Appelbaum v. Ceres Land Co.
| Decision Date | 30 August 1982 |
| Docket Number | No. 81-2358,81-2358 |
| Citation | 687 F.2d 261 |
| Parties | Melvin APPELBAUM, v. CERES LAND COMPANY, Haydock Land & Livestock Company, Seckler Company, Chilewich Sons & Company, Northwestern Mutual Life Insurance Company, Siron Corporation, Hugh R. Macklin, Appellees, Merle Levitt, Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Karla R. Wahl, Minneapolis, Minn., for appellant.
Timothy R. Thornton, Carolyn P. Short, Michael D. Tewksbury, Rider, Bennett, Egan & Arundel, Minneapolis, Minn., for appellees.
Before ROSS, Circuit Judge, and STEPHENSON and HENLEY, Senior Circuit Judges.
This is an appeal from the district court's 1 dismissal of appellant's claims brought under Minnesota Blue Sky Law for failure to file within the applicable statute of limitations. We affirm the district court's November 6, 1981 order.
Melvin Appelbaum filed suit on July 20, 1976, against Merle Levitt and Ceres Land Company for securities violations in a tax shelter cattle feeding operation called "Hallowell Pool V." 2 On September 16, 1976 Levitt asserted a cross-claim against Ceres incorporating by reference the allegations contained in Appelbaum's complaint that Ceres violated federal securities law and the Minnesota Blue Sky Act. In the spring of 1980, Ceres settled the action with Appelbaum out of court and Levitt was dismissed as a defendant. Only Levitt's cross-claim against Ceres remains.
On September 15, 1980, Ceres moved for summary judgment and dismissal of Levitt's cross-claim for the reason that the cross-claim was barred by the statute of limitations. On October 20, 1980, Levitt moved for partial summary judgment on the state Blue Sky claims. The district court, 546 F.Supp. 17, on February 13, 1981, granted Ceres' motion to dismiss that part of Levitt's claim which alleged failure to register securities under Minnesota Blue Sky Law, denied Ceres' motion to dismiss Levitt's federal claims and denied Levitt's motion for partial summary judgment.
On March 13, 1981, Levitt appealed the dismissal of his Blue Sky claims. On May 6, 1981, this court dismissed the appeal for lack of jurisdiction finding that the district court's order was not final and therefore not appealable. On November 3, 1981, upon agreement of the parties, the district court dismissed with prejudice Levitt's federal claims. Levitt appeals the district court's final order dismissing his Blue Sky claims. The appeal does not relate to the dismissal of the federal claims but is limited to the issue of whether the claims of failure to register as required by Minnesota law were properly dismissed as being barred by the statute of limitations.
A question was raised at oral argument regarding federal subject matter jurisdiction. After the district court's November 3 dismissal of Levitt's federal claims, only state law claims remain. We, therefore, address the question of whether the district court abused its discretion in exercising jurisdiction over the pendent state claims.
The Supreme Court in Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966) stated that pendent jurisdiction is a doctrine of discretion and its "justification lies in considerations of judicial economy, convenience and fairness to litigants." In Rosado v. Wyman, 397 U.S. 397, 402, 90 S.Ct. 1207, 1212, 25 L.Ed.2d 442 (1970) the Supreme Court addressed the question of whether the power of the federal court to adjudicate a pendent claim was lost when the federal claim was held to be moot. The Court held that it was
not willing to defeat the commonsense policy of pendent jurisdiction-the conservation of judicial energy and the avoidance of multiplicity of litigation-by a conceptual approach that would require jurisdiction over the primary claim at all stages as a prerequisite to resolution of the pendent claim.
Id. at 405, 90 S.Ct. at 1214 (footnote omitted).
The state and federal claims arose from a "common nucleus of operative fact" and were such that Levitt "would ordinarily be expected to try them all in one judicial proceeding." Mine Workers v. Gibbs, supra, 383 U.S. at 725, 86 S.Ct. at 1138. Additionally, at the time the district court dismissed the state claims on statute of limitations grounds the federal claims had not been dismissed. 3 We hold that it was within the district court's discretion to exercise jurisdiction over the pendent state claim in this case. See Springfield Television, Inc. v. City of Springfield, Mo., 462 F.2d 21, 23-24 (8th Cir. 1972); Hughes v. Ford Motor Credit Co., 360 F.Supp. 15, 18 (E.D.Ark.1973).
Levitt argues that his state Blue Sky claims are not barred by the statute of limitations and thus the district court erred in dismissing those claims. Levitt contends that the applicable statute of limitations is found in Minn.Stat.Ann. § 80.26 (West 1968) which provides that suit must be brought within six years of the date on which the securities were delivered to the purchaser. 4 Levitt argues that the three-year statute of limitations found in Minn.Stat.Ann. § 80A.23(7) (West Supp.1981) 5 is inapplicable to this case because it does not apply to actions arising before August 1, 1973.
Levitt also contends that if the three-year statute does apply, the federal equitable tolling doctrine should be used to toll the running of the statute of limitations until the date the fraud was discovered by Levitt. Holmberg v. Armbrecht, 327 U.S. 392, 397, 66 S.Ct. 582, 585, 90 L.Ed. 743 (1946). Finally, Levitt argues that his cross-claim, which adopts by reference Appelbaum's complaint, should relate back to the date the original complaint was filed.
The district court rejected Levitt's contentions and dismissed the state claims. The district court held that the decision in Barry and Swartz v. Ceres Land Co., et al., No. 4-74-Civil 250 (D.Minn. July 26, 1978) applying the three-year statute of limitations of Minn.Stat.Ann. § 80A.23(7) was controlling, and that the statute of limitations began to run on August 1, 1973, the date on which the investments were completed and the interests in the pool were sold. Barry and Swartz was an action by other investors in Hallowell Pool...
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