Redding & Company v. Russwine Construction Corporation

• Citation: 417 F.2d 721
• Decision Date: 21 March 1969
• Docket Number: No. 22593.,22593.
• Parties: REDDING & COMPANY, Inc., Appellee, v. RUSSWINE CONSTRUCTION CORPORATION et al., Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

417 F.2d 721 (1969)

REDDING & COMPANY, Inc., Appellee, v. RUSSWINE CONSTRUCTION CORPORATION et al., Appellant.

No. 22593.

United States Court of Appeals District of Columbia Circuit.

Decided March 21, 1969.

Mr. Mark P. Friedlander, Jr., Washington, D. C., argued the motion for appellee.

Mr. Louis P. Robbins, Washington, D. C., argued in opposition to the motion for appellant. Mr. Arnold L. Yochelson, Washington, D. C., also entered an appearance for appellant.

Before BURGER, WRIGHT and ROBINSON, Circuit Judges.

SPOTTSWOOD W. ROBINSON, III, Circuit Judge:

This case is now before us on the motion of the appellee, Redding & Co., Inc. (Redding), to require a supersedeas bond as a condition to a stay of an execution on what purports to be a judgment against the appellant, Russwine Construction Corporation (Russwine). Since this marks the eighth appearance of the litigation in this court¹ — litigation that remains uncompleted in the District Court — we begin with a recapitulation of the events from which the case assumed its present posture.² That summary will set the stage for the questions we are to decide at this juncture,³ and their resolution, hopefully, will facilitate a prompt and orderly disposition of the segment of the controversy to which the present proceeding relates.

I

The suit underlying the judgment seeks enforcement of a mechanic's lien asserted by Redding, a subcontractor, against Russwine, a general contractor, and others⁴ for sums allegedly due for work done on a construction project. As a result of activities we described in an earlier memorandum,⁵ Russwine was ordered to pay certain funds into the registry of the District Court pending the outcome.⁶ Russwine failed to comply, and as a result its pleadings were stricken and a default was entered.⁷

Subsequently, Redding moved for the entry of judgment on the default and, over Russwine's objection that its codefendants had defenses outstanding,⁸ an order responsive to the motion was passed on June 28, 1968. That order contains contradictory indications of finality and is the source of the present difficulties. On the one hand, it specifies that Redding recover from Russwine a fixed amount — $62,184.70 — and further directs that "execution on the judgment entered herein" be stayed in the event that Russwine posts a supersedeas bond.⁹ On the other hand, the order contains a certification that a controlling question of law is involved as to which there is substantial ground for difference of opinion, and that an immediate appeal might advance the ultimate termination of the litigation.¹⁰

Russwine treated the order as interlocutory and sought permission to appeal.¹¹ Redding opposed, also accepting the order as interlocutory. The order contains neither the express finding that there is no reason for delay nor the express direction for entry of judgment which Rule 54(b) of the Federal Rules of Civil Procedure makes prerequisites to finality of a judgment in a multi-claim or multi-party action.¹² In that light, this court deemed the appeal to be from an interlocutory order and, in the exercise of its discretion, denied Russwine's petition for leave to appeal.¹³

Russwine then applied for a writ of mandamus, asserting that Redding contemplated an execution on its "judgment." This court, however, regarded the order of June 28, 1968 — the only outstanding order upon which an execution might conceivably be based — as interlocutory rather than final. And, on the theory that a valid execution necessitates an underlying final order,¹⁴ no harm to Russwine was then apparent, and relief by way of mandamus was denied.¹⁵

While the mandamus proceeding was pending, Russwine unsuccessfully sought a stay of execution from the District Court. When the order terminating that proceeding was issued,¹⁶ Russwine moved the District Court for reconsideration of its application for a stay and requested alternatively the judicial determination and direction provided for in Rule 54(b).¹⁷ The motion was denied in its entirety whereupon Russwine, still confronted by a judgment non-final in terms of Rule 54(b) but ostensibly the predicate for an execution, appealed from the order of denial.¹⁸ To alleviate this dilemma, we granted a stay of execution pending the appeal, and the current motion seeks a supersedeas bond as a condition to the stay.

