Trustees of the Pension, Welfare, & Vacation Fringe Benefit Funds of IBEW Local 701 v. Pyramid Electric ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 99-3889
Trustees of the Pension, Welfare, and Vacation
Fringe Benefit Funds of IBEW Local 701,
Plaintiffs-Appellees,
v.
Pyramid Electric, and George P. Edwards,
individually,
Defendants,
and
Paul H. Schwendener, Inc.,
Citation Respondent-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 99 C 1392--George W. Lindberg, Judge.
Argued April 12, 2000--Decided August 4, 2000
Before Cudahy, Coffey and Kanne, Circuit Judges.
Cudahy, Circuit Judge. We are asked today to
decide whether the district court erred in
refusing to vacate a final order. But first we
must decide whether that order--or any of the
four that followed it--are, in fact, final and
therefore appealable.
I) Facts
Paul H. Schwendener, Inc. is a general
contractor. In the 1990s, it subcontracted with
Pyramid Electrical, Inc., to complete electrical
work on three of Schwendener’s construction
projects. The work apparently proceeded smoothly
for a while. Then, for a reason undisclosed in
the record, Pyramid "walked off" the final
construction project, known as Loews Woodridge.
See R. at 20 (Schwendener Mot. to Vacate Orders
at 3 (July 28, 1999)). Schwendener apparently had
to hire a different subcontractor to complete
about $1.7 million of outstanding electrical
work. See App. Tab B at 4 (Exhibit). Schwendener
had agreed to cover Pyramid’s payroll, including
its contributions to the Trustees of the Pension,
Welfare and Vacation Fringe Benefit Funds of IBEW
Local 701 (the Funds). Schwendener stopped making
those payments, and it is unclear from the record
whether the payroll cutoff precipitated Pyramid’s
exit or vice versa.
In any event, the Funds were out about
$140,000, and wanted to recover the money. The
Funds sued Pyramid, and Pyramid officer George P.
Edwards, for the past due payments. Pyramid
permitted an agreed judgment order to be entered
for the outstanding $140,000, after the Funds
"represented and warranted to Pyramid that they
would pursue collection of the judgment from
money due to Pyramid from Schwendener." R. at 6-2
(Objection to Agreed Order on Citation to
Discover Assets). Under the agreed order, the
Funds dismissed their claims against Pyramid, but
maintained their claims against Edwards,
promising not to seek relief against Edwards
"except on due notice." R. at 2-2.
In keeping with this agreement, the Funds filed
a "Citation to Discover Assets" against
Schwendener. Schwendener did not, as requested in
the citation, churn out a thorough accounting of
its assets and liabilities with respect to
Pyramid. Instead, it readily admitted that it
owed Pyramid for the first project that they
completed together, known as St. James.
Schwendener and the Trustees agreed that
Schwendener would turn over directly to the
Trustees what it owed to Pyramid for the St.
James project, which would cover the debt owed to
the Funds. Schwendener and the Funds submitted a
proposed agreed order to this effect.
In May 1999, Pyramid objected to the Funds-
Schwendener deal. It argued that Schwendener also
owed it money for the Woodridge project, and
contended that Pyramid’s union contributions
associated with the Woodridge project should be
paid out of Schwendener’s debt to Pyramid on that
project. See Tr. Vol. 1 at 3-5. At this early
point in the litigation, Pyramid urged that any
order settling the matter "should recite all the
money owed by Schwendener to [Pyramid], and the
Project where the money was earned so that this
court might in the exercise of its discretion,
achieve equity in compelling application of
disclosure of assets." R. at 6-13 (Objection to
Agreed Order at 3). At a hearing on May 19, 1999,
the district court denied Pyramid’s objection,
and approved the agreed order by which
Schwendener would make incremental payments
directly to the Funds as soon as the St. James
project owner made its expected payments. The
Funds asked the court to continue the citation
proceeding in order to retain jurisdiction until
all of the incremental payments had been made.
See Tr. Vol. 1 at 6. On June 1, the district
court entered an order specifically directing
Schwendener to pay over the money to the Funds,
and continuing the citation until Schwendener
received payments from the project owner. See R.
at 8; Appellant’s App. at para.para. 3-4 (Order).
