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RELIABLE TIRE DISTRIBS. v. KELLY SPRINGFIELD TIRE

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


June 18, 1985

RELIABLE TIRE DISTRIBUTORS, INC.
v.
THE KELLY SPRINGFIELD TIRE COMPANY; BOBBY UNSER; THE BARNES TIRE COMPANY, INC.

The opinion of the court was delivered by: SHAPIRO

MEMORANDUM AND ORDER

 NORMA L. SHAPIRO, J.

 Pending before this court is the motion of The Barnes Tire Company, Inc. ("Barnes") for judgment notwithstanding the verdict. Plaintiff Reliable Tire Company, Inc. ("Reliable"), a corporation engaged in wholesale tire distribution, brought suit in the Eastern District of Pennsylvania against defendants The Kelly Springfield Tire Company ("Kelly"), Bobby Unser ("Unser") and Barnes for alleged antitrust violations, breach of contract, and tortious interference with contract, arising out of two agreements for the sale of tires.

 The court held separate trials on liability and damages. On March 9, 1984, the court's Findings of Fact and Conclusions of Law determined, inter alia, that Barnes tortiously interfered with the Reliable-Kelly contract by inducing Kelly to manufacture additional Unser tires for Barnes' customers. Following the trial on damages, the court's Findings of Fact and Conclusions of Law of April 1, 1985, 607 F. Supp. 361, determined that Barnes was liable in the amount of $76,149.80 ($28,685.28 compensatory damages plus prejudgment interest of $32,454.52 plus punitive damages of $15,000). Defendant Barnes contends that this court improperly held that it had waived the defenses of lack of personal jurisdiction and improper venue.

 Lack of personal jurisdiction is a privileged defense that can be waived "by failure [to] assert [it] reasonably, by formal submission in a cause, or by submission through conduct." Neirbo Co. v. Bethlehem Corp., 308 U.S. 165, 168, 84 L. Ed. 167, 60 S. Ct. 153 (1939); see Neifeld v. Steinberg, 438 F.2d 423 (3d Cir. 1971).

 Rule 12(a) of the Federal Rules of Civil Procedure requires a responsive pleading to be served within twenty (20) days after the service of the summons and complaint. Rule 12(h)(1) *fn1" does not require the assertion of the defenses of lack of personal jurisdiction or improper venue within the time provided in Rule 12(a) but provides that these defenses will be waived if neither made by motion nor included in a responsive pleading. If an omnibus motion is made under Rule 12(g), defenses of lack of personal jurisdiction and venue must be made at that time.

 

The objective of Rule 12 is to eliminate unnecessary delay at the pleading stage by requiring the presentation of an omnibus pre-answer motion in which defendant advances every available Rule 12 defense.

 Marcial UCIN v. S.S. Galicia, 723 F.2d 994, 997 (1st Cir. 1983). Contesting the court's jurisdiction over the person must be done in a timely manner. Wyrough & Loser, Inc. v. Pelmor Laboratories, Inc., 376 F.2d 543 (3d Cir. 1967).

 Barnes asserted its defenses of lack of jurisdiction and improper venue on August 3, 1976 in its answer to Reliable's complaint. In that same answer, Barnes asserted a counterclaim against Reliable, claiming that it would have been entitled to receive 20% of the profits Reliable owed Unser. On June 15, 1978, almost two years after Barnes raised the defenses of lack of jurisdiction and improper venue, Barnes filed a motion for summary judgment, in which it argued that under the undisputed facts of the case, Barnes neither violated the anti-trust laws nor interfered with Reliable's contract. Barnes did not indicate that its motion was an alternative to the defense of lack of jurisdiction.

 The court denied this motion on the merits on January 30, 1981. At a conference on January 6, 1982, when Barnes reasserted its defense of lack of personal jurisdiction to the surprise of the court, it was ordered to file any motion to dismiss within ten days. Barnes then filed a motion to dismiss for lack of jurisdiction and venue on January 12, 1982. By Order dated February 18, 1982, the court determined that the asserted defenses of lack of jurisdiction and improper venue had been waived. In the same Order, the court also dismissed Barnes' counterclaim with prejudice.

