California Concrete Pipe Co. v. American Pipe & Construction Co.

288 F. Supp. 823, 1968 U.S. Dist. LEXIS 12201, 1968 Trade Cas. (CCH) 72,554
CourtDistrict Court, C.D. California
DecidedJuly 31, 1968
DocketCiv. No. 65-674-MP
StatusPublished
Cited by5 cases

This text of 288 F. Supp. 823 (California Concrete Pipe Co. v. American Pipe & Construction Co.) is published on Counsel Stack Legal Research, covering District Court, C.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Concrete Pipe Co. v. American Pipe & Construction Co., 288 F. Supp. 823, 1968 U.S. Dist. LEXIS 12201, 1968 Trade Cas. (CCH) 72,554 (C.D. Cal. 1968).

Opinion

DECISION ON DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT

PENCE, District Judge.

Plaintiff California Concrete Pipe Co. (CCP) has sued under Section 4 of the Clayton Act (Title 15 U.S.C. § 15) for treble the damage allegedly suffered as a result of defendants’ violations of the antitrust laws.

Between October 1962 and December 31, 1963, plaintiff was in the business of manufacturing and selling concrete conduit pipe at its plant in the City of Industry, California. On December 31, 1963 plaintiff severally sold virtually all of its manufacturing equipment to defendants herein. The sales transactions were jointly conducted pursuant to an escrow agreement administered by the Bank of America. In the course of closing American Pipe & Construction Company’s (American) escrow, [824]*824plaintiff’s agent Kearns, on behalf of CCP, signed a general release in favor of American.1

The complaint herein was filed on May 3, 1965. ' On July 15, 1965 defendants filed motions to dismiss pursuant to Rule 12(b) (6), F.R.Civ.P., for failure to state a claim on which relief could be granted. Defendant American asserted immunization from the action as a named beneficiary of the release. Defendants Martin-Marietta Corporation, United Concrete Pipe Corporation, and American Vitrified Products Co. maintained that under the applicable law a general release executed in favor of one tort-feasor frees unreleased joint tortfeasors from liability. Plaintiff opposed defendants’ motions, contending the release was either void in law or voidable in equity, or, at any rate, was ineffective as applied to the unnamed joint tort-feasors.

Since defendants’ motions considered matters ouside the pleadings they were treated as motions for summary judgment under Rule 56, F.R.Civ.P. These motions were denied on October 17, 1966, the court finding “significant and material questions of fact as to the validity of the alleged release”, but then, sm sponte, severed all issues involving the release from the case in chief pursuant to Rule 42(b), F.R.Civ.P., and ordered that (1) the voidability of the release be tried separately before the bench under its equity jurisdiction, and (2) written briefs be submitted stating the parties’ positions on whether (A) the release was applicable to the unnamed joint tort-feasors under Twentieth Century-Fox F. Corp. v. Winchester Drive-In Th., 351 F.2d 925 (9 Cir. 1965), cert. denied 382 U.S. 1011, 86 S.Ct. 620, 15 L.Ed.2d 526 (1966),2 or (B) the validity of the release must be submitted to a jury under Radio Corp. of America v. Raytheon Mfg. Co., 296 U.S. 459, 56 S.Ct. 297, 80 L.Ed. 327 (1935).

A bench trial was conducted on March 1-3, 1967, at the conclusion of which this court held that the release was not voidable in equity.3 Subsequently, on November 8, 1967, plaintiff voluntarily dismissed its claim against American, notwithstanding that the court had not yet ruled on plaintiff’s argument that the release could be found void at law. Accordingly, the only questions now remaining relate to the effect of the release on CCP’s claims against the remaining joint tort-feasors not specifically named as beneficiaries therein.

A. Applicability of release to unnamed joint tort-feasors under Twentieth Century-Fox F. Corp. v. Winchester Drive-In Th., 351 F.2d 925 (9 Cir. 1965), cert. denied 382 U.S. 1011, 86 S.Ct. 620 (1966).

In Winchester the Ninth Circuit squarely held that under the applicable federal law, in the absence of an express reservation, a general release of one joint tort-feasor releases all joint tortfeasors from liability for the tortious act. Plaintiff contends that significant factual distinctions between this action and Winchester preclude applicátion of the Winchester rule in the instant context. It specifically maintains that the following factors permit it to escape the .impact of Winchester: (a) the Winchester release was given at a time when the plaintiff had an antitrust claim pending; (b) the Winchester release was part of the settlement of the antitrust claim, and was supported by independent economic consideration; and

[825]*825(c) the Winchester plaintiff was represented by experienced antitrust counsel. Plaintiff argues that these factors are not present here, and, relying on the language in Winchester that the releasor could have reserved its rights against joint tort-feasors, but, “with the advice of antitrust counsel, failed to do so”,4 therefore contends that the appellate “court never intended its rule to apply to releases executed outside the perimeter of settling an existing antitrust claim.” 5

This court does not find any such limitation in the Winchester rule. In determining the existing federal law governing the effect of a general release involved in an antitrust case, the appellate court did not seize upon any limited “antitrust rule.” Instead, it • turned to the Restatement of Torts, section 885(1) — a rule applying to all joint tort-feasor release problems. In supporting its selection of the applicable rule of law, the court cited Dura Electric Lamp Co. v. Westinghouse Electric Corp., 249 F.2d -5 (8 Cir. 1957) as being nearly on all fours with the Winchester problem, and then continued:

“Numerous other trial courts have reinforced the proposition that the present Restatement position is an accurate expression of the current status of the law of general releases.” (Citing cases.)

The court continued:

“The * * * rule does not prevent an injured party from reserving rights against one or more joint tortfeasors while releasing others. It merely requires that he announce his intent, and express' that reservation in the release agreement. Such a rule has the substantial advantages of eliminating disputes as to the intended scope of the release. It discourages chicanery in the negotiation of the release. We find it difficult to believe that the incorporation m a release of a clear statement of its scope and intent will place too heavy a burden on counsel charged with the responsibility of drafting the instrument.
******
“We hold * * * that appellees could have reserved rights against other joint tort-feasors, * * * but * * * with the advice of antitrust counsel, failed to do so. * * * We can conclude that this was not happenstance. In the absence of such an express reservation, all joint tortfeasors are released of liability * * * >> 6

The release here at issue is clearly and unequivocally an all-inclusive general release. There is no indication in the language of the release of any intent to exclude certain joint tort-feasors. “In the absence of such * * * reservation, all joint tort-feasors are released. * * *»

Even if the thrust of the Winchester case were intended by the appellate court to be narrowly limited to the antitrust situation postulated by plaintiff, the facts in the instant case would, as this court sees it, bring the questioned release within even those narrow confines. In its “Decision On Validity Of Release”,7

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Bluebook (online)
288 F. Supp. 823, 1968 U.S. Dist. LEXIS 12201, 1968 Trade Cas. (CCH) 72,554, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-concrete-pipe-co-v-american-pipe-construction-co-cacd-1968.