Knapp Shoes, Inc. v. Sylvania Shoe Manufacturing Corp.

                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 93-1527

                      KNAPP SHOES, INC.,

                    Plaintiff, Appellant,

                              v.

           SYLVANIA SHOE MANUFACTURING CORPORATION,

                     Defendant, Appellee.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

       [Hon. Lawrence P. Cohen, U.S. Magistrate Judge]
                                                     

                                         

                            Before

                     Breyer, Chief Judge,
                                        

              Boudin and Stahl, Circuit Judges.
                                              

                                         

Timothy  C. Blank with whom  Bernard J. Bonn III,  Dina Warner and
                                                              
Dechert Price & Rhoads were on brief for appellant.
                  
Joseph B.  Green with whom Bennett  H. Klein and Kotin, Crabtree &
                                                                  
Strong were on brief for appellee.
  

                                         

                      February 10, 1994
                                         

     BOUDIN,  Circuit Judge.  Knapp Shoes Inc., the plaintiff
                           

in this commercial dispute, appeals from the district court's

order  dissolving a preliminary  injunction.  That injunction

had  frozen assets of  the defendant, Sylvania  Shoe Manufac-

turing Corp., in an amount sufficient to satisfy  a potential

judgment in Knapp's favor.   Because we find that the primary

ground of the court's order  is a defense that was  waived by

Sylvania,  and that the court's findings were insufficient to

support  its  action  on  the  alternative  ground  urged  by

Sylvania, we  vacate  the order  dissolving  the  preliminary

injunction.

                              I.

     Knapp sells work shoes at  both the wholesale and retail

levels,  including a  line  of shoes  with  a patented  slip-

resistant  rubber sole.   Beginning  in 1986  or  1987, Knapp

placed orders with Sylvania for the latter to manufacture and

supply   Knapp  with  several   different  styles   of  shoes

incorporating Knapp's slip-resistant sole.  Knapp intended to

resell the shoes both through its retail outlets and directly

to  large  customers  in  the  restaurant,  hotel  and  other

industries.  Between 1987 and 1989, Sylvania manufactured and

delivered over 250,000 pairs of shoes to Knapp.

     Sometime  in  1987,  Knapp  became concerned  about  the

quality  of the shoes manufactured  by Sylvania.  The primary

problem was  the tendency  of the sole  to separate  from the

                             -2-

leather body  of the  shoe.  Although  the parties  disagreed

(both then and now) as to the extent of the problem, Sylvania

made  a number  of changes  in construction  of the  shoes in

order  to eliminate  the  problem.   According  to its  later

complaint, Knapp was assured by Sylvania on various occasions

between 1987 and 1989 that the sole adhesion problem had been

remedied.  These  assurances, Knapp asserts, were  untrue; it

says that the proportion of defects remained high and in some

periods approached 100% for certain styles.

     On April  10, 1990,  Knapp filed  this diversity  action

under Massachusetts  law for  breach of  contract (count  1),

breach  of  express   warranty  and  implied   warranties  of

merchantability  and fitness (counts 2-4), breach of the duty

of good faith and fair dealing (count 5), fraud and negligent

misrepresentation  (counts 6 and  7), and violation  of Mass.

Gen.  Laws Ann.  ch. 93A  (count 8).1   The  gravamen of  all

these claims was  that too many of the  shoes manufactured by

Sylvania and sold to Knapp were defective. 

     Knapp's  complaint was  quite detailed in  setting forth

the categories of damages it claimed to have suffered.  These

included increased costs  of inspection and for  handling and

returning  defective  shoes;  lost  profits  due  to  Knapp's

                    

     1Chapter 93A  outlaws "[u]nfair  methods of  competition
and unfair or  deceptive acts or practices in  the conduct of
any trade or commerce." Mass. Gen. Laws Ann. ch. 93A,   2(a),
and  it permits  awards of  multiple  damages and  attorney's
fees.  Id.   11.
          

                             -3-

inability  to  fill  orders  for  customers;  losses  due  to

Sylvania's  refusal to  give credit  for  certain shoes  that

Knapp  did return  or attempted  to  return; increased  costs

because  Knapp was forced  to make substitute  purchases from

other  manufacturers; credits and price concessions Knapp had

to  afford its own customers because of their dissatisfaction

with defective shoes; and losses in good will and in customer

orders due to Sylvania's conduct.

