1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-29-1994

Apex Fountain Sales v. Klienfeld, et al.

Precedential or Non-Precedential:

Docket 93-1943

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Recommended Citation

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1 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

 

No. 93-1943 

 

APEX FOUNTAIN SALES, INC. 

v. 

ERNIE KLEINFELD; FLO AIRE, INC.; 

RALPH KEARNEY, JR.; MICHAEL KEARNEY; 

RALPH KEARNEY & SON, INC. 

 Appellants

 

On Appeal from the United States District Court 

for the Eastern District of Pennsylvania 

(D.C. Civ. No. 83-06153) 

 

Argued: March 2, 1994 

Before: SLOVITER, Chief Judge, 

ALITO, Circuit Judge and PARELL,1 District Judge 

(Filed June 29, l994 ) 

Robert J. Sugarman (Argued) 

Sugarman & Associates 

Philadelphia, PA 19103 

 Attorney for Appellants 

Norman Perlberger (Argued) 

Jeffrey A. Cohen 

Perlberger Law Associates, P.C. 

Bala Cynwyd, PA 19004 

 Of Counsel: 

 Stephen E. Feldman 

 

1Hon. Mary Little Parell, United States District Judge for the 

District of New Jersey, sitting by designation. 
2 

 Kenneth S. Feldman 

 Attorneys for Appellee 

OPINION OF THE COURT

SLOVITER, Chief Judge. 

 The dispute between the parties to this appeal is no 

stranger to this court. See Apex Fountain Sales, Inc. v. 

Kleinfeld, 818 F.2d 1089 (3d Cir. 1987) (Apex II). This bitter 

business litigation shows no sign of abating, and it is likely 

that we will see it again since neither settlement nor 

proceedings akin to arbitration have reduced the animosity shown 

by the parties as well as their lawyers. In this appeal 

defendant-appellant Ralph G. Kearney & Son, Inc. appeals from a 

finding of contempt for violating a 1985 consent decree settling 

a suit initiated by appellee Apex Fountain Sales, Inc. claiming 

Kearney infringed Apex's trademarks in champagne fountains. We 

also have pending a related appeal from a permanent injunction 

involving the same parties but a different fountain. See Apex 

Fountain Sales, Inc. v. Kleinfeld, No. 93-2150 (3d Cir. 

June 29, 1994) (Apex IV). While we are cognizant that the 

parties desire a resolution of this phase of this lengthy 

litigation, we must dismiss this appeal because the district 

court's contempt order is not yet final. 

I.

FACTS AND PROCEDURAL HISTORY

 Apex Fountain Sales, Inc. manufactures champagne 

fountains, decorative devices containing a pump that are used for 
3 

filling glasses of champagne or punch by means of a fountain 

arrangement. Apex used to purchase parts for its fountains from 

Ralph G. Kearney & Son, Inc.2 After a contract dispute between 

them, Kearney used the parts it manufactured for Apex to market 

its own, virtually identical, fountains. Apex sued Kearney in 

1983 for infringement of its trademark and trade design under the 

Lanham Act, 15 U.S.C. § 1125(a) (1988). The parties entered into 

a comprehensive settlement agreement which was incorporated into 

a consent decree entered by the district court on August 14, 

1984. 

 The crucial portion of the consent decree for purposes 

of the contempt findings is paragraph seven, which provided: 

Defendants will change their fountain design so that 

the fountains can no longer be identified as Apex 

Fountains and no longer use the Trademarks. Defendants 

will submit their new fountain designs for prior 

written approval to a panel consisting of Alvin Gruber, 

Ralph Kearney, Sr. and a third person to be chosen by 

the consent of Gruber and Kearney to decide on a 

majority basis whether the fountain designs meet the 

above standard and that decision will be binding on the 

parties. 

App. at 13. 

