United States v. Clearfield State Bank, No. 73-1703

• Decision Date: 07 June 1974
• Docket Number: No. 73-1703,73-1774.
• Citation: 497 F.2d 356
• Parties: UNITED STATES of America, Plaintiff-Appellant, v. CLEARFIELD STATE BANK, Defendant-Appellee. UNITED STATES of America, Petitioner, v. Honorable Aldon J. ANDERSON, Judge, United States District Court for the District of Utah, Respondent.
• Court: U.S. Court of Appeals — Tenth Circuit

497 F.2d 356 (1974)

UNITED STATES of America, Plaintiff-Appellant, v. CLEARFIELD STATE BANK, Defendant-Appellee.

UNITED STATES of America, Petitioner, v. Honorable Aldon J. ANDERSON, Judge, United States District Court for the District of Utah, Respondent.

Nos. 73-1703, 73-1774.

United States Court of Appeals, Tenth Circuit.

June 7, 1974.

David English Carmack, Tax Div., Dept. of Justice, Washington, D. C. (Scott P. Crampton, Asst. Atty. Gen. Meyer Rothwacks and Crombie J. D. Garrett, Washington, D. C., on the brief), for plaintiff-appellant and petitioner.

Richard W. Campbell, Ogden, Utah, for defendant-appellee and respondent.

Before CLARK,^* Justice ; HILL and SETH, Circuit Judges.

HILL, Circuit Judge.

The question presented by this consolidated appeal and application for a writ of mandamus is whether a district court's order granting summary judgment is a final judgment.

In 1963 the M & S Construction & Engineering Company (taxpayer) borrowed funds from appellee Clearfield State Bank to finance a construction project, giving promissory notes for the loans. Taxpayer subsequently became insolvent, was unable to complete its work, and defaulted on its notes. At the same time it was indebted to appellant United States, one of approximately twenty creditors, for failure to pay taxes, and a federal tax lien arose.

Claiming that a wrongful refusal to make additional loans under a long-term loan agreement destroyed its business, taxpayer instituted suit against appellee in Utah state court. Appellee counterclaimed for the amount of the unpaid and past due notes. Thereafter appellant served a notice of levy upon appellee for taxpayer's unpaid taxes ($33,573.25), claiming that taxpayer's cause of action against appellee was a property right owned by taxpayer and held by appellee. Appellee did not pay the tax.

Several years later taxpayer and appellee settled the suit. Appellee's counter-claim was dismissed and it paid $40,000 into the state court for taxpayer's benefit. Appellant then commenced this suit (No. 73-1703) against appellee, contending its failure to honor the tax levy made it personally liable for taxpayer's unpaid taxes. The complaint alleged that appellee was indebted to taxpayer in the amount of $103,000, a figure arrived at by adding the value of the counter-claim to the $40,000 settlement.

Appellee answered, denying the debt, and then filed a motion for summary judgment. Appellant opposed the motion and filed its own motion for a partial summary judgment on the counterclaim issues. The trial court granted appellee's motion and denied appellant's motion on January 22, 1973. Contending this was not a final judgment appellant, on July 3, 1973, filed a motion requesting that a final judgment be entered. A hearing was held and the motion was denied on the grounds that the January 22 order was a final judgment.

Appellant then filed a notice of appeal, and, on the theory that the court's orders were not final and therefore non-appealable, also filed an application for a writ of mandamus (No. 73-1774) to require entry of final judgment. On appeal, appellant contends the trial court's order granting summary judgment was not final because it did not dispose of all the issues and because it did not comply with the separate document requirement of Rule 58, F.R.Civ.P.

Although it lost on the counter-claim, appellant contends there still remained the issue as to whether appellee retained $40,000 on the date of the levy, belonging to taxpayer. Appellee contends this was not an issue that could be resolved by the trial court because the money was paid into the state court in satisfaction of taxpayer's judgment and subject to capture by its creditors.¹ Therefore, appellee argues, the right to the money should be litigated between appellant and taxpayer's other creditors, in another suit. Under such circumstances a determination of the counter-claim issue by the trial court would dispose of all the issues.

Initially, we note that the pleadings raised no issue concerning this money. Nor was it argued in subsequent briefs. The issue was raised for the first time by appellant, at a hearing on a motion for a final judgment, after its appeal time had lapsed. This is an indication that the parties never considered the money to be an issue. We place the greatest importance, however, on the intention of the trial judge. United States v. Evans, 365 F.2d 95 (10th Cir. 1966). Speaking to the appellant about the money, he stated:

If you have claim to it, you can make claim to it, in an appropriate manner. I have just attempted to resolve the issues as between the two parties that were involved on that motion.

This language clearly evidences an intention that the order granting summary judgment constituted a final judgment, dispositive of all the issues before the...