     Sylvania filed an  answer and counterclaim.   The answer

denied  virtually all of  the incriminating allegations.   It

also asserted  13 affirmative  defenses, including  estoppel,

disclaimer   of   warranties,  unclean   hands,   laches  and

contributory  negligence.   Sylvania's  counterclaim  alleged

that Knapp still owed Sylvania about $277,000 for shoe orders

not  yet paid  (Sylvania also  claimed  multiple damages  and

attorney's  fees  under  Chapter  93A).     The  counterclaim

suggested   that  any  defects   were  due  to   Knapp's  own

specification  of materials to  be used in  manufacturing its

shoes.

     Both parties  consented to  proceed before a  magistrate

judge and  waived a  jury trial.   The trial  was bifurcated,

with the liability phase covering  nine trial days in January

1991.  At the conclusion  of this phase, the magistrate judge

on January 31, 1991, entered a four-page memorandum and order

that devoted  one  paragraph each  to five  of Knapp's  eight

                             -4-

counts,  without  discussing  Sylvania's counterclaim.    The

first substantive paragraph reads as follows:

               Except to the  extent that plaintiff
          has  shown,  or  can  show,  that   shoes
          manufactured by  defendant and  delivered
          to plaintiff,  and/or shoes  manufactured
          by   defendant   to   be   delivered   to
          plaintiff,  were,  in   fact,  defective,
          plaintiff  has  failed  to  satisfy  this
          court by a preponderance of the  evidence
          that   defendant   breached   an  express
                                                   
          warranty.      None    of   the   parties
          anticipated,    or    could,    in    the
          circumstances,   reasonably   anticipate,
          that each and every  shoe manufactured by
          defendant for the plaintiff would be free
          of  defect.     On  its  part,  defendant
          expressly promised that it  would use its
          best  effort  to  produce  a  defect-free
          shoe,   and   that    it   would   credit
          plaintiff's account  for those  defective
          shoes  which  plaintiff  returned.    All
          parties clearly understood  that that was
          the  extent  of   the  express  warranty,
          nothing more, and nothing less.

     In the subsequent paragraphs, the magistrate judge found

that   Knapp   had   failed   to   prove   fraud,   negligent

misrepresentation or--"except  to the  extent that  plaintiff

has  shown, or  can show,"  a refusal  by Sylvania  to credit

returned  defective shoes--breach of  the duty of  good faith

and  fair dealing.   As  for Knapp's  chapter 93A  claim, the

order said that  Sylvania had not been shown  to have engaged

in conduct so unscrupulous as  to make it liable for multiple

damages;  it noted, but did not  decide, the question whether

attorney's fees might  be due Knapp under chapter  93A on the

                             -5-

theory that a  breach of warranty was a  violation of chapter

93A under a regulation of the state's attorney general.

     In May 1991, prior to  the damages phase of trial, Knapp

discovered  that Sylvania  was  going  out  of  business  and

liquidating its assets.  Fearful that Sylvania would  soon be

judgment-proof, Knapp obtained a  temporary restraining order

precluding  Sylvania from dissipating assets in the amount of

$3,775,657.22--the  amount of  damages  that  Knapp hoped  to

prove in  the next phase of the  trial.  The magistrate judge

modified this  order on June  10, 1991, converting it  into a

preliminary injunction and  amending it to allow  Sylvania to

make limited payments to its creditors and lawyers.

     The damages phase of trial  took place over five days in

June  1991;  at  Sylvania's  behest,  an  additional  day  of

evidence  was heard on November  25, 1991.  Proposed findings

were filed  by both  sides in  March 1992.   It  appears that

nothing further  occurred during the next 12 months until, in

March 1993, the magistrate judge issued an order proposing to

certify  certain  questions   to  the  Massachusetts  Supreme

Judicial Court.   Both  sides opposed  certification, but  on

April 8, 1993,  the magistrate judge certified  two questions

to the Supreme  Judicial Court; both related  to the possible

application of Chapter 93A to "a simple breach of warranty."2

                    

     2The first question  was whether a regulation  issued by
the  state attorney  general under  chapter  93A, defining  a
violation to  include  a breach  of  warranty, applied  to  a

                             -6-

     In the certification, the  magistrate judge prefaced the

two  certified  questions  with a  ten-page  statement.   The

statement repeated the magistrate judge's rulings on the five

counts discussed  in its  January 31,  1991, order,  and then

made several additional  findings of fact and  conclusions of

law.  These  determinations were prefaced by a statement that

"only the  ultimate findings  and conclusions  are set  forth

herein - not the  subsidiary findings and conclusions."   The

magistrate judge determined inter alia that:
                                      

               1.    .  .  .  .  By  their  express
          negotiations,     by     their    express
          understandings,  and  by   their  express
          course  of  dealings,  Sylvania  promised
          Knapp  that, in the event that shoes were
          defectively manufactured, Knapp's remedy,
          and sole remedy, would be the replacement
                  
          of  [or credit for]  those shoes shown to
          be defective and returned - nothing more,
          and nothing less [footnote omitted].

