Hutchinson v. Pfeil ( 2000 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
APR 4 2000
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
THOMAS R. HUTCHINSON;
DENNIS P. BULLARD; ROBERT J.
BULLARD; SHARON E.
COLEGROVE; JODY L. HARTZLER;
BARBARA L. LAWRENZ; RUTH
ANN LIBBY; KATHRYN M.
ROBINSON; JOHN M. SPANTON,
Plaintiffs-Appellants,
v. No. 98-5248
(D.C. No. 94-C-1134-E)
RICHARD PFEIL; MARY JO PFEIL, (N.D. Okla.)
Defendants-Appellees.
ORDER AND JUDGMENT *
Before EBEL , LUCERO , and MURPHY , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Plaintiffs brought suit to recover possession of a painting, the E.M.J. Betty ,
owned by defendants Richard and Mary Pfeil. 1
Defendants moved for summary
judgment, arguing that the action was barred by both laches and the statute of
limitations. Plaintiffs filed a responsive brief and a cross-motion for summary
judgment on the merits of their claim. The district court postponed proceedings
on the latter motion pending disposition of the threshold defenses of laches and
limitations raised by defendants. Ultimately, the court held that the action was
untimely under both principles, granted summary judgment for defendants, and
deemed plaintiffs’ cross-motion moot. 2
1
Background details regarding the painting and related litigation involving
plaintiff Thomas Hutchinson and the Pfeils may be found in other decisions of
this court. See, e.g. , Hutchinson v. Pfeil , No. 98-5260, ___ F.3d ___ (10th Cir.
Apr. 4, 2000); Hutchinson v. Pfeil , 105 F.3d 566 (10th Cir. 1997); Hutchinson v.
Pfeil , No. 98-5043, 1999 WL 1015557 (10th Cir. Nov. 9, 1999) (unpublished).
2
Plaintiffs contend the district court lacked authority to hear and dispose of
the motions in this sequence. They insist that, unless a continuance is entered
pursuant to Fed. R. Civ. P. 56(f), which was not invoked here, the district court
must conduct simultaneous proceedings on cross-motions for summary judgment.
In short, they deny the court’s authority to extend the time in which the parties
may brief either motion. This argument is meritless. Under Fed. R. Civ. P. 6(b),
a court “for cause shown may at any time in its discretion” extend the time to
respond to any motion not specifically excepted by the rule; summary judgment
motions are not excepted. Thus, “the court in its discretion [was] free to grant
such an extension . . . pursuant to Fed. R. Civ. P. 6(b)(1) or 56(f).” Davidson v.
Keenan , 740 F.2d 129, 132 (2d Cir. 1984) (emphasis added); see also Mendez v.
(continued...)
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Plaintiffs appeal from the entry of summary judgment, raising several
substantive and procedural objections to the district court’s disposition. They
also challenge an order precluding collateral use of certain discovery materials.
For reasons explained below, we affirm the district court in all respects.
Laches/Waiver
In the district court, plaintiffs opposed defendants’ laches defense on two
bases. First, they relied on Oklahoma case law holding that a lapse of time will
be charged against a party only if that party had knowledge of an alleged invasion
of asserted rights and an opportunity to demand redress. Plaintiffs argued neither
of these conditions was satisfied until shortly before they filed suit. Second, they
relied on Oklahoma case law holding that a laches defense cannot be asserted by a
party who created the operative delay, and they asserted defendants’ concealment
and misrepresentations of facts surrounding the origin of their unfounded claim to
the painting hindered plaintiffs’ discovery of their aggrieved interests. On appeal,
however, plaintiffs have not reasserted either of these arguments. They are,
2
(...continued)
Banco Popular De Puerto Rico , 900 F.2d 4, 6 (1st Cir. 1990) (noting court’s
“considerable discretion” in applying Rule 6(b) to summary judgment deadlines).