On June 21, before Schwendener had tendered any
payments to the Funds, a Kankakee bank objected
to the deal. It contended that it had a prior
perfected security interest in Pyramid’s proceeds
from the St. James Project. See Tr. Vol. 3 at 2.
The Funds told the court that "it is essential
that Schwendener come forward on its citation
with an analysis or . . . documentation regarding
the total amount that [it] owes to Pyramid . . .
I do think it’s necessary that we understand how
much total is due and owing from Schwendener on
at least [these] three projects." See id. at 4.
Presumably, the Funds were afraid that the
district court might order Schwendener to pay the
St. James project funds to the bank, and
therefore the Funds wanted to find out if
Schwendener had any other debts to Pyramid that
it could tap to cover the fringe benefit
payments. Schwendener resisted the lengthy
examination of its books, and urged the court to
cut the matter short by permitting it to pay the
Trustees. The district court set the matter over,
asking the parties to try to resolve it
privately. See id. at 6-7.
When the parties reconvened on July 1, 1999,
without a solution, the Funds again asked the
judge to order Schwendener to submit to a
citation hearing and document its debt to
Pyramid. See Tr. Vol. 2 at 3-4. The district
court agreed, and ordered Schwendener to share
its documentation with the Funds. Schwendener
again tried to tender the check so as to resolve
the matter, but after the bank objected that a
payment to the Funds would prejudice its rights
as a creditor, the court ordered that the check
be deposited with the clerk of court. The court
then continued the matter.
On July 15, 1999, Schwendener submitted to its
lawyer a total cost breakdown for the three
projects on which Pyramid served as electrical
subcontractor. Schwendener announced surprisingly
that its books showed Pyramid actually owed it
$1.4 million on the Woodridge project, which had
ended so unhappily. Ultimately, taking account of
Schwendener’s debts on the first two projects,
the contractor now contended that Pyramid owed it
about $1.2 million./1
Schwendener then moved to vacate the June
turnover order by which it was to pay $140,000 to
the Funds. It apparently attempted to notice the
motion for a court hearing during the week of
July 19, but the court calender did not permit a
hearing until July 28. At that hearing,
Schwendener argued that because it ultimately
owed Pyramid no money, it should not have to
cover Pyramid’s unpaid union contributions for
its employees. After receiving briefs on the
matter, the district court on August 25 denied
Schwendener’s motion to vacate. The district
court reasoned that the June and July orders were
final orders. The motion was therefore, if
treated as a motion to amend a final judgment
pursuant to Rule 59(e), untimely. See Fed. R. Civ.
P. 59(e) (motions to amend or alter judgments
shall be filed within ten days of judgment). If
the motion was treated as a motion for relief
from a final judgment, pursuant to Rule 60, it
was timely. However, under Rule 60(b), relief
from a final judgment could only be appropriate
in this case if evidence proffered by the moving
party as newly discovered could not have been
discovered before the entry of judgment, even in
the exercise of due diligence. See Fed. R. Civ. P.
60(b). The court reasoned that Schwendener could
have discovered Pyramid’s debt much earlier, and
therefore declined to grant relief from the final
judgment. Schwendener asked the court to
reconsider, and it again denied the motion in
October. Schwendener filed a notice of appeal on
November 5, 1999.
On November 23, 1999, the bank and the Funds
advised the district court that they were close
to a settlement on how to apportion the money
turned over by Schwendener. Schwendener advised
the court it had paid the turnover amount in
full, and the court held that Schwendener was
discharged from the proceeding. On March 14,
2000, the district court entered an order
detailing the settlement between the bank and the
Funds. Under that settlement, the bank took 57
percent of the money paid by Schwendener, and the
Funds took 43 percent of the money. Based on this
division, the Funds are still owed $79,461.41 of
the $140,766.13 judgment Pyramid agreed to in
April 1999. Further, the district court in the
settlement order acknowledged that Schwendener
was appealing the order to pay, and stated that,
if Schwendener succeeded, the Funds would have to
return their $61,000 portion of Schwendener’s
payment. In light of the Funds’ partial-- and
potentially temporary--recovery, Pyramid agreed
to pay the Funds $5,000 a month until the Funds’
entire judgment had been satisfied. Based on
these terms, the district court dismissed all of
the Funds’ claims against Pyramid and Edwards
without prejudice, giving the Funds leave to
reinstate in the event Pyramid breached the
settlement order. The court retained jurisdiction
for the purposes of enforcing the judgment and
terms of the settlement order, and in the event
of reinstatement. The court also stated that once
the judgment was satisfied, the settlement called
for the Funds to dismiss the action with
prejudice and to sign any documents needed to
release liens against Pyramid or Edwards.
