Resolution Trust Corp. v. U.S. Fidelity and Guar. Co.

• Court: Court of Appeals for the Fifth Circuit
• Decided: July 18, 1994
• Docket: 94-30199
• Status: Published

Opinion

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 94-30199 _____________________

RESOLUTION TRUST CORPORATION, as Receiver for Pelican Homestead and Savings Association,

Plaintiff-Appellant,

versus

UNITED STATES FIDELITY and GUARANTY COMPANY,

Defendant-Appellee.

_________________________________________________________________

Appeal from the United States District Court for the Middle District of Louisiana _________________________________________________________________

(June 27, 1994)

Before KING, HIGGINBOTHAM and BARKSDALE, Circuit Judges.

PER CURIAM:

We consider the motion of the Resolution Trust Corporation

("RTC") to dismiss its own appeal in this case removed from

Louisiana state court. Concluding that the partial summary

judgment entered in the state court was not appealable under

Louisiana law and is not appealable under federal law, we DISMISS

the appeal.

[usf&g.002] 1 I. BACKGROUND

In April 1988, Pelican Homestead and Savings Association

("Pelican") filed suit in Louisiana state court against United

States Fidelity & Guaranty Company ("USF&G"). Pelican claimed

that the dishonest acts of one William C. Smith, Jr., caused it

to suffer losses and that those losses were covered under a

Savings and Loan Blanket Bond issued to it by USF&G. In November

1991, Pelican moved for partial summary judgment on the issue of

liability only; USF&G filed a cross-motion for summary judgment

on January 15, 1992.

On January 31, 1992, Pelican was closed and the RTC was

appointed as receiver for Pelican. On February 11, 1992, the

state court entered a judgment denying Pelican's motion for

partial summary judgment and granting in part and denying in part

USF&G's motion for summary judgment. Although we do not have the

reasons for the state court's decision (the judgment states that

the reasons were orally assigned), the state court's judgment

recites that summary judgment was granted in favor of USF&G on

counts 12, 13, 15, 16, 18, 19, 23, 24, and 25 and denied on

counts 1-11, 14, 17, 20, and 22. Neither party claims that a

motion or petition for appeal to the Louisiana Court of Appeals

was made by either party as required by LA. CODE CIV. PROC. ANN.

art. 2121 (West Supp. 1994). Several days later the RTC moved to

substitute as party plaintiff for Pelican; the state court

granted the motion and granted the RTC's motion to stay the

proceedings for ninety days on February 21, 1992.

[usf&g.002] 2 On April 28, 1992, the RTC removed the action to federal

district court pursuant to 12 U.S.C. § 1441a(l)(3)(a)(i). In May

1992, the RTC moved for a new trial or, in the alternative, for

reconsideration of the state court's judgment. USF&G filed a

cross-motion seeking the same relief in August 1992. The

district court requested supplemental briefing from the parties

regarding the proper disposition of the case in light of our

decision in FDIC v. Meyerland Co. (In re Meyerland Co.), 960 F.2d

512 (5th Cir. 1992) (en banc), cert. denied, 113 S. Ct. 967

(1993). The district court then entered an order denying the

parties' motions for new trial or for reconsideration of the

state court's judgment. The denial of the parties' motions is

reported at RTC v. United States Fidelity & Guar. Co., 838 F.

Supp. 276 (M.D. La. 1993). The court concluded that existing law

required it to take the state court judgment "in the same

condition in which it left the state system." Id. at 279.

Concluding that Louisiana recognizes partial summary judgments as

final, appealable judgments, the court held that the state

court's judgment was equally final and appealable in the federal

courts. Id. at 280. The court thus entered the state court

judgment as its own by order entered November 15, 1993, and

directed the parties to follow federal procedures applicable

following entry of a final judgment. The RTC filed a second

motion for new trial, which was denied on February 24, 1994.

The RTC filed a notice of appeal of the three district court

orders; it has also filed a motion to dismiss the appeal. USF&G

[usf&g.002] 3 agrees that the appeal should be dismissed, but contends that the

RTC, in its motion to dismiss the appeal, is surreptitiously

seeking the same relief that it would be seeking on appeal.

Indeed, the RTC asks us not only to dismiss the appeal but also

to remand the case to the district court with instructions to

vacate its previous judgments adopting the state court judgment

and to administer the case to its conclusion.

II. ANALYSIS

The question posed is whether we have jurisdiction to hear

this appeal. We begin our analysis with a review of our en banc

decision in Meyerland.

