Chase Manhattan Bank v. Iridium Africa Corp., CIV.A. 00-564JJF.
| Decision Date | 09 July 2004 |
| Docket Number | No. CIV.A. 00-564JJF.,CIV.A. 00-564JJF. |
| Citation | 324 F.Supp.2d 540 |
| Court | U.S. District Court — District of Delaware |
| Parties | The CHASE MANHATTAN BANK, As Collateral Agent, Plaintiff, v. IRIDIUM AFRICA CORPORATION; Iridium Canada, Inc.; Iridium China (Hong Kong) Ltd.; Iridium India Telecom Ltd.; Iridium Middle East Corporation; Iridium Sudamerica Corporation; Khrunichev State Research and Production Space Center; Korea Mobile Telecommunications Corporation; Lockheed Martin Corporation; Motorola, Inc.; Nippon Iridium (Bermuda) Ltd.; Pacific Electric Wire & Cable Co., Ltd.; Raytheon Company; Sprint Iridium, Inc.; STET-Societa Finanziaria Telefonica Per Azioni; Thai Satellite Telecommunications Co., Ltd.; and Vebacom Holdings, Inc., Defendants. |
Stephen E. Jenkins, Esquire and Regina A. Iorii, Esquire of Ashby & Geddes, Wilmington, DE, Of Counsel: Barry R. Ostrager, Esquire, Mary Kay Vyskocil, Esquire, and David J. Woll, Esquire of Simpson Thacher & Bartlett, New York City, for Plaintiff The Chase Manhattan Bank, as Collateral Agent.
William J. Marsden, Jr., Esquire, and John T. Meli, Jr., Esquire of Fish & Richardson
P.C., Wilmington, DE, for Defendants Iridium Africa Corporation, Iridium Middle East Corporation, and Krunichev State Research and Production Space Center. Of Counsel: Robert A. Burgoyne, Esquire, and Caroline M. Mew, Esquire of Fulbright & Jaworski LLP, Washington, DC, for Defendants Iridium Africa Corporation and Iridium Middle East Corporation, Iridium Middle East.
Michael E. Wiles, Esquire, and Suzanne M. Grosso, Esquire of Debevoise & Plimpton, New York City, for Defendant Krunichev State Research and Production Space Center (Russia).
Barry M. Klayman, Esquire of Wolf Block Schorr & Solis-Cohen, Wilmington, Of Counsel: Stuart M. Brown, Esquire, and David Lenci, Esquire of Preston Gates & Ellis LLP, Portland, OR, for Defendant Iridium China (Hong Kong) Ltd.
P. Clarkson Collins, Jr., Esquire of Morris, James, Hitchens & Williams LLP, Wilmington, DE, Of Counsel: Annette Jarvis, Esquire of Ray Quinney & Nebeker P.C., Salt Lake City, UT, for Defendant Nippon Iridium (Bermuda) Limited.
Samuel A. Nolen, Esquire, and Anne C. Foster, Esquire of Richards, Layton & Finger, Wilmington, DE, for STET-Societa Finanziaria Telefonica per Azioni.
Presently before the Court are two motions, the Motion For Final Judgment filed by The Chase Manhattan Bank, now known as JPMorgan Chase Bank ("Chase") (D.I.910), and the Motion For Certification For Interlocutory Appeal filed by Defendants. (D.I.900.) For the reasons discussed, the Court will deny Chase's Motion and grant in part Defendants' Motion.
In a March 2, 2004, Memorandum Opinion and Order ("the March 2 Opinion"), the Court granted Chase summary judgment on its first claim for relief, breach of contract. See Chase Manhattan Bank v. Iridium Africa Corp., 307 F.Supp.2d 608 (D.Del.2004). In the March 2 Opinion, the Court concluded that the Defendants were precluded from denying the validity of the amendments to the Iridium LLC Agreement due to the representations made by Iridium LLC's Assistant Secretary on behalf of Defendants in a certificate delivered to Chase. Id. at 612. Additionally, in a February 13, 2004, Memorandum Opinion and Order (the "February 13 Opinion"), the Court concluded that 11 U.S.C. § 365(c)(2) does not preclude Chase from exercising its right to call the Reserve Capital Call ("RCC") obligations of the Defendants, notwithstanding Iridium LLC's bankruptcy.
Chase requests the Court to enter partial final judgment because it contends that there are no unresolved matters precluding final judgment following the Court's March 2 Opinion granting Chase summary judgment on its breach of contract claim. Chase maintains that all the defenses raised by Defendants in their Motion for Interlocutory Appeal have been resolved by the Court. In addition, Chase contends that the Court's grant of summary judgment, contrary to the assertions of Defendants, applies to both STET-Societa Finanziaria Telfonica per Azioni ("STET") and Pacific Electric Wire and Cable Company ("PEWC"). Chase also contends that its request for attorneys' fees pursuant to Section 11.03 of the LLC Agreement does not prevent the entry of final judgment because its request is not an integral part of the contractual relief it seeks.