II

An appeal from the District Court lies to this court, subject to statutory exceptions not here applicable, only from a decision that is final.¹⁹ Presented at the threshold is the question whether the order appealed from — which in effect is a ruling that the order of June 28, 1968, is enforceable by execution — is final for purposes of Russwine's appeal. Our authority to consider Redding's motion is congruent with our authority to hear Russwine's appeal, and it is incumbent upon us to first decide the jurisdictional question that is common to both.²⁰ We approach this problem heedful of the Supreme Court's admonition that "a pragmatic approach to the question of finality has been considered essential to the achievement of the `just, speedy, and inexpensive determination of every action': the touchstones of federal procedure."²¹

It is evident that we would lack jurisdiction if the requirement of finality could be satisfied only by the terminal order in the litigation. The so-called collateral order doctrine, however, teaches that an order, though entered prior to full adjudication of all of the issues as to all of the parties, may be appealable if it disposes of claimed rights separable though auxiliary to those pressed as the cause of action.²² The leading case is Cohen v. Beneficial Industrial Loan Corporation,²³ sustaining the appealability of an order denying a motion to require the posting of security for the expenses of suit. Explaining the rationale of the decision the Court said:

The effect of the statute²⁴ is to disallow appeal from any decision which is tentative, informal or incomplete. Appeal gives the upper court a power of review, not one of intervention. So long as the matter remains open, unfinished or inconclusive, there may be no intrusion by appeal. But the District Court\'s action upon this application was concluded and closed and its decision final in that sense before the appeal was taken.

Nor does the statute permit appeals, even from fully consummated decisions, where they are but steps toward final judgment in which they will merge. The purpose is to combine in one review all stages of the proceeding that effectively may be reviewed and corrected if and when final judgment results. But this order of the District Court did not make any step toward final disposition of the merits of the case and will not be merged in final judgment. When that time comes, it will be too late effectively to review the present order, and the rights conferred by the statute, if it is applicable, will have been lost, probably irreparably. We conclude that the matters embraced in the decision appealed from are not of such an interlocutory nature as to affect, or to be affected by, decision of the merits of this case.

This decision appears to fall in that small class which finally determine claims of right separable from, and collateral to, rights asserted in the action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated. The Court has long given this provision of the statute this practical rather than a technical construction. * * *

We hold this order appealable because it is a final disposition of a claimed right which is not an ingredient of the cause of action and does not require consideration with it.²⁵

In the two decades since Cohen, the Supreme Court,²⁶ and the federal courts of appeals as well,²⁷ have applied the collateral order doctrine in a fair variety of situations. Particularly pertinent to the question here are the decisions upholding the appealability of orders affecting attachments and other legal process of similar character.²⁸ And while we ourselves have not had frequent occasion to utilize the Cohen doctrine,²⁹ we nonetheless have articulated our understanding of its reach in a definition so broad as to cleanly intercept the order now before us.³⁰

The only question posed on Russwine's appeal is whether the order of June 28, 1968, is a judgment that can support an execution. Like the issue in Cohen, it is wholly collateral to the merits of the cause of action pursued in the District Court. Moreover, under the somewhat unique facts here, justice is plainly served by the appeal. For if Redding is able to execute on the June 28 order, no need for any further adjudication on Redding's claim against Russwine is apparent, and Russwine would have lost its cause without an appealable order ever having been entered. An order generating such a condition is surely final under any pragmatic view, for it not only resolves the collateral claim but, if allowed to stand, would deprive Russwine of its appeal as well.³¹

That the District Court's action may not be permitted to literally "render entirely illusory"³² Russwine's right to review, we hold that the order refusing a stay of execution is so far final as to confer jurisdiction to entertain the appeal. This, in turn, vindicates our authority to deal with Redding's incidental motion to require Russwine to post a supersedeas bond.³³

III

The requirement of a supersedeas bond undoubtedly may be appropriate in normal situations to protect an enforceable judgment in favor of the moving party,³⁴ but the problem on Russwine's pending appeal is to determine precisely whether Redding now has any such judgment to protect. While that issue on the merits is not before us, the probability or improbability that Redding will ultimately prevail is obviously an important factor to be weighed in the determination as to whether the condition Redding requests should be...