A. MEYERLAND AND ITS PROGENY

In Meyerland, Continental Savings Association

("Continental") was sued in state court for, among other things,

usury and fraud. 960 F.2d at 514. The plaintiffs won in the

trial court and Continental appealed. Id. After the appeal was

filed, the Federal Savings and Loan Insurance Corporation

("FSLIC") was appointed as receiver for Continental, and the

FSLIC removed the case to federal district court. Id. The

district court remanded to state court. Id. Soon thereafter

Congress enacted the Financial Institutions Reform, Recovery, and

Enforcement Act ("FIRREA"), Pub. L. No. 101-73, 103 Stat. 183

(1989). Id. The Federal Deposit Insurance Corporation ("FDIC")

succeeded the FSLIC as receiver for Continental, and the FDIC

then removed the case pursuant to its statutory authority, 12

[usf&g.002] 4 U.S.C. § 1819(b)(2)(B). Id. The federal district court again

remanded, and the FDIC appealed. Id. One of the questions posed

was whether § 1819(b)(2)(B) authorizes the FDIC to remove state

court appellate proceedings. Id.

We held that § 1819(b)(2)(B) does allow removal after entry

of final judgment by a state trial court and before all appeals

are exhausted. Id. at 520. This result, we concluded, was most

consistent with the plain language of the statute, id. at 516-17,

was within Congress' power to define the jurisdiction of the

federal courts, id. at 517, and was consistent with Congress'

general objective in enacting FIRREA, which was to increase the

FDIC's ability to carry out its regulatory and enforcement

responsibilities, id. at 519-20. As for the procedural effects

of post-judgment removal, we held that the district court should

"take the state judgment as it finds it, prepare the record as

required for appeal, and forward the case to a federal appellate

court for review." Id. at 520. Citing Granny Goose Foods, Inc.

v. Brotherhood of Teamsters, Local No. 70, 415 U.S. 423, 435-36

(1974), we concluded that the case "simply comes into the federal

system in the same condition in which it left the state system."

Meyerland, 960 F.2d at 520. For instance, if the notice of

appeal was adequate to perfect an appeal in the state system, we

stated that the notice should be deemed adequate in the federal

courts regardless of any differences in technical requirements

between the state and federal systems. Id.

[usf&g.002] 5 Pursuant to 12 U.S.C. § 1441a(l)(3), the RTC possesses broad

removal powers similar to those of the FDIC under §

1819(b)(2)(B). Section 1441a(l)(3)(A) provides, in pertinent

part:

The [RTC], in any capacity and without bond or security, may remove any action, suit, or proceeding from a State court to the United States district court with jurisdiction over the place where the action, suit, or proceeding is pending[.]

We have therefore applied the holding in Meyerland to cases

involving the RTC. E.g., 5300 Memorial Investors, Ltd. v. RTC

(In re 5300 Memorial Investors, Ltd.), 973 F.2d 1160 (5th Cir.

1992).

The RTC argues that this case presents a problem that we

created but did not resolve in Meyerland. Implicitly accepting

the district court's conclusion that the partial summary judgment

would have been appealable in Louisiana's court system, the RTC

contends that federal rules governing the appealability of orders

should control in cases in which the state court prior to removal

entered an order that would have been immediately appealable

under state law. The general rule in the federal courts, of

course, is that partial summary judgments are not appealable.

Gray Line Motor Tours, Inc. v. City of New Orleans, 498 F.2d 293,

295 (5th Cir. 1974); see also 10 CHARLES A. WRIGHT ET AL., FEDERAL

PRACTICE AND PROCEDURE § 2715, at 631-634 (2d ed. 1983) ("[A] partial

summary judgment determining that a certain issue be established

for the trial of the case generally is not appealable until after

the case has been tried."). In Louisiana, however, a partial

[usf&g.002] 6 judgment may be considered a final judgment, LA. CODE CIV. PROC.

ANN. art. 1915(A) (West Supp. 1994), and can be immediately

appealable, art. 1915(B), under some circumstances. See, e.g.,

Graham v. Southern Pac. Transp. Co., 619 So. 2d 894, 898 (La. Ct.

App.) (holding that a partial summary judgment that a railroad

was not negligent in failing to install active signals at a

railroad crossing was not appealable after trial because it

should have been immediately appealed), writ denied, 625 So. 2d

1044 (La. 1993). We have found no court of appeals decision on

point, although the Third Circuit has hinted in dicta that no

federal appellate jurisdiction would exist on these facts. RTC

v. Nernberg, 3 F.3d 62, 68 (3d Cir. 1993) ("[S]ome matters

properly on appeal in the state courts would conceivably not be

appealable in the federal system. For example, the United States

Courts of Appeals lack jurisdiction over appeals from some

interlocutory orders and orders for new trials that state

appellate courts may have authority to review.").

We find, however, that we need not decide this difficult

question because the district court misinterpreted Louisiana law

in concluding that the instant partial summary judgment would

have been immediately appealable in the Louisiana courts.

