State Treasurer of State of Michigan v. Barry
| Decision Date | 19 February 1999 |
| Docket Number | No. 97-9177,97-9177 |
| Parties | 12 Fla. L. Weekly Fed. C 567 STATE TREASURER OF THE STATE OF MICHIGAN, Public School Employees' Retirement System, Custodian of, et al., Plaintiffs-Appellants, v. Harold V. BARRY, Barry N.P.-500, L.P., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Steven M. Collins, Alston D. Correll, III, Alston & Bird, Atlanta, GA, for Plaintiffs-Appellants.
J. Marbury Rainer, Parker, Hudson, Rainer & Dobbs, Atlanta, GA, for Defendants-Appellees.
Appeal from the United States District Court for the Northern District of Georgia.
Before COX, CARNES and HULL, Circuit Judges.
Because the partial summary judgment order involved here was not a final decision, we dismiss this appeal for lack of jurisdiction. This Court's prior precedent controls this case. Construction Aggregates, Ltd. v. Forest Commodities Corp., 147 F.3d 1334 (11th Cir.1998); Mesa v. United States, 61 F.3d 20 (11th Cir.1995).
Plaintiff, Michigan's State Treasurer, as Custodian for various State retirement funds, sued Defendants Harold Barry and a limited partnership (collectively, "Defendants") after a real estate investment deal soured. Plaintiff's complaint contained: Count I for breach of contract, seeking specific performance of an agreement to purchase an interest in a real estate partnership; Count II for the same breach of contract, but seeking damages; and Count III for expenses of litigation, including attorneys' fees, as damages for "stubborn litigiousness" under O.C.G.A. § 13-6-11.
Defendants answered and asserted two compulsory counterclaims: 1 Count I for tortious interference with business relations, and Count II for breach of fiduciary duty.
On December 2, 1996, Plaintiff filed a motion for partial summary judgment on its claim for specific performance of the contract in Count I and on Defendants' two counterclaims. On January 13, 1997, Defendants filed a cross-motion for partial summary judgment on Plaintiff's claim for specific performance of the contract in Count I.
In an order filed May 27, 1997, the district court granted Defendants' motion for partial summary judgment on Plaintiff's claim for specific performance in Count I and denied Plaintiff's motion for partial summary judgment on that specific performance claim. The court's May 27 order also granted Plaintiff's motion for partial summary judgment on Defendants' counterclaim for tortious interference. That May 27 order left pending Plaintiff's damages claim for breach of contract in Count II, Plaintiff's claim for "stubborn litigiousness" in Count III, and Defendants' counterclaim for breach of fiduciary duty. 2
In granting Defendants partial summary judgment on Plaintiff's claim for specific performance of the contract in Count I, the district court made a finding that Defendants had not committed an anticipatory breach so as to relieve Plaintiff of its duty to perform. This finding necessarily dealt a fatal blow also to Plaintiff's claim in Count II for damages for breach of that same contract. In turn, resolution of those contract claims in Defendants' favor would defeat Plaintiff's claim in Count III for stubborn litigiousness. However, despite this favorable finding in the May 27 order regarding the specific performance claim, there was no subsequent motion for partial summary judgment on, or motion for dismissal of, the claims in Counts II and III of Plaintiff's complaint based on that finding.
The parties also never requested that the district court issue a Rule 54(b) certificate regarding the May 27 partial summary judgment order. Fed.R.Civ.P. 54(b). Upon a Rule 54(b) request, the district court may certify that no just reason exists for delay and expressly direct the entry of final judgment. If granted, this would have allowed the parties to appeal the May 27 partial summary judgment order. 3
Instead of making a Rule 54(b) request, the parties proceeded with the case. They first obtained the district court's consent to extend the due date for the pretrial order through June 23, 1997. The pretrial order was then filed on June 23, 1997.
In the pretrial order, the parties agreed that the only remaining claim to be tried was Defendants' counterclaim for breach of fiduciary duty. 4 Because a pretrial order supersedes the pleadings, the pretrial order had the effect of eliminating the remaining Counts II and III in Plaintiff's complaint. 5 Accordingly, when the district court approved and entered the pretrial order on July 14, 1997, the only claim remaining in the case was Defendants' counterclaim for breach of fiduciary duty.
