Hope v. Klabal

• Decision Date: 07 August 2006
• Docket Number: No. 05-1972.,05-1972.
• Citation: 457 F.3d 784
• Parties: Janice S. HOPE, Plaintiff-Appellant, v. Mirek KLABAL, also known as Miroslav Klabal; Lynn G. Epsteen, also known as Lynn Tescher, Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

457 F.3d 784

Janice S. HOPE, Plaintiff-Appellant, v. Mirek KLABAL, also known as Miroslav Klabal; Lynn G. Epsteen, also known as Lynn Tescher, Defendants-Appellees.

No. 05-1972.

United States Court of Appeals, Eighth Circuit.

Submitted: March 14, 2006.

Filed: August 7, 2006.

Byron L. Gregory, argued, Chicago, Illinois (Thomas S. Fraser, Laurie J. Miller, and James E. Griffith, on the brief), for appellant.

Daniel R. Shulman, argued, Minneapolis, Minnesota (Julie L. Boehmke, Gregory J. Myers, Karen Hanson Riebel, and Malcomb S. Taub, on the briefs), for appellees.

Before WOLLMAN, JOHN R. GIBSON, and ARNOLD, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

Janice Hope appeals from two orders of the district court¹ granting summary judgment to Mirek Klabal and Lynn Epsteen on her claims arising out of a series of art transactions. She alleges that she purchased artwork from Klabal and Epsteen at fraudulently inflated prices and seeks some $10 million in damages. The district court ruled that all of Hope's claims were barred by their respective statutes of limitations, except with respect to a single art transaction between Hope and Klabal. Hope argues on appeal that the district court misapplied the discovery rule and the law of fraudulent concealment, erred in finding that the continuing tort doctrine did not apply, and erred in applying the law of the case when issuing its summary judgment order as to Epsteen. We affirm.

I.

We state the facts in the light most favorable to Hope. In 1984, Klabal approached Hope, a close friend of his wife, about purchasing investment art from him. Klabal held himself out as an art expert and told Hope that he would be able to acquire art for her at prices substantially below fair market value. From 1984 through 1998, Hope purchased approximately 100 pieces of artwork from Klabal for a total of more than $8 million. These pieces included works of art by major figures in the modern and pop art fields, including Pablo Picasso, Alexander Calder, Marc Chagall, Willem de Kooning, Roy Lichtenstein, Henri Matisse, and Andy Warhol. While a few of the individual purchases were priced below $10,000, Hope purchased many of the pieces for more than $100,000. For each piece, Klabal provided Hope with an invoice, a certificate of authenticity, and an insurance evaluation stating the "current international value" of the piece. These values exceeded the prices that Hope paid for the pieces. In many instances, Hope purchased the artwork "sight unseen," based solely on Klabal's representations, and in certain instances Klabal never delivered works that Hope had purchased, claiming that he had found them to be forgeries, that he would trade them for more valuable pieces, or that it was in Hope's best interests for him to retain them.

Klabal also introduced Hope to Epsteen, who similarly represented that her expertise would enable her to obtain art for Hope at significant discounts. From 1987 through 1994, Hope purchased seven pieces of art from Epsteen for a total of over $2.1 million. Six of the pieces were works by Andy Warhol, and one was a piece by Pablo Picasso. Epsteen issued written invoices and certificates of authenticity for these pieces, along with a letter containing an appraisal "made solely for insurance purposes" and a statement describing how to obtain full appraisals from the Art Dealers Association of America. Again, as with the insurance evaluations obtained from Klabal, the amounts listed were much higher than what Hope actually paid for the pieces.

In 1997, Hope advised Klabal that she wanted to sell some of the art in order to diversify her investment portfolio. Although Klabal told Hope that he would make every effort to sell the art, no sales occurred until a year or two later, when Hope was able to sell sixteen pieces at Sotheby's through Klabal and Epsteen. All but one piece of art was sold at a substantial loss. Hope later hired an independent art expert, Dr. Elin Lake Ewald, to evaluate 23 pieces that she had purchased from Klabal. Dr. Ewald completed a report in October 2000, concluding that Hope had purchased the artwork at prices significantly above fair market value at the times of purchase. Dr. Ewald also evaluated the works Hope had purchased from Epsteen and advised her that six of the seven pieces were purchased at inflated prices.

