Season-All Industries, Inc., A Corporation v. Turkiye Sise Ve Cam Fabrikalari, A.S., A Corporation, and Seaply Glass Corporation, A Corporation, 425 F.2d 34, 3rd Cir. (1970)
Season-All Industries, Inc., A Corporation v. Turkiye Sise Ve Cam Fabrikalari, A.S., A Corporation, and Seaply Glass Corporation, A Corporation, 425 F.2d 34, 3rd Cir. (1970)
2d 34
The complaint alleged that the defendants from time to time alone or in concert
sold glass to plaintiff and entered into contracts with plaintiff 'with respect to
the disposition of claims which plaintiff had against either or both of them, and
which agreements defendants have breached.'
Seaply filed a motion to dismiss. The motion was sworn to by its president and
contained as exhibits a series of 'Order Acknowledgements' for sales of glass by
Seaply to plaintiff from October 1967 to October 1968. Turkiye is listed in
most, but not all, of these orders as the supplier. The orders state that Seaply
was acting 'as agent only for a foreign principal whose identity has been
disclosed,' that acceptance of the order would become effective only on
approval by the principal, and that Seaply's liability was limited to the use of
reasonable care in transmitting the order to the foreign principal for acceptance.
The orders then provide: 'Any controversy arising from this sale shall be settled
by and in accordance with the rules of the American Arbitration Association in
New York.' Seaply's motion to dismiss averred that it had filed a demand for
arbitration of the controversy between the parties with the American
Arbitration Association, and attached a copy of the demand for arbitration.
Since the motion contained factual allegations which were not already on the
record, it was properly treated under Rule 12(b) as a motion for summary
judgment.
The other defendant, Turkiye, filed a motion for judgment on the pleadings
because it was not subject to service under Pennsylvania's long-arm statute,
because on the merits the complaint alleged no contract between plaintiff and
Turkiye and no breach of a contract by Turkiye, and because Turkiye was not a
party in the arbitration proceeding which plaintiff was seeking to enjoin. Since
no answer had been filed to the complaint the motion for judgment on the
pleadings was improper as such, and it was rightly treated by the court as a
motion for summary judgment (see Rule 12(c)).
protective order and on Turkiye's motion for judgment on the pleadings what is
apparently a standard form of order. It required the moving parties to file their
briefs within 10 days, and curiously enough, 'dismissed' the motions for want of
timely prosecution if the briefs were not so filed, and if timely filed provided
that the 'dismissal' should then be vacated 'and the court shall make a further
order disposing of said motion or directing what further proceedings shall be
had with regard thereto.'2 Although it is not noted on the docket entries, the
defendants' briefs apparently were filed within the prescribed time, and on June
5, 1969, the court entered another ex parte order reciting their timely filing and
directed plaintiff to file its brief in opposition within five days. The order
provided that plaintiff's failure to file its brief in time would be treated as its
consent to the relief sought by the motions, but if it was so filed 'the Court shall
make a further order disposing of said motion or directing what further
proceedings shall be had with regard thereto.' On June 27, 1969, plaintiff's brief
apparently having been filed, the court entered another ex parte order in which
it recited the filing of briefs on both sides and granted defendants' motion for
summary judgment, dismissed the action and declared Seaply's motion for
protective order moot. 3 The basis of the court's decision apparently was that
plaintiff conceded that it had purchased all the glass involved on orders which
contained the arbitration clause, and that this bound the parties to arbitration of
their dispute regardless whether it arose directly from the sale or from
negotiations which sought to resolve the controversies which arose from the
sale.
8
The foundation of the court's decision is its statement that 'it appears to be
conceded by plaintiff that all glass sold to plaintiff was sold pursuant to
invoices containing the (arbitration) clause.' Plaintiff vigorously denies making
any such concession. The record, which alone must guide us, shows that
Seaply's demand for arbitration covered at the most but two of the 12 orders
which Seaply attached to its motion to dismiss. On the face of the record,
therefore, no arbitration proceeding had been invoked by Seaply on the other
10 orders. A defendant, of course, is not entitled to stay a civil action on a
contract because it contains a provision for arbitration which he refuses to
invoke. Thus, even if it be assumed, as the court held, that the subsequent
settlement discussions are included in the provision for arbitration of 'Any
controversy arising from this sale,'6 the record does not show that Seaply
sought arbitration on any but two of the 12 orders.
10
There is even less support for the summary judgment in favor of Turkiye. First,
the district court did not decide the jurisdictional question, in the absence of
which it is difficult to see why a decision on the merits was reached.7
Moreover, there is nothing in the orders naming Turkiye as a supplier which
shows its agreement to be bound by the arbitration provision, a view which is
confirmed by the fact that Seaply alone demanded arbitration and Turkiye is
not a party in the arbitration proceeding. Nor does Turkiye appear to have been
involved in the settlement discussion so tantalizingly mentioned in plaintiff's
answers to Seaply's interrogatories. Indeed, these answers allege that Seaply
agreed to assist plaintiff in any litigation it would pursue against Turkiye, thus
indicating that litigation and not arbitration was the route which they expected
plaintiff to take against Turkiye.
