U.S. Bank, N.A. v. Milburn
| Decision Date | 28 February 2003 |
| Docket Number | No. 01-1318.,No. 01-1008.,01-1318.,01-1008. |
| Citation | 100 S.W.3d 674 |
| Parties | U.S. BANK, N.A., Individually and as Trustee for Empire Funding Home Loan Trust 1997-1; U.S. Bank, N.A., Individually and as Trustee for Empire Funding Home Loan Trust 1997-2; U.S. Bank, N.A., Individually and as Trustee for Empire Funding Home Loan Trust 1997-3; U.S. Bank, N.A., Individually and as Trustee for Empire Funding Home Loan Trust 1997-4; U.S. Bank, N.A., Individually and as Trustee for Empire Funding Home Loan Trust 1997-5; U.S. Bank N.A., Individually and as Trustee for Empire Funding Home Loan Trust 1998-1; U.S. Bank, N.A., Individually and as Trustee for Empire Funding Home Loan Trust 1998-2, Appellant, v. Wilma MILBURN, Appellee; Wilma Milburn v. U.S. Bank, Individually and as Trustee. |
| Court | Arkansas Supreme Court |
Rose Law Firm, by: Herbert C. Rule III, Garland J. Garrett, and Stephen N. Joiner, Little Rock, for appellant.
Joe Holifield, Paragould; and McMath, Vehik, Drummond, Harrison & Ledbetter, P.A., by: Mart Vehik, Little Rock, for appellee.
The instant matter comes to us as a set of interlocutory appeals by Appellant U.S. Bank, N.A., stemming from a Rule 23 class-action proceeding. In conjunction with this matter, a motion to dismiss U.S. Bank's appeal was filed in this court by Appellee Wilma Milburn. Because no appeal is properly before us, we must dismiss this set of interlocutory appeals, thereby rendering Milburn's motion to dismiss appeal moot.
Rosslare Funding, Inc., made loans to several individuals. Empire Funding Corporation bought the loans from Rosslare and pooled them together. Empire then transferred the pooled loans into trusts with U.S. Bank named as trustee. Empire sold interests in the pooled loan trusts to investors. U.S. Bank as trustee received and distributed the loan collections to the investors.
The loans Rosslare sold to Empire became the subject of a class-action lawsuit filed by Wilma Milburn in Greene County Circuit Court on August 20, 1998. The original complaint alleged usury, Truth in Lending Act (TILA)/Home Ownership and Equity Protection Act (HOEPA), and common-law fraud claims against several defendants including Rosslare and Empire.1 On September 21, 1998, the case was removed to federal court where it remained until April 2, 1999, when the case was remanded to state court.2 In late 1999 and early 2000, Milburn filed motions for class certification on the usury and fraud claims pursuant to Arkansas Rule of Civil Procedure 23. She also filed a motion for partial summary judgment on the usury claims contending that Arkansas law should apply to the loans. Empire responded with its own motion for summary judgment on the choice-of-law issue.
On April 20, 2000, Milburn filed a third amended complaint that named additional defendants, including U.S. Bank, N.A., individually and as trustee for certain loan trusts created by Empire. Shortly thereafter, Empire filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. A hearing on the motions for class certification and summary judgment originally set for June 12, 2000, was postponed until June 8, 2001. In the interim, U.S. Bank filed responses to Milburn's class-certification and summary-judgment motions.3 At the June 8, 2001 hearing, U.S. Bank objected to the court hearing arguments on Milburn's summary-judgment motion because her motion was not filed against U.S. Bank. Both parties agreed that the summary-judgment motion regarding the choice of law was the "core issue" in the case and that it would be generally dispositive of the merits. The court proceeded to hear the arguments on the issues of class certification and summary judgment. Milburn argued that Arkansas law should apply and thus the loans originating with Rosslare were usurious, while U.S. Bank argued that California law should apply, thereby rendering the interest on the loans below the legal maximum. After the hearing, in an order entered on June 11, 2001, the circuit court certified the class pursuant to Rule 23 of the Arkansas Rules of Civil Procedure. Milburn then filed a motion for approval of the class-action notice on July 17, 2001.
Meanwhile, the circuit court had deferred ruling on Milburn's summary-judgment motion and allowed the parties to file additional briefs on the choice-of-law issue. After U.S. Bank4 and Milburn filed their respective briefs, the circuit judge sent a letter to counsel on July 30, 2001, advising them that Counsel for Milburn was directed to prepare the precedent for an order.
