Petition — Rosenfield v. New England Merchants National Bank

iC@ - Supreme Court, U.S.

A FILED

82-994 Nov 96 1982

No. CLERK

in the

Supreme Court

of the

United States

OCTOBER TERM, 1982

COLEMAN R. ROSENFIELD and

GLADYS ROSENFIELD,

Petitioners,

vs.

NEW ENGLAND MERCHANTS NATIONAL BANK

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEAL FOR

THE FIFTH CIRCUIT UNIT B

ALAN G. GREER

BERTHA CLAIRE LEE

FLOYD PEARSON STEWART

RICHMAN GREER & WEIL, P.A.

One Biscayne Tower

Twenty-Fifth Floor

Miami, Florida 33131-1868

Phone: (305) 377-0241

Attorneys for Petitioners

QUESTIONS PRESENTED FOR REVIEW

DOES THE FAILURE OR REFUSAL OF

THE COURT OF APPEALS TO RULE ON

AN ISSUE PROPERLY RAISED, BRIEFED

AND ARGUED ON APPEAL, WHERE SAID

ISSUE IS DISPOSITIVE OF THE CASE

OR A SIGNIFICANT PORTION OF IT,

CONSTITUTE DENIAL OF ACCESS TO

THE COURTS AND THUS DENIAL OF

DUE PROCESS OF LAW AS

GUARANTEED BY THE FIFTH

AMENDMENT TO THE CONSTITUTION

OF THE UNITED STATES. (PETITIONERS

RESPECTFULLY BELIEVE THIS TO BE

A CASE OF FIRST IMPRESSION FOR THIS

COURT.)

IN A JURY TRIAL DID THE CONDUCT

OF THE DISTRICT COURT BELOW, IN

ADMITTEDLY TRYING TO “PROTECT”

RESPONDENT AGAINST PETITIONER,

IN ADMITTEDLY DECIDING THE

CREDIBILITY OF THE WITNESSES, IN

EXCLUSING MATERIAL AND RELEVANT

EVIDENCE AND IN DIRECTING A

VERDICT, CONSTITUTE CLEAR AND

UNAMBIGUOUS BIAS AND PREJUDICE

SUCH AS TO DENY PETITIONERS’ DUE

PROCESS OF LAW AS GUARANTEED BY

THE FIFTH AMENDMENT TO THE

CONSTITUTION OF THE UNITED STATES.

RULE 28.1 LISTING

As to Petitioners, the following are the real parties

in interest and any related companies: Coleman R.

Rosenfield, Gladys Rosenfield, Mama Tino, Inc.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ..... i

TABLE OF AUTHORITIES ................... vi

eee I kin coneieenkatedessossaies 1

Ri | rere Ter enr ren err 1

CONSTITUTIONAL PROVISIONS INVOLVED. 2

UNITED STATES STATUTES INVOLVED ..... 3

STATEMENT OF THE CASE ................. 3

A. PROCEEDINGS BELOW ............. 3

B. STATEMENT OF FACTS ............. 5

REASONS WHY THE WRIT SHOULD BE

UREN RENEE 5540 040d Ce PREL Ven hecae esi e ers 9

PETITIONERS WERE DENIED ACCESS TO

THE COURTS AND THUS DUE PROCESS

OF LAW UNDER THE FIFTH AMENDMENT

AS A RESULT OF THE COURT OF APPEALS

FAILURE AND REFUSAL TO RULE ON

AN ISSUE PROPERLY RAISED AND

BRIEFED ON APPEAL................... 10

TABLE OF CONTENTS (Continued)

Page

II.

PETITIONERS’ COUNTERCLAIM WAS NOT

BARRED BY THIS APPLICABLE STATUTE

OF LIMITATIONS IN THAT IT AROSE OUT

OF THE SAME FACT SITUATION AS

RESPONDENT’S CLAIMS................

Il.

THE TRIAL COURT’S OPEN DISPLAY OF

BIAS AND PREJUDICE IN THE CONDUCT

OF THE TRIAL DENIED PETITIONERS’

DUE PROCESS OF LAW AS GUARANTEED

BY THE FIFTH AMEND AND REQUIRES

REVERSAL OF THE DIRECTED VERDICT

ST a ane eer er ener er ar eer yo

IV.

THE DISTRICT COURT AND COURT OF

APPEALS RULINGS THAT PETITIONER

ROSENFIELD’S TESTIMONY WAS NOT

BELIEVABLE BECAUSE IT WAS

SELFSERVING CONSTITUTED A DENIAL

OF DUE PROCESS OF THE LAW AS

GUARANTEED BY THE UNITED STATES

CONSTITUTION IN THAT THE SAME

STANDARDS WERE NOT APPLIED TO

RFSPONDENT’S TESTIMONY WHICH WAS

EQUALLY SELFSERVING. ..............

iv

14

16

19

TABLE OF CONTENTS (Continued)

Page

V.

THE DISTRICT COURT AS A RESULT OF

ITS BIAS IMPROPERLY EXCLUDED FROM

EVIDENCE DEPOSITION TESTIMONY OF

A MATERIAL WITNESS. ................ 22

VI.

