Federal Sav. & Loan Ins. Corp. v. Tullos-Pierremont

• Decision Date: 28 February 1990
• Docket Number: A,No. 88-4782,TULLOS-PIERREMON,88-4782
• Citation: 894 F.2d 1469
• Parties: FEDERAL SAVINGS & LOAN INSURANCE CORPORATION, as Receiver for Sun Belt Federal Bank, F.S.B., Plaintiff-Appellant, v.Partnership in Commendam, et al., Defendants, Jim Gallagher & Associates, Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1469

894 F.2d 1469

15 Fed.R.Serv.3d 1253

FEDERAL SAVINGS & LOAN INSURANCE CORPORATION, as Receiver for Sun Belt Federal Bank, F.S.B., Plaintiff-Appellant, v. TULLOS-PIERREMONT, A Partnership in Commendam, et al., Defendants Jim Gallagher & Associates, Inc., Defendant-Appellee.

No. 88-4782.

United States Court of Appeals Fifth Circuit.

Feb. 28, 1990.

Scott C. Sinclair, Jay Adams, Shreveport, La., for plaintiff-appellant.

Robert G. Pugh, Robert G. Pugh, Jr., Shreveport, La., for defendant-appellee.

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

Before KING, GARWOOD, and DAVIS, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiff-appellant Federal Savings & Loan Insurance Corporation (FSLIC), as receiver for Sun Belt Federal Bank, F.S.B. (Sun Belt), appeals the district court's judgment in favor of defendant-appellee Jim Gallagher & Associates, Inc. (Gallagher). We dismiss the appeal, agreeing with Gallagher's contention that FSLIC's notice of appeal was untimely.

Proceedings Below

FSLIC, in its capacity as Sun Belt's receiver, instituted this suit on September 12, 1986, its complaint naming the following eight defendants, viz.: Tullos-Pierremont, a Louisiana Partnership in Commendam (Tullos-Pierremont); A.J. Tullos, Jr. (Tullos); his wife, Mae T. Tullos (Mae Tullos); Warwick P. Paul (Paul); his wife, Billie Anderson Paul (Billie Paul); Marion E. Rule (Rule); his wife, Jayne Crotts Rule (Jayne Rule); and Gallagher.

The complaint is based on a past due $100,000 promissory note allegedly executed by Tullos-Pierremont payable to Sun Belt. It is alleged that Tullos, Paul, and Rule, and apparently their respective wives, are general partners of Tullos-Pierremont and are hence liable on the note. As to Gallagher, it is alleged that Gallagher agreed with Sun Belt to buy the note from it for $100,000, but defaulted in this agreement. The complaint seeks judgment against Tullos-Pierremont, Tullos, Mae Tullos, Paul, Billie Paul, Rule, and Jayne Rule, in solido, for accrued unpaid interest on the note ($17,000 to July 9, 1986) plus, in the event Gallagher is not required to purchase the note, the $100,000 unpaid note principal and subsequently accruing interest; and it also seeks judgment against Gallagher requiring him to specifically perform his obligation to purchase the note.

The same day the complaint was filed, separate summonses were issued for each of the eight named defendants. In November 1986, Gallagher filed an answer, and Tullos-Pierremont, Tullos, and Billie Paul were each served. Summons was returned unserved on Paul. No return of summons appears as to Rule or Jayne Rule. Neither Paul, Rule, nor Jayne Rule ever answered or made any character of appearance.

On December 8, 1987, default judgment was entered in favor of FSLIC and against Tullos-Pierremont, Tullos, and Billie Paul, in solido, for $117,000 plus interest.

Subsequently, Gallagher filed a motion for summary judgment, which was granted by the district court in an April 25, 1988 five-page memorandum opinion which concluded that Gallagher had prima facie established, and FSLIC had not adequately controverted, that a condition to Gallagher's obligation to purchase the note had not been fulfilled. Also on April 25, 1988, the district court entered a separate one-page order granting Gallagher summary judgment. No motion of the kind referenced in the first sentence of Fed.R.App.P. 4(a)(4) was ever filed in respect to the April 25, 1988 summary judgment.

On September 30, 1988, FSLIC filed under Fed.R.Civ.P. 41(a) a dismissal without prejudice as to Mae Tullos, Paul, Rule, and Jayne Rule, asserting in a supporting affidavit that "in spite of due diligence, plaintiff has been unable to serve its complaint upon" those four defendants and that "[p]laintiff now seeks to dismiss its claim against these defendants so that a final judgment may be entered in this matter." The supporting affidavit prayed that the court grant the application to dismiss. In an order dated October 4, 1988, FSLIC's September 30, 1988 "motion" was granted and Mae Tullos, Paul, Rule, and Jayne Rule were "dismissed as defendants from this action." On October 24, 1988, FSLIC filed its notice of appeal "from the Order granting summary judgment in favor of defendant, Jim Gallagher and Associates, Inc., entered in this action on the 25th day of April, 1988."