On August 20, 1997, the parties filed a joint stipulation entitled "Stipulation of Dismissal of Fiduciary Duty Claim." The stipulation recited that it was filed under Federal Rule of Civil Procedure 41(a)(1)(ii), and that the parties agreed to dismiss without prejudice Defendants' breach of fiduciary duty counterclaim, "with each party to bear its own costs." The Clerk of Court stamped the voluntary dismissal without prejudice as follows: "Entered as dismissed pursuant to Rule 41(a)(1)(i)(ii), F.R.C.P."
The stipulation also stated "that there are no claims remaining to be tried, since all claims in this action except the fiduciary duty claim were resolved in this Court's Order of May 27, 1997." This summary of the district court's order is technically inaccurate because the order repeatedly referred to only Plaintiff's claim for specific performance and nowhere discussed Plaintiff's claim for damages in Count II or claim based on stubborn litigiousness in Count III. Nonetheless, the pretrial order had the effect of removing Counts II and III from the pleadings in the case. Thus, the August 20 stipulation did resolve the only remaining claim, which was Defendants' counterclaim for breach of fiduciary duty.
On September 19, 1997, the Clerk of Court entered a judgment which stated, in full, as follows:
This action having come before the court [name of judge] for consideration of defendant's [sic] motion for partial summary judgment, and the court having granted said motion, it is Ordered and Adjudged that the defendants [sic] motion for partial summary judgment be granted as to specific performance.
(Emphasis in original). The judgment covered only Plaintiff's specific performance claim in Count I. No judgment was entered on Defendants' counterclaim for tortious interference, even though the partial summary judgment order clearly granted summary judgment against Defendants on that first counterclaim. No judgment was entered on Plaintiff's claims in Counts II and III, even though the effect of the pretrial order was to remove them from the case.
On October 17, 1997, Plaintiff filed a Notice of Appeal, which recited that Plaintiff was appealing from the district court's order of May 27, 1997, and the final judgment entered on September 19, 1997.
A few weeks after the appeal was filed, this Court raised, sua sponte, the appellate jurisdiction issue. On November 10, 1997, this Court sent a letter requesting that the parties address the jurisdictional issue of "[w]hether the court's orders granting partial summary judgment are final and appealable" under 28 U.S.C. § 1291. Plaintiff filed a response to the Court's jurisdiction question on November 24, 1997. Defendants filed a response on November 28, 1997, which concurred with the position taken in Plaintiff's response.
On February 24, 1998, this Court issued an order carrying the jurisdictional issue with the case. The Court's order stated, Plaintiff's brief, filed April 21, 1998, addressed the jurisdiction issue.
Shortly before oral argument, this Court notified the parties, asking them to be familiar with the recent decision in Construction Aggregates, Ltd. v. Forest Commodities Corp., 147 F.3d 1334 (11th Cir.1998). Much of the oral argument, heard November 5, 1998, focused on the jurisdiction issue.
This case concerns whether the district court's May 27 order granting partial summary judgment is a "final decision" appealable under 28 U.S.C. § 1291. Section 1291 provides, in relevant part: "The courts of appeals ... shall have jurisdiction of appeals from all final decisions of the district courts of the United States...." 28 U.S.C. § 1291. This section is the basis for the final judgment rule, which ordinarily requires that all claims and issues in a case be adjudicated before appeal.
The district court's partial summary judgment order, by itself, was not a "final decision" under § 1291. That May 27 order left pending Plaintiff's claims for damages for breach of contract in Count II and for attorneys' fees and costs for "stubborn litigiousness" in Count III, as well as Defendants' counterclaim for breach of fiduciary duty.
Subsequently, the June 23 pretrial order amended the pleadings and left pending only Defendants' counterclaim for breach of fiduciary duty. Later, on August 20, the parties stipulated to a dismissal of that counterclaim without prejudice. The parties voluntarily agreed to dismissal of that counterclaim without prejudice in order to appeal the partial summary judgment order before having to try the counterclaim. After entry of the May 27 order, the parties could have asked the district court to issue a Rule 54(b) certificate, but they never did so. Instead, they prepared the pretrial order, as ordered by the district court, and only later dismissed...
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