Morris v. City of Hobart

• Decision Date: 04 November 1994
• Docket Number: Nos. 93-6150,93-6184,s. 93-6150
• Citation: 39 F.3d 1105
• Parties: 66 Fair Empl.Prac.Cas. (BNA) 285, 63 USLW 2351, 29 Fed.R.Serv.3d 1135 Louie MORRIS, Plaintiff-Appellee-Cross-Appellant, v. CITY OF HOBART, Defendant-Appellant-Cross-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1105

39 F.3d 1105

66 Fair Empl.Prac.Cas. (BNA) 285, 63 USLW 2351,

29 Fed.R.Serv.3d 1135

Louie MORRIS, Plaintiff-Appellee-Cross-Appellant, v. CITY OF HOBART, Defendant-Appellant-Cross-Appellee.

Nos. 93-6150, 93-6184.

United States Court of Appeals Tenth Circuit.

Nov. 4, 1994.

Eric S. Eissenstat (Greg A. Castro, of Fellers, Snider, Blankenship, Bailey & Tippens, with him on the briefs), of Fellers, Snider, Blankenship, Bailey & Tippens, Oklahoma City, OK, for defendant-appellant-cross-appellee.

Mark Hammons, of Hammons & Associates, Inc., Oklahoma City, OK, for plaintiff-appellee-cross-appellant.

Before TACHA and KELLY, Circuit Judges, and VRATIL, ^* District Judge.

TACHA, Circuit Judge.

I. Background

In 1986 plaintiff Louie Morris filed suit in federal court against the City of Hobart, alleging that the City had discriminated against him on the basis of race in violation of Title VII of the Civil Rights Act of 1964 (hereinafter the "Title VII lawsuit"). In July 1987, the parties reached a settlement. The trial judge was advised of the settlement and entered an Administrative Closing Order in the court docket. ¹ On September 30, 1987, plaintiff filed a document entitled "Dismissal with Prejudice" with the clerk of the court; the clerk filed this document in the court docket on the same day.

On August 15, 1991 plaintiff again filed suit against defendant in federal court, claiming that defendant breached the settlement agreement. The district court found for plaintiff and entered judgment in the amount of $12,502.72. Defendant appeals, claiming that the district court lacked jurisdiction and that the court erred on the merits of its decision. Plaintiff cross appeals the district court's refusal to award him prejudgment interest. Because we conclude that the district court lacked subject matter jurisdiction to enforce the settlement agreement, we dismiss the case and do not address the merits of the appeal or cross appeal.

II. Preliminary Issues

When plaintiff filed this second action to enforce the settlement agreement, defendant moved to dismiss for lack of subject matter jurisdiction. The district court denied the motion, and defendant renews its jurisdictional objections on appeal. We review a challenge to subject matter jurisdiction de novo. Redmon v. United States, 934 F.2d 1151, 1155 (10th Cir.1991).

The district court found that it had subject matter jurisdiction over this dispute pursuant to our decision in Snider v. Circle K Corp., 923 F.2d 1404 (10th Cir.1991). In addition to agreeing with the district court's holding in this regard, plaintiff asserts an alternative basis for federal court jurisdiction. Specifically, plaintiff alleges that the Title VII lawsuit was never effectively dismissed, so that the lawsuit remained pending at the time plaintiff filed suit to enforce the settlement agreement. Because the district court retained jurisdiction over the Title VII lawsuit, plaintiff argues that it also had jurisdiction to enforce the settlement agreement. We first address plaintiff's assertion that the original Title VII lawsuit was never dismissed. Finding that the Title VII lawsuit was dismissed, we then address whether the district court had ancillary jurisdiction or an independent basis for subject matter jurisdiction.

III. Disposition of Title VII Lawsuit

Plaintiff first asserts that the district court has jurisdiction over the settlement agreement because the Title VII lawsuit was never dismissed. So long as a case is pending, he argues, the district court retains the power to enforce such a settlement agreement. We need not address the merits of plaintiff's contention, however, because we conclude that the Title VII lawsuit was dismissed.

Dismissals of lawsuits are governed by Rule 41 of the Federal Rules of Civil Procedure. Rule 41(a) provides two ways for a plaintiff to dismiss a case voluntarily after the defendant has filed an answer or a motion for summary judgment. The first method requires the filing of a stipulation of dismissal signed by all parties who have appeared in the action. Fed.R.Civ.P. 41(a)(1)(ii). This method normally is used when the parties have reached a settlement of the suit. In this case, although the parties reached a settlement on July 15, 1987, no written stipulation of dismissal signed by all parties was ever filed. Although, under certain circumstances, an oral stipulation by the parties in court may satisfy the requirements of Rule 41(a)(1)(ii), ² in this case the record is not clear enough for us to find that the Title VII lawsuit was dismissed pursuant to an oral stipulation by the parties in court. The document that plaintiff filed on September 30, 1987--entitled "Dismissal with Prejudice"--was not a Rule 41(a)(1)(ii) stipulation because it was signed only by plaintiff. Thus, the Title VII lawsuit was not dismissed in accordance with the requirements of Rule 41(a)(1)(ii).

