Lorenzo Esteva v. UBS Financial Services Inc. ( 2023 )

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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13580
____________________
In re: LORENZO ESTEVA,
Debtor.
____________________________
LORENZO ESTEVA,
a Florida resident,
DENISE OTERO VILARINO,
a Florida resident,
Plaintiffs-Appellees,
versus
UBS FINANCIAL SERVICES INC.,
UBS CREDIT CORP,
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2 Opinion of the Court 21-13580
Defendants-Appellants.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:20-cv-23183-MGC
____________________
Before WILLIAM PRYOR, Chief Judge, and ROSENBAUM and MARCUS,
Circuit Judges.
MARCUS, Circuit Judge:
This case raises the question whether we have jurisdiction
over an appeal taken from a bankruptcy court order granting sum-
mary judgment on some, but not all of the claims brought in an
adversary proceeding prior to the entry of final judgment. Because
the bankruptcy court order is not final, and despite the parties’ ef-
fort to create jurisdiction by stipulating to the voluntary dismissal
of the sole remaining claim during the pendency of this appeal, we
hold that we do not.
Lorenzo Esteva and his wife, Denise Otero Vilarino
(“Otero”) (together, “Plaintiffs”), commenced this adversary pro-
ceeding in the United States Bankruptcy Court for the Southern
District of Florida against UBS Financial Services Inc. and UBS
Credit Corp. (together, “UBS”), to recover funds UBS had frozen
in one of its accounts to satisfy debts owed by Esteva. After the
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21-13580 Opinion of the Court 3
bankruptcy court granted partial summary judgment in favor of
Esteva and his wife on all of the claims but one -- Esteva’s unjust
enrichment claim -- UBS appealed to the district court, which af-
firmed. Then, even though we only have appellate jurisdiction
over final decisions of the bankruptcy court in the normal course
of events, UBS appealed to this Court, urging us to apply a more
“flexible” interpretation of finality in the bankruptcy arena.
Although the parties agree that we have jurisdiction, we are
bound to dismiss this appeal because the same concepts of finality
apply in appeals taken from adversary proceedings as in appeals
taken from standard civil actions. The bankruptcy court left Es-
teva’s unjust enrichment claim open and awaiting trial, so we can-
not assert jurisdiction based on the finality of the bankruptcy
court’s order. Nor, on this record, can we find that any of three
recognized exceptions to the final judgment rule -- the collateral
order doctrine, the practical finality doctrine, or the marginal final-
ity doctrine -- allows us to reach the merits of UBS’s appeal.
In a last-ditch effort to breathe jurisdictional life into this ap-
peal, the parties filed a stipulation for voluntary dismissal in the
bankruptcy court on the eve of oral argument. While, under the
doctrine of cumulative finality, the subsequent entry of final judg-
ment may cure a premature notice of appeal, the parties’ effort to
finally resolve the underlying proceeding in this case falls flat. Fed-
eral Rule of Civil Procedure 41(a)(1)(A) unambiguously requires
that a voluntary dismissal dismiss the entire action -- not just an
individual claim. But the parties’ stipulated dismissal only sought
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4 Opinion of the Court 21-13580
to dismiss one of Plaintiffs’ claims. The stipulation was therefore
invalid upon filing, and failed to confer on us the power to decide
this case.
I.
A.
UBS hired Esteva as a financial advisor in the International
Division of its Miami office in November 2015. As part of the
bank’s recruitment strategy, UBS entered into a series of agree-
ments (the “Promissory Notes”) with Esteva, in which it agreed to
loan him approximately $2 million, to be paid back over the first
ten years of Esteva’s employment using annual bonuses tied to his
performance. The Promissory Notes stated that any outstanding
principle would be immediately due and payable with interest if
Esteva were ever fired.
Esteva deposited the loan proceeds into a UBS account (the
“Account”) that he opened with Otero, shortly after he started
working for UBS. Esteva and Otero also transferred $500,000 of
their savings into the Account.
When they opened the Account, Esteva and Otero signed a
Client Relationship Agreement -- a form agreement signed by any-
one who opens an account with UBS. The Agreement granted UBS
a security interest in the Account’s funds to secure payment of any
debt incurred “under this or any other agreement between you and
any UBS Entity, including but not limited to any loans or promis-
sory notes.”
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21-13580 Opinion of the Court 5
Things came to a head in 2017, when UBS fired Esteva for
allegedly sending falsified account statements to clients and im-
properly “journaling” funds between clients’ accounts without per-
mission. Following Esteva’s termination, UBS restricted and froze
the Account to secure repayment of the Promissory Notes. UBS
asserted that the Client Relationship Agreement granted it an in-
terest in the Account’s funds to secure Esteva’s debts under the
Notes.
B.
On May 31, 2018, Esteva voluntarily petitioned for Chapter
7 bankruptcy (later converted to Chapter 11). In his bankruptcy
petition, Esteva listed the Account as “exempt” from property of
the estate due to his interest in the property as a tenant by the en-
tirety, see 11 U.S.C. § 522(b)(3)(B), and alleged that UBS held an
unsecured claim against the estate worth $1,950,000. UBS con-
tested this characterization of its claim as unsecured, and, in March
2019, filed a proof of secured claim for indebtedness in the amount
of $2,034,662.28 under the Promissory Notes.
