Opposition Brief — South Ranch Oil Co. v. Seismic International Research Corp.

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x=» Supreme Court, U.S.

C) ' EILLED

JAN 14 96T

JOSEPH F. SPANIOL, JR.

No. 86-973

In The

Supreme Court of the United States

October Term, 1986

ry.

SOUTH RANCH OIL COMPANY, INC.,

Petitioner,

Vs.

SEISMIC INTERNATIONAL RESEARCH CORP.,

Respondent.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Tenth Circuit

*..

RESPONDENT’S BRIEF IN OPPOSITION

Ricuarp J. SPooNER

CuHarues N. Berry, Jr.

1401 Classen Drive

Oklahoma City, OK 73106

(405) 232-8551

C. Netson Berry, III

1700 Peoples National Bank Bldg.

1415 Fifth Avenue

Seattle, WA 98171

(206) 622-1828

Attorneys for Respondent

January, 1987

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

or call collect (402) 342-2831

RESTATEMENT OF QUESTION

Did the Court of Appeals make a fundamental legal or

factual error when it upheld the trial court’s refusal to

instruct on South Ranch’s claim that Seismic had induced

South Ranch’s employee to breach his fiduciary duty to

South Ranch? South Ranch made no claim that the trial

Court had abused its discretion in denying this instruction

when it was filed untimely. South Ranch did not claim

that the trial Court had misapplied Local Rule 14 in deny-

ing South Ranch’s motion to add this tort claim instruc-

tion that Seismic induced South Ranch’s employee to

breach his fiduciary duty to South Ranch. South Ranch

failed to submit a timely instruction and its motion to add

this tort claim instruction was denied because of South

Ranch’s failure to adhere to Local Rule 14.

TABLE OF CONTENTS

RESTATEMENT OF QUESTION 0

TABLE OF AUTHORITIES ili

STATEMENT OFF Feil Ca cen 1

WRIT SHOULD NOT BE GRANTED 3

I. Circuit Court Properly Found That No

Timely Instruction was Submitted by

SROC on Its Claim for Tortious In-

terference With a Fiduciary Relation-

ship ... aie 3

Il. SROC’s Complaint Does Not Justify

This Court’s Exercise of Its Supervi-

SOTY POWEEE . ..ncccccsciinctemlaa es 4

DISCUSSION once 8

Ill. Vhe Court Should Exercise Its Judicial

Discretion and Demy Certara ecccccccccccccesscereee 8

CONCLUSION ......... Ea 9

TABLE OF AUTHORITIES

Rule 14, United States District Court for the West-

ern District of Oklahoma

CASES: Page

Chase Manhattan Bank v. South Acres Develop-

ment Co., 434 U.S. 236 (1978) 7

. Hanna v. Plumer, 380 U.S. 518 (1964) cece i)

McNabb v. United States, 318 U.S. 332 (1943) 0. 5

New York City Transit Authority v. Beazer,

440 U.S. 568 (1979) 6

Oregon v. Mathiason, 429 U.S. 492 (1977) 6

Smith v. Tllemois, 469 U.S. 91 (1985) nanan eccesecsescseeceeeneee 7

Thermtron Products, Inc. v. Hermansdorfer, 423

_ RRS eee nes i)

United States v. Woodward, 469 U.S. 105 (1985) 7

OTHER SOURCES:

Moore’s Federal Practice, Second Edition, Volume

ics chtscicipclionlincinos 4

Restatement of Agency § 312 occ 1

Rule 17, Supreme Court of the United States .............. 4,6,7,8

2,8

eta

STATEMENT OF THE CASE

Respondent, Seismic Internaticnal Research Corp.,

(hereinafter referred to as SI) sued the petitioner, South

Ranch Oil Company, Inc., (hereinafter referred to as

SROC) for SROC’s failure to pay for certain seismologi-

cal services rendered by SI in connection with oil and gas

exploration. SROC counterclaimed for nonperformance.

In an amended counterclaim, SROC alleged that SI had

made an undisclosed payment to Norman Stafford, SROC’s

employee, by paying him a $28,000.00 sales commission.

Norman Stafford was one of SROC’s employees that was

responsible for monitoring the performance of SI’s work

and approving payment to SI. SROC claimed that there

was a joint venture between SROC and SI and/or Brasel

(the president of SI) which created a fiduciary relation-

ship between them which was breached by SI and/or

Brasel.

At trial, SROC was able to argue that SI had

breached its duty to deal in good faith by paying this sales

commission to Norman Stafford. The jury found in favor

of SI and against SROC on this claim.

In its Petition, SROC argues that ‘‘A jury question

was clearly presented on the counterclaim under Section

312 of the Restatement of Agency and the common law of

fiduciary duty.’’ Contrary to SROC’s contention, the trial

Court did not direct a verdict against SROC on this claim,

but rather found that the evidence presented at trial was

insufficient to submit this claim to the jury.

