Enterprise Bank v. Saettele

• Decision Date: 07 April 1994
• Docket Number: No. 92-3590,92-3590
• Citation: 21 F.3d 233
• Parties: ENTERPRISE BANK, Appellant, v. Gustave J. SAETTELE; Laura Saettele, Appellees. LANDMARK BANK OF ST. CHARLES COUNTY, Appellee, v. Gustave J. SAETTELE; Laura Saettele, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 233

21 F.3d 233

28 Fed.R.Serv.3d 1064

ENTERPRISE BANK, Appellant, v. Gustave J. SAETTELE; Laura Saettele, Appellees.

LANDMARK BANK OF ST. CHARLES COUNTY, Appellee, v. Gustave J. SAETTELE; Laura Saettele, Appellee.

No. 92-3590.

United States Court of Appeals,

Eighth Circuit.

Submitted Nov. 11, 1993.

Decided April 7, 1994.

John Sandberg, St. Louis, MO, argued (John S. Sandberg, Michael W. Foster and Elkin L. Kistner, on the brief), for appellant.

Thomas Blumeyer Weaver, St. Louis, MO, argued (Thomas B. Weaver, Paul N. Venker and Andrew B. Mayfield, on the brief), for appellee.

Before McMILLIAN, Circuit Judge, BRIGHT, Senior Circuit Judge, and MAGILL, Circuit Judge.

MAGILL, Circuit Judge.

This case involves a priority battle between two creditors, Enterprise Bank (Enterprise) and Landmark Bank of St. Charles County (Landmark), over the assets of Gustave and Laura Saettele (the Saetteles). Enterprise appeals the district court's judgment upholding the validity of Landmark's prejudgment attachment of certain assets of the Saetteles, 804 F.Supp. 1111. Because we hold that the district court abused its discretion in consolidating the two separate lawsuits and because the district court lacked jurisdiction, we vacate the judgment of the district court.

I. BACKGROUND

The procedural history of this case is complex, but at bottom, this appeal now involves a priority battle between two creditors each seeking to satisfy their respective judgments against the limited, but substantial, assets of the Saetteles. The assets involved in this dispute are real property owned by the Saetteles and Landmark Bankshares Corporation stock (Landmark stock) in the Saetteles' account at Oppenheimer & Co. (Oppenheimer). Apparently, the Saetteles' assets are insufficient to satisfy the judgments of both creditors. Therefore, determination of which creditor is entitled to first priority to the Saetteles' assets is hotly contested by both Enterprise and Landmark. Resolution of this priority battle turns on the validity of Landmark's prejudgment attachment of these assets.

In March 1991, Enterprise filed suit in district court against the Saetteles (No. 91-0616C(6), Enterprise lawsuit). In April 1991, Landmark also filed suit in the same district court, before a different district judge, against the Saetteles (No. 91-0787C(5), Landmark lawsuit). 784 F.Supp. 1434. On September 20, 1991, the district court in the Landmark lawsuit issued an order authorizing a writ of attachment in favor of Landmark. On the same day, Landmark hand-delivered this order to the Saetteles' counsel. On September 26 and 27, 1991, the United States Marshal delivered the writ of attachment on Oppenheimer and the Recorder of Deeds in St. Louis County. In December 1991, the district court handling the Enterprise lawsuit entered judgment in favor of Enterprise.

In January 1992, Enterprise, aware that it could not execute its judgment as to certain assets of the Saetteles because of Landmark's prior prejudgment attachment, sought to intervene in the Landmark lawsuit in order to attack the validity of Landmark's prejudgment attachment. On February 18, 1992, the district court in the Landmark lawsuit granted judgment in favor of Landmark against the Saetteles and denied Enterprise's motion to intervene. Because Landmark had prevailed in its suit against the Saetteles, the priority date of its judgment lien reverted back to the date of the United States Marshal's delivery of the prejudgment writs of attachment. If Landmark's prejudgment attachment was proper, then the priority date of its lien is September 26 and 27 of 1991, i.e., prior to Enterprise's December 1991 priority date. Therefore, the validity of Landmark's prejudgment attachment is dispositive of this priority battle.