               2.    Because  of  this  clear   and
          express    understanding   between    the
          respective    parties,    Knapp's    sole
                                                   
          remedies, in terms of breach of contract,
          or under  the relevant provisions  of the
          Uniform Commercial  Code, are  limited to
          the replacement of [or credit for]  those
          shoes shown to  be defective and returned
          to Sylvania.

     Other determinations included a ruling that Sylvania was

obliged to give  a credit for or replace  any defective shoes

                    

transaction  of the kind  described by the  magistrate judge,
namely, a breach as between two similarly situated businesses
based on  delivery of  a "minute"  portion of  non-conforming
goods.   If the  answer were yes,  the second  question asked
whether  the  regulation  was  valid  under  the  authorizing
statute.

                             -7-

returned by  Knapp;  a  statement  that  many  of  the  shoes

returned  by Knapp's  customers  were  made  by  an  overseas

supplier; a  finding that Sylvania acted in  "the utmost good

faith"  to correct  a problem  "not  reasonably foreseen"  by

either side; and a finding in  a final footnote that "at best

.  . .  approximately three  (3)  percent of  the shoes  were

allegedly  defective .  . .  and as  to  a majority  of those

shoes,  credit  was  given to  Knapp  when  those  shoes were

returned . . . ."  

     The Supreme  Judicial  Court  has  yet  to  act  on  the

questions  certified  by the  district  court.   But  on  the

strength  of   the  magistrate   judge's   findings  in   the

certification  order, Sylvania  moved on  April  8, 1993,  to

dissolve the  preliminary injunction.   The  magistrate judge

granted  this  motion on  May  5, 1993,  concluding  that its

earlier   findings  left  Knapp   with  so  little   hope  of

substantial recovery  that  the freeze  on Sylvania's  assets

could no longer be justified.  The order set forth findings 1

and 2 from the certification, quoted in pertinent part above.

     Knapp filed a notice of appeal on May 11, 1993, and this

court  stayed the  magistrate  judge's  order dissolving  the

preliminary injunction  pending the  outcome of  this appeal.

We  have jurisdiction  pursuant to  28  U.S.C.    1292(a)(1),

which permits  appeals from  interlocutory orders  dissolving

injunctions.

                             -8-

                             II.

     This circuit has  not explicitly addressed the  standard

to  be applied  by a  district court  in deciding  whether to

dissolve a preliminary  injunction.  But we  think it evident

that in  the ordinary case  dissolution should depend  on the

same considerations that guide a judge in deciding whether to

grant  or deny a  preliminary injunction in  the first place.

The  familiar quartet  includes  likelihood  of success,  the

threat of  irreparable injury  to the  party seeking  interim

relief, the  equities and  the public interest.3   It  is not

surprising that a  fresh look after the trial  evidence is in

might produce a  different judgment about the  probability of

success.

     In dissolving  the preliminary injunction in  this case,

the magistrate  judge relied upon his  certification findings

that the parties had agreed to limit their remedies under the

contract  to return and  replacement or credit  for defective

shoes.  As already  noted, the magistrate judge  concluded in

finding  number 1 that  "[b]y their express  negotiations, by

their  express understandings, and by their express course of

dealings, Sylvania  promised Knapp  that, in  the event  that

shoes were defectively manufactured, Knapp's remedy, and sole
                                                             

                    

     3See, e.g., Teradyne, Inc. v. Mostek Corp., 797 F.2d 43,
                                               
51  (1st   Cir.  1986);     Planned   Parenthood  League   of
                                                             
Massachusetts  v. Bellotti,  641 F.2d  1006,  1009 (1st  Cir.
                          
1981).

                             -9-

remedy, would  be the  replacement of [or  credit for]  those

shoes shown to be defective  and returned - nothing more, and

nothing less."