II) Analysis
We must first decide whether, for purposes of
appellate jurisdiction, there has been a final
order entered in this case and, if so, when it
was entered. Our review on this issue of law is
de novo. Federal law provides that "Courts of
Appeals . . . shall have jurisdiction of appeals
from all final decisions of the district courts
of the United States . . . ." 28 U.S.C. sec.
1291. Whether a decision is final for purposes of
section 1291 depends on whether the district
court’s decision "ends the litigation on the
merits and leaves nothing for the court to do but
execute the judgment." Van Cauwenberghe v. Biard,
486 U.S. 517, 521 (1988). Conversely, orders that
"specifically contemplate[ ] further activity in
[the district] court" are generally not final.
United States v. Ettrick Wood Prods., 916 F.2d
1211, 1217 (7th Cir. 1990). But if an order
contemplates only ministerial actions by the
court, finality may exist. See Dzikunoo v. McGaw
YMCA, 39 F.3d 166, 167 (7th Cir. 1994). Evaluating
the finality of the orders in this case is
complicated by the fact that they were all
entered after the default judgment. Post-judgment
proceedings are treated for purposes of appeal as
a separate lawsuit, and orders in those
proceedings are appealable if final. See King v.
Ionization Int’l, Inc., 825 F.2d 1180, 1184 (7th
Cir. 1987). We have said that the point of post-
judgment proceedings, at least in the bankruptcy
context, is to adjust rights among competing
creditors. See id. But we have noted that the
test for "finality" is more liberal in bankruptcy
proceedings. See In re Morse, 805 F.2d 262, 264
(7th Cir. 1986). Therefore, an order fixing
priorities is an appealable final order even if
proceedings to collect on the order are still
underway.
The parties tell us that there are five
candidates for the role of "final order" in this
case: the March 2000 Settlement Order; the
October 1999 denial of Schwendener’s motion to
reconsider denial of its motion to vacate; the
August denial of Schwendener’s motion to vacate;
the July order staying the turnover order pending
briefing and Schwendener’s submission to a
deposition and the original June turnover order.
We do not think any of these orders is
sufficiently final to justify our exercise of
jurisdiction. Logic would dictate that the order
last in time is also the final order, so we will
consider the orders in reverse.
Schwendener’s attorney assured us at oral
argument that the district court’s March 2000
order, setting forth the settlement agreement
between the Funds and the bank, left nothing
before the district court. But we have qualms
about that conclusion, after reading the order.
The March order dismissed all claims without
prejudice, and gave the plaintiffs leave to
reinstate in the event that any party breached
the Settlement Agreement. It is well-settled that
dismissals of claims without prejudice need not
jeopardize the finality of an order. See United
States v. Wallace & Tiernan Co., 336 U.S. 793,
793-94 n.1 (1949). But the district court’s grant
of leave to reinstate the case before it is more
problematic. Often, dismissals accompanied by
leave to reinstate are granted early in a
lawsuit, when a plaintiff can amend a complaint
or remedy a procedural deficiency. See, e.g.,
Otis v. City of Chicago, 29 F.3d 1159, 1163-65
(7th Cir. 1994). So-called conditional dismissals
may also arise in the context of settlement. For
instance, courts may conditionally dismiss cases
"where settlement is imminent, or where the
parties have decided to settle but need
considerable time to finalize the terms of their
agreement." Id., 29 F.3d at 1172 (Rovner, J.,
concurring). Usually, in conditional dismissals
based on imminent settlement, the district court
grants the parties a fixed period of time within
which to reach settlement terms. If terms are
reached by the time the period expires, the order
ripens into finality. See id. at 1166. See also
Kaplan v. Zenner, 956 F.2d 149, 150 n.1 (7th Cir.
1992).