On appeal, the Tenth Circuit affirmed the refusal to

instruct on SROC’s counterclaim because SROC failed to

submit this tort claim instruction to the Court three (3)

days before trial, as required by the Order at Pretrial,

not because Local Rule 14 required the submission of these

instructions three (3) days prior to trial, as SROC would

have this Court believe. Rather, it was SROC’s belated mo-

tion to add the tort claim instructions that was denied

because of SROC’s failure to adhere to Local Rule 14.

In its Petition, SROC maintains that it filed its pro-

posed instructions on the inducing breach of fiduciary duty

claim on March 8, 1983, three (3) weeks before the be-

ginning of the trial on March 28. (See p. 6). However,

even a cursory review of those instructions which may be

found at Appendix D of SROC’s Petition shows that those

instructions pertain to an alleged breach of fiduciary

duties which purportedly arose because of an alleged

joint venture between SI and SROC, and to claims of

interference with business relations.

SROC did not submit an instruction based on SI’s

payment to Stafford ‘‘under Section 312 of the Restate-

ment of Agency and the common law of fiduciary duty’’

on its elaim that SI had induced Norman Stafford to

breach any fiduciary duty which he owed to SROC.!

Accordingly, the Court of Appeals properly ruled:

SROC strenuously argues that it presented sufficient

evidence for the court to instruct on its tort claim.

But it does not argue that the court misapplied Local

Rule 14 [denying SROC’s motion to add the tort

claim instructions] or abuse its discretion in denying

the instructions because they were filed late [in viola-

! Section 312 of the Restatement of Agency provides:

“A person who, without being privileged to do so, inten-

tionally causes . . . an agent to violate a duty to his principal

is subject to liability to the principal.”

tion of the Order at Pretrial]. Indeed, no mention of

Local Rule 14 was made in the briefs. Counsel’s

failure to focus en the reasons the trial court denied

the required instructions leaves us without a basis

for assigning error to the trial court’s decision. (mat-

ter in brackets ours)

WRIT SHOULD NOT BE GRANTED

I. Circuit Court Properly Found That No Timely In-

struction was Submitted by SROC on Its Claim

for Tortious Interference With a Fiduciary Re-

lationship.

Timely instructions were filed by SROC on March 8,

1983. Additional instructions, not supplemental instrue-

tions, were filed by SROC on March 28, 1983, the first day

of trial, and were properly refused by the trial Court as

untimely.

SROC had put forward a claim that there was a joint

venture agreement between SROC and SI with regard to

work done by SI in Wyoming. On the basis of this alleged

joint venture, SROC argued that SI had a fiduciary re-

lationship with SROC. The instructions that SROC has

attached to its brief (A-18 through A-21) were offered on

March 8, 1983. These instructions refer to a breach of the

alleged joint venture fiduciary duty and to tortious inter-

ference with business relations but not to inducing or-

man Stafford to breach his fiduciary relationship with

his employer — different claims requiring different in-

structions.

It is disingenuous, at this late date, for SROC to

state that these instructions, which were offered on its

claim of a violation of fiduciary relations in a joint ven-

ture, now apply to SROC’s claim that SI induced Norman

Stafford to breach his fiduciary duty to SROC.

II. SROC’s Complaint Does Not Justify This Court’s

Exercise of Its Supervisory Power.

The Court of Appeals properly denied SROC’s appeal

from the trial Court. SROC in its brief correctly states

that the issues in this case do not at first blush conjure up

the speetor of certiorari or seem worthy of this Court’s

attention. Supreme Court Rule 17 ‘‘Considerations Gov-

erning Review On Certiorari’’ sets forth the special and

important reasons and circumstances when the Supreme

Court will exercise its judicial discretion and grant cer-

tiorari.

SROC seeks to come under the provision in para-

graph l(a):

“When the Federal Court of Appeals *** has so far

departed from the accepted and usual course of judi-

cial proceedings, or so far sanctioned such a depar-

ture by a lower court, as to call for an exercise of

this Court’s power of supervision.”’

Discussion of the application of this particular rule

is found in Volume 13, Moore’s Federal Practice, Second

Edition, 817.27, ‘‘Departure from Usual Court of Judi-

cial Proceedings; Court’s Power of Supervision.’’ It is

there stated:

‘The Supreme Court stands at the apex of the federal

judicial systems. Besides its duty to decide cases

within its original and appellate jurisdiction, the Court

is vested with various supervisory tasks. It promul-

gates rules of practice and procedure for the lower

federal courts, and through the Judicial Conference

of the United States, monitors the operation of fed-

eral courts and makes recommendations for improve-

ment of these operations. Rule 17 recognizes an addi-

tional responsibility—to ensure that the courts of ap-

peals stay within the boundaries of ‘the accepted and

usual course of judicial proceedings.’ If a court of

appeals has strayed too far from this course, the Su-

preme Court may grant certiorari to correct the situa-

tion. And this is true whether the court of appeals

itself has over-stepped the boundaries of accepted

procedure, or has ‘sanctioned such a departure by a

lower court.’ *’

As examples of the application of this Rule, certain cases

were cited by Moore. For example, in Thermtron Prod-

ucts, Inc. v. Hermansdorfer, 423 U.S. 336 (1976), certiorari

was granted to review a removed case that the District

Court had remanded to the State Court. The District

Court’s sole ground for remand was that its over-burdened

docket would unjustly delay going to trial. The Supreme

Court granted certiorari. This is a clear case of a depar-

ture from the accepted and usual course of judicial pro-

ceedings.