 In a motion for judgment notwithstanding the verdict, *fn2" Barnes now reasserts the lack of in personam jurisdiction, claiming it does not have sufficient contacts with Pennsylvania. The question this court must address is whether the conduct here, that is, the filing of a counterclaim and a motion for summary judgment, constitutes a waiver of the defenses of lack of personal jurisdiction and improper venue.

 In Neifeld v. Steinberg, 438 F.2d 423 (3d Cir. 1971), the court held that filing a counterclaim with an answer asserting lack of jurisdiction did not constitute a waiver where the defendant later abandoned the counterclaim. However, the court specifically left open the question whether asserting a counterclaim would constitute a waiver if the defendant were actively to press his claim. Unlike Neifeld, where defendant dismissed his counterclaim only a month after it was filed and before plaintiff had answered, Barnes did not request leave to dismiss its counterclaim until over five years after filing it.

 There are limits in the extent to which a defendant can actively litigate a case without waiving defenses of personal jurisdiction and improper venue. See Hoffman v. Blaski, 363 U.S. 335, 4 L. Ed. 2d 1254, 80 S. Ct. 1084 (1960); Marcial UCIN v. S.S. Galicia, 723 F.2d 994 (1st Cir. 1983). In UCIN, for example, the court held that entering an appearance, taking depositions and waiting four years to present the defense of lack of jurisdiction constituted a waiver. The court found that to hold otherwise would be to obtain the delay which Rule 12 was designed to prevent.

 The holding in UCIN is applicable here. Barnes asserted a counterclaim in 1976 and filed a motion for summary judgment on the merits in 1978, almost two years later. *fn3" At no time did Barnes state that this motion was in the alternative to the defenses of lack of jurisdiction and improper venue asserted in its answer. Barnes did not file a motion to dismiss for lack of jurisdiction and venue until January, 1982 when ordered by the court to present the issue for decision, five and one-half years after it first asserted the defenses and over a year after the court had decided its summary judgment motion on the merits. In view of Barnes' dilatory behavior and the prejudice that would result to plaintiff from granting Barnes' motion, this court reaffirms its finding that Barnes waived these defenses by its conduct. To hold otherwise would contravene the policies underlying Rule 12 and result in prejudice to the other parties.

 For the foregoing reasons, Barnes' motion for a judgment notwithstanding the verdict is denied.

 ORDER

 AND NOW, this 18th day of June, 1985, upon consideration of the motion of defendant Barnes Tire Company, Inc. for judgment notwithstanding the verdict, considered as a motion to amend the Findings of Fact and Conclusions of Law under Fed.R.Civ.P. 52(b), it is ORDERED that said motion is DENIED for the reasons set forth in the foregoing Memorandum.

 MEMORANDUM AND ORDER

 NORMA L. SHAPIRO, J.

 Pending before this court is the motion of defendant Bobby Unser ("Unser") to alter or amend the Findings of Fact and Conclusions of Law under Federal Rule of Civil Procedure 59(e). Plaintiff Reliable Tire Company, Inc. ("Reliable"), a corporation engaged in wholesale tire distribution, brought suit in the Eastern District of Pennsylvania against defendants The Kelly Springfield Tire Company ("Kelly"), Unser and The Barnes Tire Company, Inc. ("Barnes") for alleged anti-trust violations, breach of contract, and tortious interference with contract, arising out of two agreements for the sale of tires.

 The court held separate trials on liability and damages.

 Following a trial on damages, this court filed Findings of Fact and Conclusions of Law. Accordingly, on April 1, 1985, judgment was entered on Count IV of the Unser counterclaim in favor of Unser and against Reliable for royalties in the amount of $2,800. This award was based on the court's earlier determination in its Findings of Fact and Conclusions of Law on Liability of March 9, 1984 that Reliable was liable to Unser for royalty payments tendered by Reliable after Unser's purported termination of the agreement in April, 1975. The court stated at page 24 of its liability opinion that two checks had been sent to Unser: one in the amount of $1,828.05, and the other in the amount of $1,000, both of which had been returned. Based on those findings, Unser should have been awarded $2,828.05 instead of $2,800, as incorrectly indicated in the Order of April 1, 1985. Therefore, the court's order will be amended to award defendant Unser $2,828.05 on Count IV of its counterclaim.

