498 U.S. 269 (1991), 89-1063, FirsTier Mortgage Company v. Investors Mortgage Insurance Company

Docket Nº:No. 89-1063
Citation:498 U.S. 269, 111 S.Ct. 648, 112 L.Ed.2d 743, 59 U.S.L.W. 4070
Party Name:FirsTier Mortgage Company v. Investors Mortgage Insurance Company
Case Date:January 15, 1991
Court:United States Supreme Court
 
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Page 269

498 U.S. 269 (1991)

111 S.Ct. 648, 112 L.Ed.2d 743, 59 U.S.L.W. 4070

FirsTier Mortgage Company

v.

Investors Mortgage Insurance Company

No. 89-1063

United States Supreme Court

Jan. 15, 1991

Argued Oct. 10, 1990

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE TENTH CIRCUIT

Syllabus

Federal Rule of Appellate Procedure 4(a)(2) provides that a

notice of appeal filed after the announcement of a decision or order but before the entry of the judgment or order shall be treated as filed after such entry and on the day thereof.

On January 26, 1989, the District Court announced from the bench that it intended to grant a motion for summary judgment filed by respondent Investors Mortgage Insurance Co. (IMI) in a suit brought by petitioner FirsTier Mortgage Co. against IMI, requested that the parties file proposed findings of fact and conclusions of law to support that ruling, and clarified that its ruling extinguished all of FirsTier's claims. FirsTier filed a notice of appeal on February 8, identifying the January 26 ruling as the decision from which it was appealing, but the District Court did not enter judgment until March 3. The Court of Appeals dismissed the appeal on the ground that the January 26 decision was not a final decision appealable under 28 U.S.C. § 1291.

Held: Rule 4(a)(2) permits a notice of appeal filed from a nonfinal decision to serve as an effective notice of appeal from a subsequently entered final judgment when a district court announces a decision that would be appealable if immediately followed by the entry of judgment. In such an instance, it would be reasonable for a litigant to believe that the decision is final, and permitting a notice of appeal to become effective when judgment is entered would not catch the appellee by surprise. This interpretation of the Rule best comports with its drafters' intent. And it does not contravene Rule 1(b)'s prohibition on construing the appellate rules to extend or limit courts' jurisdiction as established by law. Even if a bench ruling were not final under § 1291, Rule 4(a)(2) would not render that ruling appealable in contravention of § 1291. Rather, it treats the premature notice as a notice filed from the subsequently entered judgment. The instant bench ruling is a "decision" under the Rule. It purported to dispose of all of FirsTier's claims, and would have been final under § 1291 had the judge set forth his judgment immediately and the clerk entered the judgment on the docket. FirsTier's confusion as to the litigation's status was understandable, and no unfairness to IMI results from allowing the appeal to go forward. Pp. 272-277.

Reversed and remanded.

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MARSHALL, J., delivered the opinion for a unanimous Court. KENNEDY, J., filed a concurring opinion.

MARSHALL, J., lead opinion

[111 S.Ct. 649] Justice MARSHALL delivered the opinion of the Court.

Federal Rule of Appellate Procedure 4(a)(2) provides that a

notice of appeal filed after the announcement of a decision or order but before the entry of the judgment or order shall be treated as filed after such entry and on the day thereof.

In this case, petitioner filed its notice of appeal after the District Court announced from the bench that it intended to grant summary judgment for respondent, but before entry of judgment and before the parties had, at the court's request, submitted proposed findings of fact and conclusions of law. The question presented is whether the bench ruling is a "decision" under Rule 4(a)(2). We hold that it is.

I

Respondent, Investors Mortgage Insurance Co. (IMI), issued eight insurance policies to petitioner, FirsTier Mortgage Co. (FirsTier). The parties intended these policies to insure FirsTier for the risk of borrower default on eight real estate loans that FirsTier had made. After the eight borrowers defaulted, FirsTier submitted claims on the policies, which IMI refused to pay. Invoking the District Court's diversity jurisdiction under 28 U.S.C. § 1332, FirsTier filed suit, seeking damages for IMI's alleged breach of contract and breach of its duty of good faith and fair dealing.

On January 26, 1989, the District Court held a hearing on IMI's motion for summary judgment. After hearing argument from counsel, the District Court announced from the bench that it was granting IMI's motion. The judge stated

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that FirsTier's eight policies had been secured from IMI through fraud or bad faith, and therefore were void:

I find that the policies should be, and are, cancelled as void for want of [sic] fraud, bad faith. The Court has heard no evidence in the matter of this hearing to change its mind from holding that the policies are void.

Of course, in a case of this kind, the losing party has a right to appeal. If the Court happens to be wrong, I don't think I am, but if the Court happens to be wrong, it could be righted by the Circuit.

The Court does find that [IMI] relied on the package [of information furnished by FirsTier] in each of these loans, and the package was not honest. In fact, it was dishonest. The...

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