Atlantic Richfield Co. v. Monarch Leasing Co.

• Decision Date: 22 May 1996
• Docket Number: No. 95-1299,95-1299
• Parties: ATLANTIC RICHFIELD COMPANY, a Pennsylvania corporation, Plaintiff-Appellee, v. MONARCH LEASING COMPANY, a defunct Michigan corporation; George D. Rinaldi; and Francis A. Rinaldi, jointly and severally, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 204

84 F.3d 204

34 Fed.R.Serv.3d 933

ATLANTIC RICHFIELD COMPANY, a Pennsylvania corporation, Plaintiff-Appellee, v. MONARCH LEASING COMPANY, a defunct Michigan corporation;

George D. Rinaldi; and Francis A. Rinaldi,

jointly and severally, Defendants-Appellants.

No. 95-1299.

United States Court of Appeals, Sixth Circuit.

Argued May 3, 1996.

Decided May 22, 1996.

Edward C. Cutlip, Jr., Patrick J. Haddad (argued and briefed), Kerr, Russell & Weber, Detroit, MI, for Atlantic Richfield Co.

John A. Lygizos (argued and briefed), Detroit, MI, for Monarch Leasing Co., George D. Rinaldi and Francis A. Rinaldi.

Before: BROWN and SILER, Circuit Judges; HOOD, District Judge. ^*

BAILEY BROWN, Circuit Judge.

The defendants appeal from the district court's award of summary judgment to the plaintiff in an action brought to renew a monetary judgment which was originally entered for the plaintiff in a 1984 diversity breach of contract case. The defendants contend that the plaintiff's complaint in the instant case was not timely brought under the applicable Michigan statute of limitations. For the reasons that follow, we AFFIRM the decision of the district court.

I. BACKGROUND

The facts are undisputed. In 1982, Atlantic Richfield Company ("ARCO") sued the defendants in federal district court to enforce the defendants' guarantees that they would pay a debt of more than $2.2 million which was owed to ARCO. Jurisdiction was based solely on diversity of citizenship.

On June 4, 1984, the district court (Cohn, J.) held a hearing on a motion for summary judgment filed by ARCO. In that hearing, the court announced from the bench that it would grant ARCO's motion, and instructed ARCO's attorneys to draft an appropriate order. The court also discussed damages, but it stated that, if the parties could not agree on the precise amount of damages, it would hold another hearing.

On June 25, 1984, the district court entered a written order granting summary judgment to ARCO and itemizing the damages owed, including interest and attorney's fees. Evidently, the parties had agreed on the final amount. In its order, however, the district court used the date of June 4 as an accrual date for purposes of calculating interest.

On June 22, 1994, almost ten years to the day after the district court had entered that written order, ARCO returned to court and filed suit to extend the life of the judgment against the defendants, and the case was assigned to Judge Cohn. ARCO had yet to collect the judgment fully, although the late Mr. Rinaldi's estate had made some payments to ARCO, and a settlement agreement between the parties had discharged a portion of the debt. More than $4.2 million remained owing to ARCO, including more than $2.6 million in unpaid interest that had accrued under 28 U.S.C. § 1691.

The defendants countered by contending that ARCO had failed to timely file, under the Michigan statute of limitations, its suit to extend the life of the 1984 judgment. The statute of limitations of the forum state applies in federal diversity cases pursuant to Walker v. Armco Steel Corp., 446 U.S. 740, 753, 100 S.Ct. 1978, 1986, 64 L.Ed.2d 659 (1980). The Michigan statute provides that judgment renewal actions like ARCO's must be brought within ten years "from the time of the rendition of the judgment." Mich.Comp.Laws Ann. § 600.5809(3) (West 1987) (emphasis added).

The defendants contended below (as they do in this appeal) that the district court "rendered" its judgment against them on June 4, 1984, when it announced from the bench that it would grant ARCO's motion for summary judgment, and not on June 25, 1984, when the district court issued its written order granting summary judgment to ARCO.

The district court, on cross-motions for summary judgment, granted ARCO's motion and denied the defendants' motion. The court noted that, under both the Walker case and Federal Rule of Civil Procedure 69(a), which dictates the procedure for enforcing money judgments in federal courts, it was bound to apply the Michigan statute of limitations. After reviewing the Michigan statute, the court below rejected the defendants' argument that it "rendered" judgment for ARCO on June 4, as opposed to June 25. Relying on Federal Rule of Civil Procedure 58, which mandates that federal court judgments be "set forth on a separate document" apart from opinions and memoranda, ¹ the district court stated that "[a] federal court judgment does not exist until it is put in writing." Thus, the court below continued, it could not have "rendered" a judgment for ARCO until it put its decision in writing on June 25, 1984. The court then held that, because ARCO had filed suit in the instant case on June 22, 1994, it had satisfied Michigan's ten-year statute of limitations. The defendants timely appealed.

