153 F.3d 413 (7th Cir. 1998), 97-2768, Kaplan v. Shure Bros., Inc.

Docket Nº:97-2768.
Citation:153 F.3d 413
Party Name:Robert B. KAPLAN, Plaintiff-Appellant, v. SHURE BROTHERS, INC., an Illinois corporation, Arnold Weinberg, of Katz Randall & Weinberg, and Katz Randall & Weinberg, Defendants-Appellees.
Case Date:August 11, 1998
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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153 F.3d 413 (7th Cir. 1998)

Robert B. KAPLAN, Plaintiff-Appellant,


SHURE BROTHERS, INC., an Illinois corporation, Arnold

Weinberg, of Katz Randall & Weinberg, and Katz

Randall & Weinberg, Defendants-Appellees.

No. 97-2768.

United States Court of Appeals, Seventh Circuit

August 11, 1998

Argued April 23, 1998.

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[Copyrighted Material Omitted]

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Sidney Margolis (argued), Chicago, IL, for Plaintiff-Appellant.

William J. Anaya (argued), Johnson & Bell, Chicago, IL, for Defendant-Appellee Shure Brothers, Inc.

Terry D. Weissman (argued), Kendra J. Panek, Neal, Gerber & Eisenberg, Chicago, IL, for Defendants-Appellees Arnold Weinberg, Katz Randall & Weinberg.

Before BAUER, FLAUM and EVANS, Circuit Judges.

BAUER, Circuit Judge.

In 1996, plaintiff/appellant Robert Kaplan brought this case against Shure Brothers, Inc., attorney Arnold Weinberg, and the law firm of Katz Randall & Weinberg. Kaplan alleged that Shure breached the warranties contained in a land sale contract and that Weinberg and his firm had committed malpractice in connection with the contract. The district court granted the defendants' motions to dismiss, and Kaplan appealed. As discussed below, we find that the district court correctly dismissed Kaplan's claims against Weinberg and the firm but incorrectly

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dismissed his claims against Shure, and we therefore affirm in part and reverse in part.


The following allegations are contained in the appellant's Second Amended Complaint and are taken as true for purposes of our review. On July 14, 1987, Shure Brothers Inc. ("Shure") entered into an agreement to sell a parcel of land at 3635 West Touhy Avenue in Lincolnwood, Illinois, to RBK Furniture, Inc. ("RBK") for $2,875,000. In this real estate purchase agreement ("the agreement"), Shure made a number of representations regarding the land, including the fact that Shure had good and marketable title to the land, that as of the closing there would be no outstanding obligations or liabilities against the land, and that the land had never been used as a landfill or waste dump and did not contain any hazardous wastes. The agreement stated that Shure's representations and warranties would survive the closing and that RBK would have a right to damages or other remedies in the event Shure breached any of its promises. Additionally, the agreement stated that it was binding on "all of the parties hereto and their respective successors and assigns." The sale of the land closed on December 2, 1987, with a trust ("the Trust"), in which Robert Kaplan ("Kaplan") was the sole beneficiary, acquiring title.

American National Bank and Trust Company of Chicago ("ANB") financed the purchase by the Trust and also served as its trustee. After the purchase had been completed, the Trust leased the land to RBK, which opened a retail furniture showroom and warehouse on the site. In April 1988, The Fidelity Mutual Life Insurance Company ("Fidelity") agreed to lend $4,000,000 to the Trust to refinance the ANB loan and to enable renovations to be made to the site. To help secure this loan, Kaplan executed a guaranty which provided that he would be personally liable for 25 percent of the outstanding principal. At some point, the Trust defaulted on its obligations under the mortgage, prompting Fidelity to file suit in the Northern District of Illinois on September 23, 1992. In 1994, the court entered judgment against Kaplan with respect to his guaranty, and he paid Fidelity $1,107,238.85.

At about the same time that Fidelity filed suit against it, the Trust entered into an option-to-purchase agreement with Wal-Mart Stores, Inc. ("Wal-Mart") for the land in May 1992. Pursuant to the agreement, Wal-Mart conducted an environmental investigation of the land. When this investigation unearthed contamination, Wal-Mart elected not to proceed with the purchase of the land. Things went from bad to worse in December 1994 when Illinois Tool Works ("Illinois Tool"), the owner of an adjacent parcel of land, filed suit against RBK (and, via an amended complaint, Kaplan as well). Illinois Tool alleged that its property was contaminated with hazardous substances released or threatened to be released from RBK's land. After some legal wrangling and the addition of other parties, this litigation, which is separate and distinct from the present case, settled.