 On January 4, 1985, Apex moved for contempt because 

Kearney was still selling the fountains it had promised not to 

sell. On January 24, 1986, the parties entered a stipulation 

settling Apex's contempt claim for $75,000, releasing "defendants 

 

2The other defendant-appellants, Flo Aire, Inc., Ralph Kearney, 

Jr., Michael Kearney and Ernie Kleinfeld, are all associated with 

Ralph G. Kearney & Son, Inc. and will be collectively referred to 

as Kearney. 
4 

from any and all liability resulting, directly or indirectly, 

from the conduct alleged in the contempt Motion." App. at 41. 

 Meanwhile, because the parties could not agree on a 

third member for the design panel as contemplated by the consent 

decree, the court, on petition by Kearney, appointed a 

Philadelphia patent and trademark lawyer, Manny Pokotilow, as the 

third panelist. Apex appealed the order and we affirmed the 

court's decision. See Apex Fountain Sales, Inc. v. Kleinfeld, 

800 F.2d 1130 (3d Cir. 1986) (table) (Apex I). 

 The Pokotilow panel convened in November 1985 to 

consider two fountain designs submitted by Kearney for approval, 

the Moselle and the Ameretta. Both fountains were rejected on 

December 18, 1985 because they were likely to be confused with 

Apex's. See Pokotilow I, App. at 34. However, the panel stated 

that if certain specific changes were made "the panel will 

consider these fountains not likely to be confused with those of 

the Plaintiff." App. at 48. The district court "accept[ed], 

adopt[ed] and confirm[ed]" this opinion on March 17, 1986. App. 

at 37. 

 Kearney altered the fountains to comply with the 

panel's suggestions, but also modified the fountains in two other 

respects which Apex claimed made them more similar. Kearney then 

marketed the two designs and the Grand Chablis (another fountain 

design), exhibiting them at the Chicago Trade Fair in May 1986. 

Apex sought to hold Kearney in contempt for failing to get these 

fountains pre-approved by the panel. The district court 

appointed the panel as a board of special masters and referred 
5 

the issue to them. In September 1986, acting in this capacity, 

the panel reviewed the fountains. In effect its ruling 

recommended against contempt because it found that: (1) its 

earlier decision in Pokotilow I authorized Kearney to market 

fountains which complied with the panel's recommendations without 

having them reviewed by the panel; (2) the two additional 

modifications were immaterial; and (3) the Grand Chablis did not 

violate the consent decree. See Pokotilow II, App. at 49, 52, 

56. The district court adopted and confirmed this opinion on 

October 10, 1986 and found "that the proposed . . . designs 

submitted to the Panel . . . and displayed at the exhibit in 

Chicago, Illinois are in conformity with the Order of this Court 

dated March 17, 1986." App. at 58. Apex appealed. 

 Our opinion on appeal dealt with three separate issues. 

First, we held that the statement in Pokotilow I that certain 

changes would bring the fountains submitted into compliance was 

"mere dicta," Apex II, 818 F.2d 1095, and thus we declined to 

overturn the district court's approval of Pokotilow I despite our 

concerns that such language was contrary to the consent decree. 

Second, we held that the district court erred in referring the 

contempt proceeding to a panel of special masters. See id. at 

1096-97. Finally, we rejected the holding of the panel in 

Pokotilow II that "no approval was necessary so long as Kearney 

complied with the suggestions" in Pokotilow I. We held that the 

panel recommendations "could not exempt Kearney from the 

obligation to submit new designs to the panel before exhibiting 

them." Id. at 1097-98. We concluded that "[b]ecause it 
6 

exhibited new fountains without the prior approval of the panel, 

Kearney would appear to be in contempt of the consent decree. 

There may be defenses to the contempt charge, however, and this 

issue has not been properly presented either to the district 

court or to this court." Id. at 1098. We directed that "[o]n 

remand, the district court should hold a hearing to determine if 

Kearney is in contempt, and if so, to determine the appropriate 

sanction." Id.