In the present case, the district court did not
establish a fixed period of time during which the
plaintiffs could reinstate suit, and after which
the Settlement Order would become final. Instead,
the court provided that the plaintiffs could
reinstate the suit if any party breached the
Settlement Agreement. (One might wonder what the
Funds would stand to gain by reviving a suit when
the Settlement Agreement already appears to
require Pyramid to cover the judgment in full.
The Settlement Agreement does not require
individual defendant George Edwards to make any
payments. So if Pyramid stopped making payments,
presumably the Funds would pursue their right to
recover payments from Edwards himself). In
practice, this means that, until the Settlement
Agreement is fulfilled without incident, the
right to reinstate remains in effect. So we must
calculate when the Settlement Agreement was, or
will be, fulfilled. As we understand it, the
Agreement calls for Pyramid to make $5,000
monthly payments to the Funds until the Funds’
full $140,000 judgment has been paid./2 As it
stands now, the Funds have turned over $79,000 to
the bank, and thus are $79,000 short on their
judgment--an amount now apparently owed to the
Funds by Pyramid pursuant to the Settlement
Agreement. And the Order intimates that Pyramid
may have to pay the full judgment amount if
Schwendener wins on appeal.
Pyramid was to make its first monthly payment
in January 2000. By our calculations, if all
proceeds smoothly, it should make its last
payment on the $79,000 portion of the judgment in
the fall of 2001. So it appears that Pyramid has
just begun to meet its obligations under the
Settlement Agreement and could, therefore, still
breach the pact. If so, we cannot say that the
condition permitting reinstatement of the lawsuit
has expired. And so we cannot say that the March
order is a final order. The finality of this
order is called into further question by the fact
that one of its terms--Pyramid’s obligation to
refund the Trustees in the event they lose on
appeal to Schwendener--seems to hinge on the
outcome of this appeal. If so, the parties are in
a difficult position, for the order cannot be
appealed until the satisfaction of its conditions
makes it final, and this condition, at least,
cannot be satisfied conclusively until the order
is appealed and we state whether or not
Schwendener may be entitled to a refund, and thus
whether or not Pyramid may owe additional money
to the Funds.
The next candidate for final order status is
the October order denying Schwendener’s motion to
reconsider the denial of its motion to vacate the
original turnover order. In this order the
district court explicitly stated that it stood by
its denial of Schwendener’s motion to vacate. At
the time this order was entered, the Bank and the
Funds had come to a tentative settlement, but had
not agreed on detailed terms. So the dispute
between the bank and the Funds was not formally
terminated by this October order. The fact that
creditors’ rights remained unresolved indicates
non-finality. See, e.g., King, 825 F.2d at 1184.
Further, the bank’s motion to vacate the June
turnover order was formally still pending until
November 23, when Schwendener turned a check over
to the Funds. Additionally, there was a judgment
only against Pyramid, and the Funds retained the
right to revive their suit against Edwards. So
this October order did not end the litigation on
the merits; it required further proceedings
before the district court to finalize the
settlement arrangement. It was not a final order.
See, e.g., Ettrick Wood Prods., 916 F.2d at 1216-
17. For similar reasons, the district court’s
order of August 25, in which it denied
Schwendener’s motion to vacate the original
turnover order, was not final. The bank and Funds
had just advised the district court of their
tentative settlement that week, meaning final
talks on the settlement were ongoing. Cf. King,
825 F.2d at 1184. More important, the court in
the August 25 order set a briefing schedule for
reconsideration of the order, thus explicitly
calling for further proceedings in the case./3
Cf. Ettrick Wood Prods., 916 F.2d at 1216-17.
For similar reasons, the July order is not
final. In that order, the district court called
for briefing on the bank’s objection to the
turnover order. The court also ordered
Schwendener to submit to a deposition in which to
discuss its assets. These provisions make clear
that the district court had not yet decided
whether the bank’s rights took priority over the
Funds’ rights, or whether Schwendener’s
obligations were to be modified. So long as the
competing parties’ rights and obligations
remained unresolved, the order could not be
final. See, e.g., King, 825 F.2d at 1184.
Additionally, the district court scheduled a
ruling on these matters for August, thus
specifically contemplating additional
proceedings. See Ettrick Wood Prods., 916 F.2d at
1216-17.