On March 4, 2019, Esteva and Otero commenced an adver-
sary proceeding against UBS to confirm the exempt status of the
Account and the unsecured nature of UBS’s proof of claim. The
adversary complaint set forth four separate counts seeking: (1) de-
claratory relief that the Account is exempt as a tenancy-by-the-en-
tirety property; (2) declaratory relief that UBS does not hold a valid
security interest in or any other encumbrance against the Account;
(3) turnover of the funds in the Account to Esteva and Otero under
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6 Opinion of the Court 21-13580
11 U.S.C. § 542; and (4) restitution on a theory of unjust enrich-
ment, based on the fact that UBS kept Esteva’s book of business
without compensation following his termination. Count 4 further
sought disallowance of UBS’s proof of claim to the extent it failed
to set off against Esteva’s unjust enrichment claim. UBS answered
and in turn brought four counterclaims of its own seeking: (1) a
declaration of UBS’s perfected security interest in the Account; (2)
avoidance of Esteva’s deposits of the Promissory Notes’ proceeds
into the Account as fraudulent transfers under the Florida Uniform
Fraudulent Transfer Act, Fla. Stat. §§ 726.105, 726.106; (3) contrac-
tual setoff against the Account’s funds under 11 U.S.C. § 553(a); and
(4) common-law setoff against the Account’s funds.
Plaintiffs moved for summary judgment on the first three
counts of their adversary complaint and all four of UBS’s counter-
claims, and partial summary judgment on Count 4 of their com-
plaint. (Because Count 4 sought disallowance of UBS’s proof of
claim, Plaintiffs asked the bankruptcy court to find that the proof
of claim was unsecured.) Over UBS’s opposition, the bankruptcy
court granted the motion in its entirety. The bankruptcy court is-
sued a “partial final judgment” fully resolving all claims in the ac-
tion except, notably, Plaintiffs’ Count 4, which, the judgment said,
would be set for trial later by separate order. The judgment di-
rected UBS to transfer the remaining funds in the Account to a joint
securities account designated by Plaintiffs within ten days of receiv-
ing the account information from Plaintiffs’ counsel. UBS did not
seek, nor did the bankruptcy court grant certification for
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21-13580 Opinion of the Court 7
immediate appeal under Federal Rule of Bankruptcy Procedure
7054. Nevertheless, without waiting for trial on Plaintiffs’ remain-
ing count, UBS appealed the partial final judgment to the district
court. Following briefing by the parties, the district court affirmed
the judgment and dismissed UBS’s appeal with prejudice.
UBS then appealed to this Court. Since Plaintiffs’ unjust en-
richment claim was still pending in the bankruptcy court, we di-
rected the parties to brief the basis for our jurisdiction. The parties
agreed that we had jurisdiction because, they claimed, the partial
final judgment could be considered “final” for purposes of appeal,
at least in the bankruptcy arena. We carried the jurisdictional issue
with the case, and scheduled oral argument for December 9, 2022.
The day before oral argument, the parties filed a joint mo-
tion to supplement the record on appeal with a stipulation they had
filed in the bankruptcy court that day. This stipulation stated that
the Plaintiffs and UBS,
under Rule 7041 of the Federal Rules of Bankruptcy
Procedure (making Rule 41(a)(1)(A)(ii) of the Federal
Rules of Civil Procedure, Fed. R. Civ. P. 41(a)(1)(A)(ii)
applicable in adversary proceedings), stipulate to the
dismissal of Count 4 of the Adversary Complaint with
prejudice. This Stipulation for Dismissal shall have
no effect on or application to Plaintiffs’ remaining
claims in Counts 1, 2, and 3 of the Adversary Com-
plaint or the Partial Final Judgment entered in this ad-
versary.
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8 Opinion of the Court 21-13580
II.
We review issues of subject-matter jurisdiction de novo.
S.F. Residence Club, Inc. v. 7027 Old Madison Pike, LLC, 583 F.3d
750, 754 (11th Cir. 2009). Even when the parties agree that juris-
diction is proper, we are “obligated to inquire into subject matter
jurisdiction sua sponte whenever it may be lacking.” Univ. of S.
Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999). “Be-
cause we are a court of limited jurisdiction, adjudicating an appeal
without jurisdiction would ‘offend[] fundamental principles of sep-
aration of powers.’” Corley v. Long-Lewis, Inc., 965 F.3d 1222,
1227 (11th Cir. 2020) (alteration in original) (quoting Steel Co. v.
Citizens for a Better Env’t, 523 U.S. 83, 94 (1998)).
A.
Our analysis begins (and, as it turns out, ends) with the issue
of our jurisdiction.
First, the obvious: we have appellate jurisdiction over “all
final decisions, judgments, orders, and decrees” by a district court
in reviewing a bankruptcy court decision. 28 U.S.C. § 158(d)(1).
