American Totalisator Co., Inc. v. Fair Grounds Corp., s. 92-3145

• Decision Date: 22 September 1993
• Docket Number: Nos. 92-3145,92-3996,s. 92-3145
• Citation: 3 F.3d 810
• Parties: AMERICAN TOTALISATOR COMPANY, INC., Plaintiff-Appellee, v. FAIR GROUNDS CORP., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 810

3 F.3d 810

26 Fed.R.Serv.3d 1490

AMERICAN TOTALISATOR COMPANY, INC., Plaintiff-Appellee, v. FAIR GROUNDS CORP., Defendant-Appellant.

Nos. 92-3145, 92-3996.

United States Court of Appeals Fifth Circuit.

Sept. 22, 1993.

Rehearing Denied Oct. 20, 1993.

David C. Loeb, Chehardy, Sherman, Ellis & Breslin, Metairie, LA, David L. Stone, George C. Freeman, C. Lawrence Orlansky, New Orleans, LA, for defendant-appellant.

George Denegre, Jr., Edward J. Gay, III, Daniel E. LaGrone, Liskow & Lewis, New Orleans, LA, for plaintiff-appellee.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before EMILIO M. GARZA and DeMOSS, Circuit Judges, and ZAGEL, District Judge. ¹

DeMOSS, Circuit Judge:

BACKGROUND

Fair Grounds owns and operates the Fair Grounds Racetrack in New Orleans, Louisiana. It is licensed to conduct pari-mutuel wagering on thoroughbred horse races and to operate off-track betting parlors. Pari-mutuel wagering is a form of gambling. The wagers of betting patrons are formed into pools from which the successful bettors are paid. "Totalisator," or "tote," services are used to receive the wagers, aggregate them into pools, calculate the odds and payout amounts, pay winning tickets, and display and report this information.

American Totalisator Company, Inc. ("AmTote") is one of the oldest and largest providers of tote services and had been Fair Grounds' exclusive provider for many years. In 1988, Fair Grounds and AmTote entered into the totalisator service agreement which is the subject of this dispute. AmTote agreed to provide Fair Grounds with tote services at Fair Grounds' live racing facilities and its off-track betting parlors.

In 1989, Fair Grounds became interested in conducting intertrack wagering on more In June 1990, Fair Grounds advised AmTote's managers that it wanted to offer intertrack wagering on four simultaneous racing programs and that it considered AmTote to be in breach of contract for failing to provide a system with this capability. A series of meetings and correspondence followed. AmTote offered to modify its system to accommodate intertrack wagering on four simultaneous events by April 1991. However, Fair Grounds terminated the agreement on November 6, 1990.

than three simultaneous intertrack racing programs. However, they discovered that the TIM 300 model terminals did not have the capability to handle four events simultaneously. A dispute regarding the contract arose. Fair Grounds contends that AmTote had a contractual obligation to provide a tote system capable of simultaneously accommodating four racing events. AmTote believes its contractual obligations were satisfied when it furnished the TIM 300 model terminals capable of handling up to three events simultaneously. The service agreement does not expressly state the number of intertrack racetracks that the terminals must accommodate.

AmTote subsequently filed a breach of contract action in the Eastern District of Louisiana. ² Before completion of discovery, the parties filed cross motions for summary judgment. The district court found the 1988 totalisator service agreement unambiguous and granted AmTote's summary judgment motion. Specifically, the district court found that the parties intended Fair Grounds to receive ticket issuing machines that could accommodate simultaneous intertrack wagering on "one or more"--but not necessarily four--intertrack races. Thus, Fair Grounds wrongfully terminated its agreement based on AmTote's system's failure to accommodate simultaneous wagering at all four Louisiana intertrack racetracks.

The district court reserved its ruling on the amount of damages and attorneys' fees pending a stipulation or a trial on this matter. On February 5, 1992, the parties entered a stipulation for $4,159,575 in liquidated damages and $83,752 in attorney costs. Fair Grounds preserved its right to contest this award on appeal. Fair Grounds then filed its notice of appeal from summary judgment on February 13. The district court entered final judgment on February 21.

On June 16, 1992, Fair Grounds filed a Rule 60(b) motion for relief from the judgment, claiming that newly discovered evidence would show that the TIM 300 model terminal installed was just one of several TIM 300 Series Terminals available during the term of the agreement, and that at least one other model in the series had the capacity to accommodate four or more simultaneous intertrack races. The district court denied the Rule 60(b) motion, and Fair Grounds later filed a notice of appeal from that order.

