Burleson v. Coastal Recreation, Inc.

• Decision Date: 05 May 1978
• Docket Number: No. 75-4184,75-4184
• Citation: 572 F.2d 509
• Parties: Ron BURLESON, Plaintiff-Appellant, v. COASTAL RECREATION, INC., Defendant-Third-Party Plaintiff-Appellee, v. INLAND SAILBOATS, INC., Third-Party Defendant-Fourth-Party Plaintiff-Appellee, v. DUTTON LAINSON COMPANY, Fourth-Party Defendant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 509

572 F.2d 509

Ron BURLESON, Plaintiff-Appellant, v. COASTAL RECREATION, INC., Defendant-Third-Party Plaintiff-Appellee, v. INLAND SAILBOATS, INC., Third-Party Defendant-Fourth-Party Plaintiff-Appellee, v. DUTTON LAINSON COMPANY, Fourth-Party Defendant.

No. 75-4184.

United States Court of Appeals, Fifth Circuit.

May 5, 1978.

Charles M. Wilson, III, Joe Hill Jones, Dallas, Tex., for plaintiff-appellant.

D. L. Case, Jack Pew, Jr., Dallas, Tex., for Coastal Recreation.

Thomas G. Nash, Jr., Dallas, Tex., for Inland Sailboats, etc.

Appeal from the United States District Court for the Northern District of Texas.

Before THORNBERRY, RONEY and HILL, Circuit Judges.

THORNBERRY, Circuit Judge:

In this products liability case, the parties have raised not only traditional issues with respect to jury instructions, the interpretation of the Texas Comparative Negligence Statute and other such standard fare, but have presented to the court the novel jurisdictional picture of a winning plaintiff seeking to overturn the lower court's judgment for lack of jurisdiction and two losing defendants attempting mightily to sustain that jurisdiction.

Burleson, a Texas resident, sued Coastal Recreation, Inc., a California corporation, in federal district court to recover for injuries sustained when a winch on his recently purchased sailboat flew off and hit him in the face. Coastal brought in Inland Sailboats, Inc., the seller, as a third party defendant. ¹ Although Inland was a Texas corporation, Burleson amended his complaint to include it, alleging that either ancillary or pendant jurisdiction supported his claim. Inland moved to dismiss the case against it for want of jurisdiction. The district court, relying on the district court opinion in Fawvor v. Texaco, Inc., D.C., 387 F.Supp. 626, rev'd, 546 F.2d 636 (5 Cir. 1977), denied Inland's motion to dismiss. ² A jury found that Burleson was damaged $30,000. It found the parties' relative negligence as Burleson 45%, Coastal 45%, and Inland 10%, but that Inland's negligence was not the proximate cause of the plaintiff's injury. The district court denied plaintiff Burleson's motion for a mistrial and permitted a stipulation by Coastal that it would assume Inland's 10% Negligence. The district court then awarded judgment against Coastal for $16,500 and entered a take-nothing judgment against Burleson in favor of Inland.

Burleson appealed, contending that the trial court lacked jurisdiction over his claim against Inland and that this court must reverse the entire case and remand for a new trial on the merits. He also asserted other trial court errors related to specific jury issues. Coastal, as appellee, countered that even if there was no jurisdiction over the Burleson-Inland aspect of the case that Finn v. American Fire & Casualty Co., 207 F.2d 113 (5 Cir.), cert. denied, 347 U.S. 912, 74 S.Ct. 476, 98 L.Ed. 1069 (1954), requires that the judgment against Coastal stand undisturbed. The appellee Inland argued the reverse of its earlier position and urged that the district court did have jurisdiction over the claim against it.

Prior to oral argument in this case, the Fifth Circuit reversed the district court's decision in Fawvor, supra. That reversal was dispositive of one issue in this case for with the circuit opinion in Fawvor as precedent it is clear that the district court's diversity jurisdiction was defective as long as Inland, a Texas corporation, was a party to the action. What is not clear and what we are required to resolve in this case is whether that defect necessarily entitles the plaintiff Burleson to demand what is in effect a second bite at the apple.

