Harrington v. Carlough ( 1999 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOHN HARRINGTON, as a participant
in The Sheet Metal Workers'
National Pension Fund,
Plaintiff-Appellee,
v.
JUNE M. CARLOUGH, as
representative of the estate of
Edward J. Carlough,
No. 97-2710
Defendant-Appellant,
and
JUDITH BOYCE, as representative of
the estate of Gordon Jones; C. T.
ROFF; RALPH E. WALDEN; FRED
KNOX; AIR QUALITY CONTROL,
INCORPORATED,
Defendants.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Albert V. Bryan, Jr., Senior District Judge.
(CA-97-21-A)
Argued: October 29, 1998
Decided: February 24, 1999
Before WILKINS, HAMILTON, and LUTTIG, Circuit Judges.
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Dismissed by unpublished per curiam opinion.
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COUNSEL
ARGUED: David W. Silverman, GRANIK, SILVERMAN, CAMP-
BELL & HEKKER, New City, New York, for Appellant. William
Willis Carrier, III, TYDINGS & ROSENBERG, L.L.P., Baltimore,
Maryland, for Appellee. ON BRIEF: Roy A. Sheetz, TAYLOR,
THIEMANN & AITKEN, L.C., Alexandria, Virginia, for Appellant.
J. Hardin Marion, Patricia B. Miller, TYDINGS & ROSENBERG,
L.L.P., Baltimore, Maryland, for Appellee.
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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
June Carlough, in her capacity as Representative of the Estate of
Edward J. Carlough, appeals from a judgment entered by the United
States District Court for the Eastern District of Virginia in favor of
plaintiff-appellee John Harrington on his ERISA claim on behalf of
the participants and beneficiaries of the Sheet Metal Workers'
National Pension Fund ("Fund"). Because the judgment from which
Carlough appeals is not a final order, we dismiss her appeal without
prejudice.
I.
In 1991, Edward J. Carlough, then-chairman of the Fund's board
of trustees and General President of the Sheet Metal Workers' Inter-
national Association, arranged for the Fund's $1 million investment,
primarily through the purchase of a subordinated debenture, in a com-
pany called Air Quality Control, Inc. ("AQC"). The investment
proved improvident, as the Fund ultimately received only a fraction
of the interest payments, and recovered none of the principal, on its
debenture.
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Appellee John Harrington brought this cause of action against,
among others, appellant June Carlough as Representative of the Estate
of the late Edward J. Carlough, alleging in two separate counts that
Carlough and the other trustees had breached their fiduciary duty to
the Fund's participants and beneficiaries in approving the AQC
investment. In Count I of his complaint, Harrington alleged that Car-
lough breached his fiduciary duty by engaging in a"prohibited trans-
action" under the terms of § 406(a) of ERISA, 29 U.S.C. § 1106(a).
In Count II, Harrington alleged that Carlough and the other former
trustees had, by their investment of Fund assets in AQC, violated the
more general fiduciary obligation, established by§ 404(a) of ERISA,
29 U.S.C. § 1104(a), to act solely in the interests of the Fund's partic-
ipants and beneficiaries.
Harrington moved for partial summary judgment on the"prohibited
transaction" claim. The district court granted the motion with respect
to liability, but reserved for trial Carlough's statute of limitations
defense and the issue of damages. At no time did the district court
directly address Count II of the complaint. After an abbreviated trial,
the district court entered an order of judgment in favor of the plaintiff
and awarded more than $2 million in damages. Carlough now appeals
from that judgment and the subsequent award of attorneys' fees.
II.
With certain exceptions not relevant to this case, our jurisdiction is
limited to appeal of final judgments. See 28 U.S.C. § 1291. Although
the parties did not raise the issue, as a court of limited jurisdiction we
are obliged, where there is some doubt, to consider sua sponte
whether the district court judgment is an appealable final judgment.