Defendants respond that numerous unresolved issues remain in this litigation that preclude the entry of final judgment. Defendants assert that the affirmative defenses of some individual Defendants, including STET, PEWC, and Iridium China (Hong Kong) Ltd. ("Iridium China"), have not been addressed by the Court. Also, Defendants maintain that Chase's fraud claim, request for attorneys' fees, and the question of the amount of damages all prevent the entry of final judgment pursuant to Rule 54(b).
Under 28 U.S.C. § 1291, a judgment is final and appealable if the judgment "`ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'" Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 275, 108 S.Ct. 1133, 99 L.Ed.2d 296 (1988)(quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945)). However, in certain circumstances, Rule 54(b) permits the entry of partial final judgment "[w]hen more than one claim for relief is presented in an action ... or when multiple parties are involved." Fed.R.Civ.P. 54(b). In such instances, the court, "upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment" may grant the entry of final judgment "as to one or more but fewer than all of the claims or parties." Id. However, where substantial issues regarding the requested relief remain unadjudicated, a Rule 54(b) judgment should not be entered. Coca-Cola Bottling Co. of Elizabethtown, Inc. v. Coca-Cola Co., 654 F.Supp. 1419, 1446 (D.Del.1987)(citing Rudd Const. Equip. Co., Inc. v. Home Ins. Co., 711 F.2d 54, 56 (6th Cir.1983)).
The Court concludes that the entry of final judgment pursuant to Rule 54(b) is not appropriate at this time. Among the relief requested by Chase is an award of attorneys' fees pursuant to Section 11.03 of the Iridium LLC Agreement. Section 11.03 of the Iridium LLC Agreement granted Iridium LLC the right to recover damages resulting from any Members' default on its RCC obligations. (D.I.927, Ex. A.) Chase maintains that it is entitled to the recovery of attorneys' fees pursuant to Section 11.03 of the Iridium LLC Agreement because the Defendants conveyed this right to Chase pursuant to the Pledge and Security Agreement. (D.I. 927 at 10.)
In Beckwith Machinery Co. v. Travelers Indemnity Co., 815 F.2d 286 (3d Cir.1987), the Third Circuit held that the entry of Rule 54(b) final judgment is inappropriate when an award of attorneys' fees is based on a contractually stipulated element of damages and not separately authorized by statute. Id. at 290. The Third Circuit reasoned that because the requested fees are "part and parcel of the relief sought and of the damages incurred [,]" it would be inappropriate to grant Rule 54(b) relief because doing so would encourage piecemeal appeals and a waste of judicial resources. Id. However, in Gleason v. Norwest Mortgage, Inc., 243 F.3d 130 (3d Cir.2001), the Third Circuit distinguished its precedent following Beckwith and held that, in certain circumstances, a contractual right to attorney fee recovery is no different than a statutory grant of attorneys' fees, and therefore, should not delay the entry of Rule 54(b) judgment. In Gleason, the contract at issue granted fees "to the prevailing party in whose favor judgment is entered[,]" and the Third Circuit concluded that, "[f]or all practical purposes, we see no difference under these circumstances, for § 1291 finality purposes, between payment of attorneys' fees to a prevailing party under statute and payment of attorneys' fees under the contract to a `prevailing party.'" Id. at 138.
The Court concludes that the instant case does not fall within the exception to Beckwith, announced in Gleason, and therefore, will deny Chase the entry of Rule 54(b) final judgment. Chase's request for attorneys' fees pursuant to the Pledge and Security Agreement precludes the entry of partial final judgment because the Court has not entered judgment in Chase's favor pursuant to this agreement. The Court granted Chase summary judgment based on the binding effect of Iridium LLC's Assistant Secretary's certificate, not pursuant to the Pledge and Security Agreement. (D.I.895, 896.) Moreover, although Chase asserts that Defendants do not dispute that the Pledge and Security Agreement is valid and enforceable,1 in their opposition brief, Defendants stated that they "vigorously contest" Chase's ability to invoke the rights of Iridium LLC to recover attorneys' fees pursuant to Section 11.03 of the Iridium LLC Agreement. (D.I. 923 at 6.)2 On this record, the Court concludes that Chase's Motion for Final Judgment must be denied because Chase's request for attorneys' fees involves a substantive issue that is not collateral to the relief requested.
Defendants contend that an interlocutory appeal is appropriate in this case because the Court's February 13 Opinion and the March 2 Opinion decided controlling questions of law, provide substantial grounds for difference of opinion, and because an immediate appeal would materially advance the termination of this litigation. Defendants also maintain that the February 13 Opinion and March 2 Opinion involved issues of first impression that make an interlocutory appeal particularly appropriate in this case.
Chase responds that interlocutory appeals are reserved for exceptional cases and...
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