THE DISTRICT COURT'S DIRECTION OF A

VERDICT IN FAVOR OF RESPONDENT WAS

FATALLY TAINTED BY ITS APPARENT

BIAS, ITS IMPROPER DETERMINATION

OF WITNESS CREDIBILITY AND ITS

IMPROPER EXCLUSION OF EVIDENCE... 25

SPORT oc nets ncngncceccsenecccccenas 26

TABLE OF AUTHORITIES

Cases Page

Adams General Contractors, Inc v.

Department of Housing and Urban Development,

501 F.2d 176 (5th Cir. 1974) ................. 10

Azada v. Carson,

252 F.Supp. 988 (D. Hawaii 1966)............ 15

Baker v. Simmons Co.,

342 F.2d 991 (5th Cir.) cert. denied

88 S.Ct. 49, 382 U.S. 820 (1965) .............. 18

Chauffeurs, etc. v. Jefferson Trucking Co., Inc.,

473 F.Supp. 1255 (S.D. Ind.) affirmed

628 F.2d 1023 (7th Cir.) cert. denied

Ee 15

Cherney v. Moody,

413 So.2d 866 (1st Fla. DCA 1982)........... 16

Commonwealth Coatings Corp. v.

Continental Casualty Co. of Puerto Rico,

89 S.Ct. 337, 393 U.S. 145 (1969) ............. 18

Cross v. State of Georgia,

661 F.2d 102 (Sth Cir. 1978) ................. 17

vi

TABLE OF AUTHORITIES (Continued)

Empire Life Ins. Co. v. Valdak Corp.,

468 F.2d 330 (5th Cir. 1972) ................

Erie Lackawanna R.R. Co. v. United States,

439 F.2d 194 (Ct. Claims 1971) .............

Glazer v. Glazer,

374 F.2d 390, 400 (5th Cir.) cert. denied

389 U.S. 831, 88 S.Ct. 100 (1968) ............

Hernas v. City of Hickory Hills,

507 F.Supp. 103 (N.D. Ill. 1981).............

Leahy v. United States,

272 F.2d 487 (9th Cir.) cert. dismissed

81 S.Ct. 465, 364 U.S. 945 (1961)............

Molnar v. Gulfcoast Transit Co.,

871 F.2d 639 (5th Cir. 1967) ................

Nalley v. M’Clements,

295 F.Supp. 1357 (D. Del. 1969).............

National Labor Relations Bd. v. Phelps,

136 F.2d 562 (5th Cir. 1943) ................

Rosenberg v. Baum,

153 F.2d 10 (10th Cir. 1946) ................

United States v. Generes,

405 U.S. 93, 106, 92 S.Ct. 827, 834 (1972) .....

vii

Page

TABLE OF AUTHORITIES (Continued)

Page

United States v. Southern California Edison Co.,

299 F.Supp. 268 (S.D. Cal. 1964) ............. 15

United States v. State of Florida,

482 F.2d 205 (5th Cir. 1973) ................. 12

United States Constitution

Article III of the Constitution of the United

| er Teer re eee eee re 12

Fifth Amendment to the Constitution of the

PR ee ee 13, 18, 21

REE Cem i Peererrrerr rire reer Tey. 1

28 U.S.C. §1291, Judiciary Act ............ 3, 9, 12, 13

TS UG. GGG i ekc eh vcdessadeeceseeeneoes 3

Other Authorities

Pee, BAGG P. BO os in ke ccsvacncvenvaisates 10, 11

Rule 401, Federal Rules of Evidence ............ 22

Rule 402, Federal Rules of Evidence ............ 22

53 C.J.S. Limitations of Actions §106 Set Off,

Counterclaim and Cross Demand ............... 15

viii

Petitioners COLEMAN R. ROSENFIELD

(hereinafter “Rosenfield”) and GLADYS ROSENFIELD

(hereinafter “Mrs. Rosenfield” and collectively “Petitioners

Rosenfield”) pray that this Court issue a writ of certiorari

to review the judgments of the United States Court of

Appeals for the Fifth Circuit Unit B which affirmed the

directed verdict in favor of Respondent NEW ENGLAND

MERCHANTS NATIONAL BANK (hereinafter

“NEMNB”) and which expressly refused to rule on the

propriety of the dismissal by way of Summary Judgment

of Petitioners’ Counterclaim even though it was an

issue properly raised on appeal and briefed by both

parties.

OPINION BELOW

The opinion of the court of appeals, reported at

—___._ F.2d ____ (5th Cir., Unit B, 1982) is printed in the

Appendix to this Petition (A.2).

JURISDICTION

The court of appeals filed its opinion and entered

its judgment on July 1, 1982. A timely petition for

renearing which raised, among other things, the court

of appeals’ failure to rule on the issue of the summary

judgment disposition of the Petitioners’ counterclaim

was denied, without opinion, on August 30, 1982.

The jurisdiction of this Court is invoked under 28

U.S.C. §1254(a) (1976).

CONSTITUTIONAL PROVISIONS INVOLVED

The Fifth Amendment to the Constitution of the

United States provides, in part, as follows:

No person shall be . . . deprived of life, liberty,

or property without due process of law; . . .