“‘Although a district court, at its discretion, may review interlocu-
tory judgments and orders of a bankruptcy court, a court of appeals
has jurisdiction over only final judgments and orders entered by a
district court . . . sitting in review of a bankruptcy court.’” Mich.
State Univ. v. Asbestos Settlement Tr. (In re Celotex Corp.), 700
F.3d 1262, 1265 (11th Cir. 2012) (emphasis in original) (citations
omitted). Accordingly, “[t]his Court is without jurisdiction to
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21-13580 Opinion of the Court 9
review an appeal of a bankruptcy court order which is not final.”
Providers Benefit Life Ins. Co. v. Tidewater Grp., Inc. (In re Tide-
water Grp., Inc.), 734 F.2d 794, 796 (11th Cir. 1984). We normally
evaluate whether an appeal was taken from a final order by looking
to the notice of appeal at the time it was taken. See, e.g., Robinson
v. Tanner, 798 F.2d 1378, 1379-82 (11th Cir. 1986); Gen. Television
Arts, Inc. v. S. Ry. Co., 725 F.2d 1327, 1331 (11th Cir. 1984).
At the time UBS noticed its appeal in our Court, no final de-
cision had yet been entered. To be final, we have held that an ad-
versary proceeding decision must resolve all of the claims brought
by all of the parties -- anything less, and “no appeal may be taken
. . . absent Rule 54(b) certification.” Dzikowski v. Boomer’s Sports
& Rec. Ctr., Inc. (In re Boca Arena, Inc.), 184 F.3d 1285, 1287 (11th
Cir. 1999); see also Fed. R. Civ. P. 54(b); Fed. R. Bankr. P. 7054
(making Federal Rule of Civil Procedure 54(b) applicable to adver-
sary proceedings). But the partial final judgment from which UBS
appealed fully resolved only three of the four claims in Plaintiffs’
adversary complaint, expressly noting that the fourth -- the unjust
enrichment claim -- would be set for trial at a later date. And nei-
ther party requested, nor did the bankruptcy court grant certifica-
tion for immediate review of the partial final judgment under Rule
54(b).
Citing two recent Supreme Court cases, Bullard v. Blue Hills
Bank, 575 U.S. 496 (2015), and Ritzen Group, Inc. v. Jackson Ma-
sonry, LLC, 140 S. Ct. 582 (2020), the parties try to avoid our un-
ambiguous case law, arguing that a bankruptcy order may be
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10 Opinion of the Court 21-13580
considered “final” so long as it resolves “discrete disputes” within
the larger bankruptcy proceeding. Thus, the parties say, jurisdic-
tion is proper because the bankruptcy court’s judgment resolved
the parties’ dispute over the validity of UBS’s lien against the Ac-
count.
This argument comes up short. Neither Bullard nor Ritzen
concerned an appeal from an adversary proceeding. Bullard held
that the bankruptcy court’s denial of a debtor’s proposed Chapter
13 repayment plan was not a final order because it did not termi-
nate the process of submitting and entering a court-approved re-
payment plan. 575 U.S. at 501-03. And Ritzen held that the denial
of a creditor’s request for relief from the automatic stay was final
because the adjudication of the stay motion was a discrete “pro-
ceeding” within the larger bankruptcy. 140 S. Ct. at 588-90. Nei-
ther case abrogated our holding in In re Boca that a bankruptcy
court order in an adversary proceeding must resolve all claims
against all parties to be considered final. 184 F.3d at 1287. Thus,
we do not have jurisdiction based on the finality of the bankruptcy
court’s judgment. See United States v. Kaley, 579 F.3d 1246, 1255
(11th Cir. 2009) (noting that, under our “prior panel precedent
rule,” we must follow our past decisions unless the Supreme Court
or this Court sitting en banc overrules those decisions in a case that
is “clearly on point” (quotation marks and citation omitted)).
B.
There are, however, some situations where we will consider
appeals taken from otherwise non-appealable interlocutory orders
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prior to the entry of final judgment. To ensure that appellate juris-
diction remains “flexible enough to handle the practicalities of
complex litigation,” Martin Bros. Toolmakers, Inc. v. Indus. Dev.
Bd. (In re Martin Bros. Toolmakers, Inc.), 796 F.2d 1435, 1437 (11th
Cir. 1986), we have recognized three judge-made exceptions to the
final judgment rule: the collateral order doctrine, the practical fi-
nality doctrine, and the marginal finality doctrine, Lockwood v.
Snookies, Inc. (In re F.D.R. Hickory House, Inc.), 60 F.3d 724, 725-
27 (11th Cir. 1995). But none of those exceptions apply in this case.