     Accordingly,  the  magistrate  judge held  that  Knapp's

claims for damages, see Mass. Gen. Laws Ann. ch. 106,   2-715
                       

(buyer's   ordinary   damages),       7-16  (incidental   and

consequential  damages), over  and  above  credits for  shoes

actually returned to Sylvania, were barred by Mass. Gen. Laws

Ann.   ch.   106,  2-719;4   hence,  Knapp's   likelihood  of

substantial   recovery  was   insufficient  to   support  the

preliminary injunction.  We need not decide whether a section

2-719 defense was supported by the evidence, because we  hold

that  Sylvania waived any such limitation of remedies defense

by failing to raise it in a timely fashion.

                    

     4Mass.  Gen. Laws  Ann. ch.  106,    2-719,  pertinently
provides:

     Contractual Modification or Limitation of Remedy

     (1)  .  .  .  (a)  the  agreement  may provide  for
     remedies  in addition  to  or  in substitution  for
     those provided  in this  Article and  may limit  or
     alter the measure of damages recoverable under this
     article,  as by  limiting the  buyer's  remedies to
     return of  the goods and repayment of  the price or
     to repair  and replacement of  non-conforming goods
     or parts;  and

     (b)  resort to  a remedy  as  provided is  optional
     unless  the  remedy  is  expressly   agreed  to  be
     exclusive, in which case it is the sole remedy.

                             -10-

     Fed. R. Civ.  P. 8(c) requires a party  to affirmatively

plead  certain  specified  defenses, as  well  as  "any other

matter  constituting  an avoidance  or  affirmative defense."

Affirmative defenses not so pleaded  are waived.  See FDIC v.
                                                          

Ramirez-Rivera, 869 F.2d  624, 626 (1st Cir. 1989).   We have
              

previously held that a  statutory provision limiting  damages

to  a  fixed  sum  constituted  an  affirmative  defense  for

purposes  of Rule  8(c).    Jakobsen  v.  Massachusetts  Port
                                                             

Authority, 520 F.2d 810, 813  (1st Cir. 1975).  Section 2-719
         

performs the same damage limitation function, and there is no

reason to reach a contrary result here.  See also Ingraham v.
                                                          

United States, 808 F.2d 1075, 1079 (5th Cir. 1987).
             

     Sylvania failed to raise the  defense in its answer, its

amended answer, its pretrial memorandum, or its proposed jury

instructions.5   Indeed, there  is no indication  that either

of  the parties thought  that a limitation  of remedies issue

was present in  the case until the ninth and final day of the

liability phase  of trial.  At  that point, after  all of the

evidence  had  been  submitted,  the  magistrate  judge  said

"[w]e've  got a  problem,  I think  under  Section 719(b)  of

whether  or not  .  . .  the  parties agreed  that  defective

returns, credits for [sic] would be the sole remedy."

                    

     5The parties submitted proposed  jury instructions prior
to  their waiver  of trial  by  jury and  consent to  proceed
before the magistrate judge.

                             -11-

     Sylvania  does  not  dispute   that  the  limitation  of

remedies is an affirmative defense.  Nor does it suggest that

it raised that defense in  its answer or elsewhere.  Instead,

Sylvania argues that the statement of the magistrate judge at

the close of the liability stage,  as well as later ones made

by the magistrate  judge in the damages phase, put plaintiffs

on notice as to the issue.  We do not agree.

     The reason why affirmative defenses under Rule 8(c) must

be pled in the answer is to give the opposing party notice of

the  defense  and a  chance  to  develop  evidence and  offer

arguments  to   controvert  the   defense.     Blonder-Tongue
                                                             

Laboratories,  Inc. v. University of Illinois Foundation, 402
                                                        

U.S. 313, 350 (1971).  Some courts have excused noncompliance

with  Rule  8(c)  if  "a  plaintiff  receives  notice  of  an

affirmative defense by  some means other than  pleadings" and

is not  prejudiced by  the omission of  the defense  from the

initial pleading.  E.g., Moore, Owen, Thomas & Co. v. Coffey,
                                                            

992 F.2d  1439, 1445 (6th Cir. 1993).  This court reached the

same result where  a defense "has been fully  tried under the

express or implied consent of the parties, as if it  had been

raised in the original  responsive pleading." Ramirez-Rivera,
                                                            

869 F.2d at 626-27.

     We need not decide whether notice and no prejudice would

also serve  as an excuse  in this circuit, cf.  Jakobsen, 520
                                             

F.2d at 813  (referring favorably to the  no-prejudice test),

                             -12-

since  we find that neither the Coffey nor the Ramirez-Rivera
                                                             

standard was met  here.  In the present  case, the limitation

of remedies issue  was not raised until virtually  the end of

the  liability trial, after  discovery and the  submission of

all  of the  evidence on  liability.   Nor  did the  parties'

presentation of witnesses  or documents focus on  this issue.