UNITED STATES STATUTES INVOLVED

28 U.S.C. §1291, Judiciary Act

STATEMENT OF THE CASE

A. PROCEEDINGS BELOW

Respondent NEMNB brought suit in the United

States District Court for the District of Massachusetts

against Petitioners in July 1974 based on alleged

guarantees. The complaint was filed over four years

after the occurrence of the facts which give rise to the

claim. The case was subsequently transferred to the

United States District for the Southern District of

Florida based on forum non-convenience pursuant to

28 U.S.C. §1401(a).

Petitioners raised various defenses including

conditional delivery and filed a counterclaim alleging

fraudulent inducement relative to the execution of the

alleged guarantees.

On March 26, 1976 the trial court granted

Respondent's motion for summary judgment as to the

counterclaim on the basis that Petitioners’ counterclaim

for fraud was barred by the applicable statute of

limitations even though it arose out of the same factual

situation which gave rise to Respondent NEMNB's

claims on the alleged guarantees which were not barred

by any statute of limitations.

Thereafter a jury trial was held on February 14,

1977. At the close of the case, but before the jury

returned a verdict, the trial court directed a verdict in

favor of Respondent NEMNB and against both Petitioners

by order dated March 9, 1977. From that directed

verdict a timely appeal was taken to the United States

Court of Appeals for the Fifth Circuit, Unit B.

In its opinion entered on July 1, 1982, the court of

appeals affirmed the trial court’s directed verdict but

expressly failed and refused to rule on the issue of the

summary judgment which dismissed Petitioners’

Counterclaim even though that issue was clearly raised

on appeal and briefed by both sides.’ (A. 13). In so doing

the court of appeals stated in its Opinion that:

This counterclaim was dismissed prior to

trial on statute of limitation grounds and is

not involved in this appeal. (Emphasis added).

(A. 13).

Thereafter Petitioners filed a timely petition for

rehearing in which they, among other things, pointed

out that the court of appeals had improperly failed to

rule on the validity of the summary judgment dismissing

to Petitioners’ Counterclaim. (A. 38). The court of appeals

denied the petition for rehearing on August 30, 1982

without opinion and again refused to address the vital

issue of Petitioners’ counterclaim. (A. 43).

From the foregoing rulings the following Petition

for Certiorari is taken.

‘See, excerpts from Appellants’ and Appellee’s briefs reprinted

in the Appendix to this Petition.

B. STATEMENT OF THE FACTS

In 1968 Petitioner Coleman Rosenfield was a lawyer

and an officer of a franchise business known as Mama

Tino’s Inc. That company promoted franchised Italian

restaurants. In 1969 and 1970 Mama Tino’s borrowed

money from Respondent NEMNB for business purposes.

Thereafter the business experienced difficulties and a

$2,500,000.00 public offering it had anticipated did not

materialize.

With this background Petitioner Rosenfield and

the President of Mama Tino’s, a Mr. Fiorentino, sought

an extension of the company’s loans from Respondent

NEMNB. Respondent would only extend the loans if

both the Petitioners and Mr. and Mrs. Fiorentino executed

personal guarantees for the company’s indebtedness.

Petitioner Rosenfield claimed that the guarantees

were signed and delivered to NEMNB on the express

condition that the bank would lend the company an

additional $50,000.00 as well as extend the existing

loans. Rosenfield testified that on the basis of NEMNB’s

unequivocal promise of additional funding, the guarantees

were executed and conditionally delivered in February,

1970.

Thereafter, the additional $50,000 loan was not

forthcoming, which materially contributed to the necessity

for the company to file for bankruptcy in May, 1970.

There was deposition testimony from a Mr. Carl

Schaeffer that at or just before the bankruptcy a senior

officer of Respondent NEMNB had stated that the

bank had committed to make an additional $50,000 loan

to Mama Tino’s and then decided to renege on that

additional loan. Mr. Schaeffer was an attorney for a

third party bank which had dealings with Mama Tino’s.

He had been personally involved in the negotiations to

try and save the company prior to the bankruptcy. (R.

670-671).

Mr. Schaeffer's deposition testimony was proferred

into evidence by the Petitioners. It was excluded by

the trial court on the basis that Mr. Schaeffer could not

personally testify that Respondent NEMNB’s offer of

an additional loan had been made at or before the date

of the execution of the guarantees. (A. 19; T. 55).

Respondent NEMNB was represented by attorney,

J. J. Simons, in the bankruptcy proceeding. Attorney

Simons and Respondent Rosenfield had a conversation

which was extremely relevant to this case; however,

they disagree as to what was said. Respondent Rosenfield

testified that Mr. Simons, the attorney for Respondent

NEMNB, told him that NEMNB would not enforce the

guarantees of Petitioners. (T. 122-123). Mr. Simons testified

that he had said that he, Mr. Simons, would not proceed

against the Rosenfields on their guarantees but “believe[sf’

he told Petitioner Rosenfield that Respondent NEMNB

was going to sue. (T. 178).

