Wolff v. Wolff
| Decision Date | 15 August 1985 |
| Docket Number | No. 84-1969,84-1969 |
| Citation | 768 F.2d 642 |
| Parties | L. Richard WOLFF, Plaintiff-Appellee, v. L. Carl WOLFF, Defendant-Appellant. Summary Calendar. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Christopher M. Weil, Anthony A. Petrocchi, Dallas, Tex., for defendant-appellant.
W.W. Mitchell, II, Bruce Akerly, Dallas, Tex., for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before RUBIN, RANDALL and TATE, Circuit Judges.
A party who consented to trial before a magistrate, with appeal of right to the district court pursuant to the Magistrate's Act, 1 seeks to appeal the district court's judgment. The Act permits such an appeal only with leave of the circuit court based upon a petition "stating specific objections to the judgment." 2 Because this court has never announced the standards by which we decide whether or not leave to appeal should be granted, we do so in this opinion. Because these standards were not met in this case, we deny leave and dismiss this appeal.
Richard Wolff, a citizen of New Jersey, and his brother, Carl Wolff, a Texas citizen, were partners in Citation Investment Company, which did business in Texas. After filing and later dismissing a suit in Texas state court seeking dissolution of the partnership, Richard filed this diversity action, reciting that the partnership had been dissolved on his earlier demand and seeking an accounting and a declaration that, as a partner, he owns a half interest in certain real estate, title to which was held by Carl. The district court first held that Citation, the partnership, was not a real party in interest and that joinder of Citation, even if necessary, would not destroy diversity jurisdiction. Thereafter, the parties consented to trial "of any and all further proceedings" before a magistrate with appeal of right to the district court. 3
The magistrate rendered judgment dissolving the partnership, holding that the real estate was intended to be a partnership asset, declaring Richard a co-owner of it, awarding $55,458 to Richard based on an accounting of the difference in their respective capital accounts in the partnership, and declaring each to have an equal four and one-half percent interest in another limited partnership. On appeal, the district court affirmed the magistrate's judgment, and Carl then filed a notice of appeal to this court. In response, Richard contests our jurisdiction over the appeal because Carl has not filed a petition for leave to appeal as required by the Act. 4 Carl in turn asserts that this court should remedy any informality in the appeal and hold that, because Citation was an indispensable party and its joinder would have destroyed diversity, the case should be dismissed. Alternatively he contends that the statute of limitations on the action had run and that the magistrate's findings of fact were clearly erroneous.
Because the Act does not permit appeals of right from such district court judgments, we treat the notice of appeal as an application for leave to appeal. Finding, under the standards announced below, that the issues presented do not warrant our granting leave, we deny it and dismiss the appeal.
Using a form provided by the district court, the parties in this action executed a consent to proceed before a magistrate. That provided that the magistrate would "conduct any and all further proceedings in the case (including the trial) and order the entry of a final judgment." The parties further agreed, pursuant to specific provisions in the Act, 5 that "any appeal shall be taken to a judge of the district court," and "[a]n appeal under Sec. 636(c)(4) [of the Act] does not bar an appeal to the Fifth Circuit as provided by Sec. 636(c)(5)," which provides that cases appealed to the district courts pursuant to such consent "may be reviewed by the appropriate United States court of appeals upon petition for leave to appeal by a party stating specific objections to the judgment."
The district court had, before referring the case to the magistrate, denied Carl's motion to dismiss for lack of jurisdiction based on the claim that joinder of Citation, whose citizenship would be that of the partners, would destroy diversity. The form consenting to trial before the magistrate and appeal to the district court mentioned only "further proceedings in the case" and said nothing about appeal of the jurisdictional issue already decided by the district court.
Section 636(c)(5) of the Magistrate's Act does not in terms foreclose appeal of right to this court of a preliminary jurisdictional decision made by the district court before referring the case to a magistrate for trial. Because the district court decided the jurisdiction issue preliminarily, and the parties did not consent to decision on that issue by the magistrate with appeal of right to the district court, we accept Carl's direct appeal of the jurisdictional issue and decide it, lest Carl be denied any appeal of right on this issue.
The statute, however, is not designed to accommodate the possibility that litigants will divide the issues in a single case and pursue a different appeal path for each issue, one to the district court for review of the magistrate's judgment based solely on the proceedings before the magistrate (with discretionary review by this court), and the other to this court for direct review of the district court's original interlocutory orders. This procedure is manifestly cumbersome and disturbs the evident purpose of the statute, to enable the parties to consent to appeal of the entire case from the magistrate to the district court "in the same manner as on an appeal from a judgment of the district court to a court of appeals," 6 with further review by this court only upon leave to appeal. To avoid this confusion, when in future cases the parties consent to entry of final judgment by the magistrate with appeal of right to the district court and discretionary review by this court, the district court is encouraged to submit the entire case to the magistrate, including preliminary issues such as subject matter jurisdiction.
