Moody Natl Galveston v. GE Life Annuity Ins

• Court: Court of Appeals for the Fifth Circuit
• Decided: September 13, 2004
• Docket: 03-41237
• Status: Published

Opinion

United States Court of Appeals Fifth Circuit F I L E D REVISED SEPTEMBER 13, 2004 August 24, 2004 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT Charles R. Fulbruge III Clerk

03-41237

MOODY NATIONAL BANK OF GALVESTON,

Plaintiff-Appellant,

Versus

GE LIFE AND ANNUITY ASSURANCE COMPANY,

Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Texas

Before HIGGINBOTHAM, DAVIS, and WIENER, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Plaintiff, Moody National Bank of Galveston (Moody), filed the

instant suit against GE Life and Annuity Assurance Company (GE)

seeking to recover the proceeds of a life insurance policy issued

by GE to Moody’s creditor, Schwartz, Inc. GE argues that Moody’s

appeal was not timely and seeks to dismiss this appeal for want of

jurisdiction. Because Moody did not file a timely notice of

appeal, we conclude that we do not have jurisdiction to consider

the appeal.

-1- I.

On June 30, 2003, the district court granted GE’s motion for

summary judgment and entered final judgment in favor of GE. In the

last sentence of its final judgment, the district court sua sponte

ordered each party to pay its own costs and attorney’s fees. On

July 14, 2003, GE filed a motion styled “Motion to Alter or Amend

the Judgment under Federal Rule of Civil Procedure 59(e).” The

only relief GE sought in the motion was to have the court tax all

costs, including GE’s against Moody Bank. The district Court

denied GE’s motion on July 30, 2003. Moody filed a Notice of

Appeal on August 27, 2003.

II.

A timely filed notice of appeal is an absolute prerequisite to

this court’s jurisdiction. Browder v. Director, Dep’t of

Corrections, 434 U.S. 257, 264 (1978). Generally, to be timely, a

notice of appeal in a civil case must be filed within 30 days after

the judgment or order appealed from is entered. Fed.R.App.P.

4(a)(1)(A).1 However, a timely filed Rule 59(e) motion to amend or

reconsider will toll the time for filing an appeal until the

district court disposes of the motion. Fed.R.App.P.

1 Fed.R.App.P. 4(a)(1)(A) provides:

(A) In a civil case, except as provided in Rules 4(a)(1)(B), 4(a)(4), and 4(c), the notice of appeal required by Rule 3 must be filed with the district clerk within 30 days after the judgment or order appealed from is entered.

-2- 4(a)(4)(A)(iv).2 Motions addressing costs and attorney’s fees, on

the other hand are generally made pursuant to Rule 54, are

considered collateral to the judgment, and do not toll the time

period for filing an appeal. Fed.R.Civ.P 54(d).3

Moody argues that even though the only relief GE sought in its

motion was that all costs be assessed against Moody, it was

nevertheless a Rule 59(e) motion to alter or amend. Moody contends

that this is true because the district court’s ruling that each

party should bear its own costs and attorney’s fees was included in

the final judgment. Moody argues that under Ramsey v. Colonial

Life Ins. Co. of America, 12 F.3d 472 (5th Cir. 1994), where the

2 Fed.R.App.P. 4(a)(4)(A)(iv) provides, in pertinent part:

(A) If a party timely files in the district court any of the following motions under the Federal Rules of Civil Procedure, the time to file an appeal runs for all parties from the entry of the order disposing of the last such remaining motion: * * * (iv) to alter or amend the judgment under Rule 59.

3 Fed.R.Civ.P. 54(d) provides, in pertinent part:

(1) Costs Other than Attorneys’ Fees. Except when express provision therefor is made either in a statute of the United States or in these rules, costs other than attorneys’ fees shall be allowed as of course to the prevailing party unless the court otherwise directs[.]

(2) Attorneys’ Fees. (A) Claims for attorneys’ fees and related non-taxable expenses shall be made by motion unless the substantive law governing the action provides for the recovery of such fees as an element of damages to be proved at trial.

-3- district court makes costs part of a final judgment, a post-

judgment motion to alter those costs will be characterized as a

Rule 59(e) motion and toll the time limit for filing an appeal.

As an initial matter, it is important to make clear that the

fact that GE labeled its motion as a Rule 59(e) motion to alter or

amend is immaterial; a motion’s substance, and not its form,

controls. Edwards v. City of Houston, 78 F.3d 983, 995 (5th Cir.