Thereafter, Respondent NEMNB waited over four

years to file the present action. The expiration of this

period allowed the claims Petitioners had against

Respondent to expire based on the running of the

relevant statute of limitations.

JUDICIAL CONDUCT DURING

AND BEFORE TRIAL

During the course of the pre-trial conference, held

just before the trial, the trial judge stated “Probably

we shouldn't have the jury that sat on the last case.” (T.

47). That jury, which was still part of the venire panel

at the time of this trial, had just rendered a defendant's

verdict in a guarantee case strikingly similar to the

present case.

Throughout the pre-trial conference the judge

indicated his readiness to direct a verdict or grant

summary judgment in favor of the Respondent (T. 43,

44, 45) but refrained from doing so because of his lack

of faith in the court of appeals (T. 68).

At the trial itself the judge openly stated that he

thought Petitioner Rosenfield, who he pointed out was

a lawyer, was lying’ (‘. 116, 124, 182). At one point at

the close of Petitioner Rosenfield’s direct testimony

the judge stated he was going to direct a verdict because

Petitioners were bringing in “extraneous information”

and Petitioner Rosenfield was “volunteering information”

(T. 127). Counsel for Respondent, in whose favor such a

directed verdict would have run, had to beg the judge

not to do so pointing out it would constitute reversible

error. (T. 127-128)

Following this a truly remarkable exchange occurred

in which the judge candidly admitted he had been

*The district court stated: “I don’t believe a word this witness

is testifying to” and “I think he has been lying from the minute he

got on the stand.” (T. 132)

trying to protect the Respondent NEMNB. It was as

follows:

Mr. Cohn (Respondent NEMNB’s counsel): I'm

not sure it is so obvious to the jury, Your

Honor. If I recall, none of them ever had any

dealings with banks.

The Court: I am going to let you go ahead. J

have been trying to protect you, Mr. Cohn.

But you go ahead. (Emphasis added) (T. 306).

At the close of the testimony the judge directed a

verdict in favor of Respondent stating that he, rather

than the jury, had determined the credibility of the

witnesses and which witnesses were to be believed. (T.

316).

During the course of the trial Petitioners moved

the trial judge to recuse himself when it became apparent

that he had abandoned any pretense of impartiality in

the conduct of the trial. The judge denied that motion.

(T. 171).

*The district court's exact quote is:

Ordinarily it is up to the jury to make a determination of

credibility of witnesses. / make that determination myself.

(T. 316)

(Emphasis added).

REASONS WHY THE WRIT

SHOULD BE GRANTED

The Constitution of the United States and its statutes

guarantee an individual the right to a fair and impartial

trial. Additionally, the individual is guaranteed the

right of appeal to the court of appeals. 29 U.S.C. §1291.

This right necessarily requires that the court of appeals

rule on all issues that are dispositive of the merits of

the controversy if properly raised on appeal.

In the present case both of these rights were

denied Petitioners. The trial judge’s conduct clearly

demonstrated his bias against Petitioners and towards

Respondent NEMNB. It would appear from the record

that this bias caused the trial judge to exclude relevant

testimony in the form of Mr. Schaeffer's deposition

which had it been admitted, would have given rise to a

jury issue. Additionally this bias would appear to have

caused the trial judge’s determination of the credibility

of the witnesses, especially as between Respondent's

lawyer Mr. Simon and Petitioner Rosenfield relative to

whether or not Respondent had agreed and promised

to not pursue the guarantees. This was clearly a very

material issue which should have gone to the jury.

Had the trial judge not acted in a biased manner

he would have admitted evidence whose admittance is

required by law and not ruled on the credibility of

witnesses all of which would have created jury issues

which in turn would have prevented a directed verdict

in favor of Respondent.

The court of appeals’ opinion expressly approves

the trial judge’s flagrant bias against Rosenfield. (A.

23) Further, contrary to the very law cited in the opinion

the appellate court also makes prohibited credibility

choices. (A. 18)

Further, the Petitioners were entitled as a matter

of right under the Constitution of the United States,

its statutes and the case law to have their appeal heard

and ruled on as to the trial court’s grant of summary

judgment in favor of Respondent based on the expiration

of the statute of limitations relative to Petitioners’

Counterclaim. The court of appeals’ failure to rule on

this issue constituted a denial of this right. (Petitioners

respectfully believe this issue to be one of first impression

for this Court.)

I.

PETITIONERS WERE DENIED ACCESS TO

THE COURTS AND THUS DUE PROCESS

OF LAW UNDER THE FIFTH AMENDMENT

AS A RESULT OF THE COURT OF APPEALS

FAILURE AND REFUSAL TO RULE ON

AN ISSUE PROPERLY RAISED AND

BRIEFED ON APPEAL.

The trial court below, ruling that Petitioners’

counterclaim, which sounded in fraud, was barred by

the applicable statute of limitations, granted a summary

judgment in favor of Respondent NEMNB as to that

counterclaim (A. 28-29). That summary judgment order

did not dispose of all the claims between all the parties

and thus was not appealable at the time it was entered.

Fed.R.Civ.P. 54(b); Adams General Contractors, Inc. v.