On June 19, 2002, Hope filed a 45-page complaint against Klabal and Epsteen alleging fraud, conspiracy to defraud, breach of fiduciary duty, conversion, breach of contract, negligent misrepresentation, consumer fraud, deceptive trade practices, and violations of 18 U.S.C. § 1964 (RICO). The complaint listed more than one hundred pieces of art Hope had bought from Klabal, as well as the seven pieces of art she purchased from Epsteen. In lieu of an answer, Epsteen filed a motion to dismiss, while Klabal answered and later filed a motion for summary judgment. Following a hearing, the magistrate judge issued a report and recommendation, later adopted by the district court, finding that Hope's claims against Epsteen should be dismissed without prejudice and that Klabal's motion for summary judgment should be granted except with respect to a single transaction that was not barred by the statute of limitations. In that transaction, which occurred in 1998, Hope traded a work by Jean-Michel Basquiat that she already owned for a painting by Marc Chagall entitled "Le Couple Allonge." Hope then served an amended verified complaint, totaling some 147 pages, including 73 pages of exhibits and affidavits, on Epsteen, and Epsteen moved for summary judgment.² The magistrate judge issued a second report and recommendation finding that Epsteen's motion should be granted as to all of Hope's claims. The district judge adopted this report and recommendation, and it denied Hope's request to certify the judgment for immediate appeal under Fed.R.Civ.P. 54(b).

As a result of the two summary judgment orders, the only claims remaining in the case related to the single transaction between Hope and Klabal in 1998 which had survived the first summary judgment order. Klabal agreed to enter into a stipulation dismissing these remaining claims, and the parties filed the stipulation with the court under Fed.R.Civ.P. 41. Pursuant to this stipulation, the district court entered an order dismissing the remaining claims without prejudice. Hope now appeals from the two summary judgment orders.

II.

In light of the peculiar procedural posture of this case, we must first determine whether we have jurisdiction over the appeal. Thomas v. Basham, 931 F.2d 521, 523 (8th Cir.1991). The jurisdiction of the federal appellate courts is limited to appeals from final decisions of the district courts, 28 U.S.C. § 1291, subject to the well-established exceptions set forth in 28 U.S.C. § 1292, Fed.R.Civ.P. 54(b), and the collateral order doctrine. Reinholdson v. Minnesota, 346 F.3d 847, 849 (8th Cir. 2003). Because none of these exceptions apply to the facts of this case, we must address whether the district court's summary judgment orders as to Klabal and Epsteen, coupled with the dismissal of the remaining claims in the case, which happened to involve only Klabal, together constitute a "final decision" for purposes of § 1291. In other words, the question is whether the voluntary dismissal of the only claims that survived the earlier partial summary judgment orders was sufficient to make those orders final for purposes of this appeal.

A final decision requires "some clear and unequivocal manifestation by the trial court of its belief that the decision made, so far as [the court] is concerned, is the end of the case." Goodwin v. United States, 67 F.3d 149, 151 (8th Cir.1995). We are guided by the rule that the requirement of finality under § 1291 is given a "practical rather than a technical construction." Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). In addition, the Supreme Court long ago established that a dismissal without prejudice can create an appealable final order if it ends the suit so far as the district court is concerned. See United States v. Wallace & Tiernan Co., 336 U.S. 793, 794 n. 1, 69 S.Ct. 824, 93 L.Ed. 1042 (1949).

Admittedly, this circuit has been less than clear in establishing the rules for finality when parties dismiss some of their claims without prejudice in order to appeal a partial summary judgment order or an interlocutory order of dismissal. See generally Terry W. Schackmann & Barry L. Pickens, The Finality Trap: Accidentally Losing Your Right to Appeal (Part II), 58 J. Mo. B. 138, 142-45 (2002) (collecting cases). However, in Chrysler Motors Corp. v. Thomas Auto Co., 939 F.2d 538, 540 (8th Cir.1991), we assumed jurisdiction over an appeal in a similar situation. In that case, the district court granted a motion for partial summary judgment but did not issue a Rule 54(b) certification. The parties later filed a stipulation of dismissal of all remaining claims without prejudice under Fed.R.Civ.P. 41, and the court entered an order of dismissal, as it did here. We held that the effect of the dismissal was to make the earlier partial summary judgment "a final judgment for purposes of appeal, even though the district court had not so certified under Fed.R.Civ.P. 54(b)." 939 F.2d at 540.

We have since expressed concern that parties will use the voluntary dismissals of their claims without prejudice as an "end-run" around Rule 54(b), and in one instance we assumed jurisdiction over the appeal but deemed the dismissal of remaining claims to be with prejudice. Minnesota Pet Breeders, Inc. v. Schell & Kampeter, Inc., 41 F.3d 1242, 1245 (8th Cir.1994) (commenting that the parties "badly miscalculated" if they assumed they could later revive the dismissed claims); see also Orion Fin. Corp. v. Am. Foods Group, Inc., 201 F.3d 1047, 1048-49 (8th Cir.2000) (dismissing appeal for lack of finality where par...