As for cause, the logical sequence of the court’s legal analysis clearly justified
postponement of the proceedings on plaintiffs’ cross-motion.
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therefore, waived. See Pino v. Higgs , 75 F.3d 1461, 1463 (10th Cir. 1996)
(following Bledsoe v. Garcia , 742 F.2d 1237, 1244 (10th Cir. 1984)).
Instead, plaintiffs now categorically insist that Oklahoma law would not
recognize a laches defense to their replevin claim. See Brief of Appellants at
19-20. This argument was never raised in district court. “‘If a party fails to
assert a legal reason why summary judgment should not be granted, that ground
is waived and cannot be considered or raised on appeal.’” Grenier v. Cyanamid
Plastics, Inc. , 70 F.3d 667, 678 (1st Cir. 1995) (quoting Vaughner v. Pulito ,
804 F.2d 873, 877 n.2 (5th Cir. 1986)). This is, of course, a particular instance
of the general rule “‘that a federal appellate court does not consider an issue
not passed upon below.’” Lyons v. Jefferson Bank & Trust , 994 F.2d 716, 720
(10th Cir. 1993) (quoting Singleton v. Wulff , 428 U.S. 106, 120 (1976));
see Tele-Communications, Inc. v. C.I.R. , 104 F.3d 1229, 1232 (10th Cir. 1997)
(barring belated presentation of “secondary, back-up theories” in context of
summary judgment). Plaintiffs try to avoid the rule by arguing that they have not
changed their claim, only the law they rely on to sustain it. This distinction is
immaterial. The waiver rule derives from and enforces the fundamental notion
that an appellate court reviews the disposition of the dispute presented to and
considered by the trial court . See Lyons , 994 F.2d at 721. The policies of the
rule are implicated whenever the appellant attempts to reconfigure that dispute on
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appeal, whether the attempt is made through the introduction of new issues,
arguments, theories, or claims.
We have discretion to consider new matters on appeal, but “only in the
most unusual circumstances” Id. (“In the main, . . . we have consistently refused
invitations to consider new issues on appeal.”). The exercise of that discretion is
not warranted here. Waiver of unpreserved legal arguments “is particularly apt
when dealing with an appeal from a grant of summary judgment.”
Tele-Communications , 104 F.3d at 1232 (in this context, “the trial judge considers
only opposing legal theories” and “[p]ropounding new arguments on appeal in an
attempt to prompt us to reverse the trial court undermines important judicial
values” ). Further, here, plaintiffs had more than two years from the date
defendants filed their motion for summary judgment in which to find and argue
the legal authority they now rely on. Under the circumstances, the “need for
finality in litigation and conservation of judicial resources” weighs heavily in
favor of the rule of waiver, and we decline to “hold everything accomplished
below [on the extensively briefed issue of laches] for naught.” Lyons , 994 F.2d
at 721 (quotation omitted).
Appellate review “is limited to the issues . . . properly preserve[d] in the
district court and adequately present[ed] on appeal.” Berna v. Chater , 101 F.3d
631, 632 (10th Cir. 1996) (social security appeal recognizing “waiver principles
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developed in other litigation contexts”). As a result of plaintiffs’ abandonment of
contentions urged below in favor of a new unpreserved argument on appeal, there
are, in fact, no issues before us relating to laches which satisfy the dual condition
for appellate review. Accordingly, we leave the district court’s determination of
the defense undisturbed.
Further, plaintiffs’ deficient challenge to the laches ruling undercuts their
entire appeal from summary judgment, the entry of which is fully supportable on
the basis of laches alone. We explained essentially the same point in Murrell v.
Shalala , 43 F.3d 1388 (10th Cir. 1994), in which the decision under review had
been supported on alternate bases and the plaintiff-appellant attacked one of these
rulings solely on a specious procedural ground, leaving the merits of that ruling
unchallenged. Id. at 1389-90 (footnote omitted); see also Berna , 101 F.3d
at 633-34 (holding appeal in which one of two alternate grounds for disposition
went unchallenged “effectively foreclosed under Murrell ”).
