Rhoades, Incorporated v. United Air Lines, Inc., 14780

• Decision Date: 22 January 1965
• Docket Number: No. 14780,14781.,14780
• Citation: 340 F.2d 481
• Parties: RHOADES, INCORPORATED, Appellant, v. UNITED AIR LINES, INC. v. PENNSYLVANIA RAILROAD COMPANY. RHOADES, INCORPORATED v. UNITED AIR LINES, INC., Appellant, v. PENNSYLVANIA RAILROAD COMPANY.
• Court: U.S. Court of Appeals — Third Circuit

340 F.2d 481 (1965)

RHOADES, INCORPORATED, Appellant, v. UNITED AIR LINES, INC. v. PENNSYLVANIA RAILROAD COMPANY.

RHOADES, INCORPORATED v. UNITED AIR LINES, INC., Appellant, v. PENNSYLVANIA RAILROAD COMPANY.

Nos. 14780, 14781.

United States Court of Appeals Third Circuit.

Argued September 22, 1964.

Decided January 22, 1965.

Gilbert E. Morcroft, Pittsburgh, Pa., for Rhoades, Inc.

H. A. Robinson, Dickie, McCamey, Chilcote & Robinson, Pittsburgh, Pa., for United Air Lines, Inc.

Aloysius F. Mahler, Pittsburgh, Pa., for Pennsylvania R. Co.

Before HASTIE and FORMAN, Circuit Judges, and KIRKPATRICK, District Judge.

FORMAN, Circuit Judge.

Rhoades, Incorporated (hereinafter Rhoades), was the owner of a device known as an airboat¹ which it had demonstrated at Los Angeles and was desirous of exhibiting in Pittsburgh, Pennsylvania. Accordingly, it arranged with United Air Lines, Inc. (hereinafter United), to transport the airboat consigned to itself, via air freight from Los Angeles to Pittsburgh. United was without facilities to transport the airboat beyond Cleveland, Ohio. After its arrival there United arranged with the Pennsylvania Railroad Company (hereinafter Pennsylvania) for its carriage to its destination. On delivery to Rhoades at Pittsburgh the airboat allegedly was received in a destroyed state. In this diversity action Rhoades seeks damages against United in the sum of $15,000.²

United impleaded Pennsylvania as a third party defendant. It admitted that the airboat was received by it in good condition and asserted that it was transferred to Pennsylvania in the same state. Pennsylvania denied liability and claimed that all the damage occurred prior to its taking over the shipment at Cleveland.

Although the parties stipulated that the airboat was so badly damaged during its transportation that it was rendered valueless, the amount of the recovery for the admitted damage was in issue. United urged that under the facts its liability was limited to $1,080, the limitation on the value of the item under the tariffs it had filed. Rhoades contended that United's liability was not limited and insisted that it was entitled to $15,000 in damages.

The jury was presented with, and answered, four special interrogatories as follows:

"Interrogatory No. 1. Did the defendant, United Air Lines, at Los Angeles, California accept plaintiff, Rhoades, Inc., airboat for shipment to Pittsburgh, Pennsylvania without at that time and place, issuing a receipt, air bill or bill of lading to the plaintiff for such airboat shipment? The answer, yes.

"Interrogatory No. 2. State the amount of total damage caused to the airboat while in transit from Los Angeles, California to Irwin, Pennsylvania. $7,500.

"Interrogatory No. 3. State the amount of money damage the plaintiff Rhoades, Inc. is entitled to from the defendant, United Air Lines. $7,500.

"Interrogatory No. 4. State the amount of money damage the defendant and third party plaintiff, United Air Lines, is entitled to, if any, from the third party defendant, Pennsylvania Railroad Company. Answer: None."

Judgment was entered in favor of Rhoades against United in the sum of $7,500 and of no cause for action in favor of Pennsylvania in the third-party action brought by United. Rhoades filed a motion under Federal Rule of Civil Procedure 59 to alter or amend the judgment, and in the alternative, for a new trial on the question of damages. United moved for a new trial on all issues as to both Rhoades and Pennsylvania. All motions were denied by the District Court.³ This case is now presented to us on the cross appeals of both Rhoades and United.

