First National Bank v. Genina Marina Svc

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 95-30940
Summary Calendar
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FIRST NATIONAL BANK IN ST. MARY PARISH,
Plaintiff-Appellee,
VERSUS
GENINA MARINE SERVICES, INC.
AGATHA RIZZO KORNEGAY,
THOMAS WILSON BRIGHTMAN KORNEGAY, JR.,
as administrator of the successor of
Thomas Wilson Brightman Kornegay, Sr.,
Defendants-Third-party Plaintiffs
Appellants,
VERSUS
U.S. DEPARTMENT OF AGRICULTURE,
FARMERS HOME ADMINISTRATION,
Third-Party Defendant-Appellee.
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Appeal from the United States District Court
for the Western District of Louisiana
(94-CV-1851)
_________________________
April 8, 1996
Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
The appellants appeal the dismissal of their third-party claim
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion
should not be published and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.
for want of jurisdiction. We vacate and remand for the purpose of
allowing the district court to state its reasons, so that we can
give this case the appropriate appellate review.
I.
This appeal arises out of the following uncontested facts:
The First National Bank in St. Mary’s Parish (“FNB”) executed a
$985,000 promissory note with Genina, Inc. (now Genina Marine
Services). The promissory note was divided into two portions. The
first portion (“the loan”), which comprised ninety percent of the
promissory note, was secured by a guaranty and Lender’s Agreement
from the Farmers Home Administration (the “FmHA”).1 The entire
promissory note (the 90% guaranteed portion and the remaining 10%)
was secured by the Kornegays’ residence, other real estate,
business equipment, and Wilson and Agatha Kornegay’s personal
guaranty.
FNB sold the loan to Pequot Partners, retaining duties as the
servicing agent and retaining its rights to the security
instruments, exclusive of the FmHA’s guaranty. After the loan
passed to Pequot Partners, it went into default. Pequot Partners
exercised the FmHA’s guaranty according to the Lender’s Agreement,
under which the FmHA purchased the loan. Thereafter, the FmHA
endorsed the loan to FNB, and FNB filed suit in Louisiana state
court against Genina Marine Services, Agatha Kornegay, and Thomas
1
Only the 90% portion of the promissory note secured by the FHA (“the
loan”) is the subject of this appeal.
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Kornegay, Jr., as administrator of the estate of Wilson B. Kornegay
(“appellants”), to enforce the loan and to foreclose the home
mortgage securing it.
The appellants filed a third-party petition against the FmHA
based in contract and tort, alleging that they had reached an
accord with the FmHA to satisfy their obligation under the loan and
that the suit filed by FNB breached this accord. The appellants
contended that the FmHA was the holder of the loan and that FNB was
suing on behalf of the FmHA. The FmHA removed the action to
federal court, where the district court dismissed the appellants’
claim against the FmHA and remanded the case between FNB and the
appellants to state court.
II.
A.
As a preliminary matter, the district court did not enter a
judgment separate from its order of dismissal as required by FED.
R. CIV. P. 58, and neither party objected to such omission. The
district court, however, plainly intended to end the litigation
with its order of dismissal, and the appellants filed a timely
notice of appeal from the purported final order. In such a
situation, we may exercise jurisdiction over the appeal. Whitaker
v. City of Houston, 963 F.2d 831, 833-34 (5th Cir. 1992); Townsend
v. Lucas, 745 F.2d 933, 934 (5th Cir. 1984).
B.
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In its motion for dismissal, the FmHA raised two bases for
dismissal: lack of subject matter jurisdiction based upon its
sovereign immunity and failure of service of process. The district
court did not state the basis for its dismissal, but simply granted
the FmHA’s motion to dismiss. The appellants raise only the issue
regarding dismissal for lack of subject matter jurisdiction on
appeal.
Because the district court gave no reason for its dismissal,
we cannot tell whether dismissal was for failure to service
properly or for sovereign immunity. Because the service-of-process
issue cannot be adequately determined, and because the district
court may have relied upon it rather than immunity, we remand to
the district court for limited purpose of obtaining reasons. In
Jot-Em Down Store (JEDS), Inc. v. Cotter & Co., 651 F.2d 245, 247
(5th Cir. 1981), we noted that, “[w]hile the Federal Rules of Civil
Procedure do not require a statement of reasons by a trial judge
for a motion to dismiss, a summary judgment or a directed verdict,
we have often stated that a reasoned statement is helpful not only
to counsel but also the appellate court.” This is one case in
which an explanation of the ruling may obviate considerable effort
by this court.
Accordingly, the judgment is VACATED and REMANDED.
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