Before the Trust purchased the land, Kaplan contacted Arnold Weinberg ("Weinberg") of the law firm of Katz Randall & Weinberg ("KR & W" or "the firm") to represent him during the deal. Weinberg also represented Kaplan (and presumably the Trust and RBK) with regard to ANB's financing of the purchase in 1987, Fidelity's refinancing of the ANB loan and financing of construction in 1988, the dealings with Wal-Mart in 1992 and 1993, and the litigation involving Fidelity and Illinois Tool in 1992 and 1993. After originally filing suit in February 1996, Kaplan filed a Second Amended Complaint on September 25, 1996, naming Shure, Weinberg, KR & W and Tom Pado, an engineer who had conducted an environmental inspection of the land prior to RBK's purchasing it. This complaint was dismissed by the district court 1 on February 14, 1997, and Kaplan filed a timely notice of appeal on March 14, 1997.

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I. Jurisdiction

Before we can consider the appellant's contentions, we must address some jurisdictional concerns that have arisen. In his brief, Kaplan cites 28 U.S.C. § 1291 as a basis for jurisdiction in this court, stating that he is seeking review of a final judgment entered by the district court. However, we are unable to find a copy of any judgment in the record. Pursuant to Fed.R.Civ.P. 58, the clerk of the court, "upon a decision by the court ... that all relief should be denied ... shall forthwith prepare, sign, and enter the judgment without awaiting any direction by the court.... Every judgment shall be set forth on a separate document." While the district court did state in several minute orders that it was dismissing Kaplan's entire case, no actual judgment was ever entered.

The fact that no judgment document appears in the record, however, does not deprive us of jurisdiction. The Supreme Court has found that the lack of such a document does not affect appealability when: 1) the district court clearly evidenced its intent that the opinion and order from which an appeal is taken represented the final decision in the case; 2) a judgment of dismissal was recorded in the clerk's docket; and 3) the appellee did not object to the taking of the appeal in the absence of a separate judgment. Bankers Trust Co. v. Mallis, 435 U.S. 381, 387-88, 98 S.Ct. 1117, 55 L.Ed.2d 357 (1978) (per curiam). Here, the district court's opinion evidenced the requisite intent, a judgment was entered in the district court's docket (albeit without using the word "judgment"), and the appellees did not raise any objection to this appeal. While the district clerk should be more fastidious about following the mandates of Fed.R.Civ.P. 58, the absence of a judgment does not deprive us of jurisdiction in this case.

Another problem exists because the case was purportedly dismissed without prejudice. See Rec. Doc. 80. As we have previously stated, "[a]n order dismissing a complaint 'without prejudice' usually is not appealable, because the plaintiff may file an amended complaint." Farrand v. Lutheran Brotherhood, 993 F.2d 1253, 1254 (7th Cir.1993). When it is clear from the order at issue that no amendment is possible, however, the dismissal is considered final and can be appealed. Id. In this case, a review of the district court's orders convinces us that the court's dismissal of Kaplan's action on February 14, 1997 is an appealable order. The district court docket reflects that a minute order was entered on June 11, 1997 dismissing Kaplan's case with leave to reinstate before July 11; if no request to reinstate was filed, the dismissal would become final with prejudice. See Docket Sheet, Entry 79 (actual document missing). On July 2, another minute order was entered stating that the order of June 11 was amended to state that "[a]ll matters in controversy having been settled, the above-entitled case is dismissed without prejudice." Rec. Doc. 80. When read in conjunction with the district court's opinion of February 14, 1997, which dismissed all of the relevant counts of Kaplan's complaint with prejudice, a clear intent by the court to end the entire case is evidenced. The fact that the minute orders state (probably incorrectly) that the case was dismissed "without prejudice," therefore, does not deprive us of jurisdiction over this appeal.

The parties seem to lack attention to detail when preparing the jurisdictional statements in their briefs. While Weinberg and KR & W attempted to clear up the confusion created by Kaplan's jurisdictional statement, neither they nor the appellant acknowledged that the language dismissing the case was without prejudice and that no formal final judgment had been entered. Jurisdictional statements are not just formalities or refresher courses in Civil Procedure. We anticipate more accurate statements; nevertheless, since we have jurisdiction here, we turn to the merits of Kaplan's appeal.

II. Dismissal of Kaplan's Complaint

In its order of February 14, 1997, the district court dismissed with prejudice all of the counts in Kaplan's Second...

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