1996)(en banc). Thus, the only question is whether a motion to

allocate costs, that would otherwise be characterized as a Rule

54(d) motion, becomes a Rule 59(e) motion to alter or amend where

the district court awarded costs as part of its final judgment.

In Budinich v. Becton Dickinson and Co., 486 U.S. 196 (1988),

the Supreme Court was faced with the question of whether a post-

judgment motion for attorney’s fees should be considered a Rule

59(e) motion where the fees are authorized by the statute sued

upon. Budinich, 486 U.S. at 201. The plaintiff argued that

because the statute authorized attorney’s fees, his motion for fees

was a request to alter the judgment rather than a collateral

request for fees under Rule 54(d). Rejecting this argument, the

Court first pointed out the collateral nature of an award of

attorney’s fees:

As a general matter, at least, we think it indisputable that a claim for attorney’s fees is not part of the merits of the action to which the fees pertain. Such an award does not remedy the injury giving rise to the action, and indeed is often available to the party defending against the action.

-4- Budinich, 486 U.S. at 200. The Court continued, explaining that

any attempt to distinguish between the merits or non-merits of an

award of fees that did not themselves give rise to the action would

not be beneficial:

[N]o interest pertinent to [finality] is served by according different treatment to attorney’s fees deemed part of the merits recovery[.] . . . The time of appealability, having jurisdictional consequences, should above all be clear. We are not inclined to adopt a disposition that requires the merits or nonmerits status of each attorney’s fee provision to be clearly established before the time to appeal can be clearly known. Courts and litigants are best served by the bright-line rule, which accords with traditional understanding, that a decision on the merits is a “final decision” for purposes of [28 U.S.C.] § 1291[.]

Id. 486 U.S. at 202.

This court was faced with a situation similar to Budinich in

Samaad v. City of Dallas, 922 F.2d 216 (5th Cir. 1991). In Samaad,

the plaintiffs’ counsel filed a post-judgment motion to allocate

costs. Plaintiffs’ counsel also filed a notice of appeal within

thirty days of entry of the district court’s judgment; however, the

appeal only named the lead plaintiff. Following the district

court’s order granting the motion for costs, the plaintiffs filed

an amended notice of appeal which listed all remaining plaintiffs

by name. Relying on Budinich, this court concluded that it only

had jurisdiction to hear the appeal of the lead plaintiff because

the amended notice of appeal was untimely. In reaching this

conclusion, we pointed out that Budinich “made it patent that a

-5- motion for costs or attorney’s fees is not to be deemed a Rule 59

motion, even where the cost or fee award might be viewed as an

integral part of the merits.” Id. at 218.

Subsequent to Samaad, this court decided Ramsey v. Colonial

Life Ins. Co. of America, 12 F.3d 472 (5th Cir. 1994), which Moody

argues supports its contention that GE’s motion was in fact a Rule

59(e) motion.

In Ramsey, an injured insured sued his insurer after the

insurer refused to continue paying his medical bills. Plaintiff

moved for summary judgment and also filed a motion for attorney’s

fees. The district court granted summary judgment in favor of the

plaintiff and, in the same order, denied the plaintiff’s motion for

attorney’s fees. Following entry of final judgment, plaintiff

filed a Rule 59(e) motion asking the court to reconsider the issue

of attorney’s fees. Plaintiff did not file an appeal within 30

days because he believed the Rule 59(e) motion would toll the

filing period. On appeal, the defendant argued that under Budinich

the plaintiff’s appeal was untimely because the Rule 59(e) motion

was really a Rule 54(d) motion for attorney’s fees that did not

toll the time for filing an appeal. This court disagreed,

concluding that Budinich was distinguishable because it involved an

“original request for attorney’s fees” not ruled upon by the

district court in its final judgment, whereas in Ramsey “the

district court, as part of its final judgment on the merits, ha[d]

-6- already passed on and denied the plaintiff’s motion for attorney’s

fees. Thus, plaintiff’s motion was not an original request for

fees but instead was a motion for reconsideration[.]” Ramsey, 12

F.3d at476-477.

