Moody Natl Galveston v. GE Life Annuity Ins ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED SEPTEMBER 13, 2004
August 24, 2004
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
03-41237
MOODY NATIONAL BANK OF GALVESTON,
Plaintiff-Appellant,
Versus
GE LIFE AND ANNUITY ASSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of Texas
Before HIGGINBOTHAM, DAVIS, and WIENER, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
Plaintiff, Moody National Bank of Galveston (Moody), filed the
instant suit against GE Life and Annuity Assurance Company (GE)
seeking to recover the proceeds of a life insurance policy issued
by GE to Moody’s creditor, Schwartz, Inc. GE argues that Moody’s
appeal was not timely and seeks to dismiss this appeal for want of
jurisdiction. Because Moody did not file a timely notice of
appeal, we conclude that we do not have jurisdiction to consider
the appeal.
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I.
On June 30, 2003, the district court granted GE’s motion for
summary judgment and entered final judgment in favor of GE. In the
last sentence of its final judgment, the district court sua sponte
ordered each party to pay its own costs and attorney’s fees. On
July 14, 2003, GE filed a motion styled “Motion to Alter or Amend
the Judgment under Federal Rule of Civil Procedure 59(e).” The
only relief GE sought in the motion was to have the court tax all
costs, including GE’s against Moody Bank. The district Court
denied GE’s motion on July 30, 2003. Moody filed a Notice of
Appeal on August 27, 2003.
II.
A timely filed notice of appeal is an absolute prerequisite to
this court’s jurisdiction. Browder v. Director, Dep’t of
Corrections, 434 U.S. 257, 264 (1978). Generally, to be timely, a
notice of appeal in a civil case must be filed within 30 days after
the judgment or order appealed from is entered. Fed.R.App.P.
4(a)(1)(A).1 However, a timely filed Rule 59(e) motion to amend or
reconsider will toll the time for filing an appeal until the
district court disposes of the motion. Fed.R.App.P.
1
Fed.R.App.P. 4(a)(1)(A) provides:
(A) In a civil case, except as provided in Rules
4(a)(1)(B), 4(a)(4), and 4(c), the notice of appeal
required by Rule 3 must be filed with the district
clerk within 30 days after the judgment or order
appealed from is entered.
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4(a)(4)(A)(iv).2 Motions addressing costs and attorney’s fees, on
the other hand are generally made pursuant to Rule 54, are
considered collateral to the judgment, and do not toll the time
period for filing an appeal. Fed.R.Civ.P 54(d).3
Moody argues that even though the only relief GE sought in its
motion was that all costs be assessed against Moody, it was
nevertheless a Rule 59(e) motion to alter or amend. Moody contends
that this is true because the district court’s ruling that each
party should bear its own costs and attorney’s fees was included in
the final judgment. Moody argues that under Ramsey v. Colonial
Life Ins. Co. of America, 12 F.3d 472 (5th Cir. 1994), where the
2
Fed.R.App.P. 4(a)(4)(A)(iv) provides, in pertinent part:
(A) If a party timely files in the district court
any of the following motions under the Federal Rules of
Civil Procedure, the time to file an appeal runs for
all parties from the entry of the order disposing of
the last such remaining motion:
* * *
(iv) to alter or amend the judgment under Rule
59.
3
Fed.R.Civ.P. 54(d) provides, in pertinent part:
(1) Costs Other than Attorneys’ Fees. Except when express
provision therefor is made either in a statute of the United
States or in these rules, costs other than attorneys’ fees shall
be allowed as of course to the prevailing party unless the court
otherwise directs[.]
(2) Attorneys’ Fees.
(A) Claims for attorneys’ fees and related non-taxable
expenses shall be made by motion unless the substantive law
governing the action provides for the recovery of such fees as an
element of damages to be proved at trial.
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district court makes costs part of a final judgment, a post-
judgment motion to alter those costs will be characterized as a
Rule 59(e) motion and toll the time limit for filing an appeal.
As an initial matter, it is important to make clear that the
fact that GE labeled its motion as a Rule 59(e) motion to alter or
amend is immaterial; a motion’s substance, and not its form,
controls. Edwards v. City of Houston, 78 F.3d 983, 995 (5th Cir.
