Alstom Caribe, Inc. v. Geo. P. Reintjes Co., Inc.

• Decision Date: 18 April 2007
• Docket Number: No. 06-2386.,06-2386.
• Citation: 484 F.3d 106
• Parties: ALSTOM CARIBE, INC., f/k/a Combustion Engineering Caribe, Inc., et al., Plaintiffs, Appellees, v. GEO. P. REINTJES CO., INC., Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

484 F.3d 106

ALSTOM CARIBE, INC., f/k/a Combustion Engineering Caribe, Inc., et al., Plaintiffs, Appellees, v. GEO. P. REINTJES CO., INC., Defendant, Appellant.

No. 06-2386.

United States Court of Appeals, First Circuit.

Heard March 8, 2007.

Decided April 18, 2007.

Paul G. Schepers, with whom Gregory S. Gerstner, John P. Lynch, and Seigfreid, Bingham, Levy, Selzer & Gee, P.C. were on brief, for appellant.

José A. Axtmayer, with whom G. William Quatman, William E. Quirk, and Shughart Thomson & Kilroy, P.C. were on brief, for appellees.

Robert C. Niesley, with whom Donna R. Tobar and Watt, Tieder, Hoffar & Fitzgerald, L.L.P. were on brief, for provisional intervenor.

Before LIPEZ, Circuit Judge, SELYA, Senior Circuit Judge, and DiCLERICO,^* District Judge.

SELYA, Senior Circuit Judge.

We are confronted with a procedural motley, in which a district judge took a short-cut that resulted in the issuance of an inherently self-contradictory order. That order (together with an implementing order issued the same day) commanded the deposit of certain funds into the registry of the district court; denied intervention by a corporation that claimed a right to the funds; transferred the funds — but not the case — to a different court in a different circuit; and, finally, entered a judgment of dismissal.

A party to the case had expected to receive the funds in settlement of pending claims. That party's ambitions were frustrated by the order, and it moved for reconsideration. Upon the denial of its motion, it filed this timely appeal.

The short-cut taken by the district court has created a number of complications, some jurisdictional in nature. Once we clear the jurisdictional hurdles, we conclude that the order appealed from is legally insupportable in at least one respect and internally inconsistent in other respects. We then explain why those bevues are not harmless and address a further complication as to choice of remedy. In the end, we vacate the order and remand with specific instructions as to future proceedings.

I. Background

This case has a long and tortured history. For present purposes, however, the details of the original dispute are no more than marginally relevant. Accordingly, we offer only a decurtate summary.

In the summer of 2000, the Alstom parties¹ retained a contractor, Geo. P. Reintjes Co. (Reintjes), to perform work on a power plant located in Puerto Rico. A surety company, St. Paul Fire & Marine Insurance Co. (St. Paul), furnished payment and performance bonds for Reintjes in connection with the work.

In the fullness of time, the contracting parties' relationship shifted from the board room to the courtroom. Each sued the other. Alstom's suit (which named St. Paul as an additional defendant) claimed faulty workmanship while Reintjes's suit claimed non-payment for work performed. These actions were brought in different federal venues: Alstom chose the District of Puerto Rico (where the power plant was located) whereas Reintjes chose the Western District of Missouri (where it maintained its principal place of business). The Missouri court eventually transferred the latter suit, see 28 U.S.C. § 1404(a), and it was consolidated with the former suit in Puerto Rico's federal district court. This history explains why the caption of this case lists Alstom as the plaintiff, even though the issues on appeal concern claims made by Reintjes against Alstom.

Late in 2003, St. Paul settled with Alstom for $2,925,000. In return, Alstom dropped its claims against both St. Paul and Reintjes. Reintjes proceeded with its suit against Alstom but disclaimed any obligation to reimburse St. Paul.

By April of 2005, Reintjes's claims against Alstom were still unresolved. At that time, St. Paul brought a new suit against Reintjes in the Western District of Missouri. That suit sought indemnification for the sums expended by St. Paul in reaching a settlement with Alstom. Reintjes denied any liability for indemnification.

Matters came to a head in the summer of 2006 when Alstom agreed to pay Reintjes $2,000,000 in settlement of Reintjes's claims against it. With the sweet smell of money wafting through the air, St. Paul claimed an interest in the settlement proceeds on theories of indemnification and equitable subrogation. Based on those claims, it sought to intervene in the pending Puerto Rico action. See Fed.R.Civ.P. 24. Alstom opposed intervention but, in the alternative, asked that it be allowed to deposit the settlement amount with the district court on the understanding that, by doing so, it would be deemed to have complied fully with its obligations under the settlement agreement.