Department of Housing and Urban Development, 501

F.2d 176 (5th Cir. 1974).

10

The summary judgment became appealable at the

close of the case below when the trial court entered its

order of directed verdict as to all remaining issues

between the parties. Fed.R.Civ.P. 54(b).

The granting of that summary judgment was duly

raised on appeal and briefed as an issue on appeal by

Appellants Rosenfield before the court of appeals below

(A. 30). The Respondent NEMNB in turn replied to the

summary judgment issue and addressed it in its brief

(A. 24). This issue was thereafter orally argued before

the court of appeals.

Following all of this the court of appeals in its

decision held that:

The Rosenfields also counterclaimed, seeking

damages from the bank for refusing to lend

Mama Tino an additional $50,000 for working

capital. This counterclaim was dismissed prior

to trial on statute of limitations grounds and

is not involved in this appeal.

(Emphasis added). (A. 13).

The error of the foregoing and the court's failure

to rule on the issue was pointed out to the court of

appeals in Petitioners/Appellants’ petition for panel

rehearing (A. 38). That petition was denied by the

court of appeals without opinion or any other ruling as

to the summary judgment issue on August 30, 1982 (A.

43).

Petitioners believe that this case presents an issue

of first impression for this Court. After diligent research

11

Petitioners have been unable to find any case in which

this Court has ruled on the propriety of a court of

appeals failing or refusing to rule either directly or

indirectly on an issue properly raised on appeal.

The Fifth Amendment to the United States

Constitution guarantees due process of law. Pursuant

to that amendment and Article III of the Constitution

of the United States Congress created the various

courts of appeal and made them the only court in which

there was an appeal by right from the final decisions of

the district courts. 28 U.S.C. §1291.

Therefore, the court of appeals below was the only

court to which the Petitioners had the right to appeal

the district court’s dismissal of their counterclaim by

means of summary judgment. It is implicit from the

right of appeal that the court of appeals has a absolute

duty to rule on all issues properly raised on appeal.

The case law tends to imply such a duty on the

part of the courts of appeal but does not expressly so

state in relations to civil cases. For example the United

States Fifth Circuit Court of Appeals has stated that:

{Olur function is, of course, to assay the asserted

errors of the judge ...

Molnar v. Gulfcoast Transit Co., 371 F.2d 639 (5th Cir.

1967). See also, United States v. State of Florida, 482

F.2d 205 (5th Cir. 1973); Empire Life Ins. Co. v. Valdak

Corp., 468 F.2d 330 (5th Cir. 1972).

In a criminal setting the issue has been somewhat

more directly addressed by the Ninth Circuit which

12

stated that a criminal appeal imposes upon the appellate

court the duty of determining the questions which are

raised on appeal. Leahy v. United States, 272 F.2d 487

fon Cir.) cert. dismissed 81 S.Ct. 465, 364 U.S. 945

1961).

None of these decisions, nor any other case which

Petitioners have been able to find after diligent research,

rule directly on the issue of an appellate court’s having

failed or refused to rule on an issue properly raised on

appeal.

The court of appeals’ failure below to rule on an

issue which was clearly and properly presented before

it denied Petitioners access to the courts of appeal as

provided for under 28 U.S.C. §1291 and thus constituted

a denial of due process of law as guaranteed under

Amendment Five to the Constitution of the United

States.

This denial should be addressed by this Court

since it raises issues which are far wider than this case

alone such as an appeals court’s ability to “duck” difficult

or unpopular issues by simply not ruling on them. In

the present case the court of appeals, either by mistake

or intent, “ducked” the issue by stating in its opinion

that “This counterclaim ... is not involved in this

appeal.” (A. 13). This Court cannot allow such a denial

of justice to go uncorrected.

13

il.

PETITIONERS’ COUNTERCLAIM WAS NOT

BARRED BY THIS APPLICABLE STATUTE

OF LIMITATIONS IN THAT IT AROSE OUT

OF THE SAME FACT SITUATION AS

RESPONDENT'S CLAIMS.

Petitioners’ based their counterclaim on an

agreement by Respondent NEMNB to provide an

additional $50,000 in funding to Petitioners’ company,

Mama Tino Inc., in return for Petitioners’ guarantees

of the company’s obligations to the Respondent bank.

Petitioners alleged in that Counterclaim that they were

fraudulently induced by Respondent NEMNB to give

their guarantees to the bank in that the bank had no

intention of going through with the additional funding

at the time it induced Petitioners to sign the guarantees

in return for the additional funding for the company.

Thus, the counterclaim arises out of the exact same

factual situation which formed the basis for Respondent's

NEMNB claims against Petitioners Rosenfield based on

the guarantees.

Respondent carefully waited over four years to

file its claims against Petitioners in the case below.

This was done after Petitioner Rosenfield testified he

was told by Respondent’s attorney, Mr. Simons, that

the Respondent would not bring suit on the guarantees

and that attorney admitted the occurrence of such a

conversation. The only difference in the two versions

of the story is that the attorney, Mr. Simons, testified

14

that he said he, Mr. Simons, would not bring suit rather

than his client the Respondent would not bring suit.‘

Thereafter, Respondent NEMNB carefully waited

over four years before bringing the present action.

