Court Opinion

ID: 9472982
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:16:33.010694+00
Date Added: 2024-06-11T17:43:15.798048
License: Public Domain

GARTH, Circuit Judge,
dissenting:
The issue on which I part company with the majority involves the “control” issue of Bowley’s appeal. Bowley contends that Mulach, the account executive, had de facto control of his trading account and that Mulach, utilizing that control, churned Bowley’s security account to Bowley’s detriment. Mulach, on the other hand, was consistent in asserting that Bowley had the right to control the account by refusing recommendations made by Mulach to either buy or sell, and that indeed, by the time of the alleged churning activity, it was Bow-ley himself who was initiating the trading activity. Hence the factual issue was drawn as to who had control of the account. All other claimed errors were subordinate to this overriding question.
The issue thus became one for the jury to decide pursuant to the instructions given to it by the court. Accordingly, we must focus on the court’s charge, and the objections and lack of objections to that charge. The majority holds that Bowley, by objecting to one aspect of the charge, must be deemed to have preserved his objection to all aspects of the charge. Alternatively, the majority holds that even without an objection to the court’s charge, Bowley has preserved this critical issue for appeal.
Because I do not believe that the district court was properly alerted by Bowley’s objection to the error that Bowley now claims, see United States v. Gibbs, 739 F.2d 838 (3d Cir.1984), and because the error asserted by Bowley is neither fundamental nor did it cause a miscarriage of justice, I would hold that Bowley had failed to preserve the issue of the control instruction for appeal. Thus, with full recognition of the record as developed at trial, I would affirm the district court. I therefore dissent.
I.
Rule 51 of the Federal Rules of Civil Procedure mandates that:
No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider the verdict, stating distinctly the matter to which he objects and the grounds of his objection.
The purposes of this Rule are twofold. First, it prevents the assertion of an objection as grounds for a new trial unless the district judge was given the opportunity to correct the instruction before the jury. It thereby obviates the necessity of a new trial, if error in the charge had occurred. Second, it prevents counsel from covertly relying on an error to guarantee a new trial in case of an adverse verdict. Fulton v. Chicago, Rock Island and Pacific R.R., 481 F.2d 326, 338 (8th Cir.), cert. denied sub nom. Fulton v. Soo Line R.R., 414 U.S. 1040, 94 S.Ct. 540, 38 L.Ed.2d 330 (1973). With respect to the issue of control, which, as I have indicted is the dominant issue on this appeal, the district court charged as follows:
Did the person who had the right to say “trade,” also have the right to refuse, or did that rest in someone else? Did Mr. Bowley, in effect, give that over to Mr. Mulach by rubber-stamping everything? Or did Mr. Mulach never accept in any trading circumstance the right to refuse to trade?
But, the right to refuse, alone, will not be sufficient. It is the right to refuse coupled with a willingness to exercise it if under all the circumstances the objectives of the customer would not be fulfilled. That is the true test.
*651The right to refuse to trade, coupled with a willingness to exercise that right to refuse if upon consideration of the objectives and all the factors it would not be in the best interest of those objectives to go forward. Whoever had the right to refuse to trade coupled with that willingness is the person in control, and that is what you have to decide.
Did Mr. Bowley, in addition to having knowledge of the objectives, did he consider all the factors? Did he have a right to refuse to trade? And was he willing to say, “Don’t trade, don’t sell,” if he thought his objectives wouldn’t be served? If you think he possessed that authority, he had control of the account.
If, on the other hand, he agreed to everything that Mr. Mulach recommended, and Mr. Mulach had the right to refuse and was willing to exercise that decision — do not sell or do not buy at a price, or that month or that commodity— and he had a willingness to do that if he thought Mr. Bowley’s objecties wouldn’t be served, then Mr. Mulach had control.
In effect, the court misspoke in the latter half of its charge. In the first part of its charge the court was clearly correct. The district court judge stated that if the jury found Bowley had the right to refuse to trade, then Bowley had control. The judge then erroneously instructed the jury that if it found that Mulach had the right to refuse to trade, then Mulach would have control. By definition, of course, this could never have occurred, since it was not disputed that the account opened by Bowley was a non-discretionary account, i.e., that Mulach had no discretion, and therefore Mulach could not “refuse” to trade as a matter of law.
There can be no question but that had Bowley’s counsel called this misstatement to the district court’s attention, it would have been immediately corrected. Indeed, a fair reading of the charge indicates that the district court was not delivering a considered substantive instruction at this point, but was rather phrasing his charge in a parallel form which he apparently considered appropriate.