What remains is the June order. Read in
isolation, the June order looks a great deal like
a final order. In it, the district court rejected
Pyramid’s objection to the settlement reached
between the Funds and Schwendener. The court also
specifically stated the judgment amount due to
the Funds, and stated Schwendener’s exact debt to
Pyramid. The court also prescribed that
Schwendener would make payments to the Funds
rather than pay Pyramid directly, and it laid out
a payment schedule. Thus, the court resolved the
rights and obligations of all three parties
before it--Pyramid, Schwendener, and the Funds.
Moreover, this court has in the past heard
appeals from turnover orders, "demonstrating
[its] belief in the finality of such orders."
Laborers’ Pension Fund v. Dirty Work Unlimited,
Inc., 919 F.2d 491, 493 n.1 (7th Cir. 1990). The
district court relied heavily on Dirty Work in
finding that the June turnover order was final.
But we think the order in Dirty Work is actually
very different from the one in this case. In
Dirty Work, one of the union’s creditors was
found to owe the union for benefit payments. The
creditor had a partner, and the partner admitted
(in a deposition conducted pursuant to a citation
to discover assets) that it owed the creditor a
small sum of money. The creditor insisted the
partner owed even more, and had initiated state
court action against the partner to recover it.
The district court ordered the partner to turn
over the small sum, and provided that, if the
creditor succeeded in state court, the partner
might have to turn over more. So in Dirty Work,
there was a fixed judgment amount at issue, and
the partner was ordered to pay a portion of that
amount that could only grow if the partner was
found liable in state court. In the present case,
when the bank emerged as a creditor, there was a
real possibility that the court might order
Schwendener to pay both Pyramid’s debt to the
Funds and Pyramid’s debt to the bank--this was
the only reason to require Schwendener’s
deposition after the turnover order to the Funds
had been issued. And in the present case, whether
Schwendener would be ordered to pay more depended
in large part on whether Schwendener had
sufficient assets to cover the second creditor--a
question left unresolved by the first turnover
order because of the parties’ failure to conduct
a citation deposition of Schwendener. So the
judgment amount in Dirty Work was not contingent
on a later development, while the judgment amount
here was subject to change.
For similar reasons, we are not persuaded that
In re Morse requires us to find this order final.
805 F.2d 262. In Morse, a creditor appealed the
district court’s determination that its claim was
unsecured. Id. at 263. We stated that because the
creditor was entitled to a fixed amount of money,
the judgment was final even though secured
creditors might deplete the fund before the
creditor recovered his money. See id. at 264-65.
We then stated that if the creditor had a secured
claim, the order would not be final because
"competing claims may have led to a reassessment
of how much of [the creditor’s] claim would be
deemed secured." Id. at 265. In the present case,
the district judge agreed to take briefs on the
bank’s claim, and asked for more information
about Schwendener’s assets. This suggests that
the trial court had not foreclosed the option of
reassessing the order that Schwendener pay the
Funds. Notably, the attractiveness of such a
reassessment depended in large part on whether
Schwendener had more available funds. If so, the
order was likely to be reassessed to
Schwendener’s detriment; if not, the Funds were
likely to suffer. In any event, the fact that the
available funds were not fixed, and the fact that
the Funds’ claim appeared vulnerable to
reassessment, distinguish the present case from
Morse.
Another factor that may undermine the ostensible
finality of the June turnover order in the
present case is the fact that the court
specifically continued the citation for about
three weeks "for further status." See Appellant’s
Short App. at 1-2 (Order of June 1). This
continuance could be classified as a "further
activity in that court," thus weighing against
finality. See, e.g., Ettrick Wood Prods., 916
F.2d at 1217. Then again, it could be classified
as a mere ministerial provision by which the
court retained jurisdiction until Schwendener
satisfied its payment obligations to the Funds,
weighing in favor of finality. See Dzikunoo, 39
F.3d at 167.
In short, the June order was not strictly
analogous to the final order in Dirty Work, and
not technically air-tight, but it did have many
earmarks of finality, if viewed in isolation. The
trouble is, it defies reality to view this order
in isolation. We have stated as a general matter
that when determining our jurisdiction, we must
"evaluate what actually occurred and determine
whether [the circumstances] misled or prejudiced
any party." Rice v. Sunrise Express, 209 F.3d
1008, 1015 (7th Cir. 2000). For instance, in one
case, the court clerk retyped jury replies to
four special interrogatories, each on a separate
judgment form. See Trzcinski v. American Casualty
Co., 901 F.2d 1429, 1430 (7th Cir. 1990). The last
of the four forms summarized the jury’s
conclusion that the plaintiff had prevailed, and
stated the damages to be paid by the defendant.