The second method of dismissal under Rule 41(a) allows the court to dismiss the case at the plaintiff's instance, upon such terms and conditions as the court deems proper. Fed.R.Civ.P. 41(a)(2). Rule 41(a)(2) does not require that the plaintiff's request for dismissal take any specific form; it requires only that the court approve such a request for dismissal. See United Steelworkers v. Libby, McNeill & Libby, Inc., 895 F.2d 421, 422 n. 1 (7th Cir.1990) (finding that dismissal was pursuant to Rule 41(a)(2) because of the "circumstances surrounding the dismissal"); see also McCall-Bey v. Franzen, 777 F.2d 1178, 1185 (7th Cir.1985) (case dismissed pursuant to Rule 41(a)(2) although the district court made no reference to it in its order of dismissal).

There is no dispute in the instant case that the parties agreed to a settlement on July 15, 1987, and that the district court was informed of the settlement. After being advised of the settlement, the district court used an administrative closing order to clear the case from its docket. This court has recognized that an administrative closing order, worded similarly to the order here, "by its own terms matured into a dismissal." Lewis v. B.F. Goodrich, 850 F.2d 641, 643 (10th Cir.1988) (en banc). Lewis did not interpret Rule 41; the issue in Lewis was whether we had jurisdiction to consider an appeal of a summary judgment order. Id. at 642.

A summary judgment order that is not a final decision is not appealable. See 28 U.S.C. Sec. 1291. The defendant in Lewis appealed a partial summary judgment without having the issue certified for appeal pursuant to Rule 54(b). When the district court subsequently disposed of the remainder of the case with an administrative closing order, the appellant failed to refile a notice of appeal. We nevertheless held that a prematurely filed appeal should not be dismissed for lack of jurisdiction so long as either the appellant subsequently obtains a Rule 54(b) certification or there is a final disposition of the entire case. Id. at 645-46. Because the administrative closing order served as the final disposition in Lewis, we exercised jurisdiction to hear appellant's claim.

Although Lewis did not address whether such an administrative closing order complies with Rule 41(a), the decision implicitly recognized the usefulness of administrative closing orders to district courts with busy dockets. Furthermore, we expressly construed the administrative closing order in Lewis as becoming a final judgment sixty days after it was filed. Id. at 643 n. 2.

We conclude that, under the circumstances of this case, the district court dismissed the Title VII lawsuit in accordance with Rule 41(a)(2). The district court was informed that the parties had settled the case; neither party suggests that the court was misinformed regarding the parties' intentions to discontinue the litigation. The Administrative Closing Order entered by the district court on July 30, 1987, dismissed the case and allowed the parties sixty days to reopen the litigation. Both parties clearly had notice of the consequences of the Administrative Closing Order, and neither party notified the court of difficulties in finalizing the settlement. Moreover, by filing his "Dismissal with Prejudice," plaintiff advised the court that the matter was concluded. We therefore hold that an administrative closing order that notifies the parties that the case will be dismissed with prejudice absent action on their part within a specified period of time is sufficient to terminate a case.

Plaintiff next argues that the Title VII lawsuit was not effectively dismissed because the district court did not comply with Fed.R.Civ.P. 58. Even were we to agree that Rule 58 affects the dismissal, plaintiff's argument fails. Rule 58 requires that the clerk enter a separate document to evidence a final judgment. The purpose of Rule 58 is to clarify the date on which judgment was entered. Hull v. United States, 971 F.2d 1499, 1508 (10th Cir.1992) ("[T]he drafters of Rule 58 intended to clarify the time that judgment was entered."), cert. denied, --- U.S. ----, 113 S.Ct. 1844, 123 L.Ed.2d 469 (1993). Thus, Rule 58's basic purpose is to set a definite date from which an appeal may be taken. See Bankers Trust Co. v. Mallis, 435 U.S. 381, 384, 98 S.Ct. 1117, 1120, 55 L.Ed.2d 357 (1978) ("The sole purpose of the separate-document requirement ... is to clarify when the time for appeal under 28 U.S.C. Sec. 2107 begins to run."). Here, the Administrative Closing Order gave the parties sixty days to reopen the proceedings. As we noted in Lewis, such an order "by its own terms [can] mature[ ] into a dismissal ... creating an appealable final judgment." Lewis, 850 F.2d at 642-43 (emphasis added). We therefore conclude that an administrative closing order, such as that utilized by the district court in this case, matures into final judgment and, if no action is taken to resolve the case, satisfies the separate document requirement of Rule 58. As a result, we conclude that Rule 58...