Discussion

Gallagher contends that we lack jurisdiction because the October 24, 1988 notice of appeal was filed several months too late, measured from the April 25, 1988 summary judgment. See Fed.R.App.P. 4(a)(1). Relying on our decision in Sider v. Valley Line, 857 F.2d 1043 (5th Cir.1988), Gallagher argues that the April 25, 1988 summary judgment was appealable when entered because the case was then fully adjudicated except as to unserved defendants. FSLIC concedes that its notice of appeal is late if Sider is followed, but urges that Sider, decided October 17, 1988, should not be applied retroactively, and that our earlier decision in Lohr v. United States, 264 F.2d 619 (5th Cir.), cert. denied, 361 U.S. 814, 80 S.Ct. 51, 4 L.Ed.2d 61 (1959), should be applied instead. Agreeing with Gallagher, we conclude that our decision in Nagle v. Lee, 807 F.2d 435, 438 (5th Cir.1987), handed down well prior to the judgment here sought to be appealed, established that the failure to dispose of unserved, nonappearing defendants does not prevent a judgment from being final and appealable without a certificate under Fed.R.Civ.P. 54(b), and that the contrary language in Lohr, relied on by FSLIC, is dicta and, as we pointed out in Sider, is no longer controlling as coming before the 1961 amendments to Rule 54(b). ¹

Courts of appeals have "jurisdiction of appeals from all final decisions of the district courts of the United States." 28 U.S.C. Sec. 1291. Generally, a decision is final for purposes of section 1291 only when it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945); see Nagle, 807 F.2d at 438; Southern Methodist University Ass'n of Women Law Students v. Wynne & Jaffe, 599 F.2d 707, 711 (5th Cir.1979). When a judgment adjudicating the rights of fewer than all the parties is rendered, it is interlocutory absent a lower court determination of finality pursuant to Fed.R.Civ.P. 54(b). ² See, e.g., Nagle, 807 F.2d at 438; Thompson v. Betts, 754 F.2d 1243, 1245 (5th Cir.1985); 10 Wright, Miller & Kane, Federal Practice and Procedure Civil 2d Sec. 2654 (1983) (hereinafter Wright & Miller). No Rule 54(b) certificate was issued in the present case.

In Nagle, one unserved defendant remained undisposed of when the judgment appealed from was rendered dismissing the suit as to all the served defendants. 807 F.2d at 438. This Court, sua sponte, raised the issue of its jurisdiction in light of the fact that no disposition had been made of the claim against the unserved defendant and no Rule 54(b) certificate had been issued. Id. at 437-38. We found that "since no service was obtained on [the defendant], nor did it make an appearance in the district court, [that defendant] never became a party" to the plaintiff's suit. Id. at 438. We held that the judgment involving the served defendants was final under section 1291 and the district court was not required to dispose of the plaintiff's claim against the unserved defendant prior to appeal, nor was it required to issue a Rule 54(b) certificate. Id. Although not expressly stated in Nagle, its holding necessarily presumes that subsequent action regarding the unserved defendant, such as a dismissal, does not prevent a section 1291 final judgment as to all served defendants without a Rule 54(b) certification.

The vast majority of circuits that have reached this issue are in agreement with the principle articulated in Nagle. See Insinga v. LaBella, 817 F.2d 1469, 1470 (11th Cir.1987); Bristol v. Fibreboard Corp., 789 F.2d 846, 847 (10th Cir.1986); Leonhard v. United States, 633 F.2d 599, 608-09 (2d Cir.1980), cert. denied, 451 U.S. 908, 101 S.Ct. 1975, 68 L.Ed.2d 295 (1981); DeTore v. Jersey City Police Employees Union, 615 F.2d 980, 982 n. 2 (3d Cir.1980); United States v. Studivant, 529 F.2d 673, 674 n. 2 (3d Cir.1976); cf. Patchik v. Kensington Publishing Corp., 743 F.2d 675, 677 (9th Cir.1984) (Recognizing that judgment of dismissal is final under section 1291 where "only unserved defendants remain," but holding that principle inapplicable as to served "Curtis" defendants whose motion to quash service remained pending and unresolved by the district court and as to whom the plaintiff "has not conceded that service was improper. The action cannot be final until the service dispute is resolved by the district court in favor of the Curtis defendants or until the action is dismissed as to those defendants."); Siegmund v. General Commodities Corp., 175 F.2d 952, 953 (9th Cir.1949); Hooven, Owens & Rentschler Co. v. John Featherstone's Sons, 111 F. 81, 84-85 (8th Cir.1901); Bradshaw v. Miners' Bank of Joplin, 81 F. 902, 904 (7th Cir.1897); but see Haley v. Simmons, 529 F.2d 78, 79 (8th Cir.1976) (holding that an appeal from a judgment dismissing the suit as to all properly served defendants was premature where the district court had entered an order quashing service as to five "improperly served" defendants but had not expressly dismissed as to those five and had not issued a Rule 54(b) certificate). The fact that these decisions all involve the question of whether the appeal was premature, rather than tardy as in the instant case, is irrelevant to the critical issue of determining finality for the purpose of appellate jurisdiction.

In Sider v. Valley Line, 857 F.2d 1043 (5th Cir.1988), the plaintiff sued five defendants. Three defendants were not served. The two served defendants obtained a dismissal based on res judicata. Id. at...