Instead of appealing the denial of its motion to intervene by the district court in the Landmark lawsuit, Enterprise motioned the district court in the Enterprise lawsuit to consolidate the Enterprise lawsuit and the Landmark lawsuit to determine the validity of Landmark's prejudgment attachment. Landmark opposed this consolidation. The district court in the Enterprise lawsuit granted Enterprise's motion to consolidate in May 1992, and requested briefing as to the validity of Landmark's prejudgment attachment.

On October 5, 1992, the district court in the Enterprise lawsuit issued an order upholding the validity of Landmark's prejudgment attachment and dissolving the prior consolidation of the two cases. Specifically, the district court held that Enterprise's challenge was untimely because Enterprise had failed to appeal the denial of its motion to intervene in the Landmark suit. Assuming, however, that the challenge was timely, the district court held that Enterprise lacked standing to raise the constitutional rights of the Saetteles. Finally, the district court rejected Enterprise's challenge to the attachment of the Saetteles' Landmark stock based on Missouri law. Enterprise timely appealed.

II. DISCUSSION

Before we can analyze the propriety of the district court's decision on the merits, we first must determine whether the district court had authority to resolve the merits of the suit. If the consolidation of the lawsuits was improper and if this error affected the district court's jurisdiction, then the district court was without authority to resolve the dispute over the validity of Landmark's prejudgment attachment. We must determine, therefore, whether that consolidation was proper, and, if improper, whether it affected the district court's jurisdiction.

Federal Rule of Civil Procedure 42(a) (Rule 42(a)) governs consolidation and states:

Consolidation. When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

Fed.R.Civ.P. 42(a). The district court's broad discretion in ordering the consolidation of matters is not unbounded, and we will reverse a district court's decision to consolidate for an abuse of discretion. United States EPA v. City of Green Forest, 921 F.2d 1394, 1402 (8th Cir.1990), cert. denied, --- U.S. ----, 112 S.Ct. 414, 116 L.Ed.2d 435 (1991).

Rule 42(a) states that a district court may consolidate separate actions when those "actions involv[e] a common question of law or fact." Fed.R.Civ.P. 42(a); see Seguro de Servicio de Salud v. McAuto Sys. Group, 878 F.2d 5, 8 (1st Cir.1989) ("The threshold issue is whether the two proceedings involve a common party and common issues of fact or law."); see also Frazier v. Garrison I.S.D., 980 F.2d 1514, 1531 (5th Cir.1993) ("[A] trial court may consolidate multiple actions if the actions involve common questions of law or fact."); Fleishman v. Prudential-Bache Sec., 103 F.R.D. 623, 624 (E.D.Wis.1984) ("There must be questions of law or fact common to the cases that are to be consolidated...."). Further, "consolidation is permitted as a matter of convenience and economy in administration, but does not merge the suits into a single cause, or change the rights of the parties, or make those who are parties in one suit parties in another." Johnson v. Manhattan Ry., 289 U.S. 479, 496-97, 53 S.Ct. 721, 727-28, 77 L.Ed. 1331 (1933); see also United States v. Altman, 750 F.2d 684, 695 (8th Cir.1984) (consolidated suits maintain their separate identities); Kraft, Inc. v. Local Union 327, Teamsters, 683 F.2d 131, 133 (6th Cir.1982) (same). We examine whether the district court abused its discretion in ordering this consolidation.

The district court consolidated the Landmark lawsuit and the Enterprise lawsuit "solely to determine the validity of [Landmark's prejudgment] attachment." Appellant's App. at 117. The district court ordered this limited consolidation " 'to avoid unnecessary costs or delay.' " Id. (quoting Fed.R.Civ.P. 42(a)). The Landmark lawsuit and the Enterprise lawsuit involved neither common issues of law nor common issues of fact. Both cases involved breach of contract claims against the Saetteles. The legal issues are unrelated. Further, the only common factual thread running through the lawsuits was the fact that the Saetteles were defendants in both cases. Specifically, the matter for which the district court consolidated the two lawsuits, the validity of Landmark's prejudgment attachment, was not in issue in either of the lawsuits. In the Landmark lawsuit, the Saetteles did not...