11
Finally, in view of the obscurity in the record regarding the facts which are
touched on in the complaint and plaintiff's answers to Seaply's interrogatories,
we believe the case is peculiarly one in which summary judgment should not
have been entered until plaintiff obtained a decision on the protective motion of
both Seaply and Turkiye so that if the motions were denied plaintiff would
have the benefit of a record containing the factual version of each defendant.8
12
The state of the record also leads to a consideration of the procedure followed
in this case. Apparently it is the practice of the district court where a motion for
summary judgment is filed to order the moving party to file his brief and on its
receipt, if there is some prima facie showing, to require the opposing party to
file his brief. The orders set no time for a hearing, although Rule 56(c) requires
that a motion for summary judgment must be served at least 10 days before the
time 'fixed for the hearing,' and authorizes the adverse party to serve opposing
affidavits 'prior to the day of hearing.' The rule does not contemplate that a
motion for summary judgment shall be disposed of on briefs, at least until the
moving and adverse parties have had an opportunity to file their respective
supporting and answering affidavits, and to supplement them if need be. Here in
a factually murky situation, with plaintiff's efforts to obtain answers to its
interrogatories and to take depositions balked by motions for protective orders
which were undecided, it was error to enter summary judgment. It is true that
on the record as it stood the court was presented with an almost incoherent and
contradictory statement of facts in plaintiff's answers to Seaply's interrogatories.
But summary judgment is not a punishment for the incoherence of a pleading
14
The burden was on the moving parties to demonstrate that on the record they
were entitled to summary judgment because it was clear that there existed no
genuine issue of fact, and any doubt must be resolved against them.13 This
burden was not satisfied by the present obscure record which makes it
impossible to say that no genuine issue of fact exists.
15
The order of the district court, therefore, will be vacated and the case remanded
for further proceedings.
This is our construction of the court's order. In fact, its language is more
indirect and reads:
'IT IS ORDERED that defendants' motions (not specifying which) be and the
same hereby are granted, and plaintiff's action dismissed; the motion of Seaply
Glass Corporation (apparently the motion for a protective order) hereby
becoming moot.'
United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176
(1962); First National Bank of Washington v. Langley-Howard, Inc., 391 F.2d
207 (3 Cir. 1968)
See Lockhart v. Hoenstine, 411 F.2d 455, 458 (3 Cir. 1969); Robin
Construction Company v. United States, 345 F.2d 610, 612-614 (3 Cir. 1965)
See generally, e.g., American Home Assurance Co. v. American Fidelity &
Cas. Co., 356 F.2d 690 (2 Cir. 1966); Kanmak Mills v. Society Brand Hat Co.,
236 F.2d 240, 250 (8 Cir. 1956); Galveston Maritime Ass'n. v. South Atlantic &
Gulf Coast Dist., 234 F.Supp. 250, 251-252 (S.D.Tex.1964); Application of
Reconstruction Finance Corp., 106 F.Supp. 358, 361-362 (S.D.NY.1952), aff'd.
R.F.C. v. Harrison & Crosfield, 204 F.2d 366 (2 Cir.), cert. denied 346 U.S.
854, 74 S.Ct. 69, 98 L.Ed. 368 (1953)
7
See Schramm v. Oakes, 352 F.2d 143, 149 (10 Cir. 1965); Arrowsmith v.
United Press International, 320 F.2d 219, 221 (2 Cir. 1963); 5 Wright & Miller,
Federal Practice and Procedure 1351 at 563 (1969)
See Bane v. Spencer, 393 F.2d 108, 109 (1 Cir. 1968); Toebelman v. MissouriKansas Pipe Line Co., 130 F.2d 1016, 1022 (3 Cir. 1942). Rule 56(c) was
amended in 1963 to expressly include 'answers to interrogatories' within the
range of materials to be considered by the trial court on motion for summary
judgment
See generally Georgia Southern & F. Ry. Co. v. Atlantic Coast Line R. Co.,
373 F.2d 493, 496-498 (5 Cir.), cert. denied 389 U.S. 851, 88 S.Ct. 69, 19
L.Ed.2d 120 (1967); Dredge Corp. v. Penny, 338 F.2d 456, 461-462 (9 Cir.
1964); Enochs v. Sisson, 301 F.2d 125 (5 Cir. 1962)
10
11
Plaintiff argues that in view of Local Rule 4(a)(2) of the Western District of
Pennsylvania it had a right to expect notification of a time and place of
argument on the defendants' motions. The relevant paragraph of Local Rule
4(a)(2) reads:
Miscellaneous Motions: These are motions which require notice and a copy
thereof to be served on the opposing party or counsel, together with an
acceptance of service thereof. The notice shall set forth the time when said
motion will be filed with the Clerk of Court. In the event the motion is not
consented to by all parties, the Clerk shall thereafter place same on the next
appropriate Argument List and sufficient notice in advance shall be given by
the Clerk as to the time and place of said Argument.'
Due to our disposition of this case, we need not decide the effect of this local
rule on individual orders entered by the court.
12
See Hazen v. Southern Hills National Bank of Tulsa, 414 F.2d 778, 780 (10
Cir. 1969); Sarelas v. Porikos, 320 F.2d 827 (7 Cir. 1963), cert. denied 375 U.S.
985, 84 S.Ct. 519, 11 L.Ed.2d 473 (1964); Bagby v. United States, 199 F.2d
233 (8 Cir. 1952); 6 Moore, Federal Practice P56.14(1) at 2258 (2d ed. 1966).