During that four year period, and in reliance on the

representation that no suit would be brought by

Respondent, Petitioners allowed the applicable statute

of limitations governing claims of fraud to expire.

The old and extremely harsh common law rule was

generally that compulsory counterclaims ordinarily barred

by a statute of limitation were not revived by the filing

of a claim arising out of the same factual situation. For

the history and application of this rule see generally 53

C.J.S. Limitations of Actions §106 Set Off, Counterclaim

and Cross Demand.

The more modern rule which is being adopted

around the country is that such a counterclaim is not

barred. Rather the running of the statute is tolled by

the filing of the main claim. Hernas v. City of Hickory

Hills, 507 F.Supp. 103 (N.D. Ill. 1981); Chauffeurs, ete.

v. Jefferson Trucking Co., Inc., 473 F.Supp. 1255 (S.D.

Ind.) affirmed 628 F.2d 1023 (7th Cir.) cert. denied 101

S.Ct. 942 (1981); Nalley v. M'Clements, 295 F.Supp.

1357 (D. Del. 1969); Azada v. Carson, 252 F.Supp. 988

(D. Hawaii 1966); United States v. Southern California

Edison Co., 229 F.Supp. 268 (S.D. Cal. 1964); cf. Erie

Lackwanna R.R. Co. v. United States, 439 F.2d 194 (Ct.

Claims 1971).

‘This clearly raised an issue of credibility which should have

been resolved by the jury relative to Petitioners’ defenses of

estoppel and abandonment and their counterclaim.

15

Florida has joined in adopting the rule that

compulsory counterclaims are not barred by the applicable

statute of limitations but that rather such statute is

tolled by the filing of the main claim. Cherney u Moody,

413 So.2d 866 (1st Fla. DCA 1982). That case was certified

to the Florida Supreme Court.

In the present case the actions of Respondent and

its attorney in lulling Petitioners into inaction over a

period of in excess of four years while their claims ran

is particularly egregious. They demonstrate the exact

reason why the modern rule as set forth above should

be followed. To do otherwise would allow potential

plaintiffs to take unconscionable advantage of the passage

of time when they know that claims against them are

governed by statutes of limitation which are of a shorter

duration than those governing their own claims.

THE TRIAL COURT'S OPEN DISPLAY OF

BIAS AND PREJUDICE IN THE CONDUCT

OF THE TRIAL DENIED PETITIONERS’

DUE PROCESS OF LAW AS GUARANTEED

BY THE FIFTH AMEND AND REQUIRES

REVERSAL OF THE DIRECTED VERDICT

BELOW.

As outlined in the facts above the trial court

apparently harbored hostility toward Petitioner Rosenfield

because he was an attorney seeking to avoid the effects

of a guarantee which he had signed.

Prior to the start of trial the district court sought

to exclude jurors who had sat on a prior case from

16

hearing the present case. That prior jury had ruled in

favor of the defendants in another guarantee case and

the trial court was not about to let that happen again.

The trial court had clearly prejudged the case and was

prepared to direct a verdict before the close of the

evidence. The judge was dissuaded from doing so only

as a result of the pleading of Respondent's attorney at

trial who was clearly sfraid of reversible error.

Further, the trial judge admitted in open court

that he had taken it upon himself to judge the credibility

of the witnesses when such a determination was the

responsibility of the jury stating:

Ordinarily it is up to the jury to make a

determination of credibility of witnesses. J make

that determination myself.

(T.316) (emphasis added).

Finally, in what can only be considered as a truly

remarkable admission by a sitting district judge in the

middle of a jury trial the trial court stated to Respondent's

NEMNB trial counsel that:

I have been trying to protect you, Mr. Cohn.

(Emphasis added). (T. 306).

There can be no clearer statement of prejudice or

bias on the part of a trial court since it is clearly not

proper for the trial |» » to try and “protect” either

side. Rather he is re..4 ed to be neutral as between

the parties. Cross v. State of Georgia, 581 F.2d 102 (5th

Cir. 1978). A fair trial by an unbiased and nonpartisan

17

court is the essence of the adjudicatory process. Baker

v. Simmons Co., 342 F.2d 991 (5th Cir.) cert. denied 86

S.Ct. 49, 382 U.S. 820 (1965); National Labor Relations

Bd. v, Phelps, 136 F.2d 562 (5th Cir. 1943). In fact, even

the appearance of bias must be avoided. Commonwealth

Coatings Corp. vu Continental Casualty Co. of Puerto

Rico, 89 S.Ct. 337, 393 U.S. 145 (1969).

The appellate court’s approval of the conduct of

the trial court below in prejudging the case and then

acting on that prejudgment to control the admission of

evidence, to determine the credibility of witnesses and

to direct a verdict in favor of Respondent NEMNB

constituted a deprivation of Petitioners’ property without

due process of law in violation of the Fifth Amendment

of the United States Constitution. Rosenberg v. Baum,

153 F.2d 10 (10th Cir. 1946).

The court of appeals below ruled that there was

no legal prejudice to Petitioners because the district

court properly directed a verdict in favor of Respondent

NEMNB. This, however, ignores the factor of the district

court having controlled the flow of evidence into the

record by excluding pertinent deposition testimony

and improperly ruling on the credibility of the witnesses

as is more fully discussed below. Such actions were

clearly controlled by the court's apparent bias and

prejudice. Thus, they fatally taint the trial court's direction

of a verdict in favor of Respondent and must be reversed.