1996)(en banc). Thus, the only question is whether a motion to
allocate costs, that would otherwise be characterized as a Rule
54(d) motion, becomes a Rule 59(e) motion to alter or amend where
the district court awarded costs as part of its final judgment.
In Budinich v. Becton Dickinson and Co., 486 U.S. 196 (1988),
the Supreme Court was faced with the question of whether a post-
judgment motion for attorney’s fees should be considered a Rule
59(e) motion where the fees are authorized by the statute sued
upon. Budinich, 486 U.S. at 201. The plaintiff argued that
because the statute authorized attorney’s fees, his motion for fees
was a request to alter the judgment rather than a collateral
request for fees under Rule 54(d). Rejecting this argument, the
Court first pointed out the collateral nature of an award of
attorney’s fees:
As a general matter, at least, we think it indisputable
that a claim for attorney’s fees is not part of the
merits of the action to which the fees pertain. Such an
award does not remedy the injury giving rise to the
action, and indeed is often available to the party
defending against the action.
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Budinich, 486 U.S. at 200. The Court continued, explaining that
any attempt to distinguish between the merits or non-merits of an
award of fees that did not themselves give rise to the action would
not be beneficial:
[N]o interest pertinent to [finality] is served by
according different treatment to attorney’s fees deemed
part of the merits recovery[.] . . . The time of
appealability, having jurisdictional consequences, should
above all be clear. We are not inclined to adopt a
disposition that requires the merits or nonmerits status
of each attorney’s fee provision to be clearly
established before the time to appeal can be clearly
known. Courts and litigants are best served by the
bright-line rule, which accords with traditional
understanding, that a decision on the merits is a “final
decision” for purposes of [28 U.S.C.] § 1291[.]
Id. 486 U.S. at 202.
This court was faced with a situation similar to Budinich in
Samaad v. City of Dallas, 922 F.2d 216 (5th Cir. 1991). In Samaad,
the plaintiffs’ counsel filed a post-judgment motion to allocate
costs. Plaintiffs’ counsel also filed a notice of appeal within
thirty days of entry of the district court’s judgment; however, the
appeal only named the lead plaintiff. Following the district
court’s order granting the motion for costs, the plaintiffs filed
an amended notice of appeal which listed all remaining plaintiffs
by name. Relying on Budinich, this court concluded that it only
had jurisdiction to hear the appeal of the lead plaintiff because
the amended notice of appeal was untimely. In reaching this
conclusion, we pointed out that Budinich “made it patent that a
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motion for costs or attorney’s fees is not to be deemed a Rule 59
motion, even where the cost or fee award might be viewed as an
integral part of the merits.” Id. at 218.
Subsequent to Samaad, this court decided Ramsey v. Colonial
Life Ins. Co. of America, 12 F.3d 472 (5th Cir. 1994), which Moody
argues supports its contention that GE’s motion was in fact a Rule
59(e) motion.
In Ramsey, an injured insured sued his insurer after the
insurer refused to continue paying his medical bills. Plaintiff
moved for summary judgment and also filed a motion for attorney’s
fees. The district court granted summary judgment in favor of the
plaintiff and, in the same order, denied the plaintiff’s motion for
attorney’s fees. Following entry of final judgment, plaintiff
filed a Rule 59(e) motion asking the court to reconsider the issue
of attorney’s fees. Plaintiff did not file an appeal within 30
days because he believed the Rule 59(e) motion would toll the
filing period. On appeal, the defendant argued that under Budinich
the plaintiff’s appeal was untimely because the Rule 59(e) motion
was really a Rule 54(d) motion for attorney’s fees that did not
toll the time for filing an appeal. This court disagreed,
concluding that Budinich was distinguishable because it involved an
“original request for attorney’s fees” not ruled upon by the
district court in its final judgment, whereas in Ramsey “the
district court, as part of its final judgment on the merits, ha[d]
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already passed on and denied the plaintiff’s motion for attorney’s
fees. Thus, plaintiff’s motion was not an original request for
fees but instead was a motion for reconsideration[.]” Ramsey, 12
F.3d at476-477.