— I —

Rhoades' motion either to alter or amend the judgment or for a new trial as to damages is its reaction to what it considered a grossly insufficient verdict of $7,500. The merit in its position rests on the disposition of two issues:

(1) Whether United's counsel, in the course of conducting the trial, made a binding admission that if United were to be found not to have successfully limited its liability, then a verdict in favor of Rhoades for $15,750 should be rendered?

(2) Whether both United's and Pennsylvania's failure to controvert Rhoades' evidence of value limited the jury to a finding of the value of the airboat in the amount offered by Rhoades?

As to the question of United's admission, during the course of its counsel's opening to the jury following the conclusion of the presentation of Rhoades' case, he stated:

"* * * and the net result of that is that you will find for the plaintiff either for what is now supposed to be the declared value of $15,750 or for the limited amount recoverable under the tariffs filed and then you will determine which of these carriers was the cause of the damage and I think that is what his honor has in mind for you to do." (Emphasis added.)

Relying on Oscanyan v. Arms Co.,⁴ Rhoades goes to great length to demonstrate that an admission of counsel in the course of trial is binding on his client, a point of law upon which there is little dispute.

Rhoades, however, assumes that the statement of United's counsel does, in fact, constitute an admission, an assumption which is in no way buttressed by Rhoades. Though finding a binding admission by counsel in Oscanyan, the United States Supreme Court carefully prefaced its conclusion with the following remarks:

"The power of the court to act in the disposition of a trial upon facts conceded by counsel is as plain as its power to act upon the evidence produced. The question in either case must be whether the facts upon which it is called to instruct the jury be clearly established. If a doubt exists as to the statement of counsel, the court will withhold its directions, as where the evidence is conflicting and leave the matter to the determination of the jury."⁵ (Emphasis added.)

And in applying the law to the Oscanyan facts, the Supreme Court found:

"Here there were no unguarded expressions used, nor any ambiguous statements made. * * * He dwelt upon and reiterated the statement of the fact which constituted the ground of the court\'s action in directing a verdict for the defendant. * * *"⁶ (Emphasis added.)

Taking United's alleged admission in its opening address, we find it far from unambiguous. To be sure, counsel for United might have meant to express his resolution of the alternatives presented by the damage question in the manner in which Rhoades would ascribe such resolution to him. But that is not clear from counsel's statement to the jury. The clause, "for what is now supposed to be," sufficiently clouds counsel's clarity of expression so as to place the entire statement outside the bounds of an admission.

Two other references to the record also seem to reinforce our view that United, in its opening to the jury, did not accept unequivocally $15,750 as the value of the airboat. In objecting to the introduction of any testimony in behalf of Rhoades as to the value of the airboat, United argued that such testimony should not be received for "under the theory of Rhoades' case, the value would be $15,750."⁷ At that point, United did not accept $15,750 as the value of the airboat. It merely indicated that under Rhoades' own theory, its declared value of $15,750 would limit Rhoades in its introduction of evidence as to value. Furthermore, reference to the pre-trial proceedings⁸ indicates that United's counsel explicitly stated that he did not have the slightest idea what the airboat was worth. Nor did the parties arrive at any formal stipulation as to its value. Under these circumstances, we do not find that United was willing to accept $15,750 as the airboat's value, and our view that we should not find the opening statement of United's counsel so unambiguous as to bind United to an admission of the value of the airboat is, therefore, reinforced.

Rhoades' second argument offered in this appeal is that the verdict of $7,500 was speculative in light of the uncontroverted evidence offered that the value of the airboat was $15,750, the claim being voluntarily limited, however, to $15,000. While it is true that $15,000 was the lowest figure Rhoades presented to the jury, the jury also was told by Rhoades' witnesses⁹ that: the value of the airboat was between $15,000 and $30,000; the value was $15,750; and that the value was $17,400. Though United did not offer expert witness testimony on the value of the airboat, it did extensively examine Rhoades' own witnesses as to the material and construction of the device. Photographs of the airboat were also presented for jury consideration. Rhoades' witnesses, in testifying as to...