Elliott v. Tilton , 62 F.3d 725 ( 1995 )

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 94-10809
MICHAEL ELLIOTT AND VIVIAN ELLIOTT,
Plaintiffs-Appellees,
VERSUS
ROBERT TILTON AND MARTE TILTON (Each Individually and d/b/a
ROBERT TILTON MINISTRIES), WORD OF FAITH WORLD OUTREACH CENTER
CHURCH, INC., and WORD OF FAITH OUTREACH CENTER CHURCH,
Defendants-Appellants.
Appeal from the United States District Court
For the Northern District of Texas
November 7, 1995
Before HIGGINBOTHAM and PARKER, Circuit Judges, and MCBRYDE1,
District Judge.
ROBERT M. PARKER, Circuit Judge:
I. PROCEDURAL HISTORY
Plaintiffs Michael and Vivian Elliott sued Robert Tilton,
Marte Tilton, Word of Faith World Outreach Center Church, Inc.
("the Incorporated Church"), and Word of Faith World Outreach
Center Church ("the Church") alleging fraud, intentional infliction
of emotional distress, conspiracy, and breach of contract. After
1
District Judge of the Northern District of Texas, sitting
by designation.
trial, the jury returned a verdict for Plaintiffs. Defendants
appealed. In our opinion of August 31, 1995, this court vacated
the judgment of the district court and dismissed Plaintiffs' claims
without prejudice after finding that Plaintiffs failed in their
burden to establish subject matter jurisdiction by not alleging the
citizenship of each of the members of the Church. Elliott v.
Tilton, 62 F.3d 725 (5th Cir. 1995).
Plaintiffs then moved to dismiss the Church as a nondiverse
party in order to achieve diversity after judgment. This motion
was filed within the fourteen days allowed by F.R.A.P. 40 for
filing of a petition for rehearing. Although Plaintiffs failed to
file a timely petition for rehearing, they did file a motion asking
this court to treat their motion to dismiss as a petition for
rehearing. Such motion was granted. We now grant the petition for
rehearing and withdraw our earlier opinion.
II. ANALYSIS
Plaintiffs moved to dismiss the Church as a nondiverse party
in order to achieve diversity after judgment on the grounds that
the Church is not an indispenable party and dismissing the Church
would not prejudice the remaining Defendants. Newman-Green, Inc.
v. Alfonzo-Larrain, 490 U.S. 826, 109 S. Ct. 2218 (1989). In
Newman-Green, the Court held:
Although we hold that the courts of appeals have the
authority to dismiss a dispensable nondiverse party, we
emphasize that such authority should be exercised
sparingly. In each case, the appellate court should
carefully consider whether the dismissal of a nondiverse
party will prejudice any of the parties in the
litigation. It may be that the presence of the
nondiverse party produced a tactical advantage for one
party or another. If factual disputes arise, it might be
appropriate to remand the case to the district court,
which would be in a better position to make the prejudice
determination.
Newman-Green, 490 U.S. at 837-38, 109 S. Ct. at 2225.
In the present case, the district court is in a far better
position to weigh the contentions of the parties concerning trial
tactics and the impact the presence of the nondiverse party had on
the remaining Defendants. We therefore remand the case to the
district court to make the appropriate determinations and to rule
on the motion to dismiss. We neither state nor imply any
indication of our views as to the merits of these issues.
Furthermore, if the motion to dismiss is granted, the district
court is instructed to reform the judgment accordingly; if the
motion is denied, the district court is instructed to dismiss
Plaintiffs' claims without prejudice for lack of subject matter
jurisdiction.
We therefore REMAND the case to the district court.