 After this decision, Kearney continued to market the 

fountains approved by Pokotilow II without any changes. Apex 

petitioned for contempt in September 1987 and again in August 

1988, and although the district court scheduled hearings on at 

least two occasions, it never completed them. Then a newly 

constituted design panel, Karl L. Spivak presiding, met in July 

1989 to consider whether three fountains, the Moselle, the 

Ameretta and the Grand Chablis, violated the consent decree. In 

its October 6, 1989 decision, the panel rejected the Moselle and 

approved the Ameretta and Grand Chablis. See Spivak I, App. at 

84. In a second hearing, Apex sought reconsideration of the 

approval of the Ameretta and Grand Chablis, and Kearney sought 

approval of a modified Moselle. The design panel rejected Apex's 

position, and approved all three fountains, the Ameretta, Grand 

Chablis, and the modified Moselle, in July 1990. See Spivak II, 

App. at 88. 

 Responding to a fifth motion for contempt filed in July 

1992, the district court held two days of hearings in May 1993 
7 

regarding Apex's pending contempt motions.3 The first witness at 

the hearing was Apex's accountant who testified about its losses 

in fountain sales. During cross-examination, the court secured 

the agreement of the parties that an independent accountant would 

audit the books of both companies. The remainder of the hearing 

consisted of viewing the fountains and hearing testimony from the 

principals of Kearney and Apex. After receiving proposed 

findings of fact and conclusions of law, the district court 

entered a contempt order against Kearney on July 7, 1993. It 

concluded that 

Apex has demonstrated by clear and convincing evidence 

that Kearney knowingly failed to comply with the 

requirements of the . . . consent decree in the 

following respects: 

a. It violated, ab initio, the provisions of ¶ 7 of 

the parties' agreement by failing to submit its Moselle 

and Ameretta designs for prior design panel approval. 

b. It exhibited the Grand Chablis fountain at the 

Chicago trade show which was never shown to the 

Pokotilow panel. 

c. Kearney continued to market the never approved 

original Moselle model along with the approved modified 

Moselle. 

App. at 104-05. 

 The court recognized that the remedy for civil contempt 

must either insure compliance or compensate for past violations. 

To insure compliance, it ordered Kearney to turn over the 

equipment used to manufacture the infringing articles to the 

United States Marshall for destruction. To grant compensation, 

 

3We note this was some six years after our opinion directing the 

district court to hold a hearing on the contempt motion. 
8 

it ordered Kearney and Apex to submit to an audit by "a certified 

public accountant who shall, using standard accepted accounting 

principles, determine the net profit which would have been 

realized by Apex Fountain Sales, Inc. utilizing Kearney gross 

sales figures of infringing fountains," App. at 108, which would 

then be entered as a judgment in favor of Apex. App. at 109. 

"Infringing fountains" was defined to include the Moselle and 

Ameretta "from the date of the consent agreement" and the Grand 

Chablis "from the date of first manufacture." App. at 109. 

 On July 19, Kearney filed a Motion for Reconsideration, 

Extension, and Partial Stay, and submitted an Amended and 

Amplified Motion for Reconsideration on July 27. The district 

court denied the motion for reconsideration on August 31. On 

September 22, Kearney filed a motion for a stay of the audit and 

the destruction of the equipment pending appeal. The court 

stayed its order in part on September 30, ordering the Marshall 

to store the equipment pending appeal but refusing to delay the 

audit. Kearney filed its appeal on September 30. 

 In its contempt order, the court stated that the 

accounting would be done by an independent accountant stipulated 

to by the parties within fifteen days of the contempt decree. 

App. at 108. However, since the parties were unable to agree, 

the court itself appointed one three months later. While the 

accountant filed the audit report in February 1994, no judgment 

containing a final dollar amount has been entered. 

II.