Statute of Limitations
As an alternative basis supporting summary judgment, the district court
ruled that plaintiffs’ claims were barred by the statute of limitations. The parties
agree this case is governed by the two-year statute of limitations in Okla. Stat. tit.
12, § 95 Third. Their dispute concerns when that limitations period began to run
under “discovery rule,” or “inquiry notice,” principles. See Weaver v. Casey
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(In re 1973 John Deere 4030 Tractor) , 816 P.2d 1126, 1132-34 (Okla. 1991)
(adopting discovery rule for replevin actions); see also Queri v. Midwest City
Mem’l Hosp. , 839 P.2d 688, 690 (Okla. Ct. App. 1992) (discussing discovery rule
in terms of inquiry notice). “The discovery rule encompasses the precept that
acquisition of sufficient information which, if pursued, would lead to the true
condition of things is sufficient to start the running of the statute.” Queri ,
839 P.2d at 690; see Daugherty v. Farmers Coop. Ass’n , 689 P.2d 947, 950-51
(Okla. 1984). The rule “tests the evidence for lack of diligence by the injured
party to discover the injury,” which in this context would be “evidence that the
[plaintiffs] had an opportunity to know of the possession of the[ir] property by
another,” but failed to timely protect their interests. In re John Deere , 816 P.2d
at 1132-33.
The district court’s straightforward application of the discovery rule may
be summarized as follows: (1) plaintiffs contend that the artist’s signature on the
painting (which allegedly has an uncharacteristic “C”-shaped “T”) is a forgery
and that this forgery, standing alone, establishes that the painting was stolen from
the artist’s estate; 3
(2) plaintiffs could have viewed the painting when it was
3
On plaintiffs’ theory of the case, the forgery and theft negate defendants’
claim of ownership, which rests on a provenance relating back to a legitimate
purchase of a (presumptively signed) painting in 1898, at an estate sale two years
after the artist’s death. Plaintiffs’ rival ownership claims are based on descent.
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publicly exhibited as early as the 1980s and, in any event, saw a catalog of
defendants’ art collection containing the work in July 1992; (3) such opportunity
to view the painting (and/or a catalog reproduction) and observe the alleged
tell-tale forgery put plaintiffs on inquiry notice that the provenance of the
painting was open to question and, consequently, that defendants’ claim of
ownership was subject to attack; and (4) therefore, the deadline for commencing
this replevin action expired at least five months before plaintiffs filed their
complaint in December 1994.
Plaintiffs acknowledge that, under their own theory of the case, the forged
signature on the face of the painting revealed it was stolen, but they seek to avoid
the significance of this fact for discovery/inquiry notice purposes by arguing that
the forgery did not reveal a posited second theft which they insist is evidenced by
the absence of an estate sale stamp on the back of the painting. See Brief of
Appellants at 24. They assert that they did not have a chance to confirm this
additional fact until October 1994, and contend their action was timely filed two
months later.
Plaintiffs’ argument, which attempts to excuse their failure to inquire into
the forgery-theft connection by positing a second theft evidenced by a fact which
a diligent inquiry prompted by the alleged forgery should have uncovered , is not
persuasive. “A plaintiff is chargeable with knowledge of facts which he ought to
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have discovered in the exercise of reasonable diligence.” Daugherty , 689 P.2d
at 951. Further, the missing estate sale stamp was, for discovery purposes, merely
cumulative; based on the forged signature alone, plaintiffs were, by July 1992,
on inquiry notice that defendants’ ownership of the painting was open to question.