The holding and reasoning of Ramsey is arguably in tension
with the goal of the Supreme Court in Budinich that “no interest is
served by according different treatment to attorney’s fees deemed
part of the merits recovery.” Budinich, 486 U.S. at 202. As a
general matter, any misgivings we may have about the correctness of
Ramsey are immaterial because we are bound to follow the prior
panel rulings of this court. United States v. Darrington, 351 F.3d
632, 634 (5th Cir. 2003). This rule is inapplicable, however,
where Congress makes a change in statutory law that directly
affects a prior panel opinion. Arbaugh v. Y & H Corp., 2004 WL
1717531 *4 (5th Cir. Aug. 2, 2004) (quoting Davis v. Estelle, 529
F.2d 437, 441 (5th Cir. 1976)).
In 1993, Appellate Rule 4(a)(4) was amended to include among
the motions that will toll the time for filing a notice of appeal
motions for attorney’s fees under Rule 54 if the district court
extends the time to appeal under Rule 58. Fed.R.App.P.
4(a)(4)(A)(iii).4 This amendment was not considered by the court
4
Fed.R.App.P. 4(a)(4)(A)(iii) provides, in pertinent part:
(A) If a party timely files in the district court any
of the following motions under the Federal Rules of
Civil Procedure, the time to file an appeal runs for
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in Ramsey.5 The Advisory Committee Notes to the 1993 Amendment
state, in pertinent part:
To conform to a recent Supreme Court decision . . .--
Budinich v. Becton Dickinson and Co., 486 U.S. 196
(1988)--the amendment excludes motions for attorney’s
fees from the class of motions that extend the filing
time unless a district court, acting under Rule 58,
enters an order extending the time for appeal.
Advisory Committee Notes, Fed. R. App. P. 4, 1993 Amendments
(emphasis added). Advisory Committee Notes do not have the force
of law, but they are instructive in determining Congress’s intent
in amending a statute. United States v. Navarro, 169 F.3d 228, 237
(5th Cir. 1999).
Although the relevant amendment to Appellate Rule 4(a)(4)
provides only that a post-judgment motion relating to attorney’s
fees may suspend the time for filing notice of appeal, the silence
of the rule on the effect of a motion addressing costs is
instructive. Rule 4(a)(4) refers to Rule 58. Rule 58(c)(1), in
turn, provides: “Entry of judgment may not be delayed, nor the time
all parties from the entry of the order disposing of
the last such remaining motion:
* * *
(iii) for attorney’s fees under Rule 54 if the
district court extends the time to appeal under Rule
58[.]
5
Although this amendment went into effect almost two months
prior to the release of Ramsey, it is clear that Ramsey did not
consider the amendments to Rule 4(a)(4) or the relevant comments
thereto in reaching its decision. Ramsey, 12 F.3d at 476 n. 5
(citing the text of old Rule 4(a)(4)).
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for appeal extended, in order to tax costs or award fees, except as
provided in Rule 58(c)(2).” Fed.R.Civ.P 58(c)(1). Rule 58(c)(2)
then provides for the limited circumstance under which a post-
judgment motion for attorney’s fees will extend the time for appeal
and makes no provision for extending the time for appeal relating
to taxing of costs. Because Rule 58(c)(2) is silent on post-
judgment motions addressing costs, the intent of the rule is clear:
a post-judgment motion addressing costs will not extend the time
for appeal.
Thus, reading (4)(a)(4) and the rule it refers to–-Rule 58–-
together, it is clear to us that any post-judgment motion
addressing costs or attorney’s fees must be considered a collateral
issue even when costs or attorney’s fees are included in a final
judgment. Post judgment motions addressing attorney’s fees can
only extend the time for appeal if (l) the motion is filed before
the delay for appeal expires and (2) the court orders that the
motion be considered as a Rule 59 motion.6 Furthermore, because
58(c)(2) does not give the district court authority to consider a
post-judgment motion for costs as a Rule 59 motion, such a motion
addressing costs cannot extend the time for appeal.
For these reasons, we conclude that GE’s motion to allocate
6
We recognize that this reasoning would not apply where the
non-payment of attorney’s fees was “the injury giving rise to the
action.” Budinich, 486 U.S. at 200. In such a case, the issue
of attorney’s fees would be the merits, rather than merely a
collateral issue.
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costs was not a motion to alter or amend judgment under Rule 59(e),
but was rather a collateral motion for costs under Rule 54(d) that
did not toll the time for filing an appeal. Because Moody’s appeal
was filed 58 days after the district court entered its final
judgment, it is untimely and we dismiss Moody’s appeal for lack of
jurisdiction.
DISMISSED
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