We do not apply these exceptions lightly. Important policy
considerations undergird our general hesitance to hear appeals
from interlocutory orders. Appeals taken before the entry of final
judgment are “inherently disruptive, time-consuming, and expen-
sive”; they “increase[] the workload of the appellate courts” and
might require us “to consider issues that may be rendered moot”;
they “undermine[] the district court’s ability to manage the action”;
and they open the door to “abuse by litigants seeking to delay res-
olution of a case.” Prado-Steiman ex rel. Prado v. Bush, 221 F.3d
1266, 1276 (11th Cir. 2000) (quotation marks and citation omitted).
This case is no exception: none of the judicial carve-outs to the final
judgment rule provide us jurisdiction.
The first of these exceptions, the collateral order doctrine,
“permit[s] review of an interlocutory order if it involves a separable
claim that has been conclusively determined and is collateral to the
merits, too important to be denied review, and too independent of
the merits to defer review until a final decision has been rendered.”
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Atl. Fed. Sav. & Loan Ass’n of Fort Lauderdale v. Blythe Eastman
Paine Webber, Inc., 890 F.2d 371, 376 (11th Cir. 1989); see also Co-
hen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). This
exception does not apply here because the bankruptcy court’s par-
tial final judgment was obviously not separate from, or “collateral
to” the merits of the adversary proceeding. Blythe, 890 F.2d at 376.
Second, under the “‘most extreme’ exception to the final
judgment rule, we will review immediately ‘even an order of mar-
ginal finality . . . if the question presented is fundamental to further
conduct of the case.’” In re F.D.R. Hickory House, 60 F.3d at 727(citation omitted) (quoting Blythe, 890 F.2d at 376). But this excep-
tion is limited to cases that “concern[] an unsettled issue of national
significance.” Acheron Cap., Ltd. v. Mukamal as Tr. of Mut. Ben-
efits Keep Pol’y Tr., 22 F.4th 979, 992 (11th Cir. 2022) (quotation
marks and citation omitted). Plainly, this case does not present the
sort of “unique facts” which would allow us to assert jurisdiction.
Third, and finally, under the practical finality doctrine, we
may review an interlocutory order that “decides the right to the
property in contest, and directs it to be [immediately] delivered up
by the defendant to the complainant.” In re F.D.R. Hickory House,
60 F.3d at 726 (quoting Forgay v. Conrad, 47 U.S. (6 How.) 201, 204
(1848)). The order must “subject[] the losing party to irreparable
harm if appellate review is delayed until conclusion of the case.”
Acheron, 22 F.4th at 992 (quotation marks and citation omitted).
Based on the record before us, we cannot find that UBS will
suffer irreparable harm if appellate review is delayed until the
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conclusion of the adversary proceeding. Because the “property in
contest” is the money contained in the Account, any harm suffered
by UBS could be remedied with an award of money damages. See
Brown v. Sec’y, U.S. Dep’t of Health & Hum. Servs., 4 F.4th 1220,
1226 (11th Cir.), vacated as moot, 20 F.4th 1385 (11th Cir. 2021).
Although in “extraordinary circumstances,” concerns about col-
lectability, a party’s insolvency, or the likelihood that a party will
never pay may give rise to a finding of irreparable harm, id. (quo-
tation marks and citation omitted); United States v. Askins & Miller
Orthopaedics, P.A., 924 F.3d 1348, 1359 (11th Cir. 2019), we see
precious little in this record that would allow us to find that Esteva
is insolvent or that he would ultimately be unable to pay back the
funds in the Account, were UBS to prevail on appeal. See O’Hal-
loran v. Harris Corp. (In re Teltronics, Inc.), 904 F.3d 1303, 1313-14
(11th Cir. 2018). And the burden of proof on this issue plainly rests
with UBS. McCormick v. Aderholt, 293 F.3d 1254, 1257 (11th Cir.
2002). That Esteva filed a petition for voluntary bankruptcy, stand-
ing alone, does not establish his insolvency. In re Marshall, 300
B.R. 507, 510 (Bankr. C.D. Cal. 2003), aff’d sub nom., Marshall v.
Marshall (in re Marshall), 721 F.3d 1032 (9th Cir. 2013); Connell v.
Coastal Cable T.V., Inc. (In re Coastal Cable T.V., Inc.), 709 F.2d
762, 764 (1st Cir. 1983) (Breyer, J.). If anything, the bankruptcy plan
and disclosure statement that UBS itself referenced in support of its
motion for a stay pending appeal show that Esteva is currently em-
ployed as the Chief Financial Officer for a pharmaceutical and med-
ical device manufacturing company and earns a $175,000 annual
salary.
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In short, we cannot assert jurisdiction over the bankruptcy
court’s partial final judgment under any of these recognized excep-
tions to the final judgment rule.
C.
That leaves us with one other possible avenue to reach the
merits of UBS’s appeal: the doctrine of cumulative finality. Some-
times referred to by our Court as the “Jetco exception” to finality,
this doctrine permits us to hear appeals that were prematurely
taken from an interlocutory order, if (but only if) the interlocutory
order would have been appealable under Rule 54(b) and if final
judgment was entered without filing a new notice of appeal. See
Robinson, 798 F.2d at 1385; see also Jetco Elec. Indus., Inc. v. Gar-
diner, 473 F.2d 1228 (5th Cir. 1973).
