Scarborough v. Eubanks, 83-5601

• Citation: 747 F.2d 871
• Decision Date: 05 November 1984
• Docket Number: No. 83-5601,83-5601
• Parties: Robert SCARBOROUGH, individually and on behalf of Jim-Bob, Inc., Appellant, v. James EUBANKS, individually and as President of Jim-Bob, Inc., Jim-Bob, Inc., a West Virginia corporation, and Ryder Truck Lines, Inc., a Florida corporation.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 871

747 F.2d 871

40 Fed.R.Serv.2d 306

Robert SCARBOROUGH, individually and on behalf of Jim-Bob Inc., Appellant, v. James EUBANKS, individually and as President of Jim-Bob Inc., Jim-Bob, Inc., a West Virginia corporation and Ryder Truck Lines, Inc., a Florida corporation.

No. 83-5601.

United States Court of Appeals Third Circuit.

Argued April 3, 1984.

Decided Nov. 5, 1984.

George Retos, Jr. (Argued), Retos, Held & Associates, Washington, Pa., for appellant.

Gary N. Altman (Argued), Hirsch, Weise & Tillman, Pittsburgh, Pa., for appellees James Eubanks, and Jim-Bob, Inc.

John A. Allegretti, William A. Gray, Vuono, Lavelle & Gray, Pittsburgh, Pa., for appellee Ryder Truck Lines, Inc.

Before GIBBONS, SLOVITER, Circuit Judges, and BISSELL, District Judge ^*

OPINION OF THE COURT

SLOVITER, Circuit Judge.

This is an appeal from a dismissal with prejudice used as a sanction for dilatory conduct by counsel, presenting the same issue as in Poulis v. State Farm Fire & Casualty Co., 747 F.2d 863, also decided today.

I. Background

It appears from the pleadings and pretrial statements that Robert Scarborough and James Eubanks, through a corporation controlled by them, were granted an exclusive agency by Ryder Truck Lines, Inc. (Ryder) to solicit and sell Ryder freight services in Ohio, West Virginia and parts of Pennsylvania; that Scarborough, Eubanks and their wives formed two corporations, first Jim-Bob, Inc. and thereafter Bob Jim Trucking Co. because the earlier name was not available in West Virginia; that an agreement was entered on July 1, 1978 between Ryder and the Scarborough-Eubanks corporation granting the exclusive agency; that Ryder purported to cancel that agreement by a letter of March 26, 1980; and, that on March 28, 1980 Ryder contracted with Eubanks individually granting him those same exclusive rights covering the same territory previously granted to the corporation.

In June 1982 Scarborough filed suit in the United States District Court for the Western District of Pennsylvania, individually and on behalf of Jim-Bob, Inc., against Jim-Bob, Inc., Eubanks individually and as president of Jim-Bob, Inc., and Ryder. The complaint alleges in Count I that Eubanks violated his fiduciary duties to Jim-Bob and its shareholders by wrongfully appropriating the contract, a corporate asset, and in Count II that Ryder breached its prior contract with Jim-Bob and tortiously interfered with the ongoing contractual relationship between Jim-Bob and Ryder. The complaint sought an accounting, and compensatory and punitive damages. Jurisdiction was based on diversity of citizenship.

Ryder moved to dismiss the claim against it on the ground that as a matter of law it could not interfere with its own prior contract; and alleged in the motion that it had no contract with Jim-Bob, that its contract with Bob Jim Trucking, Inc. was terminated on March 26, 1980, and that the suit was barred by the applicable statute of limitations. It filed an affidavit in support of the motion to dismiss. Scarborough filed an answer to the motion to dismiss, supported by his affidavit. In that affidavit, Scarborough swears, inter alia, that his purported signature on Ryder's cancellation letter of March 26, 1980 is not in fact his, and that he never agreed to waive the 30 day notice of termination required under the July 1, 1978 contract.

The answer filed on behalf of Eubanks and Bob Jim Trucking Co. (although it was Jim-Bob, Inc. that was the corporate entity named in the complaint) alleged that the prior contract with Ryder had been lawfully terminated and that Scarborough had voluntarily stopped working for the corporation. They asserted a counterclaim against Scarborough individually seeking to recover the salary paid to him as well as the costs and attorneys' fees incurred in this litigation. Plaintiff Scarborough filed a reply to the new matter and an answer to the counterclaim.

With Ryder's motion to dismiss still outstanding, the parties had a status conference with the court on November 5, 1982. The court order entered on that day provided that discovery was to close January 5, 1983; Scarborough was to file a pretrial statement on January 26, 1983; defendants were to file their statements on February 16; and scheduled a pretrial conference for March 11, 1983.

