Jerry Rhodes v. Hartford Fire Insurance Company ( 2013 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1791
JERRY LEE RHODES; BONNIE M. COCHRAN,
Plaintiffs – Appellants,
v.
HARTFORD FIRE INSURANCE COMPANY,
Defendant - Appellee.
Appeal from the United States District Court for the Southern
District of West Virginia, at Charleston. Joseph R. Goodwin,
District Judge. (2:12-cv-07135)
Submitted: November 25, 2013 Decided: December 5, 2013
Before GREGORY, SHEDD, and WYNN, Circuit Judges.
Dismissed in part, affirmed in part by unpublished per curiam
opinion.
Scott S. Blass, BORDAS & BORDAS, PLLC, Wheeling, West Virginia,
for Appellant. Archibald Wallace, III, Thomas J. Moran,
WALLACEPLEDGER, PLLC, Richmond, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Jerry Lee Rhodes and Bonnie Cochran (hereinafter
“Appellants”) filed suit in West Virginia state court against
Hartford Fire Insurance Company (hereinafter “Hartford”),
seeking statutory damages for bad faith and unfair settlement
practices, as well as damages under Hayseeds, Inc. v. State Farm
Fire & Cas., 352 S.E.2d 73 (W. Va. 1986), after having
substantially prevailed on their claims against Hartford as
surety to a mortgage broker bond. After Hartford removed the
case to federal court pursuant to diversity jurisdiction, the
district court granted Hartford’s motion to dismiss the action
for failure to state a claim. By a separate judgment order, the
court indicated that the action was to be dismissed without
prejudice. Hartford subsequently moved to correct clerical
error in the judgment, pursuant to Fed. R. Civ. P. 60(a),
arguing that the court’s analysis revealed that it had intended
to dismiss the action with prejudice. Over Appellants’
objections, the court granted the requested relief. Appellants
now seek to appeal the district court’s order dismissing the
action and its order granting Rule 60(a) relief. For the
reasons that follow, we dismiss in part and affirm in part.
While not addressed by the parties, we are obliged to
review our appellate jurisdiction sua sponte, Dickens v. Aetna
Life Ins. Co., 677 F.3d 228, 229-30 (4th Cir. 2012), and having
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done so, we conclude that we are without jurisdiction to review
the court’s judgment of dismissal.
Parties to a civil action are accorded thirty days
after the entry of final judgment to note an appeal, Fed. R.
App. P. 4(a)(1)(A), unless the district court extends the appeal
period under Fed. R. App. P. 4(a)(5), or reopens the appeal
period under Fed. R. App. P. 4(a)(6). “[T]he timely filing of a
notice of appeal in a civil case is a jurisdictional
requirement.” Bowles v. Russell, 551 U.S. 205, 214 (2007).
“A district court’s entry of a corrected judgment
under Rule 60(a) is itself an appealable order, but the scope of
the appeal is limited to the court’s disposition of the Rule
60(a) motion and does not bring up for review the underlying
judgment.” Rivera v. PNS Stores, Inc., 647 F.3d 188, 201 n.55
(5th Cir. 2011) (internal quotation marks and alteration
omitted)), cert. denied, 132 S. Ct. 1741 (2012). “The time for
appeal from the underlying judgment correspondingly dates from
the original rendition of judgment in the Rule 60(a) context
. . . .” Int’l Controls Corp. v. Vesco, 556 F.2d 665, 670 (2d
Cir. 1977).
If a party files a motion “for relief under [Fed. R.
Civ. P.] 60 . . . no later than 28 days after the judgment is
entered,” “the time to file an appeal runs for all parties from
the entry of the order disposing of” that motion. Fed. R. App.
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P. 4(a)(4)(A)(vi). Even assuming a Rule 60(a) motion could toll
the appeal period under this provision, we conclude that
Appellants’ appeal is untimely as to the underlying dismissal
order. The district court entered its memorandum order on the
docket on March 4, 2013, and its judgment order on March 5,
2013. Hartford’s Rule 60(a) motion was not filed until
April 29, 2013, outside the twenty-eight day period for a Rule
60 motion that would toll the appeal period. The notice of
appeal was filed on June 19, 2013, well outside the thirty-day
appeal period. Therefore, because Appellants failed to file a
timely notice of appeal from the dismissal and judgment orders,
or to obtain an extension or reopening of the appeal period from
these orders, we dismiss the appeal insofar as it challenges the
underlying judgment dismissing Appellants’ action.
Turning to the appeal of the order granting Hartford’s
Rule 60(a) motion—from which Appellants’ notice of appeal is
timely—the parties dispute the appropriate standard of review;
Hartford argues that the motion is reviewed for abuse of
discretion, while Appellants assert that our review is de novo.
We need not resolve this dispute, however, as even applying a de
novo standard, we conclude that the district court was
authorized to grant Rule 60(a) relief.