1.
To start, the parties have asked us to take notice of their stip-
ulation for voluntary dismissal by filing a motion to supplement
the record on appeal. Whether to supplement the appellate record
is “a matter left to our discretion,” and we primarily consider
“whether acceptance of the proffered material into the record
would establish beyond any doubt the proper resolution of the
pending issues.” CSX Transp., Inc. v. City of Garden City, 235 F.3d
1325, 1330 (11th Cir. 2000).
Because a subsequent final judgment can sometimes cure a
premature notice of appeal, see Robinson, 798 F.2d at 1385, we
grant the parties’ motion to supplement the record in this case, so
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21-13580 Opinion of the Court 15
that we may consider the effect of their voluntary dismissal on our
jurisdiction. See CSX, 235 F.3d at 1330.
2.
Under the doctrine of cumulative finality, a “premature no-
tice of appeal is valid if filed from an order dismissing a claim or
party and followed by a subsequent final judgment without a new
notice of appeal being filed.” Robinson, 798 F.2d at 1385; accord
Govern v. Meese, 811 F.2d 1405, 1408 (11th Cir. 1987) (subsequent
voluntary dismissal of remaining defendant following dismissal of
other defendants vested us with jurisdiction); United States v.
Olavarrieta, 812 F.2d 640, 642 (11th Cir. 1987) (subsequent entry of
summary judgment as to claims against remaining defendant cured
premature notice of appeal); Kramer v. Unitas, 831 F.2d 994, 997
(11th Cir. 1987) (same); Fehlhaber v. Fehlhaber, 941 F.2d 1484, 1486
n.1 (11th Cir. 1991) (same); 9A Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 3950.5 (5th ed. 2022) (ob-
serving that a notice of appeal “filed after an order disposing of
some claims or issues but before another order or orders disposing
of the remaining claims or issues relates forward to effect an appeal
after the disposition of all remaining claims or issues”).
Our research has not identified a case in which we have ap-
plied this doctrine to an appeal from an order of a bankruptcy
court, but we see no reason why it should not apply in appeals from
adversary proceedings. After all, we have previously extended the
cumulative finality doctrine to apply in other instances -- namely,
to appeals from administrative agency decisions. See Jimenez-
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16 Opinion of the Court 21-13580
Morales v. U.S. Att’y Gen., 821 F.3d 1307, 1309 (11th Cir. 2016) (cit-
ing Robinson, 798 F.2d at 1385). Several of our sister Circuits have
held that they have jurisdiction to review interlocutory orders of
the bankruptcy court where a final judgment has resolved the un-
derlying bankruptcy during the pendency of the appeal. See, e.g.,
Woolsey v. Citibank, N.A. (In re Woolsey), 696 F.3d 1266, 1269
(10th Cir. 2012) (Gorsuch, J.) (“[A] premature notice of appeal in-
volving a bankruptcy matter, even one (like this one) with an inter-
stitial stop in the district court, ripens and becomes effective once
a final order approving a plan of reorganization is entered.”
(cleaned up)); Rains v. Flinn (In re Rains), 428 F.3d 893, 900-01 (9th
Cir. 2005); Watson v. Boyajian (In re Watson), 403 F.3d 1, 4-6 (1st
Cir. 2005); In re Rimsat, Ltd., 212 F.3d 1039, 1044 (7th Cir. 2000).
Moreover, “adversary proceedings generally are viewed as ‘stand-
alone lawsuits,’” and we apply the requirements of Rule 54(b) and
the final judgment rule to those cases the same “as if the dispute
had arisen outside of bankruptcy.” In re Boca, 184 F.3d at 1286.
We therefore assume for the purposes of this appeal that the
doctrine of cumulative finality applies to appeals taken from adver-
sary proceedings, and may permit us to hear a premature appeal
under the appropriate procedural circumstances.
3.
The problem with the application of cumulative finality in
this case is that one of the procedural requirements is absent -- there
has been no entry of final judgment in the adversary proceeding,
not by the bankruptcy court, and not by operation of the
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stipulation for voluntary dismissal filed by the parties. See Robin-
son, 798 F.2d at 1385. Though the parties attempted to finally re-
solve the adversary proceeding by stipulating to a voluntary dis-
missal of the only remaining claim, their stipulation did not achieve
its purported end because it was invalid upon filing.
We reach this conclusion for several reasons. First, we look
to the text of Civil Rule 41(a)(1)(A), which governs voluntary dis-
missals without a court order:
(A) Without a Court Order. Subject to Rules 23(e),
23.1(c), 23.2, and 66 and any applicable federal statute,
the plaintiff may dismiss an action without a court or-
der by filing:
(i) a notice of dismissal before the opposing
party serves either an answer or a motion for
summary judgment; or
(ii) a stipulation of dismissal signed by all par-
ties who have appeared.
Fed. R. Civ. P. 41(a)(1)(A) (second emphasis added).
A plain reading reveals that the Rule does not authorize the
voluntary dismissal of individual claims; rather, the Rule requires
that a plaintiff dismiss the entire action. See Pavelic & LeFlore v.
