Capitol Sprinkler Inspection Inc. v. Guest Serv. Inc.

• Decision Date: 14 January 2011
• Docket Number: No. 09–7128.,09–7128.
• Parties: CAPITOL SPRINKLER INSPECTION, INC., Appellantv.GUEST SERVICES, INC., Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

630 F.3d 217

394 U.S.App.D.C. 73

264 Ed. Law Rep. 74

CAPITOL SPRINKLER INSPECTION, INC., Appellant

v.GUEST SERVICES, INC., Appellee.

No. 09–7128.

United States Court of Appeals, District of Columbia Circuit.

Argued Sept. 13, 2010.Decided Jan. 14, 2011.

Appeal from the United States District Court for the District of Columbia (No. 1:05–cv–02115–CKK).Theodore J. Segletes III argued the cause for appellant. With him on the briefs was Michael T. Hamilton.Stephen A. Horvath argued the cause and filed the brief for appellee Guest Services, Inc.Before: GINSBURG, ROGERS and GARLAND, Circuit Judges.Opinion for the Court filed by Circuit Judge GINSBURG.GINSBURG, Circuit Judge:

Capitol Sprinkler Inspection, Inc., the defendant in the district court, appeals the summary judgment entered for Guest Services, Inc. on Capitol's third-party claims for negligence and breach of contract in connection with a burst pipe at a building managed by Guest. Guest argues we lack jurisdiction for want of a timely notice of appeal. We hold that we have jurisdiction of the appeal based upon Federal Rule of Appellate Procedure 4(a)(2) and affirm the district court in all respects.

I. Background

Gallaudet University hired Guest to manage the conference center building on its campus in Washington, D.C. Guest in turn retained Capitol to service the fire sprinkler system in the conference center. One of Capitol's contractual duties was “open[ing] condensation drains on drum drip connections and drain[ing] low points during fall and winter inspection.”

In January 2003 two of Capitol's inspectors came to the conference center, where they were met by someone who escorted them around the building. The record does not reveal whether their escort was an employee of Guest. While on site, the inspectors drained water from all but one of the drum drips; that one was in a locked room for which the escort was not carrying a key card. Later that month, a pipe fitting froze, burst, and discharged water, which would not have happened if Capitol's inspectors had drained the drum drip.

Gallaudet filed a claim for the resulting damage with its property insurer, St. Paul Mercury Insurance. St. Paul, as Gallaudet's subrogee, then filed suit against Capitol for both negligence and breach of contract. Capitol in turn filed a third-party complaint against Guest, seeking contribution or indemnity, again based upon both negligence and breach of contract.

All parties filed dispositive motions. St. Paul moved for partial summary judgment on its contract claim against Capitol, which cross-moved for summary judgment against St. Paul on both claims. Capitol and Guest filed cross-motions for summary judgment on the third-party claims. All the motions drew responses and replies except that Guest did not timely respond to Capitol's motion for summary judgment. The district court denied Guest's motion to file a late response but nonetheless deemed Capitol's motion for summary judgment opposed because Guest, in the course of supporting its own motion, had briefed the relevant issues.

The district court denied Capitol's motion for summary judgment against Guest and its motion to strike Guest's reply in support of its motion for summary judgment. Because St. Paul had argued that Capitol could not prevail without expert testimony to explain the applicable standard of care in tort and the contractual duty Guest owed to Capitol but “the parties [had] devote[d] only scant attention to” the subject, the court was “unwilling to rule on [that] dispositive issue”; instead the court held all other motions in abeyance pending supplemental briefing on the need for expert testimony. On June 15, 2009 the district court, having determined Capitol could not prove its claims or defenses without expert testimony to explain Guest's duty, entered an order granting Guest's and St. Paul's motions respectively for summary and for partial summary judgment and stating “Guest Services is dismissed from further proceedings in this case.” St. Paul's tort claim against Capitol, which had not been a subject of St. Paul's dispositive motion, alone remained pending.

Capitol then filed a motion pursuant to Federal Rule of Civil Procedure 54(b) asking the district court to certify an interlocutory appeal or, in the alternative, for reconsideration of its June 15 order granting summary judgment to Guest. The district court denied Capitol's motion, holding an immediate appeal would be inappropriate because the third-party claims overlapped with St. Paul's claims against Capitol and rejecting Capitol's arguments in the alternative for reconsideration.

