Outlaw v. Airtech Air Conditioning and Heating

• Decision Date: 24 June 2005
• Docket Number: No. 04-7059.,04-7059.
• Citation: 412 F.3d 156
• Parties: Phyllis J. OUTLAW, Appellant v. AIRTECH AIR CONDITIONING AND HEATING, INC. and GDS ASSOCIATES, Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

412 F.3d 156

Phyllis J. OUTLAW, Appellant v. AIRTECH AIR CONDITIONING AND HEATING, INC. and GDS ASSOCIATES, Appellees

No. 04-7059.

United States Court of Appeals, District of Columbia Circuit.

Argued April 5, 2005.

Decided June 24, 2005.

Appeal from the United States District Court for the District of Columbia (No. 02cv00570).

Michael K. Guss, pro hac vice, argued the cause for appellant. On the brief was Phyllis J. Outlaw, pro se.

Robert R. Bowie, Jr., pro hac vice, argued the cause for appellee Airtech Air Conditioning and Heating, Inc. On the brief was Matthew G. Hjortsberg.

Before: EDWARDS, ROGERS, and ROBERTS, Circuit Judges.

ROBERTS, Circuit Judge.

Plaintiff's notice of appeal in this case was premature, filed while claims were still pending against one of three defendants. The district court subsequently dismissed the remaining claims without prejudice in an effort to cure the lack of an appealable final order, but no new notice of appeal was filed. Federal Rule of Appellate Procedure 4(a)(2) specifies that a premature notice of appeal may be effective upon entry of judgment in certain circumstances. In FirsTier Mortgage Co. v. Investors Mortgage Ins. Co., 498 U.S. 269, 276, 111 S.Ct. 648, 112 L.Ed.2d 743 (1991), the Supreme Court explained that Rule 4(a)(2) applied when a notice of appeal sought review of a nonfinal decision that "would be appealable if immediately followed by the entry of judgment." Here the nonfinal decision would have been appealable if followed by entry of judgment under Federal Rule of Civil Procedure 54(b), and accordingly we conclude that we have appellate jurisdiction.

On the merits, we affirm the district court's grant of summary judgment for the defendants.

I.

In March 2000, Phyllis Outlaw wanted to renovate the Washington, D.C. building she had recently purchased. To this end, she first hired GDS Associates to draw up the architectural plans required to secure construction permits—plans that included renovations of the building's heating, ventilation, and air conditioning ("HVAC") system. Outlaw then retained J.B. Builders as the general contractor responsible for "achiev[ing] Substantial Completion of the entire Work." J.B. Builders Contract, art. 3.1. J.B. Builders in turn subcontracted furnishing and installing the HVAC system to Airtech Air Conditioning and Heating, Inc.

On April 28, 2000, GDS secured the first construction permit, and work began. As each phase of the project was completed, J.B. Builders would receive a cash draw, and another firm retained by Outlaw—Home Consulting Plus—would inspect the project. Outlaw was a very hands-on owner, ordering several changes to the original plans, involving herself in selecting construction materials, and attending to other details usually handled by a general contractor. As work progressed on the building, relations between Outlaw and her hires deteriorated. On June 22, 2000, Outlaw ended her relationship with GDS because of its purported failure to secure permits in a timely fashion. Work on the building continued, but Outlaw and J.B. Builders also had a falling out, this one over construction delays and the amount of payment due. They parted ways in November 2000, and soon thereafter Outlaw offered to pay Airtech the balance owed to it by J.B. Builders, in exchange for Airtech completing work on the HVAC system. Airtech declined, explaining it was bound contractually only to J.B. Builders. Outlaw then hired another firm to finish the work in Airtech's stead.

Outlaw alleges that after moving into the building, she discovered that the new HVAC system did not work properly. Having released J.B. Builders from any liability in a September 2001 settlement agreement, in March 2002 Outlaw sued GDS, Home Consulting, and Airtech in the Superior Court of the District of Columbia, alleging breach of contract and seeking $100,000 in damages. The defendants removed the case to the District Court for the District of Columbia on the basis of diversity.

In April 2003, that court stayed proceedings against Home Consulting, pending the conclusion of binding arbitration pursuant to its contract with Outlaw. On March 30, 2004, the court granted summary judgment in favor of Airtech and GDS, and requested a status report from Outlaw and Home Consulting on the progress of their arbitration. On April 26, 2004, however, Outlaw filed a notice of appeal seeking review of the summary judgment order. On April 30, she filed the requested status report with the district court, informing the court that the notice of appeal had been filed and stating that "[o]nce the appeal is ruled upon, the Plaintiff and [Home Consulting] may engage in arbitration depending upon the Court's ruling." The district court promptly perceived that this building renovation dispute was about to become a federal appellate jurisdiction one as well, given the general rule that only orders disposing of all claims against all parties are final and appealable. Accordingly, on May 6, 2004, the district court sua sponte dismissed the pending claims against Home Consulting without prejudice, noting that "[o]therwise, there may be some question whether the Court's [summary judgment] Order represents a final judgment that may be appealed at this time. See Fed.R.Civ.P. 54(b)." Order of May 6, 2004, at 2. Outlaw did not file a new notice of appeal.