B. LOUISIANA LAW REGARDING IMMEDIATE APPEALS FROM PARTIAL SUMMARY JUDGMENTS

Up to this point we have assumed the accuracy of the

district court's holding that the partial summary judgment

entered by the state court in the instant case would have been

immediately appealable. Before proceeding further, however, we

[usf&g.002] 7 must scrutinize this holding closely. If the judgment entered by

the Louisiana state court and adopted by the district court was

not final and immediately appealable under Louisiana law, then

the district court erred in concluding (1) that it lacked the

power to examine the state court judgment under federal summary

judgment standards and (2) that immediate appellate review of the

state judgment was available from this court. We review the

district court's interpretation of state law de novo. Salve

Regina College v. Russell, 499 U.S. 225, 231 (1991); Commons W.

Office Condos, Ltd. v. RTC, 5 F.3d 125, 127 (5th Cir. 1993).

The Louisiana Supreme Court recently considered the problem

of piecemeal appeals in Everything on Wheels Subaru, Inc. v.

Subaru South, Inc., 616 So. 2d 1234 (La. 1993). That case arose

in the context of an action for wrongful termination of

franchise. Id. at 1235. The plaintiff sued for damages based on

four theories, and the defendant filed an exception of no cause

of action, which is the Louisiana equivalent of a Rule 12(b)(6)

motion. See id. ("The function of an exception of no cause of

action is to test the legal sufficiency of the petition by

determining whether the law affords a remedy on the facts alleged

in the pleading."). The trial court maintained the exception as

to only two of the plaintiff's theories and granted an immediate

appeal. Id. The Louisiana Supreme Court took the opportunity to

clarify the rules governing the appealability of partial final

judgments rendered on exceptions of no cause of action. Most

important for our purposes, the court concluded that a partial

[usf&g.002] 8 final judgment on an exception of no cause of action that does

not dismiss any party and adjudicates some but not all claims,

defenses, or issues, is an interlocutory judgment not appealable

in the absence of a showing of irreparable injury. Id. at 1241-

42. The court clearly desired to ensure that "there is only one

appeal in most cases." Id. at 1242.

The Everything on Wheels court explicitly limited its

decision to partial final judgments rendered on exceptions of no

cause of action. Id. at 1241 n.12. It reserved the question of

"whether a partial judgment on a motion for summary judgment,

that merely decides one of several claims, defenses or issues

without dismissing any party . . . must be appealed immediately

in order to prevent the judgment from acquiring the authority of

the thing adjudged." Id. The clear hint, however, was that the

same rules should govern both kinds of partial final judgments.

Id. ("There does not appear to be any logical reason to treat

partial judgments resulting from a motion for summary judgment

any differently from partial judgments resulting from an

exception of no cause of action.").

The court of appeals that decided the Graham case did not

mention Everything on Wheels in reaching its conclusion that a

partial summary judgment in favor of one defendant on one theory

of liability had been final and appealable when entered by the

trial court. Graham, 619 So. 2d at 898. A more recent court of

appeals case, however, came to the opposite conclusion. In Caire

v. Fremen, 630 So. 2d 297, 297-98 (La. Ct. App. 1993), the

[usf&g.002] 9 plaintiff sued the other driver in a traffic accident and his

insurer. The action against the insurer included a direct action

claim under Louisiana's direct action statute and a claim for

arbitrary refusal to pay a claim; the trial court granted the

insurer partial summary judgment on the latter claim only. Id.

at 298. The court of appeals dismissed the appeal from the

partial summary judgment, concluding that the judgment was an

interlocutory judgment not appealable in the absence of a showing

of irreparable injury, relying on Everything on Wheels. Id. at

299.

The Caire reading of Everything on Wheels appears to us to

be correct, and we conclude that the partial summary judgment

rendered in favor of USF&G in the instant case was interlocutory

and unappealable under both Louisiana and federal law. In the

absence of a final, appealable judgment from the district court,

we are without jurisdiction. Kahlil, 978 F.2d at 184. In the

absence of an appealable order from the district court, the RTC's

notice of appeal was ineffective either to divest the district

court of jurisdiction or to confer jurisdiction on this court.

Id. This case does not pose the difficult question of whether we

would have jurisdiction to review a state court order that is

immediately appealable under state law but interlocutory and

unappealable under federal law, and we express no opinion

regarding that question.

[usf&g.002] 10 III. CONCLUSION

Because we lack jurisdiction to hear this appeal, IT IS

ORDERED that the motion of appellant to dismiss this appeal is

GRANTED.

IT IS FURTHER ORDERED that the motion of appellant to

suspend appellant deadlines pending consideration of its motion

to dismiss the appeal is DENIED as moot.

[usf&g.002] 11