A preliminary concern of the court was whether Burleson, having taken a $16,500 judgment against Coastal, had standing to appeal as against that defendant. Ordinarily only a litigant who was a party below and who is aggrieved by the judgment or order may appeal. Credits Commutation Co. v. United States, 177 U.S. 311, 20 S.Ct. 636, 44 L.Ed. 782 (1900); United States v. Adamant Co., 197 F.2d 1 (9 Cir.), cert. denied sub nom., Bullen v. Scoville, 344 U.S. 903, 73 S.Ct. 283, 97 L.Ed. 698 (1952); Milgram v. Loew's Inc., 192 F.2d 579 (3 Cir.), cert. denied, 343 U.S. 929, 72 S.Ct. 762, 96 L.Ed. 1339 (1952). A seldom discussed correlative notion is that a party may not rely on anything as cause for reversing a judgment for his advantage, but that theory has been said to have an exception. American Fire & Casualty Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951). The Supreme Court's opinion in Finn stated in dicta that the exception applied and allowed a party to appeal when there was a departure by the court itself from its settled course of procedure. 341 U.S. at 18, 71 S.Ct. at 542, n. 18. The issue arose in the removal context. A Texas plaintiff had sued two insurance companies and an agent to recover for fire damage to her home. The insurance companies were citizens of Florida and Indiana but the insurance agent was also a Texan. The two insurance companies succeeded in removing the case to federal district court over the plaintiff's protests. The district court entered judgment against American Fire & Casualty Company and ordered that the plaintiffs take nothing from the Indiana company and the individual agent. American Fire & Casualty appealed the district court's denial of a motion to vacate the judgment and the Fifth Circuit affirmed on the ground that the causes of action against the insurance companies were separate and independent from that against the individual defendant and under 28 U.S.C. § 1441(c) the entire case was removable. The Supreme Court interpreted the removal statute differently and reversed. In doing so it noted first that American Fire & Casualty was not estopped to assert lack of jurisdiction despite its earlier request for removal and, second, that federal court jurisdiction could not be expanded by prior action of the parties or their consent. 341 U.S. at 18, 71 S.Ct. at 542.

In a footnote, the Court referred to Mansfield, C. & L.M. Ry. Co. v. Swan, 111 U.S. 379, 4 S.Ct. 510, 28 L.Ed. 462 (1884) as the source of an exception that allowed a party to appeal a favorable judgment. In Mansfield an Ohio partnership sued the railway company for breach of contract in an Ohio state court. The defendant railway company removed. The subsequent trial resulted in a verdict against the defendants. On appeal, the Supreme Court held that the circuit court ³ had no jurisdiction to try the action because it appeared affirmatively from the removal petition that one of the plaintiffs was an Ohio citizen and that the defendants were Ohio citizens. The Court stated:

It is true that the plaintiffs below, against whose objection the error was committed, do not complain of being prejudiced by it, and it seems to be an anomaly and a hardship that the party at whose instance it was committed should be permitted to derive an advantage from it; but the rule, springing from the nature and limits of the judicial power of the United States, is inflexible and without exception which requires this court, of its own motion, to deny its own jurisdiction, and, in the exercise of its appellate power, that of all other courts of the United States, in all cases where such jurisdiction does not affirmatively appear in the record on which, in the exercise of that power, it is called to act. On every writ of error or appeal the first and fundamental question is that of jurisdiction, first, of this court, and then of the court from which the record comes. This question the court is bound to ask and answer for itself, even when not otherwise suggested, and without respect to the relation of the parties to it.

In the Dred Scott Case, 19 How. 393-400, (15 L.Ed. 691,) it was decided that a judgment of the circuit court, upon the sufficiency of a plea in abatement, denying its jurisdiction, was open for review upon a writ of error sued out by the party in whose favor the plea had been overruled. And in this view Mr. Justice Curtis, in his dissenting opinion, concurred; and we adopt from that opinion the following statement of the law on the point: "It is true," he said, (19 How. 566), "as a general rule, that the court will not allow a party to rely on anything as cause for reversing a judgment which was for his advantage. In this we follow an ancient rule of the common law. But so careful was that law of the preservation of the course of its courts that it made an exception out of that general rule, and allowed a party to assign for error that which was for his advantage, if it were a departure by the court itself from its settled course of procedure. The cases on this subject are collected in Bac.Abr. "Error," H, 4. And this court followed this practice in Capron v. Van Noorden, 2 Cranch. 126, (2 L.Ed. 229,) where the plaintiff below procured the reversal of a judgment for the defendant on the ground that the plaintiff's allegations of citizenship had not shown jurisdiction. But it is not necessary to determine whether the defendant can be allowed to assign want of jurisdiction as an error in a judgment in his own favor. The true question is not what either of the parties may be allowed to do, but whether this court will affirm or reverse a judgment of the circuit court on the merits, when it appears on the record, by a plea to the jurisdiction, that it is a case to which the judicial power of the United States does not extend. The course of the court is, when no motion is made by either party, on its own motion, to reverse such a judgment for want of jurisdiction, not only in cases where it is shown, negatively, by a plea to the jurisdiction, that jurisdiction does not exist, but even when it does not appear, affirmatively, that it does exist. Pequignot v. Pennsylvania R. Co., 16 How. 104, (14 L.Ed. 863.) It acts upon the principle that the judicial power of the United States must not be exerted in a case to...