Green Tree Servicing, L.L.C. v. Anthony Cha , 872 F.3d 637 ( 2017 )

Case: 17-60165 Document: 00514176555 Page: 1 Date Filed: 09/29/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 17-60165 FILED
Summary Calendar September 29, 2017
Lyle W. Cayce
Clerk
GREEN TREE SERVICING, L.L.C.; WALTER INVESTMENT
MANAGEMENT CORPORATION,
Plaintiffs - Appellees
v.
ANTHONY CHARLES,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Mississippi
Before STEWART, Chief Judge, and ELROD and HIGGINSON, Circuit
Judges.
CARL E. STEWART, Chief Judge:
This case involves two separate civil actions involving the same parties
and essentially the same dispute. Defendant-Appellant Anthony Charles
initially brought a lawsuit against Plaintiffs-Appellees Green Tree Servicing,
L.L.C. (“Green Tree”) and Walter Investment Management Corporation
(“Walter Investment”) in Mississippi state court (“Charles I”). Charles I was
subsequently removed to federal court on diversity jurisdiction and is currently
stayed pending arbitration. Before the district court stayed the proceedings in
Charles I, Green Tree and Walter Investment moved as plaintiffs in a separate
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No. 17-60165
action against Charles (“Charles II”) to compel him to participate in arbitration
for the claims that he brought against them in Charles I. The district court in
Charles II granted the motion to compel arbitration, ordered that the
proceedings in Charles I be stayed as to the claims against Green Tree and
Walter Investment, and entered judgment dismissing Charles II with
prejudice. Charles now appeals Charles II. We dismiss for lack of appellate
jurisdiction.
I. FACTUAL AND PROCEDURAL BACKGROUND
In March 2007, Charles, a Texas citizen, contracted with Jim Walters
Homes, Inc. (“Jim Walters Homes”) for the construction and financing of a
home in Mississippi. Despite the arbitration clause in the agreement between
the parties, Charles brought suit in Mississippi state court against Jim Walters
Homes, its parent company Walter Energy, Inc. (“Walter Energy”), his
mortgage servicer Green Tree, its parent company Walter Investment, and
other defendants, i.e., Charles I. In this suit, Charles alleged claims of civil
conspiracy, joint venture and vicarious liability, negligence, gross negligence,
and fraud against Green Tree and Walter Investment relating to the
construction of his home.
Charles I was subsequently removed to federal court on the basis of
diversity jurisdiction in March 2015. The district court administratively closed
Charles I in July 2015 due to the decision of Jim Walters Homes and Walter
Energy to file for bankruptcy.
In January 2016, Green Tree and Walter Investment filed a separate
action, i.e., Charles II, against Charles to move to compel his participation in
arbitration under Section 4 of the Federal Arbitration Act (“FAA”) and to stay
the proceedings as to Green Tree and Walter Investment in Charles I. After
the filing of Charles II, the district court reopened Charles I in September 2016.
Subsequently, in February 2017, the district court granted Green Tree and
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Walter Investment’s motion to compel arbitration. The district court then
dismissed Charles II and stated that “each party may move to re-open this case
if further judicial intervention is necessary to enforce the rulings of this Court,
or to enforce the rulings of the arbitrators.” The district court further stated
that since Charles was “ordered to arbitrate all of the claims that he alleges
against [Green Tree and Walter Investment] in Charles I, all proceedings in
that case will be stayed” between Charles, Green Tree, and Walter Investment
pending arbitration.
Charles now appeals the district court’s order dismissing Charles II.
Plaintiffs-Appellees, Green Tree and Walter Investment, assert that the
district court’s order compelling arbitration was not a “final decision with
respect to arbitration” and this court therefore lacks jurisdiction over the
appeal. See 9 U.S.C. § 16(a)(3). We agree.
II. DISCUSSION
This court must examine the basis of its jurisdiction, on its own motion
if necessary. Hill v. City of Seven Points, 230 F.3d 167, 169 (5th Cir. 2000).
Section 16 of the FAA only authorizes this court to consider an appeal from “a
final decision with respect to an arbitration.” 9 U.S.C. § 16(a)(3). A final
decision is one that “ends the litigation on the merits and leaves nothing more
for the court to do but execute the judgment.” Green Tree Fin. Corp v.
Randolph, 531 U.S. 79, 86 (2000) (quoting Digital Equip. Corp. v. Desktop
Direct, Inc., 511 U.S. 863, 867 (1994)); Coopers & Lybrand v. Livesay, 437 U.S.
463, 467 (1978)) (quotation marks omitted). An arbitration order entering a
stay, as opposed to a dismissal, is not an appealable final order. 9 U.S.C. §
16(b)(3); see also CitiFinancial Corp. v. Harrison, 453 F.3d 245, 251 (5th Cir.
2006). Accordingly, this court’s jurisdiction turns on whether the district
court’s order in Charles II constitutes a final order.
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If we were only examining the district court’s order in Charles II, there
would be jurisdiction to consider this appeal. This order would be “final because
there is nothing left to be done in the district court.” Sphere Drake Ins. PLC v.
Marine Towing, Inc., 16 F.3d 666, 668 (5th Cir. 1994) (quotation marks
omitted). The only issue before the district court in Charles II was Green Tree
and Walter Investment’s motion to compel arbitration. The district court
granted the motion to compel arbitration, entered a judgment compelling the
arbitration, and dismissed the case with prejudice.
However, the claims in Charles I against Green Tree and Walter
Investment are still pending in the district court. If both Charles I and Charles
II are considered together, there is an order compelling arbitration and a stay
of the underlying proceedings. Two different proceedings from the same
district court can be considered collectively because it “is most consistent with
the strong federal interest—expressed by both the Congress and the Supreme
Court—in favor of arbitration.” Harrison, 453 F.3d at 251. “Examining both
pushes this case to arbitration quickly, foregoing delay while the merits are
considered on appeal.” Id. The substantive claims of Charles I have not been
dismissed by the district court because its order stayed all proceedings in that
case pending arbitration. See id. at 251–52. Consistent with section 16 of the
FAA, “[a]n arbitration order entering a stay, as opposed to a dismissal, is not
an appealable order.” 9 U.S.C. § 16(a)(3); see also Green Tree, 531 U.S. at 87
n.2; Harrison, 453 F.3d at 250; Apache Bohai Corp., LDC v. Texaco China, B.V.,
330 F.3d 307, 309 (5th Cir. 2003). Thus, the order in Charles II compelling
arbitration is not a “final appealable order” over which this court has
jurisdiction because of the pending substantive claims from Charles I that were
stayed pending arbitration. Green Tree, 531 U.S. at 87 n.2; Harrison, 453 F.3d
at 251–52; South La. Cement, Inc. v. Van Aalst Bulk Handling, B.V., 383 F.3d
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297, 300 (5th Cir. 2004). 1 Accordingly, we lack jurisdiction over this appeal.
Harrison, 453 F.3d at 251–52.
III. CONCLUSION
This appeal is dismissed for lack of jurisdiction.
1 See also Green Tree Servicing, L.L.C. v. Keyes, No. 17-60107 (5th Cir. May 31, 2017)
(per curiam) (unpublished) (dismissing for lack of jurisdiction because order compelling
arbitration was not a final appealable order). This matter was decided by a quorum and is
not binding precedent. 28 U.S.C. § 46(d).
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