants-appellees.

Appeal From the United States District Court for the Northern District of California.

Before MERRILL, CUMMINGS, ^* and SNEED, Circuit Judges.

SNEED, Circuit Judge:

This is a consolidation of three appeals arising from two diversity actions brought in the Northern District of California. Such consolidations not infrequently induce appellate dispositions that resemble a vehicle made from mismatched spare parts. This disposition, unfortunately, did not escape this infirmity.

The first action was initiated on July 6, 1970 by appellee Telfon Communications Corporation (Telfon) for the purpose of terminating a franchise agreement with appellant Thomas W. Moore. Moore filed a counterclaim against Telfon and appellees William A. Anderson, Telfon's president, and Bear, Stearns & Co. (Bear Stearns), a substantial stockholder and financier of Telfon. The counterclaim was dismissed with prejudice for failure to prosecute by a final order issued October 26, 1976. The order also denied Moore's motion for change of venue under 28 U.S.C. § 1404(a), granted a motion to amend a cross-complaint filed by Moore against appellees Telfon, Anderson, Bear Stearns, Feldman, Waldman & Kline, Telfon's former attorneys, and the three insurance companies, and simultaneously dismissed the cross-complaint with prejudice. Moore appeals this order, claiming that the district court's disposition of the counterclaim, cross-complaint and motion for change of venue amounted to an abuse of discretion.

During the pendency of the counterclaim, appellee Broad, Khourie & Schulz moved to withdraw as Moore's attorneys of record and requested the district court to fix fees and disbursements. The court granted the former motion, but denied the latter for lack of jurisdiction. Moore claims the district court erred by refusing to fix fees and disbursements.

The second action, filed by Moore against Telfon and Anderson, alleged violations of the California and Federal wiretapping and eavesdropping statutes as well as common law invasion of privacy. After a three week trial the case resulted in a jury verdict for Telfon and Anderson. Moore appeals, contending that there was insubstantial evidence to support the verdict, that a statement of defense counsel in final argument prejudiced the jury in favor of defendants, and that certain jury instructions were erroneous.

We decline to overturn the jury verdict in the privacy action. Also, we hold that the order denying the motion to fix attorney's fees and disbursements was not an abuse of discretion. Furthermore, we find that the district court did not abuse its discretion in dismissing the counterclaim or in denying the motion for change of venue, and, accordingly, those portions of the October 26, 1976 order disposing of the counterclaim and venue motion are affirmed. However, for reasons hereinafter stated, we remand to the district court that portion of the order disposing of the cross-complaint.

I.

Statement of the Case.

Telfon operated a radio broadcasting correspondence school known as "Columbia School of Broadcasting." Although its principal place of business was San Francisco, courses were marketed nationwide through franchised distributors. Moore, a resident of New York, contacted Anderson, the creator and founder of the school, for the purpose of obtaining a franchise in 1966.

Although Moore desired the New York franchise, he ultimately purchased the Hartford, Connecticut franchise. The New York franchise was beyond Moore's means and Anderson intended to reserve that market for Columbia itself. Nevertheless, Moore extended his operations into the New York area, violating a Telfon agreement with Columbia Broadcasting Systems. Anderson and Moore entered into negotiations over this and other problems arising from Moore's activities in the course of which Moore threatened to institute a multi-million dollar antitrust suit if Anderson did not buy him out at an equal figure.

A. The Privacy Action.

On July 6, 1970, Telfon instituted an action to terminate the franchise agreement. Moore filed a counterclaim against Telfon, Anderson, and Bear Stearns, alleging antitrust violations, as well as breach of contract. Discovery disclosed that Anderson had recorded several conversations with Moore during the course of their business relationship. It had been a common practice for Anderson to record conversations with franchisees pertaining to statistical information and advertising leads. Anderson did not regard these conversations as confidential because the information was to be related to other officers and employees. During the period when Moore was threatening to institute lawsuits, Anderson recorded seven conversations without Moore's consent for the purpose of documenting threats of extortion. On the basis of these conversations Moore sued Anderson and Telfon for common law invasion of privacy, violations of the California invasion of privacy statute (C.P.C. §§ 630-637.2), the Omnibus Crime Control and Safe Streets Act of 1968 (18 U.S.C. § 2510 et seq.). The jury found for defendants on July 21, 1975. Although Moore represents himself on this appeal, he was represented by counsel during the entire trial.

B. Attorney's Fees.

On September 8, 1975, after Telfon was adjudicated bankrupt, Telfon's original claim against Moore was dismissed with prejudice for failure to prosecute. Meanwhile, Moore, dissatisfied with his counsel's conduct of the privacy action and the pending antitrust suit, discharged his counsel, Broad, Khourie & Schulz. Thereafter, on January 15, 1976, Broad, Khourie & Schulz moved to withdraw as attorneys of record in the antitrust case, requesting the court to fix fees and disbursements. Moore filed a countermotion disputing his liability for attorney's fees. The court granted the motion to withdraw but declined to fix fees and disbursements.

C. The October 26, 1976 Order.

A final order, issued October 26, 1976, dismissed the antitrust counterclaim with prejudice for failure to prosecute. The counterclaim had been pending for six years. Moore's entire prosecution thereof consisted of a Request For Production of Documents on April 14, 1972, and the taking of a deposition of an officer of Bear Stearns. He resisted defendant's discovery efforts. Moore's filing on August 2, 1976, a motion to continue the trial date and to grant an indeterminate extension of time precipitated the October 26, 1976 dismissal. Moore's reasons for the delay were the pendency of the privacy action and the withdrawal of his attorneys of record, which he claimed left him without the resources or documents necessary to prosecute the counterclaim. The district court did not credit the excuse, stating that Moore appeared to have made a deliberate choice to prosecute another suit instead. It also denied Moore's motion for change of venue, reasoning that "it came too late" and the "demonstration which was made to support (it) is not nearly adequate . . . to justify a transfer."

A third motion, which has been interchangeably designated as either a motion to amend the counterclaim or a cross-complaint, also was disposed of at hearings on September 22, 1976. The October 26, 1976 order accurately reflects the district court's disposition of the motions to dismiss the counterclaim and for change of venue. It is by no means clear that this order accurately reflects the district court's intended disposition of the cross-complaint or amendment to Moore's counterclaim.

To understand the uncertainty it is necessary to relate certain pertinent events which occurred at the hearing which led to the October 26, 1976 order. At the hearing the district judge treated the cross-complaint as a motion for leave to amend the counterclaim. ¹ This clearly was denied and the district judge informed Moore that he could file the claims alleged in the cross-complaint elsewhere. ² A proposed order, prepared at the request of the district judge by cross-defendant's counsel, for the most part accurately represented the oral rulings. That order stated, however, that the "Cross-complaint is hereby Dismissed with Prejudice." (C.T. 1176). The district judge corrected this misstatement by interlining the phrase and initialling it, thus conforming the order to his earlier ruling. (C.T. 1176). Perhaps because Moore had filed a petition for reconsideration of the rulings of September 22, this order did not become the final order. Rather, the district judge asked cross-defendant's counsel to prepare another order, reflecting his rulings, but incorporating the denial of the motion for reconsideration. (C.T. 1172).

The final order as prepared originally read, the "Motion of the Cross-Complainant to amend the Cross-complaint is hereby Denied." "Denied" was crossed out and "granted" was substituted. (C.T. 1183). The order then continues by granting a motion to dismiss the cross-complaint with prejudice for failure to state a claim. (C.T. 1183). However, the record does not indicate that such a motion was filed. The order concludes by reiterating that "if movant, Thomas W. Moore, wishes, he is...