The record shows that plaintiff and Eubanks/Jim-Bob filed cross-notices of depositions and requests for production of documents. There is no subsequent reference to any deposition having been taken. Ryder filed requests for admissions to the other co-defendants, which were answered and appear on the record.

Up to this time, this case appears to have proceeded in an unexceptional manner. However, Scarborough did not file his pretrial statement on January 26 when due, and on February 8, 1983 Eubanks filed a motion for involuntary dismissal under Rule 41(b). Three days later, on February 11, 1983 plaintiff filed his pretrial statement and on the same day the court denied the motion for involuntary dismissal. On February 25, all the defendants filed their pretrial statements, and the pretrial conference was held on the date originally scheduled, March 1, 1983.

As shown by the transcript, that conference proceeded along the usual course. There was no reference to plaintiff's delay in filing his pretrial statement. The court found some deficiencies in the pretrial statements of all of the parties. All of the statements had failed to designate whether specific witnesses were to testify as to damages or liability and had failed to designate experts. Tr. 2-3. In its order signed the same day the court directed all parties to file amended pretrial statements by March 18, 1983, although defendants may have construed the colloquy at the conference as an oral amendment. That order also provided that only those witnesses and exhibits specifically listed would be admissible at trial, and stated that Ryder's motion to dismiss would be converted to one for summary judgment. The order also provided that "[p]laintiff must address damages and how he will prove those damages in amended pretrial." In this regard, the court stated at the pretrial conference,

The pretrial rules, Mr. Retos, require you to set forth the damages that you are claiming. You list damages in terms of only--I think areas of damages, rather than setting forth the damages and how you intend to prove them, which the pretrial rules require you to do.

* * *

You set forth damages, loss of profit, for instance. You just use the words, "loss of profits". You are required to tell him what you are claiming in loss of profits and how you intend to prove it.

So, in your amended pretrial, I'm advising you that only those damages which you set forth particularly, in amount as well as in method of proof, will you be allowed to present at trial. So you can take care of that in your amended pretrial.

Tr. 10.

In response to a comment by defense counsel with regard to the claim for damages, the court stated:

What I have listed here is loss of profits, exemplary damages, damages to the corporate entity of Jim-Bob, Inc., and/or Jim-Bob Trucking Company, Inc., damage to the shareholders of Jim-Bob, Inc., or Jim-Bob Trucking Company, attorney's fees and costs of suit, and that's what's listed.

Now in each of those areas, he's going to have to specifically set forth, except in exemplary damages, but in all other areas he is going to have to set forth exactly what damages he is claiming and how he intends to prove those damages.

Tr. 11. The court also requested a brief from plaintiff on an issue of West Virginia law, and directed the parties to file voir dire questions and points for charge.

Despite the pretrial order requiring "all parties" to file amended pretrial statements by March 18, no party filed any amendment by that date. On March 24 Eubanks again filed a motion for involuntary dismissal under Rule 41 and plaintiff filed his amended pretrial statement on March 28, 1983, 10 days late. On April 1, 1983, Eubanks and Bob Jim Trucking, Inc. filed a third motion for involuntary dismissal and/or lesser sanctions, asserting that plaintiff's amended pretrial statement was deficient.

Defendants contended, inter alia, that plaintiff's amended pretrial statement listed witnesses who had not heretofore been listed on the original documents, included an additional claim for damages for the alleged non-funding of a pension plan not heretofore referred to, alluded to an expert witness who was not identified, and referred to damages that were not described with precision. In that regard, defendants claimed that "[d]efendants cannot ascertain any difference between the loss of profits claim and the damage to the corporate entity claim as set forth in the Amended Pre-Trial Statement. Plaintiff sets out no method by which he will prove these damages nor any legal theory which would entitle him to these damages."

The defendants' motion requested the court to dismiss the action for failure of plaintiff to prosecute under Rule 41, for failure of plaintiff to comply with Fed.R.Civ.P. 16 and Western District Local Rule 5, and for failure to comply with the court order entered March 11, 1983. As an alternative, defendants requested the court to preclude witnesses and certain evidence, to limit the claims to those asserted in timely fashion by plaintiff, and to grant defendants attorneys' fees and costs in preparing the three motions to dismiss. Defendants filed their request for charge on April 1 and plaintiff filed his points for charge on April 8.

On April 8, 1983 the district court entered an order granting "part of defendants' Motion for Involuntary Dismissal." That order recited that plaintiff's original pretrial statement was filed on February 11, 1983 instead of January 26, 1983; that his amended pretrial statement was filed March 28 instead of March 11, and that his request for charge was received on April 8 rather than...