Nevarez Law Firm, P.C. v. Dona Ana Title Company

708 F. App'x 186

• Court: Court of Appeals for the Fifth Circuit
• Decided: January 3, 2018
• Docket: 17-50053
• Status: Unpublished

Opinion

PER CURIAM; *

Nevarez Law Firm, P.C., brought suit in the United States District Court for the Western District of Texas against various individuals and entities that were allegedly engaged in a fraudulent real estate transaction that harmed the law firm’s former clients. Nevarez brought Racketeer Influenced and Corrupt Organizations Act claims and numerous state law claims against the defendants. The law firm sought to recover two types of damages from the defendants: (1) unpaid attorney’s fees the law firm incurred in representing the former clients in litigation against the defendants and (2) a forty-percent interest in the net recovery of the litigation against the defendants, to which the law firm would have been entitled under its agreement with its former client.

Under Federal Rule of Civil Procedure 12(b)(1), the district court dismissed with prejudice all of Nevarez’s claims against the defendants, holding the law firm lacked Article III standing to pursue the claims. The district court did not err in dismissing on that basis. As properly analyzed by the district court, Nevarez suffered neither an injury in fact nor one fairly traceable to the defendants’ conduct.

The district court relied on Rule 12(b)(1) when it dismissed Nevarez’s claims with prejudice after concluding there was no standing. That was error. “A dismissal with prejudice is a final judgment on the merits” of a case. Brooks v. Raymond Dugat Co. L C, 336 F.3d 360, 362 (5th Cir. 2003) (citing Schwarz v. Folloder, 767 F.2d 125, 129-30 (5th Cir. 1985)). We agree with an earlier opinion of this court that “to dismiss with prejudice under Rule 12(b)(1) is to disclaim jurisdiction and then exercise it.” Cox, Cox, Filo, Camel & Wilson, L.L.C. v. Sasol N. Am., Inc., 544 Fed.Appx. 455, 456-57 (5th Cir. 2013). Because the court did not have jurisdiction over Nevarez’s claims, it could not enter a final judgment on the merits by dismissing Nevarez’s claims with prejudice. See Heaton v. Monogram Credit Card Bank of Ga., 231 F.3d 994, 1000 (5th Cir. 2000).

We VACATE and REMAND so that the district court may enter a revised order and final judgment that dismiss Nevarez’s claims without prejudice.

* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.