State National Bank of El Paso v. United States

• Decision Date: 27 February 1974
• Docket Number: 73-3751.,No. 73-2106,73-2106
• Citation: 488 F.2d 890
• Parties: The STATE NATIONAL BANK OF EL PASO, Trustee for Lee Moor Children's Home, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant (two cases).
• Court: U.S. Court of Appeals — Fifth Circuit

488 F.2d 890 (1974)

The STATE NATIONAL BANK OF EL PASO, Trustee for Lee Moor Children's Home, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellant (two cases).

Nos. 73-2106, 73-3751.

United States Court of Appeals, Fifth Circuit.

January 25, 1974.

Rehearing and Rehearing Denied February 27, 1974.

Scott P. Crampton, Asst. Atty. Gen., Ernest J. Brown, Acting Chief, App. Sec., Meyer Rothwacks, Atty., Tax Div., Dept. of Justice, Lee H. Henkel, Jr., Act. Chief Counsel, IRS, Fred A. Luyties, Michael L. Paup, Attys., Tax Div., Dept. of Justice, Washington, D. C., William W. Guild, Tax Div., Dept. of Justice, Dallas, Tex., Eugene G. Sayre, Atty., Tax Div., Dept. of Justice, Washington, D. C., Wm. S. Sessions, U. S. Atty., San Antonio, Tex., for defendant-appellant.

Robert B. Zaboroski, El Paso, Tex., for plaintiff-appellee.

Before THORNBERRY, GOLDBERG and INGRAHAM, Circuit Judges.

Rehearing and Rehearing En Banc Denied February 27, 1974.

THORNBERRY, Circuit Judge:

Lee Moor Children's Home ("taxpayer") is a charitable trust, and the State National Bank of El Paso acts as its trustee. Taxpayer owns a large farm run by one Calhoun. The merits of this suit involve the question whether taxpayer's income from the farm is taxable unrelated business income or tax exempt rent. The Government has brought this case to us in a gnarled procedural posture, however, and we are unable to reach the merits. We must remand for entry of a judgment.

I.

This case comprises two separate Government appeals that we have consolidated. The first appeal¹ challenges the lower court's decision on the merits, which was rendered in the form of a document entitled "opinion and judgment" and dated September 20, 1972. The Government's first step toward appeal was an October 4 motion entitled "defendant's motion for judgment notwithstanding the verdict, or in the alternative, for a new trial." The district judge denied this motion on February 7, 1973, and the Government filed its notice of appeal on April 5, 1973.

At that point the Government's appeal contained a possibly fatal imperfection. The October 4 motion arguably had been filed too late,² four days beyond the ten allowed by Rules 50(b) and 59(b) of the Federal Rules of Civil Procedure. To protect itself from this flaw the Government attacked the validity of the September 20 judgment, which had triggered the ten-day deadline.

The Government's attack came in a motion to enter judgment which requested the district court to enter judgment on a separate document. Rule 58 requires that "every judgment shall be set forth on a separate document." The trial judge had tacked his judgment on at the end of a memorandum opinion instead of placing it on an entirely separate piece of paper. The Government made its motion to enter judgment on June 15, 1973, and the district court rejected it in an order dated July 5. This order is the subject of the Government's second appeal,³ which the bank urges us to dismiss on the theory that the order is not appealable. We have carried with the case the bank's motion to dismiss.

Awaiting our decision, then, we have an appeal from a decision on the merits, an appeal from the order refusing to enter a judgment on a separate document, and a motion to dismiss the latter appeal. We shall discuss them in that order.

II.

In considering the first appeal, initially we must consider whether the September 20 decision satisfies Rule 58's "separate document" requirement. The pertinent part of Rule 58 provides:

Every judgment shall be set forth on a separate document. A judgment is effective only when so set forth and when entered as provided in Rule 79(a).

Fed.Rules Civ.Proc. rule 58, 28 U.S.C.A. The bank argues logically that the judgment in this case was contained in a separate document, a document entitled "opinion and judgment." In support of its position the bank cites Steccone v. Morse-Starrett Products Co., 9th Cir. 1951, 191 F.2d 197, in which the court held that a "memorandum opinion" similar to the document in the case at bar was a judgment that satisfied Rule 58.

The bank's argument fails to recognize that the "separate document" requirement was added to Rule 58 in a 1963 amendment⁴ as a ". . . `mechanical change' that must be mechanically applied in order to avoid new uncertainties as to the date on which a judgment is entered." United States v. Indrelunas, 1973, 411 U.S. 216, 93 S.Ct. 1562, 1565,⁵ 36 L.Ed.2d 202.

We have every reason to believe that a mechanical application of Rule 58 requires district judges to enter their judgments in one document and opinions in another. In its note following the proposed (1963) amendment to Rule 58 the Advisory Committee on Civil Rules described problems caused by parties' inability to tell that a judgment has been entered and assessed the amendment's contribution.

The amended rule eliminates these uncertainties by requiring that there be a judgment set out on a separate document — distinct from any opinion or memorandum — which provides the basis for the entry of judgment. (Emphasis supplied.)

Judicial Conference of the United States, Report of Proposed Amendments to Certain Rules of Civil Procedure for the United States District Courts, 31 F. R.D. 621, 650 (1962). Likewise Professor Moore interprets "separate document" to mean "separate from an opinion or memorandum of the court." 6A Moore's Federal Practice ¶ 58.01 1.-2 at 58-14. See 11 C. Wright and A. Miller, Federal Practice and Procedure § 2785 at 14. Cf. Pure Oil Co. v. Boyne, 5th Cir. 1966, 370 F.2d 121. In light of the Supreme Court's guidance and these respected authorities' advice we feel constrained to hold that Rule 58 requires a judgment separate and apart from an accompanying opinion. In the instant case, therefore, no judgment has been entered on the merits. And the court did not enter an appealable order when it denied the Government's motion asking for a new trial or judgment n. o. v. 5A Moore's Federal Practice ¶ 50.16 at 2387; 11 C. Wright and A. Miller, Federal Practice and Procedure § 2818 at 116; 6A Moore's Federal Practice ¶ 59.15 at 59-267. See Thibaut v. Car and General Ins. Corp., 5th Cir. 1950, 181 F.2d 494. Therefore we must dismiss the Government's first appeal for lack of an appealable order.

III.

In the Government's second appeal, which challenges the district court's order refusing to enter judgment on a separate document, the issue is whether that order is appealable. Two courts have faced this issue before, only to reach different results.

The Ninth Circuit believes that an order denying a motion to enter judgment is not appealable because it does not finally dispose of an entire controversy. Steccone v. Morse-Starrett Products Co., 9th Cir. 1951, 191 F.2d 197. In its view if one desires a recalcitrant judge to enter an order with that dispositive effect, his remedy is mandamus.

We prefer the First Circuit's view, which says that an order refusing to enter judgment is appealable. In re Forstner Chain Corp., 1st Cir. 1949, 177 F.2d 572. There the court reasoned that such an order is a "final decision" and not interlocutory because the district judge regards it as final. He believes he has already...