Marvel Ent. Grp., 493 U.S. 120, 123 (1989) (“We give the Federal
Rules of Civil Procedure their plain meaning.”), superseded in part
on other grounds by rule, Fed. R. Civ. P. 11 (amended 1993). Rule
41(a)(1)(A) speaks of “an action,” not “claims,” and the terms are
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18 Opinion of the Court 21-13580
generally understood to carry different meanings. “Action” de-
notes “a lawsuit,” Action, Oxford English Dictionary (online ed.),
“a civil . . . proceeding,” Action, Black’s Law Dictionary (11th ed.
2019), or “the entire controversy,” Harvey Aluminum, Inc. v. Am.
Cyanamid Co., 203 F.2d 105, 108 (2d Cir. 1953), whereas “claim” is
used to refer to a particular “demand for money, property, or a le-
gal remedy,” Claim, Black’s Law Dictionary, supra. An “action”
generally is made up of multiple such demands; thus, we have ex-
plained, Rule 41(a)’s reference to the voluntary dismissal of “an ac-
tion” refers to “the whole case” instead of particular claims. Perry
v. Schumacher Grp. of La., 891 F.3d 954, 958 (11th Cir. 2018) (quo-
tation marks omitted) (quoting Berthold Types Ltd. v. Adobe Sys.,
Inc., 242 F.3d 772, 777 (7th Cir. 2001)); see also Fed. R. Civ. P. 3 (“A
civil action is commenced by filing a complaint with the court.”).
Moreover, reading Rule 41(a)(1)(A) in concert with Rule 41’s
other provisions, 1 as we must, makes it abundantly clear that when
1 Rule 41, in its entirety, provides:
(a) VOLUNTARY DISMISSAL.
(1) By the Plaintiff.
(A) Without a Court Order. Subject to Rules 23(e), 23.1(c),
23.2, and 66 and any applicable federal statute, the plaintiff
may dismiss an action without a court order by filing:
(i) a notice of dismissal before the opposing party
serves either an answer or a motion for summary judg-
ment; or
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21-13580 Opinion of the Court 19
(ii) a stipulation of dismissal signed by all parties who
have appeared.
(B) Effect. Unless the notice or stipulation states otherwise,
the dismissal is without prejudice. But if the plaintiff previously
dismissed any federal- or state-court action based on or includ-
ing the same claim, a notice of dismissal operates as an adjudi-
cation on the merits.
(2) By Court Order; Effect. Except as provided in Rule 41(a)(1), an
action may be dismissed at the plaintiff’s request only by court order,
on terms that the court considers proper. If a defendant has pleaded a
counterclaim before being served with the plaintiff’s motion to dis-
miss, the action may be dismissed over the defendant’s objection only
if the counterclaim can remain pending for independent adjudication.
Unless the order states otherwise, a dismissal under this paragraph (2)
is without prejudice.
(b) INVOLUNTARY DISMISSAL; EFFECT. If the plaintiff fails to prosecute or to
comply with these rules or a court order, a defendant may move to dismiss
the action or any claim against it. Unless the dismissal order states otherwise,
a dismissal under this subdivision (b) and any dismissal not under this rule --
except one for lack of jurisdiction, improper venue, or failure to join a party
under Rule 19 -- operates as an adjudication on the merits.
(c) DISMISSING A COUNTERCLAIM, CROSSCLAIM, OR THIRD-PARTY CLAIM. This
rule applies to a dismissal of any counterclaim, crossclaim, or third-party
claim. A claimant's voluntary dismissal under Rule 41(a)(1)(A)(i) must be
made:
(1) before a responsive pleading is served; or
(2) if there is no responsive pleading, before evidence is introduced at
a hearing or trial.
(d) COSTS OF A PREVIOUSLY DISMISSED ACTION. If a plaintiff who previously
dismissed an action in any court files an action based on or including the same
claim against the same defendant, the court:
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20 Opinion of the Court 21-13580
the Rule’s drafters wanted to distinguish between the dismissal of
an “action” and a “claim,” they knew how. See Pavelic, 493 U.S. at
123. Rule 41(b), which governs involuntary dismissals, expressly
permits a defendant to “move to dismiss the action or any claim
against it” if the plaintiff fails to prosecute or comply with the Rules
or a court order. Fed. R. Civ. P. 41(b) (emphasis added). And the
inclusion of “actions” and “claims” is also found in Rule 41(d),
which, in turn, allows a defendant to recover costs if “a plaintiff
who previously dismissed an action in any court files an action
based on or including the same claim against the same defendant.”
Fed R. Civ. P. 41(d) (emphasis added). Had the Rule’s drafters in-
tended to allow for the voluntary dismissal of an “action” or a
“claim” under Rule 41(a)(1)(A), they would have said so; instead,
they only chose to allow for the dismissal of “an action.” See Smith,
Kline & French Lab’ys v. A.H. Robins Co., 61 F.R.D. 24, 28 (E.D.
