Jarrett v. Kassel

972 F.2d 1415, 1992 U.S. App. LEXIS 17649, 1992 WL 182806
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 4, 1992
DocketNos. 91-5766, 91-5787
StatusPublished
Cited by37 cases

This text of 972 F.2d 1415 (Jarrett v. Kassel) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jarrett v. Kassel, 972 F.2d 1415, 1992 U.S. App. LEXIS 17649, 1992 WL 182806 (6th Cir. 1992).

Opinion

RYAN, Circuit Judge.

Plaintiffs, Dr. Charles L. Jarrett, Jr. and Edward Austin, et al., appeal the district court’s grant of summary judgment for the defendant, Robert L. Kassel, on their claims that Kassel conspired with others to sell contracts to the plaintiffs for future delivery of coal, in violation of the Commodity Exchange Act, 7 U.S.C. §§ 6, 6a, 6b(A), 6b(C), 6h(1), and 6o(1) (1976), and conspired to defraud them in violation of Tennessee common law. Plaintiffs also appeal two interlocutory orders of the district court. In addition, defendant Kassel cross-appeals two interlocutory orders that were adverse to him.

The plaintiffs raise the following issues on appeal: 1) whether the district court erred in granting summary judgment to Kassel on the ground that the plaintiffs’ claims were barred by the appropriate statute of limitations; 2) whether the district court abused its discretion in denying plaintiffs’ motion for partial summary judgment on the issue of liability; and 3) whether the district court erred in denying the plaintiffs’ motion for an alternative deposition procedure.

Kassel raises two issues on his cross-appeal: 1) whether the district court erred in denying his request that the court disqualify the plaintiffs’ attorney, Erich Merrill, due to Merrill’s dual status as attorney and witness; and 2) whether the district court erred in finding that Kassel was collaterally estopped from relitigating certain issues decided in prior litigation.

We conclude that the district court erred in granting summary judgment to Kassel on the ground that plaintiffs’ claims were barred by the statute of limitations and therefore we shall reverse and remand the case for further proceedings. Moreover, because we reverse the final order from which this appeal was taken, there is no longer a final order to support our review of the interlocutory orders of the district court. See Milan Express Co. v. Western Surety Co., 886 F.2d 783, 785 n. 1 (6th Cir.1989). We therefore decline to address the remaining issues raised by the parties on appeal.

I.

The plaintiffs in this action are former customers of an organization known as the National Coal Exchange (“NCE”). From April 1980 until December 1981, plaintiffs purchased contracts for future delivery of coal from NCE. Plaintiffs allege that the owners and employees of NCE secured these sales by making various misrepresentations and without having a viable means of acquiring the coal to fulfill the contracts. In 1983, counsel for the plaintiffs, Erich Merrill, initiated the suit now before this court on appeal to recover the plaintiffs’ losses on these contracts. This was not the first suit regarding the sale of these contracts, however, and to understand the procedural context of the case before this court, it is necessary to understand the history of the case that preceded it.

In 1981, the Commodity Futures Trading Commission brought a suit against NCE, its associated companies, and their officers (“CFTC litigation”), alleging multiple violations of the Commodity Exchange Act (“CEA”). Commodity Futures Trading Commission v. National Coal Exchange, Inc., et al., No. 81-2250 (W.D.Tenn. Apr. 2, [1418]*14181982). The federal district court found that NCE had indeed violated the CEA in selling coal contracts to the plaintiffs. Id., slip op. at 22. Robert Kassel, the defendant in this appeal, was not a defendant in the CFTC litigation. In fact, he acted as NCE’s counsel both before and during that litigation.

The court in the CFTC litigation appointed Erich Merrill as receiver for NCE and the other companies involved in the scheme. Merrill sent notice of his appointment to about 900 customers of NCE and requested that they fill out a form providing the details of their purchases of coal contracts from NCE. The notice also stated: “The Receiver is not able to furnish you with any legal advicé. If you have any questions, you should consult with legal or tax counsel of your choice.” Approximately 500 customers completed and returned the forms.

As receiver, Merrill acquired the assets of the companies for liquidation and distribution to the defrauded customers but failed to collect sufficient funds for that purpose. Consequently, he sought and obtained permission from the court in the CFTC litigation to file the lawsuit now before this court on appeal on behalf of NCE’s customers against the officers of NCE and the Tennessee River Coal Company, one of the other companies involved in the scheme. Merrill and two of the defrauded customers, plaintiffs Jarrett and Austin, filed this suit in November 1983. Jarrett and Austin sued individually and on behalf of all purchasers of futures contracts from NCE, while Merrill sued as receiver for NCE and sought to act as a class representative. Merrill also acted as attorney for Jarrett and Austin.

They alleged that the officers of NCE and the Tennessee River Coal Company conspired to sell contracts for future delivery of coal in violation of the Commodity Exchange Act, 7 U.S.C. §§ 6, 6a, 6b(A), 6b(C), 6h(l), and 6o(l) (1976), and conspired to defraud their customers in violation of Tennessee common law. They further claimed that Merrill, as the receiver of NCE, was entitled to be indemnified against the liability imposed on NCE as a result of the officers’ wrongful conduct.

Significantly, the original complaint did not name Kassel as a defendant. Plaintiffs moved to add him as an additional defendant on May 23, 1985, and he was joined as a defendant on July 5, 1985. The other defendants have settled; Kassel is the only one that remains.

Merrill, Jarrett, ,and Austin originally brought this action on behalf of all the customers of NCE, but they did not move for class certification until October 23, 1984. Although a hearing was set for this motion, it was continued. In the meantime, various defendants began to settle with the plaintiffs, and Kassel moved for summary judgment on the grounds that the fraud actions against him were barred by the statute of limitations and that Merrill had failed to state a claim upon which relief could be granted with respect to the indemnification action.

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Bluebook (online)
972 F.2d 1415, 1992 U.S. App. LEXIS 17649, 1992 WL 182806, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jarrett-v-kassel-ca6-1992.