First National Bank v. Genina Marina Svc

• Court: Court of Appeals for the Fifth Circuit
• Decided: April 23, 1996
• Docket: 95-30940
• Status: Unpublished

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________

No. 95-30940 Summary Calendar _______________

FIRST NATIONAL BANK IN ST. MARY PARISH,

Plaintiff-Appellee,

VERSUS

GENINA MARINE SERVICES, INC. AGATHA RIZZO KORNEGAY, THOMAS WILSON BRIGHTMAN KORNEGAY, JR., as administrator of the successor of Thomas Wilson Brightman Kornegay, Sr.,

Defendants-Third-party Plaintiffs Appellants,

U.S. DEPARTMENT OF AGRICULTURE, FARMERS HOME ADMINISTRATION,

Third-Party Defendant-Appellee.

_________________________

Appeal from the United States District Court for the Western District of Louisiana (94-CV-1851) _________________________

April 8, 1996

Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.

PER CURIAM:*

The appellants appeal the dismissal of their third-party claim

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. for want of jurisdiction. We vacate and remand for the purpose of

allowing the district court to state its reasons, so that we can

give this case the appropriate appellate review.

I.

This appeal arises out of the following uncontested facts:

The First National Bank in St. Mary’s Parish (“FNB”) executed a

$985,000 promissory note with Genina, Inc. (now Genina Marine

Services). The promissory note was divided into two portions. The

first portion (“the loan”), which comprised ninety percent of the

promissory note, was secured by a guaranty and Lender’s Agreement

from the Farmers Home Administration (the “FmHA”).1 The entire

promissory note (the 90% guaranteed portion and the remaining 10%)

was secured by the Kornegays’ residence, other real estate,

business equipment, and Wilson and Agatha Kornegay’s personal

guaranty.

FNB sold the loan to Pequot Partners, retaining duties as the

servicing agent and retaining its rights to the security

instruments, exclusive of the FmHA’s guaranty. After the loan

passed to Pequot Partners, it went into default. Pequot Partners

exercised the FmHA’s guaranty according to the Lender’s Agreement,

under which the FmHA purchased the loan. Thereafter, the FmHA

endorsed the loan to FNB, and FNB filed suit in Louisiana state

court against Genina Marine Services, Agatha Kornegay, and Thomas

1 Only the 90% portion of the promissory note secured by the FHA (“the loan”) is the subject of this appeal.

2 Kornegay, Jr., as administrator of the estate of Wilson B. Kornegay

(“appellants”), to enforce the loan and to foreclose the home

mortgage securing it.

The appellants filed a third-party petition against the FmHA

based in contract and tort, alleging that they had reached an

accord with the FmHA to satisfy their obligation under the loan and

that the suit filed by FNB breached this accord. The appellants

contended that the FmHA was the holder of the loan and that FNB was

suing on behalf of the FmHA. The FmHA removed the action to

federal court, where the district court dismissed the appellants’

claim against the FmHA and remanded the case between FNB and the

appellants to state court.

II.

A.

As a preliminary matter, the district court did not enter a

judgment separate from its order of dismissal as required by FED.

R. CIV. P. 58, and neither party objected to such omission. The

district court, however, plainly intended to end the litigation

with its order of dismissal, and the appellants filed a timely

notice of appeal from the purported final order. In such a

situation, we may exercise jurisdiction over the appeal. Whitaker

v. City of Houston, 963 F.2d 831, 833-34 (5th Cir. 1992); Townsend

v. Lucas, 745 F.2d 933, 934 (5th Cir. 1984).

B.

3 In its motion for dismissal, the FmHA raised two bases for

dismissal: lack of subject matter jurisdiction based upon its

sovereign immunity and failure of service of process. The district

court did not state the basis for its dismissal, but simply granted

the FmHA’s motion to dismiss. The appellants raise only the issue

regarding dismissal for lack of subject matter jurisdiction on

appeal.

Because the district court gave no reason for its dismissal,

we cannot tell whether dismissal was for failure to service

properly or for sovereign immunity. Because the service-of-process

issue cannot be adequately determined, and because the district

court may have relied upon it rather than immunity, we remand to

the district court for limited purpose of obtaining reasons. In

Jot-Em Down Store (JEDS), Inc. v. Cotter & Co., 651 F.2d 245, 247

(5th Cir. 1981), we noted that, “[w]hile the Federal Rules of Civil

Procedure do not require a statement of reasons by a trial judge

for a motion to dismiss, a summary judgment or a directed verdict,

we have often stated that a reasoned statement is helpful not only

to counsel but also the appellate court.” This is one case in

which an explanation of the ruling may obviate considerable effort

by this court.

Accordingly, the judgment is VACATED and REMANDED.