Rather, the magistrate  judge's ruling seems to  have derived

from  a fragment  of testimony  from one  witness:   a former

Knapp executive named John  Esser testified that he  had told

the  Knapp president in July 1989 that Sylvania "[had] agreed

and will  agree, if  we do  have a  claim, to  take back  any

shoes, and always have."  

     This  is pretty thin  stuff, even coupled  with evidence

from   other  sources   that   the   parties  had   extensive

arrangements  for the return  of defective goods  in exchange

for credit.  The question,  after all, is not whether credits

were an available remedy  but whether the parties had  agreed

that credits were the exclusive  remedy.  See Mass. Gen. Laws
                                             

Ann. ch. 106,    2-719(1)(b) (quoted in note 4  above).  More

to the point,  Esser's statement in context  was not elicited

by Sylvania  to show that credits were  the exclusive remedy,

nor  did  Knapp  cross-examine  in order  to  refute  such  a

suggestion, which after all Sylvania had not previously made.

Thus the parties  did not litigate the limitation of remedies

issue in the liability phase of the trial.

                             -13-

     Nor  was the  issue  litigated  in  the  damages  phase.

Although in this  phase the magistrate judge  adverted to the

limitation of remedies  issue, his brief remarks  suggest not

that  it was  now  open  to litigation  but  rather that  the

parties either had or should  have addressed the issue in the

liability  phase of the trial.6   One can argue as to whether

the  limitation of remedies  issue is  better described  as a

liability or a damage issue.  But in this case, the issue was

not litigated  in the former phase and  it would have taken a

fortune  teller  to  suppose  that  such  evidence  would  be

welcomed in the latter phase.

     In  sum, we conclude that Sylvania waived the limitation

of remedies defense by  failing to assert it in the answer or

by amendment in  accordance with Rule 8(c).   The defense was

not  resurrected either by clear  notice given prior to trial

or by actual litigation of the  issue in the course of trial.

Thus the  limitation of remedies  defense is out of  the case

and cannot support the order vacating the injunction.

                             III.

                    

     6On  the first day  of the damages  trial the magistrate
judge, in ruling on an in limine motion by Sylvania to  limit
                                
evidence,  said that  the motion  was granted "to  the extent
it's already  [sic] on  what type of  remedy is  available as
opposed to what  damage is suffered." In a  written order the
next day,  the magistrate  judge--speaking  of the  liability
phase--said:   "An overriding  issue -  recognized, or  which
should  have been  recognized by  the  parties -  was and  is
whether parties agreed to limit their respective remedies . .
. ."

                             -14-

     Sylvania  argues that the order under review may, in the

alternative,  be  upheld  based  on  the  magistrate  judge's

finding  that only  a  very  small  percentage of  the  shoes

manufactured by Sylvania for Knapp were defective.  If only a

very small fraction  of the shoes made by  Sylvania for Knapp

were defective, it might well follow that the damages claimed

by Knapp were wildly excessive and that the injunction was no

longer needed or  ought to be reduced in amount.   After all,

practically all of  the types  of damage  claimed in  Knapp's

complaint (and recited above) depend as a practical matter on

the  premise  that  a  large percentage  of  the  shoes  were

defective.  

     But in this case we have no way to review or sustain the

critical determinations--that the defective shoes were a very

small  quantity--about  three percent--because  there  are no

supporting findings by the magistrate judge.  Fed. R. Civ. P.

52(a)  requires that "in  granting or  refusing interlocutory

injunctions the court shall .  . . set forth the  findings of

fact and conclusions  of law which constitute the  grounds of

its action."   This requirement,  which also attaches  to the

court's own final  decision in a jury waived  trial, id., but
                                                        

not to  most other rulings,  id., reflects the  importance of
                                

injunctions  and of  providing an  adequate  basis for  their

appellate review.

                             -15-

     Sylvania argues  that Rule  52(a) is  not applicable  to

this case  because the  rule, by its  terms, applies  only to

decisions "granting  or refusing  interlocutory injunctions."