JURISDICTION
9 

 Apex has filed a motion to dismiss the appeal, arguing 

that because the amount of money that Kearney owes Apex has not 

yet been determined, no final judgment has been entered. We 

agree.4 Our appellate jurisdiction is limited to final 

decisions. 28 U.S.C. § 1291 (1988). "It is a well-established 

rule of appellate jurisdiction . . . that where liability has 

been decided but the extent of damage remains undetermined, there 

is no final order." Sun Shipbuilding & Dry Dock Co. v. Benefits 

Review Bd., 535 F.2d 758, 760 (3d Cir. 1976) (per curiam) 

(collecting cases); see also Republic Natural Gas Co. v. 

Oklahoma, 334 U.S. 62, 68 (1948) ("[T]he requirement of finality 

has not been met merely because the major issues in a case have 

been decided and only a few loose ends remain to be tied up--for 

example, where liability has been determined and all that needs 

to be adjudicated is the amount of damages."); EEOC v. Delaware 

Dep't of Health & Social Servs., 865 F.2d 1408, 1413 (3d Cir. 

1989) ("An order which establishes liability without fixing the 

amount of recovery is generally not final."); Weiss v. York 

Hosp., 745 F.2d 786, 802 (3d Cir. 1984) ("because . . . 

additional proceedings, including the determination of certain 

defenses and of damages, are yet to take place, most of these 

'judgments' . . . are not final within the meaning of 28 U.S.C. 

§1291"), cert. denied, 470 U.S. 1060 (1985). 

 

4Since we determine the order is not final, we need not reach the 

claim Apex asserts in its brief that the appeal was not timely 

because the motion for reconsideration was ineffective in 

suspending the 30-day time limit imposed by Fed. R. App. P. 

4(a)(1). 
10 

 Until the court enters a judgment with the precise 

amount of damages calculated, the extent of Kearney's liability 

is unknown. Given the contentiousness of this litigation, it is 

not surprising that both parties have submitted lengthy motions 

in the district court objecting to the accountant's findings and 

seeking a hearing before the court. See Docket Nos. 118, 121, 

122, 123, 124, 130, 133. Indeed, the district court has 

recognized that the parties have factual and legal disputes about 

the accountant's report and has ordered them to submit to it any 

evidentiary materials no later than July 15, 1994. Docket No. 

135. 

 It is more than likely that after the district court 

resolves the issue, one or both parties will dispute the ultimate 

amount of damages awarded, leading to a second appeal. This 

would be contrary to the federal judiciary's general policy 

against piecemeal litigation. "Permitting piecemeal appeals 

would undermine the independence of the district judge, as well 

as the special role that individual plays in our judicial system. 

In addition, the [finality] rule is in accordance with the 

sensible policy of avoiding the obstruction to just claims that 

would come from permitting the harassment and cost of a 

succession of separate appeals from the various rulings to which 

a litigation may give rise, from its initiation to entry of 

judgment." Van Cauwenberghe v. Biard, 486 U.S. 517, 521-22 n.3 

(1988) (quotations omitted); see Catlin v. United States, 324 

U.S. 229, 233-34 (1945) ("The foundation of this policy is not in 
11 

merely technical conceptions of 'finality.' It is one against 

piecemeal litigation."). 

 This understanding is also reflected in our cases 

holding that a district court order awarding "reasonable" 

attorneys fees is not appealable until the fees are quantified in 

order to prevent two appeals--one on whether attorneys fees 

should be awarded and a second on the amount of the award. See

Pennsylvania v. Flaherty, 983 F.2d 1267, 1276-77 (3d Cir. 1993); 

In re Colon, 941 F.2d 242, 246 (3d Cir. 1991); Frangos v. Doering 

Equip. Corp., 860 F.2d 70, 72 (3d Cir. 1988); see also Napier v. 

Thirty or More Unidentified Federal Agents, Employees or 

Officers, 855 F.2d 1080, 1089-90 (3d Cir. 1988) (Rule 11 

sanctions may not be appealed until judgment entered on the 

amount). 

