TPM Holdings, Inc. v. Intra-Gold Industries, Inc.
| Decision Date | 06 June 1996 |
| Docket Number | INTRA-GOLD,No. 95-1786,95-1786 |
| Citation | 91 F.3d 1 |
| Parties | TPM HOLDINGS, INC., Plaintiff, Appellee, v.INDUSTRIES, INC. and Jasper C. Rowe, Defendants, Appellants. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Jasper C. Rowe, Dallas, TX, with whom Law Offices of Jasper C. Rowe was on briefs, for appellants.
Daniel P. Schwarz, Portsmouth, NH, with whom Christopher Cole and Sheehan, Phinney, Bass & Green, P.C. were on briefs, for appellee.
Before SELYA, CYR and BOUDIN, Circuit Judges.
Intra-Gold Industries, Inc. ("Intra-Gold"), a Texas corporation, appeals from the New Hampshire district court's grant of summary judgment in favor of TPM Holdings, Inc. ("TPM"), in TPM's action to remove a notice of lis pendens from the title of property it owns in New Hampshire. The lis pendens relates to a Texas federal-court action brought by Intra-Gold against TPM and another party, New England Aggregate Trust, Inc. ("Aggregate Trust"), in which Intra-Gold sought enforcement of an alleged agreement with Aggregate Trust to transfer to Intra-Gold certain mineral rights in the New Hampshire property.
The background facts are complex but largely undisputed, and we limit our description to the transactions directly pertinent to this appeal. In June 1992, TPM bought a promissory note and mortgage interest in 3,500 acres of property located in both Freedom and Madison, New Hampshire. One of the mortgagors was Freedom Properties Realty Trust ("Freedom Properties"), a New Hampshire general partnership with Aggregate Trust as its general partner. By late 1992, the mortgagors were in default, and TPM had initiated foreclosure proceedings.
Intra-Gold claims that in January 1993, Aggregate Trust agreed on behalf of Freedom Properties to assign the latter's mineral rights in the New Hampshire property to Intra-Gold. According to Intra-Gold this was part of a plan to avoid the foreclosure; in return for the mineral rights, Intra-Gold would try to arrange financing that would permit Aggregate Trust to retire its debt to TPM and would pay royalties to Aggregate Trust for the minerals removed.
But in February 1993, the mortgagors of the New Hampshire property--including Freedom Properties--agreed to deed the property to TPM in lieu of foreclosure proceedings. The agreement reserved in the mortgagors the right to exploit the minerals for one year and gave them an option to purchase the property within one year for approximately $4 million. Intra-Gold took the position that by entering into this settlement, Aggregate Trust had breached its January 1993 agreement with Intra-Gold.
In July 1994, Intra-Gold filed suit in Texas state court against Aggregate Trust and TPM, seeking damages and rescission of the deed transferring the property to TPM. The defendants removed the case to the federal district court for the Eastern District of Texas. The day after bringing the suit, Intra-Gold placed--without notice to TPM or application to any court--a notice of lis pendens on the deed for the New Hampshire property. It was the filing of this lis pendens in the Registry of Deeds in Carroll County, New Hampshire that prompted the litigation at issue here.
On November 1, 1994, TPM filed a complaint in the federal district court in New Hampshire, based on diversity jurisdiction, seeking a declaration that the notice of lis pendens was not valid under the New Hampshire statute. N.H.Rev.Stat. Ann. § 511-A:8 permits filing a lis pendens without prior application to the court or notice to the adverse party, in "equity cases for specific performance of an agreement to transfer land or a unique chattel." TPM pointed out that Intra-Gold's Texas complaint sought only money damages and rescission of the deed from Aggregate Trust (and the other mortgagors) granting the New Hampshire property to TPM.
While pre-trial motions were pending in the New Hampshire action, the Texas district court on April 7, 1995, dismissed with prejudice all of Intra-Gold's claims against TPM for failure to state a claim. Fed.R.Civ.P. 12(b)(6). On motion by TPM, the court followed with an order on May 17, 1995, cancelling the notice of lis pendens filed in the New Hampshire Registry of Deeds. Intra-Gold proceeded with its claims against Aggregate Trust, but after a bench trial in the summer of 1995, the court found in Aggregate Trust's favor on all claims.
One might think that resolution of the underlying claims against TPM in Texas would moot the New Hampshire action by removing the basis for the lis pendens, but Intra-Gold appealed the Texas decision to the Fifth Circuit, and some cases suggest that a lis pendens remains in effect pending appeal. See 54 C.J.S. Lis Pendens § 26 (1987). In all events, neither party asserts mootness, and there are obvious practical reasons why--with the Fifth Circuit appeal pending--it is important for TPM to maintain in force the district court's declaration that the lis pendens is invalid. We thus resume the chronology.
In the New Hampshire district court, Intra-Gold argued by motion that the court should refuse to entertain TPM's claim because similar issues were then before the Texas district court. Intra-Gold contended this result was required both by 28 U.S.C. § 1450--a claim now abandoned--and for reasons of "fairness and judicial economy." In the alternative, Intra-Gold argued that Texas law should govern the validity of the lis pendens. The district court denied this motion in June 1995.
During the June 1995 hearing, the New Hampshire district court also proposed sua sponte to grant summary judgment on the merits in favor of TPM, because the lis pendens was not authorized by the New Hampshire statute because the underlying Texas action was not an equity case for specific performance of an agreement to transfer land or a unique chattel. In opposition, Intra-Gold conceded this defect, but argued that it had filed an amended complaint in the Texas suit on December 7, 1994--over a month after TPM had initiated the New Hampshire declaratory action--which asked for "an injunction preventing transfer of the property to TPM or any third party and granting title to the property to [Intra-Gold]."
Unpersuaded, the district court granted summary judgment in TPM's favor, explaining simply that the lis pendens "was not filed in compliance with ...
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