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Bankers Trust Co. v. Publicker Industries Inc.


May 1, 1981.


Before Oakes and Meskill, Circuit Judges, and Sand, District Judge.*fn*

Author: Oakes

Appellant, Publicker Industries, Inc., seeks to overturn a judgment of the United States District Court for the Southern District of New York, Thomas P. Griesa, Judge, entered upon a jury verdict in a diversity case. The jury awarded appellee Bankers Trust Company approximately $430,000, the amount of an agreed upon finder's fee for Bankers Trust's participation in arranging the sale of Publicker's alcoholic beverage division principally the Inver House Scotch Whisky brand to Standard Brands, Inc. Ordinarily the issues raised here would not warrant discussion in a full length opinion. The points of law involved are well established and the facts, read in the light most favorable to Bankers Trust, as they must be after a jury verdict in its favor, clearly warrant recovery of the fee, which was earned after Bankers Trust had, in the words of Publicker's president (as testified to by the director of mergers and acquisitions at Bankers Trust), "done a wonderful job" and "performed (their) duty well." But we will discuss the issues raised because of Bankers Trust's application for double costs, damages for delay, and attorney's fees under 28 U.S.C. §§ 1912, 1927, and Federal Rule of Appellate Procedure 38.*fn1

Publicker's "Memorandum" on appeal makes seven arguments. Each will be briefly discussed in the order in which they are made.

1. Publicker first claims that the trial court erred as a matter of law in permitting Bankers Trust's principal witness, Mary Jo Zandy (whom the Publicker "Memorandum" refers to as "a junior employee," but who was in fact a vice president specializing in beverage and food industries acquisitions in Bankers Trust's mergers and acquisitions group), to use testimonial notes, specially prepared for trial and without a formal foundation. The simple answer to this claim, given by Judge Griesa in denying Publicker's motion for judgment notwithstanding the verdict or for a new trial, is that Zandy's "testimonial notes" were merely a chronology. They included little of the substance of her testimony, and the use of them was permitted after Zandy had indicated that they were prepared from records and correspondence "to enhance my memory since a lot of this happened two years ago," a use which was within the broad discretion of the trial court to allow. There is no required, ritualistic formula for finding exhaustion of memory. See Goings v. United States, 377 F.2d 753, 760-61 & n.11 (8th Cir. 1967); Thompson v. United States, 342 F.2d 137, 140 (5th Cir.), cert. denied, 381 U.S. 926, 85 S. Ct. 1560, 14 L. Ed. 2d 685 (1965); 3 J. Wigmore, Evidence § 765 (Chadbourn rev. 1970). See generally Fed.R.Evid. 612.

In making its argument, Publicker relies on NLRB v. Federal Dairy Co., 297 F.2d 487 (1st Cir. 1962), where the court was "shocked" that a witness had read from a prepared manuscript whose nature was misrepresented to the trial examiner, and counsel had then argued that a witness "has the absolute right to use anything to refresh his recollection." Id. at 488. The court in that case nevertheless granted enforcement of the NLRB order challenged, noting that "it is not of such stuff that appeals are made." Id. at 489. That court also stated the general rule that a witness' memory must be exhausted before his recollection may be refreshed by a document, but pointed out that the purpose of the rule is to avoid having testimony improperly suggested to the witness. Id. at 488-89 & n.3. There was no impermissible suggestiveness in the instant case. So far as appears the witness referred to the chronology only two or three times, and a comparison of the Zandy testimony with the chronology demonstrates clearly that she was not, as Publicker suggests, "reading from a script."

Publicker further argues for reversal on the basis that "the trial court made clear at the very beginning of Ms. Zandy's testimony that inquiry into the foundation for her use of the chronology of events would not be tolerated," making it futile to cross-examine her about it. But we find no such ruling, certainly not counsel's statement that "I would like to know if the witness can testify first without this or if she is using this document to refresh her recollection," and the court's response, "Let's not worry about that, please. Go ahead." Publicker's counsel was in no way prevented on cross-examination from delving into Zandy's memory or her need to use the chronology. Although at one point Publicker's counsel indicated that he wished to move for production of the records underlying the chronology, after the court stated that it wished the application to be made out of the presence of the jury since it was a "discovery request," the application was never made.

Publicker also rather weakly contends that its cross-examination of Zandy in respect to the chronology, as provided for in Federal Rule of Evidence 612,*fn2 was restricted, but fails to point out any such instances in which questions on relevant points were not allowed. Counsel for Publicker questioned Zandy both as to her sources for the document and as to facts noted in it. Publicker was permitted to inspect the chronology, but chose not to have it introduced into evidence for the jury to see.