 Kearney argues that the order is final because 

determining the precise amount of money due is a "ministerial" or 

"mechanical" act and thus the order is "final" under what is 

known as the Forgay-Conrad doctrine. See Forgay v. Conrad, 47 

U.S. (6 How.) 201 (1848); Parks v. Pavkovic, 753 F.2d 1397, 1401 

(7th Cir.) ("if the determination of damages will be mechanical 

and uncontroversial, so that the issues the defendant wants to 

appeal before that determination is made are very unlikely to be 

mooted or altered by it--in legal jargon, if only a 'ministerial' 

task remains for the district court to perform--then immediate 

appeal is allowed"), cert. denied, 473 U.S. 906 (1985); 9 James 

Wm. Moore et al., Moore's Federal Practice ¶ 110.11 (2d ed. 

1994). 
12 

 The district court seems to have viewed the judgment in 

this way, noting that it had "resolved the legal rights of the 

parties and provided the formula for calculating the amount of 

the judgment; determining the dollar amount of damages is merely 

a ministerial act." App. at 116 n.1; see also App. at 123 ("we 

specifically noted that our July order resolved the legal rights 

of the parties, provided the formula for calculating the amount 

of the contempt judgment, and rejected any assertion that the 

order was interlocutory or otherwise unappealable"). 

 In Cromaglass Corp. v. Ferm, 500 F.2d 601, 605 (3d Cir. 

1974) (in banc), we described the Forgay-Conrad doctrine as 

permitting appellate jurisdiction for a "judgment which is final 

except for ministerial acts." While not mentioning Forgay, we 

have continued to recognize that an order is final even if it 

does not reduce the damages to a sum certain if "the order 

sufficiently disposes of the factual and legal issues and [if] 

any unresolved issues are sufficiently 'ministerial' that there 

would be no likelihood of further appeal." Polychrome Int'l 

Corp. v. Krigger, 5 F.3d 1522, 1544 n.52 (3d Cir. 1993). Thus, 

in Polychrome, we held that we had jurisdiction of the 

government's appeal of a district court order invalidating a tax 

regulation, even though the court did not state the amount of 

refund to which the plaintiffs were entitled. Presumably, the 

court viewed the determination of the amount of taxes paid by 

each plaintiff as a ministerial calculation. Accord United 

States v. Brook Contracting Corp., 759 F.2d 320, 322-23 (3d Cir. 

1985); Hattersley v. Bollt, 512 F.2d 209, 213-14 (3d Cir. 1975). 
13 

 The district court's order in this case does not fall 

within the "ministerial" exception to the final judgment rule. 

The record of this litigation indicates that the determination of 

the "net profit which would have been realized by Apex" absent 

the contemptuous acts will not be easily reached. See Goodman v. 

Lee, 988 F.2d 619, 625 (5th Cir. 1993) (when calculating damages 

would be a "nightmare," judgment was not final). While in some 

circumstances this might be a simple calculation, in this 

situation it has become a highly contested dispute about Kearney 

and Apex sales over the past 10 years. 

 Further, before the order is sufficiently final for 

review purposes the district court will undoubtedly make 

particularized findings indicating specifically how the damages 

are actually linked to the contemptuous behavior it found. It is 

a general principle that "[t]he relief granted in civil contempt 

proceedings is compensatory . . . [and] must not exceed the 

actual damages caused the offended party by a violation of the 

court's order." Quinter v. Volkswagen of America, 676 F.2d 969, 

975 (3d Cir. 1982) (citations omitted); see also Gregory v. 

Depte, 896 F.2d 31, 34 (3d Cir. 1990) (compensatory fine "must 

not exceed the actual damages caused the offended party and must 

be based on evidence of a complainant's actual loss" (citations 

omitted)). 

