Citicorp Real Estate, Inc. v. Smith

Decision Date10 September 1998
Docket Number97-56338,94-55070,97-56358,Nos. 93-56640,s. 93-56640
Citation155 F.3d 1097
Parties98 Cal. Daily Op. Serv. 7075, 98 Daily Journal D.A.R. 9807 CITICORP REAL ESTATE, INC., a Delaware Corporation, Plaintiff-Appellee, v. Helen SMITH, an individual; J.A.H., LTD, a California limited partnership; Stewart Title Company of San Diego, a California corporation, Defendants-Appellants. CITICORP REAL ESTATE, INC., a Delaware Corporation, Plaintiff-Appellee, v. Helen M. SMITH, an individual; M.H.H., a California general partnership, Defendants-Appellants. CITICORP REAL ESTATE, INC., a Delaware Corporation, Plaintiff-counter-defendant-Appellee, v. Helen SMITH, an individual, Defendant-counter-claimant-Appellant, and J.A.H., Ltd., a California limited partnership, Defendant-Appellant, and Stewart Title Company of San Diego, a California corporation, Defendants. CITICORP REAL ESTATE, INC., a Delaware Corporation, Plaintiff-Appellee, v. M. Helen SMITH; M.H.H., a California general partnership, Defendants-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

R. Keith McKellogg, Circuit, McKellogg, Kinney & Ross, La Jolla, CA, for defendants-appellants.

Frank T. Pepler and Julie B. Landau, Steefel, Levitt & Weiss, San Francisco, CA, for plaintiff-appellee.

Appeals from the United States District Court for the Southern District of California; William B. Enright, District Judge, Presiding. D.C. Nos. CV 91-01757-WBE, CV 91-1754-GT.

Before: SCHROEDER, PREGERSON, and KLEINFELD, * Circuit Judges.

PREGERSON, Circuit Judge:

I

This consolidated appeal arises out a judicial foreclosure action. The district court granted summary judgment in Plaintiff-Appellee Citicorp Real Estate, Inc.'s ("Citicorp") favor, ordered the property securing the loans to be sold at a judicial foreclosure sale, and entered deficiency judgments against the defendants Helen Smith, M.H.H., and J.A.H. ("Defendants").

On appeal, Defendants argue that the district court erred by: (1) entering summary judgment in Citicorp's favor; (2) denying leave to amend their counterclaims to seek the remedy of rescission; (3) overcalculating the deficiency judgments-by determining the fair value of the property based on what a buyer would be willing to pay in cash for the property and by failing to apply the federal interest rate in calculating the post-judgment interest. Defendants seek reversal of the district court's grant of summary judgment in favor of Citicorp. Alternatively, Defendants ask the court to recalculate the deficiency judgments by assessing the fair value of the property at $12.2 million, not $7.3 million, and remanding with instructions to apply the federal interest rate in calculating the post-judgment interest. Citicorp argues that this court lacks jurisdiction to review the district court's grant of summary judgment in its favor. Citicorp requests the court to affirm the district court.

We affirm the district court's September 30 and December 8, 1993 orders granting summary judgment in Plaintiff-Appellee Citicorp Real Estate, Inc.'s ("Citicorp") favor. We also affirm the district court's August 2, 1997 order entering a deficiency judgment against Defendant-Appellants Helen Smith and M.H.H. and the court's August 27, 1997 order entering a deficiency judgment against Defendants-Appellants Smith and J.A.H.

II

A. Jurisdiction
1. Appellate Jurisdiction

As a threshold matter, Citicorp contends that this court lacks appellate jurisdiction over the district court's December 8, 1993 and September 30, 1993 judgment orders ("foreclosure judgments") granting Citicorp's motion for summary judgment. Citicorp argues that the foreclosure judgments are not final within the meaning of 28 U.S.C. § 1291 because they leave the actual amount of the deficiency judgment to be determined at a fair value hearing following the judicial foreclosure sales.

Section 1291 of Title 28, U.S.C., gives courts of appeal jurisdiction over "all final decisions" of district courts, except where a direct review may be had by the Supreme Court. 28 U.S.C. § 1291. "The requirement of finality precludes consideration of decisions that are subject to revision, and even of 'fully consummated decisions [that] are steps towards final judgment in which they will merge.' " Behrens v. Pelletier, 516 U.S. 299, 313, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996) (citing Cohen v. Beneficial Industrial Loan Corporation, 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949)). The purpose of section 1291 is to "disallow appeal from any decision which is tentative, informal or incomplete." Cohen, 337 U.S. at 546, 69 S.Ct. 1221.

