Calcasieu Marine Nat. Bank v. Grant

• Decision Date: 17 October 1991
• Docket Number: Nos. 90-4249,90-4261,s. 90-4249
• Citation: 943 F.2d 1453
• Parties: , RICO Bus.Disp.Guide 7863, 34 Fed. R. Evid. Serv. 118 CALCASIEU MARINE NATIONAL BANK, Plaintiff-Appellant, v. Thomas Arthur GRANT, III, Defendant-Appellee. Suzanne Brunazzi GRANT, Plaintiff-Appellee, v. Thomas A. GRANT, III, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1453

943 F.2d 1453

21 Fed.R.Serv.3d 377, RICO Bus.Disp.Guide 7863,

34 Fed. R. Evid. Serv. 118

CALCASIEU MARINE NATIONAL BANK, Plaintiff-Appellant, v. Thomas Arthur GRANT, III, Defendant-Appellee.

Suzanne Brunazzi GRANT, Plaintiff-Appellee, v. Thomas A. GRANT, III, Defendant-Appellant.

Nos. 90-4249, 90-4261.

United States Court of Appeals,

Fifth Circuit.

Oct. 17, 1991.

W. Joe Mize, Wade N. Kelly, Carmouche & Gray, Lake Charles, La., for Calcasieu Marine Nat. Bank.

William Paul Lawrence, II, Comegys, Lawrence, Jones, Odom & Spruiell, Shreveport, La., for Thomas Arthur Grant, III.

James L. Paxton, Kevin R. Tully, W.K. Chritovich, Chritovich & Kearney, New Orleans, La., for Suzanne Brunazzi Grant.

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

Before CLARK, Chief Judge, REAVLEY and JONES, Circuit Judges.

CLARK, Chief Judge:

Suzanne Grant (Mrs. Grant) brought this action against her former husband, Thomas Grant, III (Grant) and others. She claimed violations under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-1968, and asserted unfair trade practices, fraud, negligence, and tort claims under Louisiana law. She settled with all of the defendants except Grant before trial. The jury found that Grant violated the RICO statute and the Louisiana Unfair Trade Practices and Consumer Protection Act and committed fraud under Louisiana law. We affirm the verdict as to the state law fraud claims and reverse as to the RICO claim.

Mrs. Grant's action was consolidated for trial with an action covering many of the same events which was brought by Calcasieu Marine National Bank (CMNB) against Grant and the others who had been named as defendants in Mrs. Grant's action. CMNB settled its claims against all defendants except Grant before trial. The jury found that Grant did not violate the RICO The facts are set out by transaction groups.

                statute and was not guilty of fraud or negligence under Louisiana law with respect to CMNB.   We affirm
                

A. Nineteen Seventies Dealings.

During the mid-1970s James Steele, III (Steele), a business associate of Mr. Grant, obtained loans from Ouachita National Bank (ONB) by allegedly giving kickbacks to Benjamin Marshall (Marshall), ONB's chief lending officer. Grant was not involved in any of these loans.

B. Aurelle Field and Modoc Partnership.

In 1980, Primos Production, a mineral development partnership in which Grant was an active member, began borrowing money from ONB to finance purchases of mineral leases in the Aurelle Field in Arkansas. Later in the year, Marshall's twenty-year old son, Biff, purchased a 1/16 working interest in the leases for a partnership called Modoc Petroleum, which consisted of Mr. Marshall's children. Grant arranged Biff's purchase and did not disclose the arrangement to the other Primos partners. Biff testified that he financed the purchase through a loan from American Bank in Monroe, Louisiana. It is unclear whether Marshall personally guaranteed the loan.

Through Marshall, Grant obtained a line of credit at ONB which Primos used for drilling expenses. Marshall did not disclose to the appropriate ONB officials that he and his children had an interest in the leases. By May 1981, the Aurelle Field had not proved to be successful. According to CMNB, Grant and Steele later bought out Modoc to persuade Marshall to loan money to Grant and Steele for a larger deal involving the Cities Service Corporation.

C. Cities Service Deal.

In 1982 Cities Service Corporation offered land and mineral interests for sale. Steele and Grant successfully offered to buy the properties for approximately $36 million and, allegedly, bribed Marshall to secure an ONB loan, of approximately $10 million towards the purchase, by buying out Modoc and giving Marshall part of the property purchased.

D. CMNB Loan Participation.

The $10 million loan was in excess of ONB's legal lending limit. Marshall contacted a number of banks, and asked them to purchase a participating interest in the loan. During these contacts Marshall did not disclose: his prior relationship with Steele, the Aurelle and Modoc transactions, or his personal interest in securing the loan. CMNB purchased a 40% participation interest in the loan from ONB.

E. Bankers First.

The Grants and others obtained a loan from ONB to finance the purchase of stock in Bankers' First, a Georgia S.L. Grant allegedly arranged a kickback for Marshall in order to get the loan. In connection with this deal, Marshall was indicted for, and pleaded guilty to, failing to disclose his interest in the ONB loan. Grant was investigated, but was not indicted.