A district court “may correct a clerical mistake or a
mistake arising from oversight or omission whenever one is found
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in a judgment, order, or other part of the record.” Fed. R.
Civ. P. 60(a). Rule 60(a) applies when “the court intended one
thing but by merely clerical mistake or oversight did another.”
Dura-Wood Treating Co. v. Century Forest Indus., Inc., 694 F.2d
112, 114 (5th Cir. 1982); see also Kosnoski v. Howley, 33 F.3d
376, 379 (4th Cir. 1994) (recognizing that Rule 60(a) is
appropriately used “to perform a completely ministerial task”
such as “making a judgment more specific in the face of an
original omission” but not to “revisit the merits of the
question” or “reconsider[] the matter” (internal quotation marks
omitted)). “The relevant test . . . is whether the change
affects substantive rights of the parties and is therefore
beyond the scope of Rule 60(a) or is instead a clerical error, a
copying or computational mistake, which is correctable under the
Rule.” Pfizer Inc. v. Uprichard, 422 F.3d 124, 130 (3d Cir.
2005) (internal quotation marks and alteration omitted).
The basic distinction between clerical mistakes
and mistakes that cannot be corrected pursuant to Rule
60(a) is that the former consist of blunders in
execution whereas the latter consists of instances
where the court changes its mind, either because it
made a legal or factual mistake in making its original
determination, or because on second thought it has
decided to exercise its discretion in a manner
different from the way it was exercised in the
original determination.
In re Walter, 282 F.3d 434, 440 (6th Cir. 2002) (internal
quotation marks omitted); see Rivera, 647 F.3d at 199 (“An
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amendment to a judgment affects the substantive rights of the
parties if it expands the scope or modifies the content of the
court’s adjudication.”). Thus, “Rule 60(a) does not provide for
the correction of the deliberate choice of the district judge,
even where that deliberate choice is based on a mistake of law.”
Rivera, 647 F.3d at 195-96 (internal quotation marks and
footnote omitted). However, “Rule 60(a) authorizes a district
court to modify a judgment so that the judgment reflects the
necessary implications of the court’s decision,” even if they
were not expressly stated. Id. at 194-95 (internal quotation
marks omitted). The district court’s intent may be ascertained
through consideration of contemporaneous documents, such as a
memorandum opinion or transcript, and by the presiding judge’s
own subsequent statements regarding his intent. Id., at 196-97;
In re Jee, 799 F.2d 532, 535 (9th Cir. 1986).
We conclude that the court did not exceed its
authority in granting relief under Rule 60(a) to change the
dismissal to one with prejudice. While Appellants correctly
note that the court referred to the Ashcroft v. Iqbal, 556 U.S.
662 (2009), pleading standard when dismissing their claims, this
statement is not dispositive. Contrary to Appellants’
assertions, the court’s analysis did not contemplate that
amendment would permit Appellants to plead cognizable claims.
Rather, the court clearly based its dismissal on its conclusion
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that the surety bond did not establish the requisite contractual
relationship between Hartford and Appellants to support
first-party claimant status. Moreover, in its Rule 60(a) order,
the court specifically stated that the dismissal was a clerical
mistake. In the absence of record evidence to the contrary, we
find no basis to discredit this explanation. See Rivera, 647
F.3d at 196-97. Because dismissal of the complaint without
prejudice is logically inconsistent with the court’s rationale,
we conclude that the court’s dismissal order implicitly
dismissed the case with prejudice, and the judgment order
designating a dismissal without prejudice was merely a clerical
error.
Appellants cite to several cases for the proposition
that changing a dismissal from “without prejudice” to “with
prejudice” works a substantive change inappropriate under Rule
60(a). But we find these cases distinguishable. Despite the
fact that the parties’ understanding of their rights and
obligations arising from the original dismissal may have been
changed by the order granting Rule 60(a) correction, the order
effected no actual substantive change to the parties’ rights
that was not contemplated by the original memorandum order. See
id. at 199 (“Where the record makes it clear that an issue was
actually litigated and decided but was incorrectly recorded in
. . . the judgment, the district court can correct the judgment
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under Rule 60(a), even where doing so materially changes the
parties’ positions and leaves one party to the judgment in a
less advantageous position.”). Because the correction was
clerical in nature, we conclude that the district court had
authority under Rule 60(a) to alter its judgment order to
reflect a dismissal with prejudice.
Accordingly, we dismiss the appeal in part, insofar as
it challenges the court’s underlying dismissal of Appellants’
claims. We affirm in part, insofar as the appeal seeks review
of the order granting Rule 60(a) relief. We dispense with oral
argument because the facts and legal contentions are adequately
presented in the materials before this court and argument would
not aid the decisional process.
DISMISSED IN PART;
AFFIRMED IN PART
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