JURISDICTION

AmTote contends that this Court is without jurisdiction to hear this appeal because Fair Grounds filed its notice of appeal before the district court had entered a final judgement. The district court ruled from the bench after oral argument and granted summary judgment in favor of AmTote on January 29, 1992. However, the court reserved ruling on damages and attorney's fees pending either stipulation or trial on these amounts. The parties entered a stipulation on February 5, and Fair Grounds filed its notice of appeal on February 13. The district court subsequently entered judgment on February 21, 1992.

Rule 4(a)(1) of the Federal Rules of Appellate Procedure provides that an appellant must file its notice of appeal "within 30 days after the date of entry of the judgment or order appealed from." FED.R.APP.P. 4(a)(1). AmTote maintains that Fair Grounds' notice of appeal--filed prior to the district court's entry of final judgment--was prematurely filed and divests this Court of jurisdiction under 28 U.S.C. Sec. 1291. ³ Fair Grounds responds that Rule 4(a)(2) saves its "technically" premature notice because it was Fair Ground's failure to wait until the clerk entered a judgment under Federal Rule of Civil Procedure 58 before filing its notice of appeal is not fatal. The Supreme Court has held:

filed after the district court judge announced a decision and, consequently, is "treated as filed after [the actual] entry [of judgment] and on the day thereof." ⁴

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. In these instances, a litigant's confusion is understandable, and permitting the notice of appeal to become effective when judgment is entered does not catch the appellee by surprise. Little would be accomplished by prohibiting the court of appeals from reaching the merits of such an appeal.

FirsTier Mortgage Co. v. Investors Mortgage Ins. Co., 498 U.S. 269, 276, 111 S.Ct. 648, 653, 112 L.Ed.2d 743 (1991) (emphasis in original).

Here, it appears that Fair Grounds harbored a reasonable belief when it filed its notice of appeal that the judgment was final. The district court's summary judgment was final upon the entering of the parties' stipulation on liquidated damages and attorneys' fees. All that remained was the clerk's ministerial task of entering a Rule 58 judgment. AmTote does not argue that it would be prejudiced if the premature notice were deemed effective. Since nothing would be accomplished by not allowing us to review the merits of this appeal, we find that Fair Grounds' premature notice of appeal relates forward and is effective as of February 21, 1992, the date of the district court's entry of judgment.

CONTRACT

The district court determined that the 1988 tote service agreement was unambiguous. Thus, the parties' intention was determined through the plain language of the agreement without the introduction of extrinsic evidence to aid in this determination. Accordingly, AmTote's summary judgment motion was granted. Fair Grounds contends that summary judgment was in error.

On appeal, a district court's interpretation of a contract is a matter of law reviewable de novo. That is, we review the record independently and under the same standard that guided the district court. Walker v. Sears, Roebuck & Co., 853 F.2d 355, 358 (5th Cir.1988). This broad standard of review includes the initial determination of whether the contract is ambiguous. Austin v. Decker Coal Co., 701 F.2d 420, 425 (5th Cir.), cert. denied, 464 U.S. 938, 104 S.Ct. 348, 78 L.Ed.2d 314 (1983).

Under Louisiana law, where the words of a contract are clear and explicit and lead to no absurd consequences, the contract's meaning and the intent of its parties must be sought within the four corners of the document and cannot be explained or contradicted by extrinsic evidence. LA.CIV.CODE ANN. art. 2046 (West 1987); Billingsley v. Bach Energy Corp., 588 So.2d 786, 790 (La.App. 2nd Cir.1991). If a court finds the contract to be unambiguous, it may construe the intent from the face of the document--without considering extrinsic evidence--and enter judgment as a matter of law. National Union Fire Ins. Co. v. Circle, Inc., 915 F.2d 986, 989 (5th Cir.1990).

The 1988 Totalisator Service Agreement requires AmTote to provide the TIM 300 Series Terminals. ⁵ Exhibit "A," subsection (j) of the agreement sets forth the performance requirements of the TIM 300 terminals. ⁶ Nothing in that section refers to We disagree. A contract is not rendered ambiguous simply because the agreement does not expressly impose the obligation in question. See, e.g., Baber v. Hoffer, 430 So.2d 220, 221 (La.App. 4th Cir.1983) ("When a clause of a contract is clear and unambiguous, the letter of it should not be disregarded under the pretext of pursuing the spirit."), Ransom v. Camcraft, Inc., 580 So.2d 1073, 1077 (La.App. 4th Cir.1991) ("[T]he rule of strict construction does not authorize perversion of language or the creation of ambiguity where none exists...."). Nothing in the 1988 agreement can be construed reasonably as obligating AmTote to provide a system capable of handling intertrack wagering on four simultaneous events. Thus, no such obligation...