18

IV.

THE DISTRICT COURT AND COURT OF

APPEALS RULINGS THAT PETITIONER

ROSENFIELD’S TESTIMONY WAS NOT

BELIEVABLE BECAUSE IT WAS

SELFSERVING CONSTITUTED A DENIAL

OF DUE PROCESS OF THE LAW AS

GUARANTEED BY THE UNITED STATES

CONSTITUTION IN THAT THE SAME

STANDARDS WERE NOT APPLIED TO

RESPONDENT’S TESTIMONY WHICH WAS

EQUALLY SELFSERVING.

The district court justified its failure to give credit

to Petitioner Rosenfield’s testimony to the fact that it

was “selfserving” because he was trying to avoid the

effect of the guarantees. On the other hand, it

characterizes the testimony of Respondent’s employees

who procured the guarantees, who were seeking to

enforce them and who made the false representations

as being unimpeachable. That testimony was equally

as selfserving as Petitioners.

The court of appeals’ opinion adopts this line of

reasoning. On one hand the opinion rejects Rosenfield’s

“self-serving” statements and the testimony tending to

corroborate them while on the other accepts the bank

employees’ self-serving statements because they

“corroborated” each other. (A. 19-20)

This is especially true when corroborating testimony

was excluded. As discussed below, it was improper to

exclude Shaeffer’s corroborating deposition testimony

on the basis that the bank’s statement made to him in

19

May about a $50,000.00 loan to the corporation could

not possibly corroborate Rosenfield’s statement that a

commitment to fund the additional $50,000.00 in the

future had been made to him by the bank in February.

What is actually involved here is a question of

credibility which is solely within the province of the

jury to decide Glazer v. Glazer, 374 F.2d 390, 400 (5th

Cir.) cert. denied 389 U.S. 831, 88 S.Ct. 100 (1968). In

fact the district court admitted it was making credibility

decisions as between the witnesses (T. 316). Thus, in

the present case the district court clearly made improper

and prohibited decisions as to credibility.

The court of appeals seeks to justify such actions

by finding that Petitioner’s testimony was so self-serving

and unsupported that it was incredible. In a ping so the

court of appeals relies on United States v. Generes, 405

US. 93, 106, 92 S.Ct. 827, 834 (1972). However, the test

for such incredible testimony as set forth in United

States v. Generes requires that no jury could believe

the testimony.

Can it be said, as a matter of law, that no jury

could believe that, based on the testimony of this case,

when Petitioner's Rosenfield executed the guarantee

he believed that the bank had promised to lend his

company an additional $50,000.00 as needed?®

‘Certainly the district court felt there was some possibility of

the jury's believing Petitioners’ testimony since it refused to

allow the case to go the jury stating:

“Just exactly what I feared would happen has happened.

There has been no attempt to present the case on the

20

Equally important is the district court and the

court of appeals application of a double standard as to

what constitutes “selfserving” testimony as between

Petitioners and Respondent. If Petitioner Rosenfield’s

testimony is to be viewed as selfserving because he is

trying to avoid the effect of the guarantees then

Respondent's NEMNB testimony is equally “selfserving”

because they are trying to enforce those same guarantees.

What we have here is a classic case of witness credibility

which must be decided by the jury.

This application of a double standard constitutes a

denial of due process of law guaranteed by the Fifth

Amendment to the Constitution of the United States.

(Footnote 5 Continued)

facts. But there ias been attempts to throw sand in the

eyes of the jury from the very start of this case. I let a lot

of evidence in about surmise and all the prejudicial thing

that have come in.

(T. 312)

“I concluded fairly early in the trial, and certainly after I

heard all of the testimony, that if the jury had brought in

a verdict which supported Mr. Rosenfield, I could not, in

good conscience, permit that verdict to stand.”

(T. 316-317)

21

V.

THE DISTRICT COURT AS A RESULT OF

ITS BIAS IMPROPERLY EXCLUDED FROM

EVIDENCE DEPOSITION TESTIMONY OF

A MATERIAL WITNESS.

Part of Petitioners’ defense was that Respondent

had agreed to provide the company, Mama Tino Inc.,

with an additional $50,000 loan in return for the subject

guarantees. At trial Petitioners sought to introduce

the deposition testimony of Carl Schaeffer, an attorney

for a third party bank which had also lent money to the

company and which had been in negotiation with

Respondent relative to the company. Mr. Schaeffer

would have testified that a vice-president of the

Respondent had admitted in conversation, after the

date of the guarantees, that Respondent intended to

make such a $50,000 loan and later reneged on that

agreement. Such testimony was relevant to corroborate

the fact that a $50,000 loan was in fact an issue between

the parties. The exclusion by the district court was

upheld by the court of appeals because the subject

conversation occurred some three months after the

date of the guarantees. This ignores the fact that the

$50,000.00 was to be funded on an as needed basis in

the future after the guarantees were signed.

