Wrs, Inc. v. Plaza Entertainment, Inc.

• Decision Date: 04 April 2005
• Docket Number: No. 03-4094.,03-4094.
• Citation: 402 F.3d 424
• Parties: WRS, INC., d/b/a WRS Motion Picture Laboratories, a corporation, Appellant v. PLAZA ENTERTAINMENT, INC., a corporation; Eric Parkinson, an individual; Charles von Bernuth; John Herklotz, an individual.
• Court: U.S. Court of Appeals — Third Circuit

402 F.3d 424

WRS, INC., d/b/a WRS Motion Picture Laboratories, a corporation, Appellant v. PLAZA ENTERTAINMENT, INC., a corporation; Eric Parkinson, an individual; Charles von Bernuth; John Herklotz, an individual.

No. 03-4094.

United States Court of Appeals, Third Circuit.

Argued October 7, 2004.

Filed April 4, 2005.

Thomas E. Reilly (Argued), Pittsburgh, PA, for Appellant.

John W. Gibson, Pittsburgh, PA, for Appellees, Plaza Entertainment, Inc. Eric Parkinson and Charles von Bernuth.

John P. Sieminski, Richard A. O'Halloran (Argued), Burns, White & Hickton, Pittsburgh, PA, for Appellee, John Herklotz.

Before SLOVITER, VAN ANTWERPEN, and COWEN, Circuit Judges.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

WRS, Inc. appeals from an order of the District Court entered September 15, 2003 denying its Motion to Reopen. The District Court held that the case had already been dismissed without prejudice and that WRS must file a new action against defendants to pursue the claims asserted in its original complaint. It appears that both parties and the District Court were proceeding on the assumption that the original case had been dismissed. That assumption, although not unreasonable, was erroneous. Therefore, we must dismiss the appeal from the order of the District Court denying the Motion to Reopen.

I.

WRS, through counsel Thomas E. Reilly, filed a complaint on October 13, 2000 in the United States District Court for the Western District of Pennsylvania against Plaza Entertainment, Inc. ("Plaza"), Eric Parkinson, Charles von Bernuth, and John Herklotz, invoking federal jurisdiction on the basis of diversity of citizenship. WRS alleged that Plaza had failed to pay WRS for duplicating various film and video titles and that the individual defendants were liable on their guaranties of Plaza's obligations to WRS for the duplication services. The complaint sought money damages, declaratory relief, and "foreclosure of its security interest in the property of Plaza," including Plaza's right to exploit the titles at issue. Parkinson, von Bernuth, and Herklotz filed answers to the complaint; Plaza answered and filed a counterclaim.

Thereafter, on August 24, 2001, WRS filed a Chapter 11 bankruptcy proceeding in the United States Bankruptcy Court for the Western District of Pennsylvania. It appears that no counsel was appointed for WRS in the bankruptcy proceeding and Reilly filed a motion to withdraw as WRS' counsel in this case on December 13, 2001, explaining that he did so because under 11 U.S.C. § 327(a), a Chapter 11 debtor must have court approval to hire professionals, including attorneys.

The District Court granted Reilly's motion to withdraw on February 14, 2002, and entered the following order:

1. Plaintiff WRS, Inc. d/b/a/ WRS Motion Picture Laboratories, is in bankruptcy and is not represented by counsel in the above-captioned action. It appears that no further action may be taken by the court at this time. The Clerk shall accordingly mark the above-captioned case as closed. Nothing contained in this order shall be considered a dismissal or disposition of this action, and should further proceedings therein become necessary or desirable, any party may initiate the same in the same manner as if this order had not been entered.

2. In the event that counsel does not enter an appearance for plaintiff on or before March 15, 2002, the above-captioned action will be dismissed without prejudice.

App. at 4-5 (emphasis added).

After receiving permission to withdraw, Reilly withdrew his appearance on behalf of WRS; no other counsel entered an appearance on behalf of WRS on or before March 15, 2002. No action was taken in this case until August 20, 2003, when Reilly filed a Motion to Reopen the case.¹ The District Court denied WRS' Motion to Reopen by Memorandum Order dated September 15, 2003. In that order, the District Court stated that the "case was dismissed without prejudice [and][t]herefore, if WRS wishes to pursue the claims asserted in its October 13, 2000 complaint, WRS must file a new action against defendants." App. at 3.² WRS filed a Motion for Reconsideration, which the District Court denied. WRS then filed this timely appeal.

II.