See id. at 1430. None of the forms addressed the
defendant’s counterclaim or the plaintiff’s
request for prejudgment interest. See id. Several
weeks later, the district court entered an order
denying the request for prejudgment interest and
stating that the order was "final." See id. A
month later, the district court entered another
order changing the amount awarded to the
plaintiff. None of the judgments resolved the
counterclaim. While the case was on appeal, the
district court entered yet another order stating
its intent that the order deemed "final" was
indeed the final order. See id. We held that the
fourth judgment form, which stated the jury’s
finding of liability, and an assessment of
damages (which therefore looked final) was not
final because it had been superseded by the order
changing the amount awarded to the plaintiff. See
id. at 1431. And the judgment changing the amount
awarded did not resolve the counterclaim. We
concluded that based on the record alone, there
was no final order. We took jurisdiction only
because the parties agreed that the answers to
the interrogatories resolved the counterclaim.
In the present case, the June order has been
superseded, just as the jury verdict was
superseded in Trzcinski. The June order called
for Schwendener to pay money to the Funds alone,
and required nothing of Pyramid. The March order,
in contrast, called for the Funds to share the
money with the bank, and for Pyramid to begin
making supplemental monthly payments toward the
judgment amount. So the terms of the June order
have changed significantly. As in Trzcinski,
subsequent events have robbed the order of
finality.
One more circumstance casts doubt on the
finality of the June turnover order. Though the
district court announced firmly in August that
the June turnover order was final, and has stuck
to that position since then, neither the court
nor the parties seemed to consider the order
final in June. The June turnover order was
entered on June 3. The Kankakee bank reared its
head on June 23, objecting to the turnover order.
The district court asked the parties to negotiate
toward a resolution, never mentioning that the
order was final and therefore subject to change
only if the strict standards of Federal Rule of
Civil Procedure 60(b) were met. See Tr. Vol. III
at 6 (June 23 hearing). When the parties reported
back without a resolution, the bank submitted a
revised motion, styled a motion to vacate the
turnover order. Again, the district court did not
protest that the order was final and therefore
governed by the stringent standards of Rule
60(b). See Tr. Vol. II at 7 (July 1 hearing). The
court ordered briefing on the merits of the
bank’s position. See id. More important, the
court ordered Schwendener to sit for a citation
deposition on its assets. This suggests that the
court wanted to know the extent of Schwendener’s
debt to Pyramid in the event that both the Funds
and the bank were entitled to recover funds from
this pot. We can think of no other reason to
delve into Schwendener’s finances. So the court
gave every indication that the June turnover
order was subject to revision if circumstances so
required./4 As long as it looked as if
additional funds might be uncovered from
Schwendener, none of the parties treated the June
order as though it were etched in stone.
The evolving nature of the order is not the
only basis for finding it non-final. Rice
suggested that the key consideration in deciding
whether to waive technical errors in otherwise
"final" judgments is whether the error "misled or
prejudiced any party." 209 F.3d at 1015.
Tellingly, in Trzcinski, we excused the district
court’s failure to enter a final order only
because the parties agreed that the unresolved
issue--the counterclaim--was essentially dead.
Here, the parties bitterly dispute which order in
this case is final. The Funds insist the June
order was final. See Appellee’s Br. at 17-20.
Schwendener argued in its reply brief that the
August order denying its motion to vacate the
June order was final. See Appellant’s Reply Br.
at 5-6. Schwendener’s lawyer assured us at oral
argument that the March order was final if the
August order was not, but the Funds’ lawyer was
conspicuously silent on that point, perhaps
because that concession might foreclose the
Funds’ ability to pursue George Edwards if
Pyramid defaults on its settlement obligations.