Reintjes objected to the other parties' motions. It opposed intervention on the ground that St. Paul was, in effect, seeking an unwarranted prejudgment attachment; it opposed Alstom's exit strategy on the ground that payment of the funds into the registry of the court would violate the terms of the settlement agreement.

On July 28, 2006, the Puerto Rico district court denied St. Paul's motion to intervene but nonetheless instructed Alstom to pay the settlement amount into the registry of the court (thereby satisfying all of its obligations under the settlement agreement). In the same order, the court commanded the clerk, immediately upon receipt of Alstom's deposit, to remit the funds to the Western District of Missouri (the court in which St. Paul's indemnification action was pending). The court did not cite any authority for the transfer of the funds, nor did it purport to transfer any claim or cause of action from the District of Puerto Rico to the Western District of Missouri. That same day, the Puerto Rico district court entered a final judgment dismissing the Puerto Rico litigation.² The court subsequently denied Reintjes's motion for reconsideration without elaboration.

Reintjes did not move to stay the contemplated transfer of the funds. Thus, when Alstom made the deposit, the clerk of the Puerto Rico district court promptly forwarded the funds to the Western District of Missouri, and that court assumed control of them. Reintjes asked the transferee court to release the funds to it, but that motion was denied pending an adjudication of the merits of St. Paul's claims.

Meanwhile, Reintjes initiated this appeal. In it, Reintjes beseeches us to reverse the multi-faceted order of the Puerto Rico district court and to instruct the transferee court to disburse the deposited funds to it. We have allowed St. Paul to participate in this proceeding as a provisional intervenor. Because it has become apparent that St. Paul has a substantial stake in the outcome and that its interests are not fairly represented by any other party, we today grant St. Paul's motion and authorize its intervention in these proceedings as an appellee. See Mangual v. Rotger-Sabat, 317 F.3d 45, 62 (1st Cir. 2003) (confirming the existence of "discretion to permit intervenors at the appellate level").

II. Appellate Jurisdiction

As a threshold matter, St. Paul asserts that we lack jurisdiction to entertain this appeal. Its principal jurisdictional argument is that the Puerto Rico district court's order was not final and, thus, not immediately appealable. See 28 U.S.C. § 1291 (limiting appellate jurisdiction in most instances to "final decisions").

For this purpose, a "final decision" is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945). Given this definition, there is no doubt that, had the district court granted St. Paul's motion to intervene and then transferred the case (along with the funds) to the Western District of Missouri, we would not have jurisdiction to hear this appeal. After all, transfer orders typically are not regarded as final orders and, accordingly, are not subject to challenge by way of an immediate appeal.³ See Subsalve USA Corp. v. Watson Mfg., Inc., 462 F.3d 41, 47 (1st Cir.2006).

With this case law in mind, St. Paul suggests that the July 28 order was the functional equivalent of a transfer order and, thus, should be treated as non-final in determining its eligibility for immediate appellate review. This suggestion overlooks the particulars of the events that transpired here. Chronicling those events exposes the implausibility of St. Paul's suggestion.

To begin, the Puerto Rico district court denied St. Paul's motion to intervene. This is significant because, without St. Paul in the case, the court's approval of the settlement resolved all the outstanding claims between those who were then parties to the case and, therefore, concluded the controversy. It is impossible to reconcile the denial of intervention with the notion that the district court impliedly transferred St. Paul's claims to the Western District of Missouri. Without St. Paul in the case, there was no cause of action remaining to be transferred.

In all events, at no point did the Puerto Rico district court say that it intended to transfer the case to the Western District of Missouri. It simply directed the clerk to forward the funds to the Missouri court. District courts speak to appellate courts primarily through the orders that they enter, see, e.g., Subsalve, 462 F.3d at 44; Advance Fin. Corp. v. Isla Rica Sales, Inc., 747 F.2d 21, 26 (1st Cir.1984), and the order in question here does not bespeak any such intention.

If more were needed — and we doubt that it is — other indicia in the record make it pellucid that the Puerto Rico district court did not think that it had transferred the case to the Western District of Missouri. The most telling indicium is that, on the same day that it issued the Rule 67 order, the Puerto Rico district court dismissed all of the claims then pending before it. The order of dismissal would have been entirely superfluous had the court intended to transfer the action.

To say more on this point...