Valmont Industries, Inc. v. Enresco, Inc., 548-70.

• Decision Date: 29 September 1971
• Docket Number: No. 548-70.,548-70.
• Parties: VALMONT INDUSTRIES, INC., et al., Plaintiffs-Appellees, v. ENRESCO, INC., a Colorado corporation, and Yuma Manufacturing Company, Inc., a Colorado corporation, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

446 F.2d 1193 (1971)

VALMONT INDUSTRIES, INC., et al., Plaintiffs-Appellees, v. ENRESCO, INC., a Colorado corporation, and Yuma Manufacturing Company, Inc., a Colorado corporation, Defendants-Appellants.

No. 548-70.

United States Court of Appeals, Tenth Circuit.

July 8, 1971.

Rehearing Denied September 29, 1971.

Richard W. Hanes, Colorado Springs, Colo. (Charles E. Painter, Colorado Springs, Colo., and James M. Naylor and John K. Uilkema, San Francisco, Cal., on the brief), for appellants.

John E. North, Omaha, Neb. (Michael A. Williams, Denver, Colo., and H. Robert Henderson, Omaha, Neb., on the brief), for appellees.

Before PHILLIPS, HILL and HOLLOWAY, United States Circuit Judges.

HILL, Circuit Judge.

This is an appeal from an order denying appellants relief from final judgment under the "newly discovered evidence" part of Rule 60(b) F.R.Civ.P., 28 U.S.C. The trial court denied the motion on three grounds: (1) that the motion was untimely; (2) that the judgment was merged in a compromise agreement which superseded the judgment; and (3) the due diligence requirement of Rule 60(b) was not met.

This is a patent infringement suit involving United States Letters Patent No. 2,604,359 for Self-Propelled Sprinkling Apparatus issued July 22, 1955 to Frank L. Zybach. In the trial court, appellees alleged that a center-pivot irrigation system manufactured and sold by appellants infringed Claims 8, 9, 10 and 13 of the patent. Appellant denied infringement and asserted the affrmative defenses of patent invalidity, file wrapper estoppel and patent misuse. The suit was tried to the court without a jury, and on November 22, 1968, the trial court entered a formal judgment decreeing validity, infringement, entitlement of appellees to damages, and enjoined further infringement. However, not until April 10, 1969, was the damage question decided by the court when it entered a money judgment in favor of appellees.

A notice of appeal was filed, as was a motion for new trial. However, on June 13, 1969, Enresco, Inc. and Valmont Industries, Inc. entered into a written "Settlement Agreement". That agreement provided that all appeals would be dismissed and that Enresco would pay Valmont the sum of $280,000, payable in installments of $60,000 each over a two-year period ending June, 1971. In consideration of the promises by Enresco, Valmont agreed not to levy execution on the appellants or seek to enforce the judgment or injunction against the former unless Enresco defaulted. It was further agreed that Valmont would procure a satisfaction of judgment against both appellants when Enresco fully performed the agreement. The appeal was then dismissed, the motion for new trial was withdrawn, and the parties began performing according to the agreement.

However, in September, 1969, appellants became aware of a German patent which they believed to be anticipatory of the Zybach patent. On the strength of what they considered "newly discovered evidence", appellants filed a Motion for Relief from the Final Judgment under Rule 60(b) on March 23, 1970. Extensive briefs, affidavits and exhibits were filed by both parties, and on July 17, 1970, the trial court heard oral argument on the motion. Thereafter the district court denied the motion on the three aforesaid grounds, and appellants appeal.

At the outset, appellants urge that their motion was timely under the Rule and that the post-judgment settlement agreement does not preclude the requested relief. Even assuming, arguendo, that appellants might prevail on these arguments, we conclude that the trial court properly denied the motion on the ground that the due diligence requirement of Rule 60(b) was not met.

Rule 60(b) (2) provides that the court may relieve a party from a final judgment if there is "newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)." There is no doubt that the German patent was not known to appellant prior to September, 1969. But to prevail on the motion, the appellants must show that the failure to discover the new evidence during or preceding trial was not due to their lack of diligence. McCullough Tool...