The foregoing is the strongest of Publicker's seven arguments for reversal.

2. Publicker next contends that the trial court erred in dismissing its counterclaim for an alleged violation of its "right to publicity." This claim apparently was based on Bankers Trust's publication in the Wall Street Journal of an advertisement mentioning Bankers Trust's handling of the Publicker-Standard Brands deal as one of six mergers and acquisitions in which it had participated in August 1979. On the record below, when Publicker's counsel was asked to identify his theory of law on the counterclaim, he properly disclaimed reliance on section 51 of the New York Civil Rights Law, given its application only to living persons. But as his "best theory" he produced only one, inapposite case, Electrolux Corp. v. Val-Worth, Inc., 6 N.Y.2d 556, 161 N.E.2d 197, 190 N.Y.S.2d 977 (1959), an unfair competition-misrepresentation case which gave the district court nothing with which to work. While we would be justified in affirming the dismissal on this ground alone, we additionally fail to see that Publicker has stated any claim at common law or could establish any damages, since Bankers Trust, by truthfully naming Publicker as one of its clients, did not appropriate Publicker's name in a way that infringed any economic interest of Publicker.*fn3

3. Publicker argues that the trial court's charge respecting the credibility of the key witnesses was prejudicial error. It claims, by way of post-trial affidavits of its counsel, that Zandy was a nervous witness while Publicker's president, Robert Leventhal, was calm on the stand. In light of this, the standard charge bearing on credibility, as set forth in the margin,*fn4 is faulted in Publicker's "Memorandum" on appeal as one-sided. No challenge was made to this portion of the charge before the jury retired, however, so the objection was not preserved for appeal. Fed.R.Civ.P. 51.*fn5

Publicker also argues that the court's inquiries of Mr. Leventhal, while the latter was being examined by counsel for Bankers Trust, involved improper ridicule and embarrassment:

Q. Did anything happen in the month of April 1979 to make you more flexible about your price and your terms for the liquor business?

A. More flexible?

MR. WEISS: Objection. There was no foundation he was unflexible.

THE COURT: Overruled.

A. What do you mean by "flexible"?

THE COURT: I think you know what is meant by flexible. Do you not know the word?

THE WITNESS: I know the word. I don't know whether he means as to price or segmentation.

THE COURT: The witness doesn't understand the question. He doesn't know what flexible means.

THE WITNESS: I know what it means.

We think that Publicker's argument is lacking in merit, especially in light of Judge Griesa's subsequent comment that "I was a little too abrupt with Mr. Leventhal but I think the jury ought to disregard any comments of mine." This colloquy was certainly not on a par with the trial judge's comments on witness credibility which were condemned in Quercia v. United States, 289 U.S. 466, 53 S. Ct. 698, 77 L. Ed. 1321 (1933), and, as such, the incident here did not constitute prejudicial error. A federal trial judge need not simply be a tennis linesman, calling the ball either in or out. See also Herron v. Southern Pacific Co., 283 U.S. 91, 95, 51 S. Ct. 383, 384, 75 L. Ed. 857 (1931).

4. Publicker next argues that the court unduly restricted the testimony of its "principal witness," one Abraham Schecter, who, Publicker claims, had really brought Standard Brands and Publicker together. Schecter, as the last witness, was scheduled to arrive and to testify at four o'clock on a Thursday afternoon. When he did not arrive, the court, instead of treating the evidence as closed, put the case over until Friday morning, suggesting that counsel "cut" the evidence "to the bone" and have Schecter testify for no more than half an hour. Publicker's counsel said, "We intend to make it brief, your Honor." This is nothing more than routine trial handling, and is fully within the court's discretion to control the presentation of evidence. See United States ex rel. Nelson v. Follette, 430 F.2d 1055, 1059 (2d Cir. 1979), cert. denied, 401 U.S. 917, 91 S. Ct. 899, 27 L. Ed. 2d 818 (1971). Moreover, Schechter's testimony covered all points counsel wanted to make. The court did not cut the testimony short. No suggestion was made post-trial either to the district court or to us as to what Schechter might have testified to had he had more time. Indeed, there was no objection taken to any of the court's actions with reference to the witness Schechter, and counsel for Bankers Trust did not even find it necessary to cross-examine this witness. In short, Publicker's argument is at best shallow, at worst a sham.