Pa. 1973) (“The language of Rule 41(b) is broader and more com-
prehensive than the parallel language in Rule 41(a) . . . . [I]t is rea-
sonable to assume that the drafters of Rule 41 would have included
similar language in Rule 41(a), had they intended to have that rule
cover dismissal by the plaintiff of less than all the claims against any
defendant.”); Becker v. Fitzgerald, No. 94 C 7646, 1995 WL 215143,
at *3 (N.D. Ill. Apr. 10, 1995); 8 Moore’s Federal Practice – Civil
§ 41.21 (2023) (“Rule 41(a) may not be employed to dismiss fewer
(1) may order the plaintiff to pay all or part of the costs of that previous
action; and
(2) may stay the proceedings until the plaintiff has complied.
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21-13580 Opinion of the Court 21
than all of the claims against any particular defendant. . . . This
interpretation is usually justified by resort to textual interpretation:
while the dismissal provisions of Rule 41(a) speak only of an ‘ac-
tion,’ Rule 41(b) specifically distinguishes between ‘an action or
any claim’ and permits the involuntary dismissal of either one.”);
cf. also Bus. Guides, Inc. v. Chromatic Commc’ns Enters., Inc., 498
U.S. 533, 545 (1991) (examining provisions in Rule 11 which distin-
guish between represented and unrepresented parties to conclude
that “[h]ad the Advisory Committee intended to limit the applica-
tion of [Rule 11’s] certification standard to parties proceeding pro
se, it would surely have said so”).
Finally, our case law has unambiguously concluded that
Rule 41(a) does not allow a plaintiff to voluntarily dismiss fewer
than all of the claims brought in an action. See Perry, 891 F.3d at
958. In Perry, the district court disposed of seven of the plaintiff’s
eight claims by involuntary dismissal or summary judgment, leav-
ing just one claim for trial. Id. at 955-57. To facilitate immediate
appellate review, the parties stipulated to the voluntary dismissal
of the plaintiff’s sole remaining claim under Rule 41(a)(1)(A)(ii). Id.
at 957.
A panel of this Court held that the parties’ stipulation was
“invalid” because it failed to comply with the text of Rule 41(a). Id.
at 958. We said that Rule 41(a) “permits voluntary dismissals only
of entire ‘actions,’ not claims.” Id. at 956. And because the parties’
stipulation only “purported to dismiss ‘Count III of the Fourth
Amended Complaint,’” we determined that the stipulation filed by
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22 Opinion of the Court 21-13580
the parties had not operated to terminate the action or divest the
district court of jurisdiction to hear subsequently filed motions. Id.
at 958.
Perry presents almost identical procedural circumstances to
those presented in this case. Like the district court there, the bank-
ruptcy court here resolved all but one of the pending claims. And
like the parties there, the parties here stipulated to dismiss the sole
remaining claim following the entry of the partial final judgment
to facilitate immediate appellate review -- for good measure, they
even specified that “[t]his Stipulation for Dismissal shall have no
effect on or application to Plaintiffs’ remaining claims in Counts 1,
2, and 3 of the Adversary Complaint or the Partial Final Judgment
entered in this adversary.” The only difference between Perry and
this case is that UBS’s appeal arose from an adversary proceeding
in a bankruptcy court, rather than from a standard civil action in a
district court. But this is a distinction without a difference because,
subject to exceptions that are not relevant here, Rule 41(a) applies
equally to adversary proceedings by virtue of Federal Rule of Bank-
ruptcy Procedure 7041,2 and for all relevant purposes, our case law
2 The Rule provides: “Rule 41 F.R.Civ.P. applies in adversary proceedings, ex-
cept that a complaint objecting to the debtor’s discharge shall not be dismissed
at the plaintiff’s instance without notice to the trustee, the United States trus-
tee, and such other persons as the court may direct, and only on order of the
court containing terms and conditions which the court deems proper.” Fed.
R. Bankr. R. 7041. The exception for complaints objecting to a debtor’s dis-
charge is not relevant here because the adversary proceeding does not contain
a claim objecting to the discharge of any debt by Esteva under 11 U.S.C. § 727.
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21-13580 Opinion of the Court 23
has long considered adversary proceedings to be the functional
equivalent of standard civil lawsuits. See In re Boca, 184 F.3d at
1286.
Perry does not stand alone. Our cases have consistently ob-
served that Rule 41(a) “does not permit plaintiffs to pick and
choose, dismissing only particular claims within an action.” Klay v.
United Healthgroup, Inc., 376 F.3d 1092, 1106 (11th Cir. 2004); ac-
cord Campbell v. Altec Indus., Inc., 605 F.3d 839, 841 n.1 (11th Cir.