Although  there  is  some  general  support  for   Sylvania's

position, see Baltimore & O. R. R. v. Chicago R. &  I. R. R.,
                                                            

170 F.2d 654, 659 (7th Cir. 1948), cert. denied, 336 U.S. 944
                                               

(1949); Munoz  v. Porto Rico Ry.  Light & Power  Co., 83 F.2d
                                                    

262,  270 (1st  Cir.)  (construing Equity  Rule  70 1/2,  the

precursor of Fed.  R. Civ. P. 52(a)), cert.  denied, 298 U.S.
                                                   

689  (1936), both  the  cases  cited  involved  the  district

court's refusal  to dissolve  a preliminary  injunction.   We
               

agree that where a court made adequate findings when granting

the preliminary  injunction in the  first place, it  need not

restate those findings in order to maintain the injunction.

     A decision to vacate  an existing preliminary injunction
                         

is quite another matter.  It is not only a substantial change

in the status quo but is the effective equivalent of a denial
                                                             

of  a preliminary  injunction,  an event  that unquestionably

triggers Rule  52(a)'s requirement  of findings.   We do  not

think that  it stretches Rule 52(a) unduly  to apply it to an

order vacating a  preliminary injunction.   But the need  for

findings in such a case is so strong that we would impose the

findings  requirement ourselves if we thought that Rule 52(a)

had left an inadvertent loophole.

                             -16-

     Given  our  conclusion  that Rule  52(a)  findings  were

required, we cannot sustain the order vacating the injunction

in this  case on the alternative ground  offered by Sylvania,

namely,  the  small  percentage  of  defective  shoes.    The

magistrate   judge  did  not   rely  at  all   on  Sylvania's

alternative  ground.  Instead, in  a footnote sentence at the

close  of the certification, the magistrate judge observed in

explaining the  questions being certified:   "[T]he plaintiff

has shown that 

three  (3) per cent  of the shoes  were allegedly defective."

We do not think that this sentence is sufficient for purposes

of Rule 52(a).

     Admittedly, the case law lays down few clear rules as to

what is  adequate compliance with  Rule 52(a).  We  have said

that "conclusory  findings" are  not enough,  Thermo Electron
                                                             

Corp. v. Schiavone Construction Co.,  915 F.2d 770, 773  (1st
                                   

Cir. 1990), but  also that "the `judge need  only make brief,

definite,  pertinent  findings   and  conclusions  upon   the

contested  matters;     there  is  no  necessity   for  over-

elaboration  of  detail  or  particularization  of   facts.'"

Applewood  Landscape & Nursery Co. v. Hollingsworth, 884 F.2d
                                                   

1502, 1503  (1st Cir.  1989).  The  difficulty in  devising a

yardstick  is not  surprising when  one  considers the  great

diversity of disputes governed by the rule.

                             -17-

     In  the abstract,  one might  or  might not  describe as

"conclusory" a magistrate  judge's statement  that the  shoes

delivered by  Sylvania to  Knapp had a  defect rate  of about

three percent:   the statement is specific  and concrete, but

unexplained.   In truth, pinning  a label like  "ultimate" or

"conclusory"  on a single sentence  is not very helpful; Rule

52(a)  calls  for  a  level  of  detail  adequate  to  permit
                                                 

appellate  review on  factual issues,  and  what is  adequate

depends on the  importance of an  issue, its complexity,  the

depth  and nature of evidence presented, and similar elements

that  vary  from case  to  case.    See generally  Kelley  v.
                                                         

Everglades Drainage District, 319 U.S. 415, 420 (1943).
                            

     Here the  percentage of defects is critically important.

Of course, the  magistrate judge could not know  that his own

basis for dissolving  the injunction would  be set aside  and

that Sylvania would rely on the percentage finding to support

the  dissolution order.   But  to the  extent that  the three

percent finding is proffered by Sylvania  as a foundation for

the dissolution order,  it must meet the test  of Rule 52(a).

For this purpose,  the importance of the  issue requires more

rather than less detail.  