 Unser also requests that this court amend its findings to award prejudgment interest on this amount from June, 1975 until the date of judgment. In New Jersey contract cases, prejudgment interest is generally awarded in accordance with equitable principles. See Bak-A-Lum Corp. of America v. Alcoa, 69 N.J. 123, 131, 351 A.2d 349, 353 (1976). An award of prejudgment interest is regarded as compensatory to indemnify the plaintiff for the loss of what would presumably have been earned on the sum due if payment had not been refused. See Rova Farms Resort, Inc. v. Investors Ins. Co. of America, 65 N.J. 474, 323 A.2d 495 (1974).

 The court in its discretion determines that here equitable considerations here do not favor an award of prejudgment interest to Unser. Reliable did not breach its contract with Unser; rather, it continued to send checks to Unser for the royalties to which he was entitled. Unser did not choose to keep those payments. Thus, it cannot be said that Reliable wrongfully withheld monies to which Unser was entitled.

 Moreover, Unser could have moved for summary judgment on his counterclaim any time after it was filed and the court could have entered final judgment on it. Federal Rule of Civil Procedure 54(b) provides:

 When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim . . . the court may direct the entry of a final judgment as to one or more but fewer than all of the claims.

 Here, Reliable admitted that Unser was entitled to the payments and presented no defense. This would have been a case to request the application of Rule 54(b). "It is left to the sound judicial discretion of the district court to determine the 'appropriate time' when each final decision in a multiple claims action is ready for appeal." Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 8, 64 L. Ed. 2d 1, 100 S. Ct. 1460 (1980).

 Because Unser returned the payments of Reliable and did not move for summary judgment at any time after filing its counterclaim, this court determines that equitable considerations do not warrant an award of prejudgment interest.

 ORDER

 AND NOW, this 18th Day of June, 1985, upon consideration of defendant Bobby Unser's motion to alter or amend the Findings Fact (sic) and Conclusions of Law under Fed.R.Civ.P. 59(e), and plaintiff's response thereto, it is ORDERED that the court's Final Judgment of April 1, 1985 is AMENDED as follows:

 AMENDED FINAL JUDGMENT

 1. On the claims of Reliable Tire Distributors, Inc. v. The Kelly Springfield Tire Company and Bobby Unser and The Barnes Tire Company, Inc. as follows:

 Count I - in favor of plaintiff Reliable Tire Distributors, Inc. and against defendant The Kelly Springfield Tire Company in the amount of $61,139.80 ($28,685.28 plus prejudgment interest of $32,454.52).

 Count II - in favor of defendants The Kelly Springfield Tire Company and Bobby Unser and The Barnes Tire Co., Inc.

 Count III - in favor of defendants The Kelly Springfield Tire Company and Bobby Unser and The Barnes Tire Co., Inc.

 Count IV - in favor of defendants The Kelly Springfield Tire Company and Bobby Unser and The Barnes Tire Co., Inc.

 Count V - in favor of plaintiff Reliable Tire Distributors, Inc. and against the Barnes Tire Company, Inc. in the amount of $76,139.80 ($28,685.28 plus prejudgment interest of $32,454.52 plus punitive damages of $15,000).

 Count VI - in favor of defendants The Kelly Springfield Tire Company and Bobby Unser.

 Count VII - in favor of defendants The Kelly Springfield Tire Company and Bobby Unser.

 2. On the remaining counterclaims of Bobby Unser, Count III having been withdrawn at trial, as follows:

 Count I - in favor of plaintiff Reliable Tire Distributors, Inc.

 Count II - in favor of plaintiff Reliable Tire Distributors, Inc.

 Count IV - in favor of defendant Bobby Unser and against plaintiff Reliable Tire Distributors, Inc. for royalties in the amount of $2,828.05.

 MEMORANDUM and ORDER


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