Rothenberg v. Security Management Co., Inc., 78-2631

• Citation: 617 F.2d 1149
• Decision Date: 29 May 1980
• Docket Number: No. 78-2631,78-2631
• Parties: Jack ROTHENBERG and Shirley Rothenberg, Plaintiffs-Appellees, v. SECURITY MANAGEMENT CO., INC., et al., Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 1149

617 F.2d 1149

Jack ROTHENBERG and Shirley Rothenberg, Plaintiffs-Appellees, v. SECURITY MANAGEMENT CO., INC., et al., Defendants-Appellants.

No. 78-2631.

United States Court of Appeals,

Fifth Circuit.

May 29, 1980.

J. Michael Lamberth, J. Timothy White, Atlanta, Ga., for defendants-appellants.

Herbert S. Waldman, Robert J. Hipple, Atlanta, Ga., for plaintiffs-appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before GOLDBERG, CHARLES CLARK and THOMAS A. CLARK, Circuit Judges.

PER CURIAM:

In affirming the instant appeal, we write to clarify two points, one procedural and one substantive.

1. Rule 54(b) Certification.

Davis and Security Management Co., Inc., urge the following as the law of this circuit: "In entering a rule 54(b) certification (Fed.R.Civ.P. 54(b)), a district court should include a statement explaining its reasoning for determining (that) there is no just reason for delay." In support of this proposition, they cite Huckeby v. Frozen Food Express, 555 F.2d 542, 550 (5th Cir. 1977), and Schwartz v. Compagnie General Transatlantique, 405 F.2d 270, 274-275 (2d Cir. 1968). Neither authority supports this assertion. In the disposition portion of Huckeby, this circuit declined to review the dismissal of a would-be intervenor's complaint in a Title VII action but pointed out that on remand the district court could be asked to determine whether rule 54(b) was applicable. Our mandate stated, "In the event that the district court decides to certify its order for appeal, it should include a brief statement explaining why there is no just reason for delay. Gumer v. Shearson, Hammill & Co., Inc., 516 F.2d 283, 286 (2d Cir. 1974); Allis-Chalmers Corp. v. Philadelphia Electric Co., 521 F.2d (360) at 364 (3d Cir.)." 555 F.2d at 550. Thus, in a case already subjected to extensive review, we found it appropriate in our mandate to require the inclusion of a brief statement of reasons if the district court on remand exercised its discretionary power to proceed under rule 54(b). We did not go as far as the Second and Third Circuits in the cases cited above as to "suggest" to district courts that they make a brief, reasoned statement in support of their determination in all rule 54(b) certifications. See Gumer v. Shearson, Hammill & Co., Inc., 516 F.2d at 286. Nor did we exercise our supervisory power to include Gumer's practice "as a requirement for all rule 54(b) certifications." Allis-Chalmers Corp. v. Philadelphia Electric Co., 521 F.2d at 364.

Rule 54(b) contains no specific requirement that a district court include a statement explaining its reasoning for applying the rule. Huckeby did not intend to supplement the rule as a matter of general practice. The inclusion of such a statement is left to the discretion of the district court and is not imposed as a requirement in all cases. Thus, the district court was not in error in making the rule 54(b) certification without such an explanatory statement. However, when the case is of such a nature that the reasons for the 54(b) certification are unclear, it may be necessary for adequate appellate review to require that the district court's reasons be stated. What is said here is intended to encourage, not inhibit, such helpful explanations in any future cases, although we hold only that it is not a required procedure in this circuit at this time.

2. Interpretation of the Guaranty.

Davis and Security Management Co., Inc., complain that the rule 54(b) certification in the instant case prevented the district court from knowing that the Georgia Court of Appeals would reach a contrary result in a case styled Pisano v. Security Management Co., Inc., 148 Ga.App. 567, 251 S.E.2d 798 (1978). The chronology shows that the district court below granted plaintiff's motion for partial summary judgment on January 25, 1978, and denied a motion for reconsideration on April 18, 1978. The State Court of Fulton County entered its order and judgment in Civil Action No. 621029, styled Pisano, et al. v. Davis and Security Management Co., Inc., on May 12, 1978. The rule 54(b) certification in the instant case was made on June 30, 1978, after the district court had been advised that the Georgia decision in Pisano was on appeal. The Georgia Court of Appeals rendered its decision on November 14, 1978, and denied rehearing on December 20, 1978. The Supreme Court of Georgia denied certiorari on February 7, 1979.

Pisano would have substantive significance only if the Georgia court had authoritatively interpreted the legal meaning of the guaranty agreement on which the district court depended. We determine that it did not. Thus, there was no conflict between the decision of the Georgia Court of Appeals and the district court.

The controversy centers upon whether the Georgia adjudication interpreted the so-called B guaranty or limited its construction to the A guaranty only. The original complaint in Pisano was based upon the A guaranty only. Three days before the entry of the decision of the state court of Fulton County, the complaint was amended also to exhibit the B guaranty. The order and judgment of the Fulton County court was placed on three...