Gould v. Mutual Life Ins. Co. of New York

Decision Date28 May 1986
Docket NumberNos. 85-3833,85-4163,s. 85-3833
Citation790 F.2d 769
PartiesHarriet M. GOULD, an unremarried widow, Plaintiff-Appellant, v. MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a foreign corporation, Defendant-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Vaughn E. Evans, Seattle, Wash., for plaintiff-appellant.

Robert M. Kraft, Frank Draper, Seattle, Wash., for defendant-appellee.

Appeal from the United States District Court for the Western District of Washington.

Before: WRIGHT and ANDERSON, Circuit Judges, and CROCKER *, Senior District Judge.

EUGENE A. WRIGHT, Circuit Judge:

At issue are the competing concerns of the finality of judgments and the limited subject matter jurisdiction of federal courts. Mrs. Gould asks this court to reconsider its previous determination of subject matter jurisdiction. She contends that removal was improper and the district court lacked subject matter jurisdiction. Her contentions fail because of the procedural posture of the case: the district court has entered final judgment against her; and the issues, including subject matter jurisdiction, have been litigated all the way to the Supreme Court. She would continue the controversy by having the case remanded to the state court. Having determined that our prior determination was correct, we hold that the district court was bound by the law of the case.

BACKGROUND

We summarized the facts in our earlier opinion:

In May 1976, Vick Gould was found shot to death in a public park in Bellevue, Washington. He was killed by a bullet that entered through the base of his skull. Vick was insured under a life insurance policy issued by Mutual Life Insurance Company of New York ("MONY"). The policy insured against accidental death, but excluded death by suicide. Plaintiff Harriet Gould, the insured's widow and beneficiary of the policy, submitted a claim to collect the $25,000 proceeds of the policy. MONY refused payment, claiming that the death was by suicide.

Plaintiff then brought an action in state court to enforce the policy. MONY raised the policy's suicide exclusion clause as an affirmative defense. The jury returned a verdict for plaintiff and, on appeal, the Washington Supreme Court affirmed. Gould v. Mutual Life Insurance Co., 95 Wash.2d 722, 629 P.2d 1331 (1981) (en banc).

Gould v. Mutual Life Insurance Co. of New York, 735 F.2d 1165, 1166 (9th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 2023, 85 L.Ed.2d 304 (1985).

Having prevailed on her policy claim, Gould, a Washington resident, sued in state court under the Washington Consumer Protection Act against two Washington attorneys and MONY, a New York corporation. The court dismissed the claims against the two attorneys, and Gould appealed.

While the appeal was pending, MONY removed the action. The district judge denied Gould's motion for remand and entered summary judgment for MONY.

Gould appealed. After that appeal was submitted, the Washington Court of Appeals reversed the state trial court's dismissal of the two Washington attorneys. Gould v. Mutual Life Insurance Co. of New York, 37 Wash.App. 756, 683 P.2d 207 (1984) (filed in April 1984).

In June 1984, we affirmed the summary judgment for MONY. Gould v. Mutual Life Insurance of New York, 735 F.2d 1165 (9th Cir.1984). Gould petitioned for rehearing and suggested rehearing en banc, raising for the first time on appeal the district court's removal jurisdiction. After calling for a response by MONY, we denied Gould's petition for rehearing and suggestion for rehearing en banc. 1

Gould then petitioned for certiorari, again raising the district court's removal jurisdiction. While the petition was pending, Gould moved in the district court for remand. On April 15, the Supreme Court denied certiorari. Gould v. Mutual Life Insurance Co. of New York, --- U.S. ----, 105 S.Ct. 2023, 85 L.Ed.2d 304 (1985). On April 17, the district court denied the remand motion. Gould appealed (Appeal No. 85-3833).

Gould next filed an independent federal action, alleging that the judgment for MONY in the previous action was void for lack of subject matter jurisdiction. The district court dismissed the action on MONY's motion. Gould appealed (Appeal No. 85-4163).

STANDARD OF REVIEW

Removal is a question of federal subject matter jurisdiction, reviewable de novo. Williams v. Caterpillar Tractor Co., 786 F.2d 928, 931 (9th Cir.1986) (citing Bright v. Bechtel Petroleum, Inc., 780 F.2d 766, 768 (9th Cir.1986) ). "The burden of establishing federal jurisdiction falls on the party invoking removal." Id. (citing Hunter v. United Van Lines, 746 F.2d 635, 639 (9th Cir.1984), cert. denied, --- U.S. ----, 106 S.Ct. 180, 88 L.Ed.2d 476 (1985) ).

Motions to vacate under Rule 60(b) are not a substitute for appeal, however, and are usually reviewed for abuse of discretion. Pena v. Sequros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir.1985); Bruce v. United States, 759 F.2d 755, 759 (9th Cir.1985). "[R]eview of a Rule 60(b) motion may encompass a claim that the district court acted in excess of its jurisdiction...."