On October 16 Capitol and St. Paul informed the court they had “settled all claims between them,” would “finalize a settlement agreement” within 30 days, and would thereafter file a joint stipulation of dismissal. Later that same day Capitol filed a notice of appeal with respect to its claims against Guest. Later still that day, the district court entered an order dismissing the case without prejudice based upon the impending settlement and stating the case would stand dismissed with prejudice as of October 26 unless counsel moved to extend the date or to reopen the case. On October 23 St. Paul and Capitol filed their joint stipulation of dismissal. The order dismissing the case having become final on October 26, this appeal by Capitol proceeded without further action by the district court and without Capitol having filed a notice of appeal from the final judgment.

II. Analysis

On appeal, Capitol challenges the district court's order denying its and granting Guest's motion for summary judgment, and the orders denying its motions (1) to supplement its expert disclosures, (2) to strike Guest's reply, and (3) for reconsideration or for an appealable judgment under Rule 54(b). Guest defends each of those orders but first argues this court lacks appellate jurisdiction. We begin, of course, with our jurisdiction. Yousuf v. Samantar, 451 F.3d 248, 251 (D.C.Cir.2006).

A. Appellate Jurisdiction

To vest this court with appellate jurisdiction under 28 U.S.C. § 1291, the appellant must file a timely notice of appeal from a final, appealable judgment of the district court. See Budinich v. Becton Dickinson & Co., 486 U.S. 196, 203, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988) (timely notice of appeal is “mandatory and jurisdictional”); St. Marks Place Hous. Co. v. U.S. Dep't of Hous. & Urban Dev., 610 F.3d 75, 79 (D.C.Cir.2010) (final judgment required). The district court ordinarily enters a final judgment only after it has disposed of all claims against all parties. See Fed.R.Civ.P. 58; Cambridge Holdings Grp., Inc. v. Federal Ins. Co., 489 F.3d 1356, 1363 (D.C.Cir.2007). The district court may, however, exercise its discretion to “direct entry of a final judgment as to one or more, but fewer than all, claims or parties.” Fed.R.Civ.P. 54(b).

In the present case, it is undisputed Capitol's only notice of appeal was filed prematurely, that is, before the district court had entered a final, appealable judgment. When Capitol filed the notice of appeal on October 16, the district court had granted summary judgment in favor of Guest on Capitol's third-party claims—the only claims Capitol sought to appeal—but had neither disposed of all St. Paul's claims nor entered a partial final judgment pursuant to Rule 54(b). Indeed, the court had expressly denied Capitol's motion for a Rule 54(b) judgment. St. Paul and Capitol had notified the court earlier that day of their agreement to settle the remaining claims, but their letter informed the court they would file a stipulation of dismissal in the future, making it clear the proceedings in the district court were still ongoing as of October 16.

A premature notice of appeal “filed after the court announces a decision or order [ ] but before the entry of judgment or order” can be saved by Federal Rule of Appellate Procedure 4(a)(2), which provides such a notice is to be “treated as filed on the date of and after the entry” of a judgment or order. Still, the Supreme Court has held “Rule 4(a)(2) permits a notice of appeal from a nonfinal decision to operate as a notice of appeal from the final judgment only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment,” because in such a situation a litigant could reasonably believe the order was appealable. FirsTier Mortg. Co. v. Investors Mortg. Ins. Co., 498 U.S. 269, 276, 111 S.Ct. 648, 112 L.Ed.2d 743 (1991). In FirsTier, Rule 4(a)(2) rescued a notice of appeal filed after the district court had “announced from the bench” a ruling that addressed all the claims before it. Id. at 270, 111 S.Ct. 648. “Had the judge set forth the judgment immediately following the bench ruling, and had the clerk entered the judgment on the docket,” there could be “no question that the bench ruling would have been ‘final’ under § 1291.” Id. at 277, 111 S.Ct. 648.

In Outlaw v. Airtech Air Conditioning & Heating, Inc., this court held Rule 4(a)(2) applies to a ruling disposing of fewer than all parties or all claims no differently than to a ruling disposing of an entire case. 412 F.3d 156, 161–62 (2005) (Roberts, J.). That is, if the appellant files a notice of appeal after the district court has issued, orally or in writing, an order that would be appealable if followed by a partial final judgment issued pursuant to Rule 54(b), then the notice ripens when a final judgment is later entered. The court reached this issue in Outlaw because the plaintiff filed a notice of appeal after the district court had entered summary judgment for two of the three defendants. Id. at 158–59. In these circumstances, we acknowledged that, because the court's order did not dispose of all claims against all parties, “[s]imple entry of judgment would not have had the same effect” as in FirsTier but we saw no reason the rule in that case should not extend to a case...