CMNB alleges that it also made loans to Grant and others in connection with the Bankers' First stock purchases.

F. Cross Collateralization of Primos.

Grant was a partner in Primos. Mrs. Grant claims that she, too, was a partner in Primos based on her Louisiana community property rights. Grant claims that, under Louisiana law, she was not a partner, but agrees the community had an interest in the value of Grant's partnership interest.

Grant mortgaged the community's interests in Primos' oil and gas properties as security for additional Cities Service loans from ONB. Mrs. Grant signed loan documents relating to this transaction. But she claims she would not have done this had she known of the other Steele-Marshall-Grant dealings in which ONB was involved. She claims that Grant engaged in the transactions as part of a scheme to eliminate her community interest in Primos.

G. Formation of OFT.

Around 1988, Grant and Steele were involved in a lender liability action against ONB. After the Grants were divorced, Grant settled with ONB. The confidential settlement agreement required Grant to assist in foreclosing on collateral.

During his marriage to Mrs. Grant, Grant formed several partnerships. The assets of Grant's partnerships, including Primos, were transferred to OFT Service Corporation. Mrs. Grant was not a shareholder of OFT. Ultimately, ONB acquired OFT, through foreclosures in which Grant participated as an attorney.

In Mrs. Grant's action, the jury found that Grant violated the RICO statute and the Louisiana Unfair Trade Practices and Consumer Protection Act. The jury also found that Grant committed fraud and was negligent under Louisiana law. Mrs. Grant was awarded $400,000 which was trebled under RICO. Grant filed a Motion for Judgment Notwithstanding the Verdict (JNOV), New Trial or Remittitur. The trial court denied this motion. Grant appeals.

The jury also found that Grant did not violate the RICO statute or commit fraud or act negligently under Louisiana law with respect to CMNB. CMNB filed a Motion for JNOV or a New Trial. The trial court denied this motion. CMNB appeals.

JURISDICTION

Mrs. Grant raises an initial challenge to this court's jurisdiction to hear Grant's appeal. In February 1990, Grant filed a Motion for JNOV, New Trial, or Remittitur. The motion was overruled on March 6, 1990. On April 5, 1990, Grant filed both a notice of appeal and a motion for reconsideration of the court's denial of his state law prescription defense. On June 19, 1991, the court entered an order holding the motion to reconsider pending the outcome of this appeal. Grant did not file a new notice of appeal.

Mrs. Grant contends that since Grant did not refile his notice of appeal after his motion to reconsider the state law prescription defense was acted on, his April 5, 1990, notice is without effect and the appeal must be dismissed.

Rule 4(a)(4) of the Federal Rules of Appellate Procedure provides:

If a timely motion under the Federal Rules of Civil Procedure is filed in the district court by any party: (i) for judgment under Rule 50(b); (ii) under Rule 52(b) to amend or make additional findings of fact, whether or not an alteration of the judgment would be required if the motion is granted; (iii) under Rule 59 to alter or amend the judgment; or (iv) under Rule 59 for a new trial, the time for appeal for all parties shall run from the entry of the order denying a new trial or granting or denying any other such motion. A notice of appeal filed before the disposition of any of the above motions shall have no effect. A new notice of appeal must be filed within the prescribed time measured from the entry of the order disposing of the motion as provided above. No additional fees shall be required for such filing.

(Emphasis added). Grant complied with the rule by filing a notice of appeal after the court denied his Rule 59 motion for a new trial. Rule 4(a)(4) does not require the filing of a second notice of appeal after the court declined to act on a motion to reconsider its ruling on a prior Rule 59 motion. Despite its harsh and often unanticipated consequences, we have strictly construed and applied the language of Rule 4(a)(4)(iv). Harcon Barge Co. v. D. & G. Boat Rentals, Inc., 784 F.2d 665 (5th Cir.1986) (en banc), cert. denied, 479 U.S. 930, 107 S.Ct. 398, 93 L.Ed.2d 351 (1986). However, we decline to exact its penalty by implying it applies to any motions not expressly set out in the Rule. Mrs. Grant was clearly put on notice that Grant was appealing from the order overruling his motion for JNOV, a new trial, and a remittitur. The district court's action on the motion was also fully consistent with the fact that an appeal was underway. This court has jurisdiction to hear Grant's appeal.

ABSTENTION

Grant argues that the lower court should have sustained his motion to dismiss on grounds of abstention because the case involves Louisiana domestic relations law.

He relies on Dubroff v. Dubroff, 833 F.2d 557 (5th Cir.1987).

In Dubroff, an ex-wife brought a RICO claim against her ex-husband and his law firm for fraud in connection with a community property settlement. We abstained because to proceed would have deeply involved this court in the "novel and dubious questions of state family law" which were...