In Hanna v. Plumer, 380 U.S. 518 (1964), the question

raised was whether service of process should be made in a

manner prescribed by Federal Rules of Civil Procedure

or by the state law of Massachusetts. The Supreme Court

granted certiorari because of the threat to the goal of uni-

formity of federal procedure posed by the decision below.

Again, a situation where the Supreme Court is interested

in uniformity of procedure throughout the judicial system

and it granted certiorari.

In McNabb v. United States, 318 U.S. 332 (1943), the

question was presented of admissibility against persons of

a crime of statements obtained by secret interrogation.

The Supreme Court granted certiorari and stated at 341:

‘‘The principles governing the admissibility of evi-

dence in federal criminal trials have not been re-

stricted, therefore, to those derived solely from the

Constitution. In the exercise of its supervisory author-

ity over the administration of criminal justice in the

federal courts (cases cited) this Court has, from the

very beginning of its history, formulated rules of evi-

dence to be applied in federal criminal prosecutions.’’

Again, the Supreme Court granted certiorari in the exer-

cise of its power of supervision.

In New York City Transit Authority v. Beazer, 440

U.S. 568 (1979), the Supreme Court granted certiorari

because the trial court had decided a constitutional ques-

tion before considering whether statutory grounds might

be dispositive. This was a violation of regularly accepted

procedure.

All the eases cited by Moore pursuant to Rule 17.1.(a)

were concerned with such departures from regular pro-

cedure by a lower court as to call for an exercise of the

Supreme Court’s power of supervision.

The cases cited by SROC in its brief are not in point.

They do not deal with the exercise of the Supreme Court’s

power of supervision of departure by the lower courts

from accepted and usual courses of judicial procedure but

rather with the grounds set forth in Rule 17.1.(c¢).

In Oregon v. Mathiason, 429 U.S. 492 (1977), a police

officer had called a suspect to the police station, but had

not arrested him, and had obtained a confession from him

without first giving a Miranda warning. The lower court

held that the confession was inadmissible because obtained

in a coerciv2 environment. On certiorari, the lower court

was reversed on the ground that the man was not arrested,

that this was not a ‘‘custodial interrogation’’ and that

Miranda did not apply. In this case, certiorari was granted

under subparagraph (c) of Rule 17 and the Supreme Court

was not exercising its power of supervision.

In Chase Manhattan Bank v. South Acres Develop-

ment Co., 434 U.S. 236 (1978), the question presented was

whether Congress had authorized the United States Dis-

trict Court of Guam to exercise diversity jurisdiction. Cer-

tiorari was granted and the Supreme Court coustrued the

statute granting Guam jurisdiction of a District Court of

the United States. The Supreme Court found that it did

not encompass diversity jurisdiction. Again, decided un-

der subparagraph (c) of Rule 17, being an important ques-

tion of Federal law which should be settled by the Supreme

Court. Again, the case not in point.

In United States v. Woodward, 469 U.S. 105 (1985),

the question was whether a defendant, convicted of both

false statement and violation of currency reporting sta-

tutes, had been subjected to double jeopardy. The Su-

preme Court construed the two federal statutes and held

no double jeopardy involved. Again, decided under sub-

paragraph (c) of Rule 17 and not in point.

Smith v. Illinois, 469 U.S. 91 (1985), the question pre-

sented was whether an accused had properly requested

counsel in accordance with Miranda rule. The Supreme

Court held that the request of accused was not ambiguous

and that afiy information obtained after that request

could not be used against him. Again, the Supreme Court

was applying subparagraph (c) of Rule 17.

DISCUSSION

III. The Court Should Exercise Its Judicial Discre-

tion and Deny Certiorari.

SROC petitions this Court for the issuance of a Writ

of Certiorari on the ground that the Court of Appeals

made a fundamental legal or factual mistake. Yet, when

one gets past the rhetoric of the petitioner and looks at

the record, it is clear that the Tenth Circuit made no such

mistake.

It would have been proper for the Court of Appeals

to have affirmed the decision of the trial Court’s refusal

to instruct on SROC’s counterclaim that SI had induced

Stafford to breach his fiduciary obligations based on insuf-

ficiency of evidence. The Tenth Circuit was equally cor-

rect in affirming the trial Court on the ground that SROC

failed to file appropriate jury instructions on this counter-

claim in the time required by the Order on Pretrial and

that SROC’s motion to add the tort claim instructions on

the day the trial began was properly denied because of

SROC’s failure to adhere to Local Rule 14.

CONCLUSION

For each of the reasons stated herein, the Petition

for Writ of Certiorari should be denied.

January 12, 1987

Respectfully submitted,