2010) (citing Klay, 376 F.3d at 1106) (same); PTA-FLA, Inc. v. ZTE
USA, Inc., 844 F.3d 1299, 1307 (11th Cir. 2016) (“Rule 41 speaks of
voluntary dismissal of an action, not a claim. . . . A district court
cannot dismiss some claims while leaving others pending.” (quota-
tion marks and citation omitted)); Gov’t Emps. Ins. Co. v. Glassco,
Inc., -- F.4th --, 2023 WL 1775724, at *3 (11th Cir. Feb. 6, 2023)
(“[R]ule 41(a)(1) permits voluntary dismissals only of entire actions,
not claims.” (quotation marks and citation omitted)). We have rec-
ognized an exception to this rule, allowing plaintiffs to voluntarily
dismiss less than the entire action so long as they dismiss a defend-
ant in its entirety (i.e., they dismiss all of the claims brought against
that defendant). See, e.g., Plains Growers, Inc. ex rel. Florists’ Mut.
Ins. Co. v. Ickes-Braun Glasshouses, Inc., 474 F.2d 250, 255 (5th Cir.
1973); Klay, 376 F.3d at 1106 (acknowledging that Rule 41(a) “al-
lows a plaintiff to dismiss all of his claims against a particular de-
fendant”); Corley, 965 F.3d at 1231. But our cases make clear that
a voluntary dismissal purporting to dismiss a single claim is invalid,
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24 Opinion of the Court 21-13580
even if all other claims in the action have already been resolved.
See Perry, 891 F.3d at 958.
Further, by our count, all of our sister Circuits that have
squarely addressed this issue have reached the same conclusion.
See Berthold, 242 F.3d at 776-77; Gobbo Farms & Orchards v.
Poole Chem. Co., 81 F.3d 122, 123 (10th Cir. 1996); Ethridge v.
Harbor House Restaurant, 861 F.2d 1389, 1392 (9th Cir. 1988);
Exxon Corp. v. Md. Cas. Co., 599 F.2d 659, 662 (5th Cir. 1979);
Gronholz v. Sears, Roebuck & Co., 836 F.2d 515, 518 (Fed. Cir.
1987); Mgmt. Invs. v. United Mine Workers, 610 F.2d 384, 394-95
& n.22 (6th Cir. 1979); see also Harvey Aluminum, 203 F.2d at 108(holding that Rule 41(a) does not permit voluntary dismissal of an-
ything less than the entire action, even an entire defendant).
The long and short of it is that the parties’ stipulation for
voluntary dismissal was invalid upon filing. It did not resolve Es-
teva’s unjust enrichment claim or terminate the adversary proceed-
ing, and thus it did not denude the bankruptcy court of jurisdiction
over the proceeding; it did not “leave[] nothing for the [bank-
ruptcy] court to do but execute the judgment,” CSX, 235 F.3d at
1327 (quotation marks and citation omitted); and it did not cure
UBS’s premature notice of appeal under the doctrine of cumulative
finality, see Robinson, 798 F.2d at 1385. The bankruptcy court still
must address or otherwise dispose of the unjust enrichment claim
in some way. See Perry, 891 F.3d at 958.
As a court of limited jurisdiction, we are bound by law, by
the Federal Rules of Civil Procedure, and by our case precedent to
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21-13580 Opinion of the Court 25
dismiss this appeal. But that does not mean that our decision will
deprive the parties of the opportunity to have their claims heard
before this Court. Certification under Rule 54(b) provides a viable
path to achieving the requisite level of finality. Nothing prevented
the parties from seeking Rule 54(b) certification before UBS filed its
notice of appeal, see id. (“Another option would have been to in-
voke Rule 54(b) before entering into the Stipulation.”); nothing
prevented the bankruptcy court from certifying the partial final
judgment for immediate review on its own, see Fed. R. Bankr. P.
7054; and nothing prevents the parties from seeking Rule 54(b) cer-
tification following our dismissal.
Still another procedural alternative is to move to amend the
adversary complaint under Civil Rule 15(a) to eliminate the unjust
enrichment claim. See Fed. R. Bankr. P. 7015 (“Rule 15 F.R.Civ.P.
applies in adversary proceedings.”). As we observed in Perry,
“[t]here are multiple ways to dismiss a single claim without dismiss-
ing an entire action. The easiest and most obvious is to seek and
obtain leave to amend the complaint to eliminate the remaining
claim, pursuant to Rule 15.” 891 F.3d at 958. Again, nothing pre-
vented the parties from pursuing this alternative before UBS filed
its appeal in our Court, and nothing prevents them from doing so
in the wake of our dismissal.
The result we reach today is not some technical application
of a silly or obscure rule. “Congress has the constitutional author-
ity to define the jurisdiction of the lower federal courts, and, once
the lines are drawn, limits upon federal jurisdiction . . . must be
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26 Opinion of the Court 21-13580
neither disregarded nor evaded.” Keene Corp. v. United States, 508
U.S. 200, 207 (1993) (quotation marks and citations omitted). And
Congress has determined that our jurisdiction is limited to “final
decisions, judgments, orders, and decrees” of the bankruptcy
courts. 28 U.S.C. § 158(d); In re Tidewater, 734 F.2d at 796. Be-
cause the parties’ stipulation for voluntary dismissal was invalid, no
final judgment has been rendered in this case.
DISMISSED.