5. Publicker claims that Bankers Trust's summation was improper in that the word "you" was used ten times in six sentences,*fn6 making a personal appeal to the jury. Publicker cites Klotz v. Sears, Roebuck & Co., 267 F.2d 53 (7th Cir.), cert. denied, 361 U.S. 877, 80 S. Ct. 141, 4 L. Ed. 2d 114 (1959), which involved a plaintiff's attorney asking the jurors to award the amount of money that they would want had they lost one of their eyes. Those statements were in effect pleas to the sympathy of the jury and, as such, were prejudicial. Id. at 54-55. The statements here, in contrast, were an appeal to the jurors' common sense and were perfectly proper. Nor, again, was objection made at trial.

6. Publicker claims that the district court's charge concerning Bankers Trust's contractual obligations under the finder's fee agreement was erroneous, because the court "charged the jury that it was not necessary for Bankers Trust to bring the parties together." The portion of the charge quoted in Publicker's brief and relied upon to make this argument is set out in the margin.*fn7 However, Publicker's quote is selective, omitting a key phrase within the section quoted as well as the two paragraphs preceding and the two paragraphs following that section.*fn8 When the charge is viewed in its proper context it is quite clear that it was correct under New York law on finder's fees. See Minichiello v. Royal Business Funds Corp., 18 N.Y.2d 521, 527, 223 N.E.2d 793, 796, 277 N.Y.S.2d 268, 272 (1966) ("It is possible for a finder to accomplish his service by making only two phone calls and, if the parties later conclude a deal, he is entitled to his commission."), cert. denied, 389 U.S. 820, 88 S. Ct. 41, 19 L. Ed. 2d 72 (1967).

7. Finally, Publicker argues on appeal that the jury's verdict was not supported by the evidence. This argument is stated in conclusory terms and is answered by the documentary evidence, the testimony of Zandy, that of Hunt Whitacre, director of corporate development for Standard Brands, who confirmed Zandy's testimony, and that of Richard Berman, director of mergers and acquisitions at Bankers Trust, who testified as to Leventhal's admissions. The lack of substance to Publicker's argument is emphasized by the statement in its "Memorandum" on appeal, "not only is the jury's verdict not supported by the evidence, it is against the weight of the evidence," coupled with the follow-up that "Ms. Zandy may have wanted the jury to believe that she was a maiden wronged, but no amount of sympathy for any witness can supply evidence that simply isn't there." This conclusory argument in a case involving two versions of the events (but a considerable amount of documentary evidence supporting Bankers Trust's assertions) is hardly aided by the derogation of the witness, Zandy, as in the irrelevant statement quoted above.

There is no doubt whatsoever that the judgment must be affirmed. In determining whether the appeal is frivolous, the only question of any substance in this case, we have gone over the seven arguments and found them, respectively: (1) directed against the trial judge's exercise of discretionary powers; (2) made with no relevant supporting law presented to the trial court or to us; (3) going to one colloquy between witness and judge that was invited by the witness' momentary evasiveness and, at worst, was cured; (4) going to the trial judge's power to run a case, here exercised favorably on behalf of appellant; (5) totally lacking in merit; (6) quoting a portion of the jury charge out of context and with a misleading elision; and (7) conclusory in nature and highly implausible. We believe that the appeal is frivolous, and that it was brought without the slightest chance of success, largely constituting an argument with the verdict of a jury which believed Bankers Trust's witnesses, supported as they were by documentary evidence, and disbelieved Publicker's.

We can only conclude that Publicker either was badly advised to appeal or was determined to delay the payment of the money owed under the judgment on the finder's fee contract to the last possible moment, in light of the differential between the legal rate of interest and the interest that may be earned at present rates in the money market or elsewhere. We wish we could call this sort of dilatory action to the attention of the Congress and the state legislatures, especially at a time of overcrowded court dockets. It is an imposition ultimately upon the American taxpayer that the low legal interest rates may encourage appeals solely for the purpose of delaying the payment of money judgments.

In this case, the appeal has been an imposition upon appellee Bankers Trust, an imposition that may be relieved by the assessment, pursuant to 28 U.S.C. §§ 1912, 1927, and Federal Rule of Appellate Procedure 38, of (1) double costs of the appeal and (2) damages in the sum of either $10,000 or the appellee's expenses (other than costs of the appeal) including its counsel fees, whichever sum is less. See Bank of Canton, Ltd. v. Republic National Bank of New York, 636 F.2d 30 (2d Cir. 1980) (per curiam); Acevedo v. INS, 538 F.2d 918 (2d Cir. 1976) (per curiam). The costs and damages are assessed against appellant Publicker and its counsel; they may decide as between themselves who should bear the ultimate responsibility. Any differences over damages or counsel fees may be resolved by the district court.

Judgment affirmed; cause remanded.

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