                Cel-A-Pak v. California Agr. Labor Relations Board, 680 F.2d 664, 668 (9th Cir.1982) (citing United States v. Russell, 578 F.2d 806, 807 (9th Cir.1978) ), cert. denied, 459 U.S. 1071, 103 S.Ct. 491, 74 L.Ed.2d 633 (1982).  A court considering a motion to vacate a judgment, which it finds void for lack of jurisdiction, has no discretion to hold that the judgment should not be set aside.    Watts v. Pinckney, 752 F.2d 406, 410 (9th Cir.1985)
                
ANALYSIS
I. District Court Jurisdiction After Appeal of Final Judgment

Initially, MONY contends that once the original notice of appeal was filed, the district court was without jurisdiction to consider Gould's postjudgment contentions.

The filing of a notice of appeal divests the district court of jurisdiction. Scott v. Younger, 739 F.2d 1464, 1466 (9th Cir.1984) (citing Long v. Bureau of Economic Analysis, 646 F.2d 1310 (9th Cir.), judgment vacated on other grounds, 454 U.S. 934, 102 S.Ct. 468, 70 L.Ed.2d 242 (1981); Smith v. Lujan, 588 F.2d 1304 (9th Cir.1979) ). Unless the appellate court remands to the district court, the latter is without jurisdiction to consider motions to vacate judgment. See Bruce v. United States, 759 F.2d 755, 757 (9th Cir.1985) (citing Scott v. Younger, 739 F.2d at 1466).

Indeed, we have held that, where the underlying judgment has been appealed, denial of a motion for relief from that judgment is a nonappealable order. Los Angeles Memorial Coliseum Commission v. NFL, 726 F.2d 1381, 1386 n. 2 (9th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 397, 83 L.Ed.2d 331 (1984); see also Scott, 739 F.2d at 1466 (denial of "request to 'entertain' a motion to vacate ... is interlocutory in nature and not appealable."); Crateo, Inc. v. Intermark, Inc., 536 F.2d 862, 869 (9th Cir.) (not appealable but court construes as request for remand), cert. denied, 429 U.S. 896, 97 S.Ct. 259, 50 L.Ed.2d 180 (1976). But cf. Long v. Bureau of Economic Analysis, 646 F.2d 1310, 1318 (9th Cir.) (recognizing that other circuits allow denial of motion), judgment vacated on other grounds, 454 U.S. 934, 102 S.Ct. 468, 70 L.Ed.2d 242 (1981).

The proper procedure, once an appeal has been taken, is to " 'ask the district court whether it wishes to entertain the motion, or to grant it, and then move this court, if appropriate, for remand of the case.' " Scott, 739 F.2d at 1466 (quoting Long, 646 F.2d at 1318). If that route is not taken, an appeal of the denial of the motion to vacate is subject to dismissal. Smith v. Lujan, 588 F.2d 1304, 1307 (9th Cir.1979).

Gould's motion for remand at issue in No. 85-3833 was not denominated a Rule 60(b) motion. But, since it followed final judgment 2 and was not within the time limits of Rule 59(e), we may consider it a Rule 60(b) motion. Rodriquez v. Southern Pacific Transportation Co., 587 F.2d 980, 981 (9th Cir.1978). It follows that since she did not follow the proper procedure to request a remand from this court, we might dismiss the appeal as interlocutory. Gould's motion in her independent action is admittedly pursuant to Rule 60(b). If the rules noted above apply, the decision on appeal in No. 85-4163 would also be unappealable.

Although language in the cited cases supports the proposition that the district court never regains jurisdiction in the absence of a remand, the better approach is that the district court may consider motions to vacate once the mandate has issued.

The Supreme Court approved this procedure in Standard Oil Co. of California v. United States, 429 U.S. 17, 97 S.Ct. 31, 50 L.Ed.2d 21 (1976). The Court recognized that requiring appellate leave for the The Court had denied certiorari by the time the district court ruled on the motion. Standard Oil applies to preclude the necessity of seeking leave of the Supreme Court. See id. at 17 n. 1, 97 S.Ct. at 31 n. 1 ("mandate" incorrect but useful); S.Ct. R. 52.3 (no formal mandate from Supreme Court to federal courts). Thus, Gould need not have applied to this court or the Supreme Court for either a remand or a recall of mandate in order for the district court to have had jurisdiction to consider the motion and the independent action.

                district court's consideration of Rule 60(b) motions is often inefficient and that the district court may better recognize a frivolous motion.    Id. at 18-19, 97 S.Ct. at 31-32.  We agree and adopt the rule that, once the appellate mandate has issued, leave of this court is not required for district court consideration of a Rule 60(b) motion
                
II. Removal Jurisdiction and the Voluntary/Involuntary Rule

Gould contends that the district court improperly denied her remand motion made immediately after MONY removed the action. As an initial matter, she is right. Removal jurisdiction is statutory and strictly construed. Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1064 (9th Cir.1979) (citing Shamrock Oil &...

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