The duty to investigate their competing legal interests and bring this action to
enforce them commenced at that time. See In re John Deere , 816 P.2d at 1134
(replevin action accrues when plaintiff knows or should discover identity of
person in possession of allegedly stolen property). Whether plaintiffs’ vaguely
sketched theory of a second theft may have bolstered their case is at best
debatable, but is, nonetheless, not decisive. To trigger operation of the discovery
rule, plaintiffs need not have had “ knowledge of the exact nature or source of the
defects [in defendants’ title to the painting], but only the knowledge that a
problem existed .” Samuel Roberts Noble Found., Inc. v. Vick , 840 P.2d 619,
625-26 (Okla. 1992). Certainly, a theft-revealing forgery on the face of the
painting would indicate that a problem existed.
The conclusion of the Oklahoma Supreme Court in Daugherty is equally
appropriate in this case:
Under the facts of this case on motion for summary judgment it
is undisputed that the means of knowledge existed, and as it appears
from the record, the circumstances were such as to put a reasonable
man upon inquiry. Then plaintiff[s] [are] chargeable with the
knowledge such inquiry would have produced, and the discovery rule
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does not, under this record, bar the running of the statute of
limitations.
Daugherty , 689 P.2d at 951.
Case Reassignment and Protective Order
Plaintiffs generally challenge the authority of the district judge to hear and
decide this case, because it had been unilaterally reassigned from another judge of
the district. The same objection was made and unqualifiedly rejected in another,
related appeal prosecuted by plaintiff Thomas Hutchinson. See Hutchinson v.
Pfeil , No. 98-5260, ___ F.3d ___, slip op. at 17-18 (10th Cir. Apr. 4 , 2000).
We adhere to the rationale and decision issued in that case.
Plaintiffs also challenge the district court’s denial of their motion to unseal
certain materials obtained through discovery in connection with this and related
litigation. These materials were covered by a protective order which plaintiffs
repeatedly asked the court to vacate so they could use the materials in lawsuits
pending elsewhere. Two other orders denying such relief have already been
affirmed by this court. See id. at 19 (following Hutchinson v. Pfeil , No. 98-5043,
1999 WL 1015557, at **5-**7 (10th Cir Nov. 9, 1999) (unpublished)). As the
district court recognized, “this motion [was] merely another attempt to lift the
protective order made without providing the required information.” Appellants’
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App. II at 675. Plaintiffs provide no adequate grounds for deviating from
previous decisions denying relief.
Appellate Motions and Conclusion
Defendants have submitted as supplemental authority the Seventh Circuit’s
recent decision in Hutchinson v. Spanierman , 190 F.3d 815 (7th Cir. 1999),
holding plaintiff Thomas Hutchinson barred by laches from claiming an interest in
certain Thomas Robinson works held by other descendants of the artist. Plaintiffs
have moved to strike this supplemental authority under Fed. R. App. P. 28(j) as
irrelevant and argumentative, and have submitted their own counter-request that
we take judicial notice of a petition for rehearing now pending in the case.
Because the proffered authority relates solely to laches, and our disposition of
that issue here turns on case-specific procedural grounds, Spanierman is
immaterial to our decision. The motion to strike and request to take judicial
notice are therefore denied as moot.
Plaintiffs have also submitted “Appellants’ Notice of Sale of Subject
Painting by Appellees and Request that the Court of Appeals Direct Appropriate
Proceedings to Determine Buyers’ Identity and Address.” Our disposition of the
appeal, affirming summary judgment for defendants under the doctrine of laches
and the statute of limitations, does not turn on the identity of the present owners
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of the painting in question. Indeed, it renders plaintiffs’ interest in that question
moot. The request is denied.
Finally, plaintiffs have moved for leave to file a supplemental appendix
containing materials submitted to the district court in support of their challenge
to reassignment of the case. We grant the motion, having considered the
materials contained in the supplemental appendix. We, however, are not
persuaded that reassignment of the case was in any way improper.
The judgment of the United States District Court for the Northern District
of Oklahoma is AFFIRMED.
Entered for the Court
Michael R. Murphy
Circuit Judge
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