The district court judge, after his charge, then invited objections of counsel at a sidebar before the jury retired. Bowley’s counsel, however, did not object to that portion of the court’s instruction which made control contingent on Mulach’s right to refuse to trade. He did object to the charge defining a discretionary account and, based on that objection, the court delivered a curative instruction. After the corrective instruction, which did not deal with the issue of control, no objection was made. Had counsel made an objection at that point, the district court judge undoubtedly would have recognized his misstatement and cured any error by still another supplementary charge, thereby forestalling the need for either an appeal or a new trial.
Nor did Bowley’s requested charge on the issue of control serve as a substitute for an objection to the court’s charge on Mulach’s right to refuse trades. Fulton v. Chicago Rock Island and Pacific R.R. Co., supra. Bowley’s proposed charge did not deal with the “right to refuse” issue. It dealt only with other factors affecting control.
In the present context, it is Fed.R.Civ.P. 51, not Rule 46, which controls the issue on this appeal. Rule 46 does no more than indicate when an exception may be unnecessary. Rule 51, however, provides specifically that
No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection.
It was the failure of Bowley to call specific attention to what he now labels objectionable that resulted in the challenged instruction remaining uncorrected. In my opinion, it was Bowley’s obligation to call the attention of the court to the error which Bowley claimed and to do so in sufficient time so that the court could react appropriately. He did not do so and by not seeking to correct the court’s charge, which he now challenges, he did not preserve this issue *652for our review. See United States v. Gibbs, supra.
II.
Since no objection to the right-to-refuse-to-trade charge was preserved, this charge is reviewable by this court only if it constitutes “plain error.” See United States v. Logan, 717 F.2d 84, 91 (3d Cir.1983). Under this judicially created exception to Fed. R.Civ.P. 51, this discretionary power [to , -i ill • i review] should be exercised sparingly. United States v. 564.54 Acres of Land, More or Less, 576 F.2d 983, 988 (3d Cir. 1978); see Trent v. Atlantic City Electric Co., 334 F.2d 847, 859 (3d Cir.1964). In order for the exception allowing review to apply, two conditions must obtain: first, the error must result in manifest injustice; and second, the error must be fundamental, See Trent, supra, 334 F.2d at 859. in my view, neither condition is present here.
In applying the first test, i.e., manifest injustice, the Trent court reviewed the evidence of record in that case to determine whether the verdict could be supported despite the erroneous instruction given. Manifest injustice would result only if the evidence could not support the verdict, not simply where a different charge might have resulted in a different verdict. According to the Trent court,
This court has on occasion reversed sua sponte on the basis of plain or fundamental error respecting the charge---This discretionary power is exercised sparingly in order to prevent only what is deemed to be a miscarriage of justice. We need not express an opinion on whether the deficiency in the present charge constituted fundamental error within the meaning of our decisions for in any event under the facts and circumstances of this case, in our view the jury’s findings as to the appellants’ negligence cannot be said to manifest a miscarriage of justice. In regard to Deep-water and Gibbs and Hill, as is indicated infra, the evidence was more than suffi-dent to justify findings of negligence on their part even under a more properly detailed charge. 334 F.2d at 859.
Similarly, in the case before us, the evidence is clearly sufficient to support a finding, even under a proper charge, that it was Bowley, not Mulach, who had de facto eontrol of the acc0unt. Thus, I find no manifest injustice. I therefore am not required to reach the question as to whether the court>s error in itg charge was funda_ mentaL See Trent 334 F.2d at 859. If forced to do ho j would hold that . iw w9íS no V»
In light of the balance of the court’s charge in which it spoke to other issues which the jury might consider in determining control, such as, who was considering investment objectives and who was deciding to trade, and in light of the fact that it was Bowley who was in the best position to recognize the challenged error and who could have easily sought correction of the court’s one misstatement and did not do so, I find the charged error to be one that does not rise to the level of importance we normally reserve for “plain error.” In Namet v. United States, 373 U.S. 179, 190-91, 83 S.Ct. 1151, 1157, 10 L.Ed.2d 278 (1962), the Court concluded its opinion by stating:
No objection was ever made to this instruction, even though counsel for the petitioner did object to other aspects of the charge. Thus, we are not concerned with whether the instruction was right, but only whether, assuming it was wrong, it was a plain error or defect “affecting substantial rights” under Rule 52(b) 0f the Federal Rules of Criminal Procedure.
D . 0. „ „ . „ <cltlIf to Rul®30 °f Federal Rules of Criminal Procedure). Rule 30 is the exart ™™terpart Rul* 51 °* Federal Rules of Cml. Procedure and also requires *at an objection stat[e] distinctly the matter obíected to' 11 is evident to me that> on this record as a whole> no substantial ri^ht® of Bowley were affected by the courts charge.
Because I believe that the erroneous instruction on “right to refuse” is barred from review by Fed.R.Civ.P. 51, and that the other errors assigned do not of them*653selves warrant a new trial, I would affirm the judgment of the district court. Because the majority holds otherwise, I respectfully dissent.