Rule 402 of the Federal Rules of Evidence provides

that all relevant evidence is generally admissible. Rule

401 of the Federal Rules of Evidence sets forth the

definition of relevant evidence:

“Relevant evidence” means evidence having

any tendency to make the existence of any

22

fact that is of consequence to the determination

of the action more or less probable than it

would be without the evidence. (Emphasis

added).

The trial judge excluded the deposition testimony

of Mr. Carl Schaeffer, an attorney for Butler’s Bank, on

the grounds that:

[There is nothing in the deposition that indicates

that this promise of $50,000 was made at or

prior to the time the guarantee was given (T.

55).

In excluding Mr. Schaeffer's testimony on this ground,

the district court and the court of appeals virtually

ignored the definition of relevant evidence as set forth

above.

Mr. Schaeffer would have testified that Mr. MacAlear,

one of the bank’s vice-presidents, stated to him that

the bank agreed to make $50,000 in working capital

available to the bankrupt corporation, Mama Tino, Inc.

(R. 670-671).

Under questioning Mr. Schaeffer testified as follows:

Q: So, you have, strictly from your own

memory as apart from a written record, a

recollection that Mr. MacAlear committed New

England Merchants National Bank to make an

unsecured loan unconditionally for $50,000 to

Mama Tino?

A: That is absolutely right. (R. 670-671).

23

This testimony directly and unequivocally supports

what the Defendants have been contending throughout

this litigation; to-wit that there was an agreement to

lend an additional $50,000 in return for the subject

guarantees.

Mr. Schaeffer would have further testified that

Mr. MacAlear told him that after the promise had been

made, the bank decided to renege on it (R. 664).

The fact that these conversations took place

subsequent to the execution of the guarantees is

immaterial in that they nevertheless has a tendency to

show that the $50,000 loan commitment was, in fact,

made. The issue of whether that commitment was made

at the time of the guarantees or later was a fact issue

for the jury to decide. Moreover, Mr. Schaeffer's testimony

would have directly conflicted with that of the bank’s

representatives who denied that the bank had ever

made such a commitment under any circumstances

thus raising the issue of the bank’s credibility which

the court of appeals found to be unimpeachable (T. 197).

Also Mr. Schaeffer’s testimony would have further

corroborated the fact that the $50,000 loan would have

helped to salvage Mama Tino’s situation.

In addition, the testimony of Mr. Schaeffer was

from a witness who was not only impartial, but might

well have been expected to be adverse to the Defendants.

Mr. Schaeffer represented Butler’s Bank, a major creditor

of Mama Tino and an institution which had lost substantial

sums of money as a result of the Mama Tino bankruptcy.

He certainly had no reason, therefore, to be favorably

disposed toward the Defendants. Clearly, Mr. Schaeffer

24

would have been perhaps the only truly disinterested

witness in the trial. His testimony lent considerable

credence and support to that of Rosenfield while, at

the same time, reflected adversely on the believability

and credibility of the bank’s officer.

In excluding the testimony of Mr. Schaeffer the

court ruled, in effect, that such testimony had no tendency

to make the existence of any fact more or less probable

than it would be without such testimony. For the reasons

discussed herein, the exclusion of this testimony was

clear error.

VI.

THE DISTRICT COURT'S DIRECTION OF A

VERDICT IN FAVOR OF RESPONDENT WAS

FATALLY TAINTED BY ITS APPARENT

BIAS, ITS IMPROPER DETERMINATION

OF WITNESS CREDIBILITY AND ITS

IMPROPER EXCLUSION OF EVIDENCE.

As is more fully discussed above the district court

improperly made determinations of witness credibility,

and excluded relevant testimony. Such determinations

were or are arguably the result of the district court's

apparent bias and prejudice against Petitioner Rosenfield

also discussed above.

Even without reference to why it was done had

those credibility choices not been made by district

court and/or the evidence in question not been excluded

the direction of a verdict in favor of Respondent would

have been improper. Therefore, the decision below must

be reversed.

25

CONCLUSION

This is a case of first impression as to the court of

appeal’s failure or refusal to rule on an issue properly

raised on appeal. It should be made clear to all the

courts that they have a Constitutional and statutory

duty to rule on all issues properly raised before them.

The failure to do so constitutes a denial of access to the

courts in violation of the due process of law requirements

of the Fifth Amendment to the Constitution of the

United States.

Further, the district court’s obvious bias and

prejudice below which resulted in improper exclusion

of evidence, improper determination of credibility of

witnesses and the direction of a verdict also constitute

a denial of due process of the law guaranteed by the

Fifth Amendment to the Constitution of the United

States.

For these reasons certiorari should be granted.

Respectfully submitted,

FLOYD PEARSON STEWART

RICHMAN GREER

& WEIL, P.A.

One Biscayne Tower

Twenty-Fifth Floor

Miami, Florida 33131-1868

Phone: (305) 377-0241

Df

By: Zs

ALAN G. GREER

BERTHA CLAIRE LEE