On that same day, the circuit judge signed an order approving the class-action notice, which order was filed on August 1, 2001.5 The notice advised each class member that the court would exclude the member from the class only if the member so requested within 20 days of the date of the notice. Subsequently, the notice was sent to each class member at his or her last known address in successive mailings on August 3, 2001, and August 9, 2001.
On August 23, 2001, which was twenty days after the first mailing of the classaction notice, the circuit court entered partial summary judgment in favor of Milburn. In its order, the court ruled that Arkansas law applied; and, thus, the mortgage loans were usurious. U.S. Bank's local counsel then filed a motion to be relieved as counsel, which the court granted on September 6, 2001. In the meantime, U.S. Bank had hired new counsel who filed a notice of appeal on September 4, 2001, designating an appeal from three separate orders: 1) the class-certification order; 2) the order approving the class-action notice; and 3) the order granting partial summary judgment. Also, on September 4, U.S. Bank filed a motion requesting reconsideration of the class-certification and partial summary-judgment orders. The motion asked the court to decertify the class, or in the alternative, to set aside the summary judgment, because Milburn obtained partial summary judgment on the merits of the issues in the case prior to completion of notice to the class.
On September 7, 2001, an order was entered appointing the Circuit Clerk of Greene County to act as a receiver, and directing U.S. Bank to pay all principal and interest received from the members of the class into the registry of the court during the pendency of this action. Milburn objected to U.S. Bank's September 4 notice of appeal and on September 17, 2001, filed a motion to dismiss the appeal for lack of jurisdiction. We deferred ruling on the motion until the submission of this appeal. U.S. Bank filed another notice of appeal on October 9, 2001, designating an appeal from the order appointing a receiver. See Ark. R.App. P. — Civ. 2(a)(7) (2002). The record was subsequently filed in this court on December 3, 2001.
In its original brief filed on January 22, 2002, U.S. Bank raised four separate points on appeal and requested oral argument. However, the fourth point, which challenged the circuit court's entry of partial summary judgment, was abandoned in the reply brief filed by U.S. Bank on April 16, 2002. U.S. Bank has therefore recognized that the partial-summary-judgment order is not a final order, and, thus, not properly appealable.
At oral argument, U.S. Bank's counsel conceded that the notice of appeal was untimely with respect to the class-certification order and the order approving class notice. Moreover, counsel for the bank admitted that at the time the orders were entered, there was no fundamental error. Nonetheless, while recognizing in its reply brief and at oral argument that the partial summary-judgment order was not a final appealable order, U.S. Bank contends that the entry of partial summary judgment on August 23 "impacted" the prior orders, thereby subsuming or bootstrapping those orders into the partial summary-judgment order. Under the so-called "impact theory" proposed by U.S. Bank, an order may become appealable at a later time when subsequent facts develop relating to that order. Thus, U.S. Bank suggests that the class-certification and class-action notice orders became appealable on August 23 when Milburn's motion for partial summary judgment was granted and entered of record. In other words, August 23 became the date from which to calculate the deadline for filing a timely notice of appeal with respect to the earlier class-certification and class-action notice orders. We decline to adopt the "impact theory" suggested by U.S. Bank.
The jurisdiction of this court depends upon the calculation of filing deadlines pursuant to the Arkansas Rules of Appellate Procedure — Civil. The relevant dates in this case are as follows:
June 11, 2001 Class-certification order entered
August 1, 2001 Order approving class-action notice entered
August 23, 2001 Partial-summary-judgment order entered
September 4, 2001 U.S. Bank filed its notice of appeal from the following orders: (1)
class-certification order; (2) order approving class-action notice
and (3) order granting partial summary judgment
September 4, 2001 U.S. Bank filed its motion for reconsideration of class certification
and partial summary judgment
September 7, 2001 Order appointing receivership entered
October 9, 2001 U.S. Bank filed its notice of appeal from the order appointing
receiver
October 9, 2001 U.S. Bank filed its motion to reconsider order appointing receiver
December 3, 2001 Record filed with the Supreme Court Clerk
Class-Certification Order
U.S. Bank's notice of appeal filed on September 4, 2001, designated the original class-certification order as an...
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