See Bender v. Williamsport Area Sch. Dist. , 475 U.S. 534, 541
(1986); Baird v. Palmer, 114 F.3d 39, 42 (4th Cir. 1997). Mindful of
this obligation, following oral argument we requested supplemental
briefing to determine whether appellate jurisdiction exists in this case
even in the absence of a formal final judgment as to Count II of appel-
lee's complaint.
Although "[a] final determination as to one of several legal theories
is not an appealable final judgment," Chiari v. League City, 920 F.2d
311, 314 (5th Cir. 1991) (quoting In re Bassak , 705 F.2d 234, 237
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(7th Cir. 1983)), jurisdiction will nonetheless lie where judgment has
been entered on all non-abandoned claims. See , e.g., Moreau v.
Harris County, 158 F.3d 241, 244 (5th Cir. 1998) ("If a party aban-
dons one of its claims, a judgment that disposes of all remaining theo-
ries is final and appealable so long as it is apparent that the district
judge intended the judgment to dispose of all claims."); Baltimore
Orioles, Inc. v. Major League Baseball Players Ass'n, 805 F.2d 663,
667 (7th Cir. 1986) ("We have held that an order that effectively ends
the litigation on the merits is an appealable final judgment even if the
district court did not formally enter judgment on a claim that one
party has abandoned.") (emphasis added). Thus, if we conclude that
appellee abandoned Count II in prosecuting his complaint before the
district court, the absence of a formal final judgment on that count
would not necessarily preclude our exercise of appellate jurisdiction.
It is equally clear, however, that if appellee did not abandon this
claim, there consequently has been no final judgment over which we
may exercise jurisdiction under 28 U.S.C. § 1291.
Although appellant argues in favor of our jurisdiction on the
grounds that Harrington did, in fact, abandon Count II of his com-
plaint, appellee's supplemental brief conclusively rebuts any such
suggestion. First, appellee simply denies that he abandoned Count II
of his complaint before the district court and disclaims any intention
to do so now. This is significant because courts exercising appellate
jurisdiction over non-abandoned claims have often done so in reliance
on the parties' mutual stipulations that all remaining counts were
indeed abandoned prior to the entry of judgment. See, e.g., Moreau,
158 F.3d at 244; Baltimore Orioles, 805 F.2d at 666 (noting that in
response to inquiry at oral argument the parties submitted an amended
judgment order "mak[ing] clear . . . [that] the parties had abandoned
[the remaining] claims").
Second, and even more importantly, the record supports appellee's
contention that he did not abandon prosecution of his second count
before the district court. In fact, appellee submitted proposed "Con-
clusions of Law" with respect to the allegations included in Count II
the day before the challenged judgment was awarded.1 Thus, because
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1 Appellee has filed an unopposed motion to file an addendum, which
includes this submission, to his supplemental brief. We hereby grant that
motion.
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appellee did not "fail[ ] to urge his . . . claim before the district court,"
Chiari, 920 F.2d at 314, or "bur[y] [the claim] in pleadings," Vaughn
v. Mobil Oil Exploration & Producing Southeast, Inc., 891 F.2d 1195,
1198 (5th Cir. 1990), we cannot say that he "abandoned" its prosecu-
tion as that term is conventionally understood.
Accordingly, we hold that there has been no appealable final judg-
ment, and dismiss the appeal, without prejudice, for lack of jurisdiction.2
DISMISSED
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2 In lieu of dismissal, appellee urges us instead to grant the parties time
to cure this jurisdictional defect by securing certification from the district
court pursuant to Federal Rule of Civil Procedure 54(b). We have in the
past exercised jurisdiction over an appeal of a judgment on less than all
claims where the district court had certified appealability after the notice
of appeal, so long as the appellee was not prejudiced by the tardy certifi-
cation. See Harrison v. Edison Bros. Apparel Stores, Inc., 924 F.2d 530,
531-32 (4th Cir. 1991). However, we have not exercised jurisdiction over
such a claim in any case in which the district court has never considered
certification at all. Lacking any statutory grounds for jurisdiction in such
a case, we have no choice but to dismiss the appeal.
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