 The numbers, even if the parties had agreed with the 

accountant's report regarding total Kearney sales of the 

"infringing fountains," will not speak for themselves. Although 

we do not express any opinion on the merits, we question whether 
14 

the district court intended to assess damages based on the sales 

of all Moselle, Ameretta and Grand Chablis fountains since 1984, 

because for at least some of that period Kearney was marketing 

these fountains with the acquiescence, if not the explicit 

approval, of the design panel and the district court. A party 

cannot be held in contempt for acts permitted by a court order 

simply because that order was later reversed or disapproved, for 

it is the knowledge of and disobedience of an existing court 

order which are the predicates for any contempt sanction. See

United States v. Sarbello, 985 F.2d 716, 727 (3d Cir. 1993). 

 In short, while it appears that there were sales by 

Kearney as to which the district court's contempt order might 

well be found to be justified, that order is neither final nor 

reviewable until the court details which of Kearney's sales had a 

"sufficiently specific nexus" to the violations and the precise 

amount of loss incurred by the sales. Inmates of Allegheny 

County Jail v. Wecht, 754 F.2d 120, 130 (3d Cir. 1985); see also

Gregory, 896 F.2d at 34.5 Indeed, when the court enters its 

final order with the specificity required, it will undoubtedly 

clarify some ambiguities that appear on the record.6 

 

5We assume the court will also ensure that the damages do not 

include any sales for which Apex released Kearney in the January 

24, 1986 settlement. 

6For example, the court found that "Kearney continued to market 

the never approved original Moselle model along with the approved 

Moselle modified model." App. at 105. It is not clear whether 

the phrase "continued to market" refers to a date from the entry 

of the consent decree in August 1984, the panel decision in 

Pokotilow I in December 1985 rejecting the Moselle, or the panel 

decision in Spivak I in October 1989 rejecting the Moselle. 

 
15 

 We make these comments in order to provide the district 

court with some insight into the specificity that is necessary to 

ensure proper appellate review. 

Fact finding is the trial court's province. We do 

remain responsible, however, for the ultimate justness 

of trial determinations drawn before us. Since this is 

so, we must know the basis of the trial court's 

decisions: this Court cannot be left to second-guess 

the factual basis for the district court's conclusion. 

Review is our responsibility, and we cannot review bare 

conclusions. In short, our duty to respect the trial 

court's factual determinations gives rise to a 

reciprocal one on its part to tell us the reasons for 

them. [A] mere statement of a result [] cannot stand. 

Chandler v. City of Dallas, 958 F.2d 85, 89 (5th Cir. 1992) 

(quotations and ellipses omitted); see also Anthuis v. Colt 

Indus. Operating Corp., 789 F.2d 207, 213 (3d Cir. 1986) ("Of 

course, a district court is not required to write an opinion 

explaining every judgment that it renders. But in a complex case 

such as this one, . . . both the parties and this court should be 

 

 Kearney claims that if the court meant that Kearney 

marketed the original Moselle after the decision in Spivak I, the 

factual findings that the Moselle was marketed "through print 

advertising appearing in September 1989 and at the National 

Association of Food Equipment Manufacturers show in Dallas in 

October 1989," App. at 102, are inapposite because the record 

shows that the print advertising in September 1989 and the 

October 1989 show in Dallas preceded the decision in Spivak I. 

App. at 897, 925, 929-31, 955. 

 Similarly, before the order is final the district court 

may want to clarify its finding that the Moselles were displayed 

in two 1991 tradeshows, App. at 102, because we have found no 

supporting testimony at the contempt hearing. Photographs of 

Kearney's displays at the two shows, attached to the affidavit of 

Apex's president, are not identified anywhere as depicting an 

unmodified Moselle, and thus there is no contradiction on the 

record to Ralph Kearney's testimony that he took the Moselle "off 

the market" after Spivak I. App. at 867, 974-75; see also App. 

at 422, 961, 971. 
16 

fully informed as to the bases of the district court's 

decision."). We anticipate that, assuming this case is properly 

appealed after the entry of final judgment, the next appellate 

panel to review this case will be appreciative of the district 

court's attention to these details. 

III.

CONCLUSION

 For the reasons set forth above, we will dismiss the 

defendants' appeal for lack of an appealable order at this time.