Richard seeks to be declared the owner of a half interest in the Texas real estate, title to which is held by Carl, on the basis that, when the property was bought, the brothers intended it to be a partnership asset and Richard contributed to its purchase price. The suit does not seek to transfer legal title to the partnership but to assert Richard's claim to be declared a co-owner. Although Richard alleged that Citation had been dissolved when this action was filed, the complaint named Citation as an "additional nominal plaintiff."
The district court found that joinder of Citation, if necessary, would not defeat diversity jurisdiction because the real parties to the controversy are Richard and Carl and the partnership "is a nominal party joined solely for the purpose of performing any ministerial acts required for the final dissolution and winding up of the partnership."
In determining diversity jurisdiction, the citizenship of the real parties in interest is determinative, 7 and the citizenship of nominal or formal parties who have no real interest in the dispute before the court may be disregarded, even though they may be required by law or court order to join in the lawsuit. 8
Richard's complaint prayed that he "be adjudged a co-partner in the said property ... and entitled to one-half of the assets and profits thereof." The complaint did not seek to have title to the property conveyed to Citation. That partnership was either already dissolved, as Richard asserts, or was dissolved as a result of the judgment in this suit. In either event, transfer of title to the partnership would have been a formal and doubtless unnecessary act, requiring the partnership in dissolution to convey the real estate in turn to the partners. 9 Because the citizenship of the real parties in interest was diverse, the district court had subject matter jurisdiction of this action.
Acknowledging that he has not submitted a petition for leave to appeal stating specific objections to the judgment, except insofar as his brief may serve that purpose, Carl requests that we consider his notice of appeal together with his brief as a petition for leave to appeal.
While we have found no cases discussing the treatment of a notice of appeal as a petition for leave to appeal under the Magistrate's Act, Federal Rule of Appellate Procedure 6(a) presents an analogous situation. That rule provides that appeals under Sec. 24 of the Bankruptcy Act 10 shall be sought by filing a petition for allowance of the appeal with the clerk of the court of appeals.
In Reconstruction Finance Corp. v. Prudence Securities Advisory Group, 11 the Supreme Court permitted a notice of appeal under another bankruptcy statute to be treated as a petition to allow the appeal, reasoning that "the defect is not jurisdictional in the sense that it deprives the court of the power to allow the appeal." The Court held that the court of appeals "has discretion, where the scope of review is not affected, to disregard such an irregularity in the interests of substantial justice." Invoking this discretion, but construing it narrowly, we have held, in Household Finance Corporation of Atlanta v. Jones, 12 that a notice of appeal under Sec. 24 of the Bankruptcy Act 13 would be treated as a petition for allowance of the appeal only when "a special equity or exceptional circumstances exist." 14
No jurisdictional obstacle, therefore, prevents us from regarding the notice of appeal filed by Carl in the district court as a petition for leave to appeal under the Magistrate's Act. Because the appellant has not been dilatory, the appeal appears not to be frivolous, and appellee has not shown that he will suffer unfair prejudice by our treating the notice as a petition for leave, we...
To continue reading
Request your trial
-
Parish of Plaquemines v. Total Petrochemical & Refining USA, Inc.
...destroy diversity amongst the other parties. See Louisiana v. Union Oil Co., 458 F.3d 364, 366 (5th Cir.2006) (citing Wolff v. Wolff, 768 F.2d 642, 645 (5th Cir.1985) ). Even where the nominal party is an agent of the State instead of the State itself, diversity is destroyed because the age......
-
Grace Ranch, L.L.C. v. BP Am. Prod. Co.
...citizenship of nominal or formal parties who have no real interest in the dispute before the court may be disregarded." Wolff v. Wolff , 768 F.2d 642, 645 (5th Cir. 1985) (footnote omitted). The State has a real interest if "the relief sought is that which inures to it alone" so that a judg......
-
Parish of Plaquemines v. Petrochemical
...destroy diversity amongst the other parties. See Louisiana v. Union Oil Co., 458 F.3d 364, 366 (5th Cir. 2006) (citing Wolff v. Wolff, 768 F.2d 642, 645 (5th Cir. 1985)). Even where the nominal party is an agent of the State instead of the State itself, diversity is destroyed because the ag......
-
Morgan v. U.S.
...leave to appeal must contain "copies of the final judgments of the district court and the magistrate") (emphasis added); Wolff v. Wolff, 768 F.2d 642, 648 (5th Cir.1985) (same). In neither case was there any discussion of the need for finality, since in both cases the petitions had sought l......