This dispute is the heart of the case. For if the
June order was final, then the district court
correctly stated that Rule 60(b) applied to
Schwendener’s motion to vacate. Therefore, the
motion could be granted only if Schwendener
presented new evidence that it could not have
discovered earlier in the exercise of due
diligence--a very high standard. But if the June
order was not final, then Rule 54(b) would apply,
permitting the district court to change or set
aside the turnover order based on Schwendener’s
argument that it now realized Pyramid actually
owed it money. Because the rights of the parties
depend on which, if any, order is final, we
cannot minimize any factor that undermines the
finality of any of these orders.
In short, we find each of the five proffered
"final" orders problematic. And because the
merits of the case depend entirely on when the
district court reached finality, we cannot take
jurisdiction until a conclusively final order has
been entered. Accordingly, the appeal is Dismissed.
/1 We have no opinion on the legitimacy of this
calculation. Pyramid disputes it, contending it
completed 70 percent of the Woodbridge work
before its relationship with Schwendener
deteriorated. See App. Doc. 24 at para. 3.
(Edwards affidavit).
/2 The Settlement Order states that Pyramid must pay
the Funds any unpaid portion of the judgment
"whether . . . allocable to the funds shared with
the Bank . . . or allocable to any return of
amounts to Schwendener which might be required if
the appeal is successful." See Supplemental
Record, Doc. 45. It then states that "[t]he
amount collected by [the Funds] shall not include
any amounts which they share with the Bank or
which must be returned to Schwendener." See id.
We do not understand exactly where this language
leaves Pyramid.
/3 We also reject the notion that these two orders
are appealable based on 28 U.S.C. sec.
1292(a)(1), a notion raised and refuted by the
Funds. That provision permits interlocutory
appeals of orders refusing to dissolve
injunctions. The Funds describe the June turnover
order as "injunctive in nature," and state that
the August and October orders could be seen as
refusals to dissolve the injunction. See
Appellee’s Br. at 26-27. "Some orders to pay are
injunctions, [but m]ost orders to pay are not .
. . the normal rule is that even interlocutory
orders to pay money may not be appealed as
injunctions." Pacific Reinsurance Mgt. Corp. v.
Fabe, 929 F.2d 1215, 1218 (7th Cir. 1991).
Further, this court has explained that "[s]ection
1291(a)(1) is designed to allow prompt appeals of
decisions on the merits, and this purpose informs
the definition of ’injunction.’" Uehlein v.
Jackson Nat’l Life Ins. Co., 794 F.2d 300, 302
(7th Cir. 1986). Thus, only an order that
effectively decides the merits, and has an
irreparable effect on the merits, is considered
a grant or denial of an interlocutory injunction
sufficient to permit appellate jurisdiction. See
id. So even if the June and July orders were
injunctions--a questionable proposition, which
bucks the "normal rule"--we doubt that the orders
refusing to reexamine them had an irreparable
effect on the merits. At most, the district
court’s refusal to reconsider the turnover order
meant that Schwendener had to pay the money
immediately. This does not mean that Schwendener
cannot, in a properly presented appeal, succeed
in reversing the turnover order and recover the
money.
/4 The Funds now argue that even if the June order
was not final, the district court was bound by it
under the law of the case doctrine. See
Appellee’s Br. at 28. The law of the case
doctrine establishes a presumption that a ruling
made at one point in a lawsuit will govern
throughout. See Avitia v. Metropolitan Club of
Chicago, Inc., 49 F.3d 1219, 1227 (7th Cir. 1995).
But the strength of this presumption varies with
the circumstances. See id. Particularly where the
court is asked to reexamine its own ruling,
rather than the ruling of a higher court, it may
do so "if [it] has a conviction at once strong
and reasonable that the earlier ruling was wrong,
and if rescinding it would not cause undue harm
to the party that had benefitted from it." Id. So
in the present case, if the district court had
not considered itself bound by Rule 60(b), it
would have been free to examine the reality of
the case based on circumstances that developed
after the June order. The discovery that
Schwendener did not owe Pyramid any money would
have been a justifiable basis for finding the
June order wrong, and while this might have
worked a harm against the Funds (which would have
had to seek their money elsewhere) or Pyramid
(the likely alternate source for the funds), we
cannot say these would have been undue harms.
After all, if Schwendener’s accounting is
correct, it is actually Pyramid that owes the
money, and forcing the Funds to seek payment from
the actual debtor is hardly an exercise of
inequity. We are not saying this result was
required; we merely disagree with the Funds that
it was not permitted.