Payless v. Alberto
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Payless v. Alberto, (1st Cir. 1993).
Opinion
USCA1 Opinion
April 5, 1993
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-2149
PAYLESS WHOLESALE DISTRIBUTORS, INC., ET AL.,
Plaintiffs, Appellants,
v.
ALBERTO CULVER (P.R.) INC., ET AL.,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gilberto Gierbolini, U.S. District Judge]
___________________
____________________
Before
Stahl, Circuit Judge,
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Aldrich and Coffin, Senior Circuit Judges.
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Fernando L. Gallardo with whom Woods & Woods was on brief for
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appellants.
Victor E. Grimm with whom Michael J. Abernathy, Bell, Boyd &
________________ ______________________ _____________
Lloyd, Ana Matilde Nin, Ramon Coto-Ojeda and McConnell Valdes Kelley
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Sifre Griggs & Ruiz-Suria were on brief for appellees.
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April 5, 1993
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ALDRICH, Senior Circuit Judge. On July 17, 1990
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plaintiffs Payless Wholesale Distributors, Inc. (Payless);
L.A. Formulations, Inc. (LAF); and Leonel M. Lima (Lima)
filed a 110 page first amended complaint, containing twenty
causes of action against Alberto Culver (P.R.), Inc.; LSE
Sales Corp.; LSE Advertising Company; Alberto-Culver Company;
and Leonard S. Etten. Monetary damages were specified for
each cause, varying between $5 million and $150 million. Out
of abundance of caution, plaintiffs requested "any additional
relief that this Honorable Court deem (sic) just and proper."
The district court, quite properly, criticized the complaint
for not being "a short and plain statement" in accordance
with Fed. R. Civ. P. 8(a)(2). Even more justly, it could
have complained of the flagrant violation of Fed. R. Civ. P.
11.1 The amount of damages sought is a relevant matter.
See Mestayer v. Wisconsin Physicians Service Ins. Corp., 905
___ ________ ________________________________________
F.2d 1077, 1080 (7th Cir. 1990). Cf. Thorpe v. Mutual of
__ ______ __________
Omaha Ins. Co., 984 F.2d 541, ___ (1st Cir. 1993). Coupled
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with the extended complaint it would be difficult to think of
clearer indifference to counsel's elementary obligations.
In a comprehensive opinion the court granted
defendants' motion to dismiss nineteen of the causes of
action, and then granted a motion for summary judgment for
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1. ". . . The signature of an attorney or party constitutes
a certificate [of] belief . . . it is well grounded in
fact. . . ."
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defendants as to the twentieth. Happily, we need not reach
the correctness of these individual rulings. The court
should have recognized the defense of judicial estoppel and
dismissed the complaint at the outset. On that basis we
affirm.
According to the complaint defendants were guilty,
inter alia, of violating the antitrust and RICO laws,
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tortious interference with contractual relations, mail and
wire fraud, conspiracy, breach of contract, fault or
negligence, and damage to reputation, all for the purpose of
driving plaintiffs out of business.2 By reason of these
alleged wrongs Payless, soon after commencing business in
February, 1986, found itself having to take various actions
that it would not have chosen. Business was unsuccessful,
and in July, 1988 it filed for bankruptcy under Chapter 11.
In re Payless Wholesale Distributors, Inc., No. 88-0951
_______________________________________________
(Bankr. D.P.R. filed July 14, 1988). In connection therewith
there were requirements to give reasons for filing, and to
list all debtor's assets, including claims and causes of
action.3 In no filing did Payless even vaguely refer to the
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2. Strictly, Payless is the one business entity having
claims. LAF was a manufacturer of products Payless proposed
to sell, and Lima a mere stockholder. Neither had
independent rights. Warth v. Seldin, 422 U.S. 490, 499
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(1975); Jones v. Niagara Frontier Transp. Auth., 836 F.2d
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731, 736 (2d Cir. 1987), cert. denied, 488 U.S. 825 (1988).
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3. 11 U.S.C. 521(1), 1125(a).
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present claims, or distinguish the one defendant mentioned
from its other creditors, yet Payless now alleges bankruptcy
was "a direct result of the conspiratorial acts of
defendants." First Am. Complaint 98. Even a cursory
examination of the claims shows that defendants should have
figured in both aspects of the Chapter 11 proceedings, and
that Payless could not have thought otherwise. The
brazenness of its ambivalence is illustrated by its present
assertion that the statute of limitations had not run because
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