At the outset, we must consider whether we have jurisdiction to hear WRS' appeal. Ordinarily, we only have jurisdiction to hear appeals from final decisions of the district court. 28 U.S.C. § 1291. A decision is considered "final" for purposes of § 1291 when the district court's decision" `ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'" Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) (quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945)). "Conversely, if the order specifically contemplates further activity by the District Court, it is not considered final." Berke v. Bloch, 242 F.3d 131, 135 (3d Cir.2001); see also Aluminum Co. of Am. v. Beazer E., Inc., 124 F.3d 551, 557 (3d Cir.1997) ("Ordinarily, a final decision will have two effects. First, the decision will fully resolve all claims presented to the district court. Second, after the decision has been issued, there will be nothing further for the district court to do.").³

We are faced here with what appears to be, at least with respect to the first paragraph of the District Court's February 14, 2002 order, an order administratively closing the case because of the pendency of the bankruptcy proceeding: "It appears that no further action may be taken by the court at this time. The Clerk shall accordingly mark the above-captioned case as closed." App. at 4. In Penn West Assocs. Inc. v. Cohen, 371 F.3d 118 (3d Cir.2004), we stated that an order administratively closing a case is not, in and of itself, a final order, but then held that because "[t]he practical effect of [the denial to reopen the administratively closed case] was to dismiss Penn West's action," the order denying the motion to reopen "was a final decision under 28 U.S.C. § 1291." Penn West, 371 F.3d at 124; see also Brown Shoe Co. v. United States, 370 U.S. 294, 306, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962) (noting that the Supreme Court of the United States has adopted "[a] pragmatic approach to the question of finality").

The facts in Penn West differ from those before us. There, the case was administratively closed because the parties reported that they had reached a "full and final settlement" and that "there [were] no further matters pending before the Court." 371 F.3d at 121. It does not appear from the Penn West opinion that the district court's order at issue there contained language comparable to that included in the first paragraph of the February 14, 2002 order which clearly states that "[n]othing contained in this order shall be considered a dismissal...." App. at 4. In light of such clear language, it is difficult to construe the February 14 order as a dismissal unless there is something in the second paragraph of the February 14 order that does constitute such an order.

III.

The second paragraph of the court's February 14, 2002 order states that "[i]n the event that counsel does not enter an appearance for plaintiff on or before March 15, 2002, the above-captioned action will be dismissed without prejudice." App. at 4-5 (emphasis added). No appearance was entered by counsel on behalf of WRS by March 15, 2002. Both parties and the District Court have proceeded on the assumption that because no counsel entered an appearance by March 15, there was a subsequent order entered dismissing WRS' suit. That was obviously the predicate of WRS' Motion to Reopen the proceedings. In addition, the District Court stated in its September 15, 2003 order (denying the Motion to Reopen) that the case had been "dismissed without prejudice." App. at 3. Although we have scoured the docket for this order of dismissal, no such order was ever entered.

At oral argument, counsel for the defendants conceded that there was no March 15, 2002 order of dismissal but argued that such an order was not necessary because the order of dismissal could be found within the body of the February 14 order. We disagree. Although we recognize that great deference is given to a district court's interpretation of its own order, see In re Fine Paper Antitrust Litig., 695 F.2d 494, 498 (3d Cir.1982), there is a substantial difference between giving deference to a district court's interpretation of its order and allowing that court to assume the existence of such an order post hoc. The District Court's original intention to dismiss the case without prejudice should the plaintiffs fail to make an appearance by March 15, 2002 cannot be translated into the entry of an order dismissing the case. Similarly, we cannot now find that the February 14 order contained an implied order of dismissal when it obviously did not. As a result, we hold that the case was administratively closed pursuant to the February 14 order,⁴ but that it was never in fact dismissed. Indeed, what date should we assume the order was entered?

In Penn West, we stated that administrative closings can become final orders if they contain "a built-in timetable under which the administrative closing may automatically expire, or, alternatively, mature into a final decision." 371 F.3d at 128. Although orders with a built-in timetable may mature into a final decision, they are not entirely self executing. Such orders must still be entered into the docket before they can be considered final orders of dismissal.

The need for a separate entry of dismissal, distinct from the administrative order containing the timetable, follows from the decision in United States v. Indrelunas, 411 U.S. 216, 93 S.Ct. 1562, 36 L.Ed.2d 202 (1973) (per curiam), called into question on other grounds, Bankers Tr. Co. v. Mallis, 435 U.S. 381, 98 S.Ct. 1117, 55 L.Ed.2d 357 (1978) (per curiam). In that case, the Supreme Court explained...