     In this case  there is no  detail whatever.   We do  not

know  how the magistrate  judge defined "defect,"  a disputed

issue  at trial,  nor how  he  arrived at  the three  percent

figure, nor how he handled Knapp's claim  that the percentage

                             -18-

of shoes  actually returned  to Sylvania  greatly understated

the percentage of defects.7   On all of these issues there is

no indication as to why certain witnesses were credited, what

data  was used  or how  it  was construed,  or why  competing

evidence was rejected.  We are thus unable to make a reasoned

judgment  whether, on  this critical  issue  of defects,  the

magistrate   judge's  finding   was  or   was  not   "clearly

erroneous."  Fed. R. Civ. P. 52(a).

     In fairness to the magistrate judge, we note that he did

not  make  the  "approximately three  (3)  per  cent" finding

either to support a final determination of damages (which has

not   yet  occurred)  or   to  support  dissolution   of  the

preliminary injunction (it is Sylvania  who is trying to make

the finding play that role).  Rather the footnote finding was

made to flesh out a hypothetical statement in the body of the

certification.   There  is  no  requirement  for  Rule  52(a)

findings in certifying a legal question to a state court.  

                             IV.

     The trial in this case concluded on November 25, 1991, a

year and a half before  entry of the interlocutory order that

forms the basis  of this appeal and  over two years  prior to

the present decision.  We  see little point in remanding this

                    

     7Knapp claimed  that many  of the  defective shoes  were
simply disregarded by  customers and that other  shoes, which
Knapp sought  to return  to Sylvania  as defective,  were not
accepted by Sylvania.

                             -19-

case  for further  findings  with  respect  to  the  district

court's  order dissolving the preliminary injunction.  In our

view, the energies of both  the court and the litigants would

be more fruitfully directed toward a final resolution of this

case on the merits.    

     Sylvania is,  of course,  free to file  a new  motion to

dissolve the preliminary injunction.  But unless  it can show

some  urgent need  for the  release  of the  funds, we  would

expect  the magistrate judge  to refuse summarily  to revisit

the  preliminary  injunction  until  the  final  decision  is

issued.  Knapp's  case was once thought to  have enough merit

to  justify  an injunction;  as  yet there  are  no supported
                                                             

findings that warrant a reappraisal of potential damages; and

Sylvania is apparently in the process of distributing  all of

its unencumbered assets.

     As for the certification, it relates only to the limited

issue  of attorney's  fees under  chapter 93A.   Possibly the

Supreme Judicial Court will have answered the questions posed

by  the time  the  magistrate  judge is  ready  to issue  his

decision on  the merits.   If not,  the magistrate  judge may

think that the wiser course, in litigation that has otherwise

been ripe  for resolution  at least since  March 1992,  is to

decide the  whole case  and make his  best conjecture  on the

chapter 93A issues.  

                             -20-

     One  final issue  remains.   In  the order  vacating the

preliminary injunction,  the magistrate judge  also dissolved

the attachment on trustee process.  An attachment on  trustee

process is  an interim remedy  that was used here  to prevent

certain  persons owing funds to Sylvania from disbursing them

to Sylvania, in effect protecting funds that might be used to

satisfy a  judgment for Knapp.  See Mass. Gen. Laws. Ann. ch.
                                   

246   1; Fed. R. Civ.  P. 64; Mass R. Civ. P. 4.2.   Our stay

pending review kept both the injunction and the attachment in

effect until disposition of this appeal.  

     Sylvania argues  that the dissolution  of the attachment

is  not  equivalent  to  the  dissolution  of  a  preliminary

injunction and is not an appealable event.  Knapp argues that

the attachment is appealable, citing Teradyne, Inc. v. Mostek
                                                             

Corp.,  797 F.2d  43, 44-47  (1st Cir. 1986),  but we  see no
    

reason  to  resolve  this  issue.    The  magistrate  judge's

rationale   for  dissolving  both   the  injunction  and  the
         

attachment was  the same.  As we have found that rationale to

constitute legal error,  we assume that the  magistrate judge

will  on his  own  motion maintain  the  attachment in  force

unless and until there is a proper basis for modifying.  

     Sylvania says that  the funds under the  attachment have

been  earning no interest  for two years.   If the  funds are

unequivocally  owing to  Sylvania, there  should  be an  easy

means for dealing with this problem (e.g.,  by an arrangement
                                         

                             -21-

transferring the funds to an interest bearing account subject

to  the  attachment).    Nothing  in  this  opinion  prevents

Sylvania   from  applying  to  the  magistrate  judge  for  a

modification of the  attachment to address this  or any other

problem pertaining to the attachment.

     The magistrate judge's order  dissolving the preliminary

injunction is vacated.
                     

                             -22-