The foreclosure judgments at issue in this appeal conclusively establish Smith's liability for the defaulted loans (including a quantified amount of principal, interest, and reasonable attorney's fees). Cf. Burlington, C.R. & N. Ry. v. Simmons, 123 U.S. 52, 54, 8 S.Ct. 58, 31 L.Ed. 73 (1887) (holding that an order establishing the right of the junior mortgagee to redeem the prior mortgage was interlocutory and not appealable because the amount due had not been fixed or the property ordered sold); North Carolina R.R. v. Swasey, 90 U.S. (23 Wall.) 405, 409, 23 L.Ed. 136 (1874) (holding that an order directing a foreclosure sale that fails to specify the amount of an unliquidated claim or identify the property to be sold is not final). The judgments also identify the property to be sold in satisfaction of the debt. As such, the foreclosure judgments conclusively determine the rights of the parties to the litigation. The district court retained jurisdiction for the sole purpose of holding the Defendants personally liable for any deficiency judgment remaining after the judicial foreclosure sales. See id. (concluding that an appeal may be taken from a decree of foreclosure and sale "when the rights of the parties have all been settled and nothing remains to be done by the court but to make the sale and pay out the proceeds."); see also Leadville Coal Co. v. McCreery, 141 U.S. 475, 478, 12 S.Ct. 28, 35 L.Ed. 824 (1891) (holding that where a creditor failed to appeal the order directing the sale of property he was barred from asserting any rights to the property by merely appealing the order confirming the sale). Accordingly, we conclude that the foreclosure judgments, as written, are final decisions appealable within the meaning of 28 U.S.C. § 1291.

2. Subject Matter Jurisdiction

Citicorp filed the underlying action on the basis of diversity jurisdiction, 28 U.S.C. § 1332(a). Citicorp is a Delaware corporation with its principal place of business in New York. The Defendants are all citizens of California. Defendants contend that Citibank, Citicorp's predecessor in interest, was also a citizen of California. Defendants argue that the district court lacked subject matter jurisdiction because Citibank improperly assigned its interest in the loan agreements to Citicorp for the sole purpose of creating diversity jurisdiction.

The existence of subject matter jurisdiction is a question of law reviewed de novo. See Ma v. Reno, 114 F.3d 128, 130 (9th Cir.1997); Sahni v. American Diversified Partners, 83 F.3d 1054, 1057 (1996), cert. denied, --- U.S. ----, 117 S.Ct. 765, 136 L.Ed.2d 712 (1997). This court reviews the district court's findings of fact relevant to its determination of subject matter jurisdiction for clear error. H2O Houseboat Vacations Inc. v. Hernandez, 103 F.3d 914, 916 (9th Cir.1996); Wilson v. A.H. Belo Corp., 87 F.3d 393, 396 (9th Cir.1996). The district court's factual findings on all jurisdictional issues must be accepted unless clearly erroneous. Adler v. Federal Republic of Nigeria, 107 F.3d 720, 729 (9th Cir.1997); Wang v. Reno, 81 F.3d 808, 813 (9th Cir.1996).

The district court asserted subject matter jurisdiction over this matter on two alternative grounds. First, the district court determined that there was no indication that the assignment from Citibank to Citicorp was made for the purpose of manufacturing jurisdiction. 1 Second, the district court concluded that the argument was meritless because the citizenship of Citibank was diverse from that of Defendants. 2 On appeal, defendants argue that the district court erred by failing to grant their request for a continuance to conduct additional discovery as to the parent-subsidiary relationship between Citibank and Citibank FSB.

The decision to grant or deny a continuance is in the sound discretion of the trial court and will not be overturned except upon a showing of clear abuse of discretion. See Columbia Pictures Television v. Krypton Broadcasting of Birmingham, Inc., 106 F.3d 284, 296 (9th Cir.), cert. granted by, --- U.S. ----, 118 S.Ct. 30, 138 L.Ed.2d 1059 (1997); Woods v. Saturn Distribution Corp., 78 F.3d 424, 427 (9th Cir.1996), cert. dismissed, 518 U.S. 1051, 117 S.Ct. 30, 135 L.Ed.2d 1123 (1996). The district court's decision not to permit additional discovery pursuant to Federal Rule of Civil Procedure 56(f) is reviewed for an abuse of discretion. See Nidds v. Schindler Elevator Corp., 113 F.3d 912, 920 (9th Cir.1996), cert. denied by, --- U.S. ----, 118 S.Ct. 369, 139 L.Ed.2d 287 (1997); Maljack Productions, Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 887 (9th Cir.1996). Defendants offer no reasoned basis for needing additional time to investigate the parent-subsidiary relationship between Citibank and Citibank FSB. See Qualls v. Blue Cross of Cal., Inc., 22 F.3d 839, 844 (9th Cir.1994) (holding that "[w]e will only find that the district court abused its discretion if the movant diligently pursued its previous discovery opportunities, and if the movant can show how allowing additional discovery would have precluded summary judgment."). Therefore, we conclude that the district court did not abuse its discretion in denying Defendants' request for a continuance. Accordingly, the district court properly exercised subject matter jurisdiction over this...

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