The parties' briefs on appeal did not raise any question concerning our jurisdiction. Shortly before oral argument, we directed "[t]he parties [to] be prepared to discuss whether this court has appellate jurisdiction, given the apparently premature filing of the notice of appeal. See FirsTier Mortgage Co. v. Investors Mortgage Ins. Co., 498 U.S. 269, 111 S.Ct. 648, 112 L.Ed.2d 743 (1991); Holland v. Williams Mountain Coal Co., 2004 WL 2713122 (D.C.Cir. Nov.23, 2004)."

II.

"Jurisdiction is, of necessity, the first issue for an Article III court." Tuck v. Pan Am. Health Org., 668 F.2d 547, 549 (D.C.Cir.1981). The timely filing of a notice of appeal is "mandatory and jurisdictional," Budinich v. Becton Dickinson & Co., 486 U.S. 196, 203, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988); United States v. Robinson, 361 U.S. 220, 224, 80 S.Ct. 282, 4 L.Ed.2d 259 (1960), and accordingly we are required to address any questions on the issue, even in the absence of objection from the parties.

Our jurisdiction under 28 U.S.C. § 1291 generally extends only to final district court orders. See DSMC Inc. v. Convera Corp., 349 F.3d 679, 682 (D.C.Cir. 2003). The order from which Outlaw purported to appeal—the district court's grant of summary judgment—was not an appealable final order because the claims against Home Consulting were still pending at the time of its issuance. "It is elementary that a grant of summary judgment as to some parties in a multi-party litigation does not constitute a final order unless the requirements of Fed.R.Civ.P. 54(b) are met." Brookens v. White, 795 F.2d 178, 179 (D.C.Cir.1986) (per curiam). The district court did not make the required determination or direct the entry of judgment under Rule 54(b), so Outlaw's notice of appeal was plainly premature.

Federal Rule of Appellate Procedure 4(a)(2) addresses such premature notices of appeal. It provides that "[a] notice of appeal filed after the court announces a decision or order—but before the entry of the judgment or order—is treated as filed on the date of and after the entry." The Supreme Court considered Rule 4(a)(2) in FirsTier. In that case, the notice of appeal was filed after the district judge announced from the bench that he was granting summary judgment on all claims, but before the judge entered findings of fact and conclusions of law. The Supreme Court concluded that Rule 4(a)(2) operated to make the premature appeal effective after the subsequent entry of final judgment.

The Court explained that the rule "was intended to protect the unskilled litigant who files a notice of appeal from a decision that he reasonably but mistakenly believes to be a final judgment, while failing to file a notice of appeal from the actual final judgment." 498 U.S. at 276, 111 S.Ct. 648. The Rule would not rescue a notice of appeal "from a clearly interlocutory decision—such as a discovery ruling or a sanction under Rule 11," because a "belief that such a decision is a final judgment would not be reasonable." Id. The Court then concluded that "Rule 4(a)(2) permits a notice of appeal from a nonfinal decision to operate as a notice of appeal from the final judgment only when a district court announces a decision that would be appealable if immediately followed by the entry of judgment." Id. In such cases, the Court explained, "a litigant's confusion is understandable, and permitting the notice of appeal to become effective when judgment is entered does not catch the appellees by surprise." Id.

Deciding whether we had appellate jurisdiction here would have been easy prior to FirsTier. We had a line of precedent dating back at least to Sacks v. Rothberg, 845 F.2d 1098, 1099 (D.C.Cir.1988), in which we held that "an appeal taken prematurely effectively ripens and secures appellate jurisdiction when the district court's judgment becomes final prior to disposition of the appeal." We have regularly relied on that line of authority subsequent to FirsTier, see, e.g., Alegria v. District of Columbia, 391 F.3d 262, 264 (D.C.Cir.2004); United States v. Real Property Identified as Parcel 03179-005R, No. 04-5217, 2004 WL 1859778 (D.C.Cir. Aug.19, 2004); Cebula v. Bush, No. 91-5385, 1993 WL 45836 (D.C.Cir. Feb.16, 1993), but in no case have we addressed its continuing validity in light of FirsTier. This state of affairs is not unique to our court, given that, prior to FirsTier, many circuits had a broader understanding of when a premature notice of appeal could become effective. See, e.g., Alcorn County v. U.S. Interstate Supplies, Inc., 731 F.2d 1160, 1165-66 (5th Cir.1984); Cape May Greene,...