The holding and reasoning of Ramsey is arguably in tension

with the goal of the Supreme Court in Budinich that “no interest is

served by according different treatment to attorney’s fees deemed

part of the merits recovery.” Budinich, 486 U.S. at 202. As a

general matter, any misgivings we may have about the correctness of

Ramsey are immaterial because we are bound to follow the prior

panel rulings of this court. United States v. Darrington, 351 F.3d

632, 634 (5th Cir. 2003). This rule is inapplicable, however,

where Congress makes a change in statutory law that directly

affects a prior panel opinion. Arbaugh v. Y & H Corp., 2004 WL

1717531 *4 (5th Cir. Aug. 2, 2004) (quoting Davis v. Estelle, 529

F.2d 437, 441 (5th Cir. 1976)).

In 1993, Appellate Rule 4(a)(4) was amended to include among

the motions that will toll the time for filing a notice of appeal

motions for attorney’s fees under Rule 54 if the district court

extends the time to appeal under Rule 58. Fed.R.App.P.

4(a)(4)(A)(iii).4 This amendment was not considered by the court

4 Fed.R.App.P. 4(a)(4)(A)(iii) provides, in pertinent part:

(A) If a party timely files in the district court any of the following motions under the Federal Rules of Civil Procedure, the time to file an appeal runs for

-7- in Ramsey.5 The Advisory Committee Notes to the 1993 Amendment

state, in pertinent part:

To conform to a recent Supreme Court decision . . .-- Budinich v. Becton Dickinson and Co., 486 U.S. 196 (1988)--the amendment excludes motions for attorney’s fees from the class of motions that extend the filing time unless a district court, acting under Rule 58, enters an order extending the time for appeal.

Advisory Committee Notes, Fed. R. App. P. 4, 1993 Amendments

(emphasis added). Advisory Committee Notes do not have the force

of law, but they are instructive in determining Congress’s intent

in amending a statute. United States v. Navarro, 169 F.3d 228, 237

(5th Cir. 1999).

Although the relevant amendment to Appellate Rule 4(a)(4)

provides only that a post-judgment motion relating to attorney’s

fees may suspend the time for filing notice of appeal, the silence

of the rule on the effect of a motion addressing costs is

instructive. Rule 4(a)(4) refers to Rule 58. Rule 58(c)(1), in

turn, provides: “Entry of judgment may not be delayed, nor the time

all parties from the entry of the order disposing of the last such remaining motion: * * * (iii) for attorney’s fees under Rule 54 if the district court extends the time to appeal under Rule 58[.]

5 Although this amendment went into effect almost two months prior to the release of Ramsey, it is clear that Ramsey did not consider the amendments to Rule 4(a)(4) or the relevant comments thereto in reaching its decision. Ramsey, 12 F.3d at 476 n. 5 (citing the text of old Rule 4(a)(4)).

-8- for appeal extended, in order to tax costs or award fees, except as

provided in Rule 58(c)(2).” Fed.R.Civ.P 58(c)(1). Rule 58(c)(2)

then provides for the limited circumstance under which a post-

judgment motion for attorney’s fees will extend the time for appeal

and makes no provision for extending the time for appeal relating

to taxing of costs. Because Rule 58(c)(2) is silent on post-

judgment motions addressing costs, the intent of the rule is clear:

a post-judgment motion addressing costs will not extend the time

for appeal.

Thus, reading (4)(a)(4) and the rule it refers to–-Rule 58–-

together, it is clear to us that any post-judgment motion

addressing costs or attorney’s fees must be considered a collateral

issue even when costs or attorney’s fees are included in a final

judgment. Post judgment motions addressing attorney’s fees can

only extend the time for appeal if (l) the motion is filed before

the delay for appeal expires and (2) the court orders that the

motion be considered as a Rule 59 motion.6 Furthermore, because

58(c)(2) does not give the district court authority to consider a

post-judgment motion for costs as a Rule 59 motion, such a motion

addressing costs cannot extend the time for appeal.

For these reasons, we conclude that GE’s motion to allocate

6 We recognize that this reasoning would not apply where the non-payment of attorney’s fees was “the injury giving rise to the action.” Budinich, 486 U.S. at 200. In such a case, the issue of attorney’s fees would be the merits, rather than merely a collateral issue.

-9- costs was not a motion to alter or amend judgment under Rule 59(e),

but was rather a collateral motion for costs under Rule 54(d) that

did not toll the time for filing an appeal. Because Moody’s appeal

was filed 58 days after the district court entered its final

judgment, it is untimely and we dismiss Moody’s appeal for lack of

jurisdiction.

DISMISSED

-10-