II. ANALYSIS

A. Standard of Review.

We review the district court's grant of summary judgment de novo, using the same test the district court used when reviewing the motion. E.g., Maddox v. University of Tenn., 62 F.3d 843, 845 (6th Cir.1995). Summary judgment is appropriate if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). When dealing with cross-motions for summary judgment, these same rules of review apply. E.g., Lansing Dairy, Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir.1994), cert. denied, --- U.S. ----, 116 S.Ct. 50, 133 L.Ed.2d 15 (1995). If the facts of a case are undisputed, as they are here, one of the parties is clearly entitled to summary judgment. Niecko v. Emro Mktg., 973 F.2d 1296, 1304 (6th Cir.1992).

B. Choice of Law.

The parties agree with the district court that, under Walker, 446 U.S. at 753, 100 S.Ct. at 1986, the Michigan statute of limitations controls in this diversity case. They also agree with the general principle that, under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and its progeny, a blend of federal procedural law and state substantive law controls this case. See Hanna v. Plumer, 380 U.S. 460, 471-74, 85 S.Ct. 1136, 1144-46, 14 L.Ed.2d 8 (1965) (holding that the Federal Rules of Civil Procedure apply in diversity cases where they are on point, unless they both directly conflict with state law and are invalid under the Constitution or the Rules Enabling Act); see also Walker, 446 U.S. at 749-50, 100 S.Ct. at 1984-85 (reaffirming Hanna ).

The real issue in this case is on which day the district court "rendered" its original summary judgment for ARCO in 1984: on June 4 (orally), or in its written order of June 25. This issue could well be viewed as either procedural or substantive, depending upon one's perspective. As the Hanna Court noted, "The line between 'substance' and 'procedure' shifts as the legal context changes. 'Each implies different variables depending upon the particular problem for which it is used.' " Hanna, 380 U.S. at 471, 85 S.Ct. at 1144 (quoting Guaranty Trust Co. v. York, 326 U.S. 99, 108, 65 S.Ct. 1464, 1469, 89 L.Ed. 2079 (1945)). Nevertheless, as we will explain below, the Supreme Court's decision in Hanna mandates that we find the issue here to be procedural, because there is a Federal Rule of Civil Procedure, Rule 58, directly on point.

We hold that, under federal procedural law, a federal court judgment is "rendered" only when it is set forth in writing on a separate, discrete document and entered on the civil docket. Thus, under Michigan's substantive law, ARCO met the statute of limitations because it filed its complaint in the instant case within ten years of the district court's original "rendition" of summary judgment. We also believe, however, that the applicable rule is the same under Michigan law. Thus, we do not fear that our holding in this case will promote any "forum-shopping." See Hanna, 380 U.S. at 468, 85 S.Ct. at 1142 (reminding courts of the "twin aims of the Erie rule: discouragement of forum-shopping and avoidance of inequitable administration of the laws"). We will analyze both bodies of law to support this conclusion.

C. Federal law.

Because Rule 58 mandates that federal court judgments be set forth on a separate document, because the Supreme Court has held that the Rule's requirement of a separate writing is to be mechanically observed, ² and because a proper federal rule of procedure "has the force of a federal statute," ³ we hold that the district court in the instant case "rendered" its judgment on June 25, 1984, when it issued and entered its written order granting summary judgment to ARCO and defining the amount of damages owed by the defendants. Thus, under the Michigan statute of limitations, ARCO timely filed its complaint to extend the life of the original judgment it won.

We are mindful of the Supreme Court's statement in Walker, 446 U.S. at 753, 100 S.Ct. at 1986, that, "in the absence of a controlling federal rule," the mere presence of diversity jurisdiction should not allow actions to survive in federal court when they would be barred in state courts on limitations grounds. Nevertheless, in this case we have such a "controlling federal rule": Rule 58.

Under the Court's holding in Hanna, we must follow that rule unless we find that it is invalid under the Rules Enabling Act, 28 U.S.C. § 2072, or the Constitution, which we do not. Hanna, 380 U.S. at 471-74, 85 S.Ct. at 1144-46. Rule 58 is a purely procedural "housekeeping" rule that helps courts and litigants conduct their business with a desirable level of certainty, and it fits within Congress's constitutional power to craft rules of federal court procedure. See id. at 472-73, 85 S.Ct. at 1144-45 (upholding the federal service of process rule, 4(d)(1), over a conflicting state rule on the grounds of promoting uniformity in the federal courts and recognizing Congress's power "to regulate matters which, though falling within the uncertain area between substance and procedure, are rationally...