___________ No. 93-4083

___________ Thomas A. Warmus, * * Appellant, * * v. * Appeal from the United States * District Court for the Lewis Melahn; James Oetting; * Western District of Missouri. William Hobbs, * * Appellees. *

___________ Submitted: January 16, 1997 Filed: April 4, 1997

___________ Before HANSEN, Circuit Judge, FLOYD R. GIBSON and HENLEY, Senior Circuit Judges.

___________ HENLEY, Senior Circuit Judge. This case is on remand from the Supr eme Court. In Warmus v. Melahn , 62 F.3d 252 (8th Cir. 1995), vacated and remande d , 116 S. Ct. 2493 (1996),
we upheld the district court’s dismissal of Warmus’s 42 U.S.C. § 198 3 damages action on the basis of Younger abstention, which is premised on th e ”longstanding public policy against federal court interference with state court proceedings.” Younger v. Harris , 401 U.S. 37, 43 (1971). Warmus is the owner of AmericanFinancial Security Life Insurance Company (AFSLIC), a Missouri-based insu rance company. The Missouri Department of Insurance (MDI) found that as of September 30, 1992, AFSLIC was operating in a hazardo us condition, and after a period of administrative supervisio n petitioned a state court for an order of

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rehabil itation, Mo. Rev. Stat. § 375.1165(1), which was granted. Se e Angoff v. AFSLIC , 869 S.W.2d 90 (Mo. Ct. App. 1993) ( Angoff I ) (upholding rehabilitation order) ; see also Angoff v. AFSLIC , 891 S.W.2d 833 (Mo. Ct. App. 1 994) ( Angoff II ) (upholding denial of motion to terminat e rehabilitation).
Warmus filed the instant suit agains t Melahn, the former director of the M DI, and two of his subordinates (collectively referred to as “th e offi cials”), alleging that they conspired to force AFSLIC int o rehabilitation and drive Warmus out of the insurance business. We hel d that abs tention was proper because the action “might well have th e practical effect of undermining the validity and integrity of the statecourt rehabilitation proceedings.” 62 F.3d at 256. The Supr eme Court, 116 S. Ct. at 2493, granted certiorari, vacate d our judgment, and rem anded for reconsideration in light of Quackenbush v. All state Ins. Co. , 116 S. Ct. 1712 (1996). In Quackenbush , the Cour t “decided that ‘federal courts have the power to dismiss or remand case s base d on abstention principles only where the relief being sought i s equitable or otherwise discretionary.’” Amersonv. Iowa , 94 F.3d 510, 512 (8thCir. 1996) (quoting Quackenbush , 116 S. Ct. at 1728), cert. denied , 117 S. Ct. 6 96 (1997). In contrast, “in actions at law, the Cour t explai ned, abstention principles permit federal courts only to enter a n order that stays the adjudication” pending completion of state proceedings , “not one that dismisses the federal action altogether.” Id. However , “[i]n Quackenbush , th e Court preserved and distinguished the very limited holding of Fair Asses sment in Real Estate Ass’n, Inc. v. McNary , 454 U.S. 100, 115 (1981), where the Court dismissed a § 1 983 damages case” in which "[t]he plaintiff . . . sought damages from the allegedly unconstitutional application of a state tax scheme." Amerson , 94 F.3d at 513. The

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Supreme Court "dismissed the case, holding that the claim was akin to an action for declaratory relief because the damages sought could not b e awarded without first , in effect, declaring that the state tax scheme was unconstitutional.” Id

.

In th is case, in light of the Supreme Court’s remand order, w e ordered supplemental briefing and heard oral argument on the effect o f Quackenbushon Warmus’s section 1983 damages action. Relying on Amerson and Fair Assessment , the officials argue that Quackenbushdoes no t preclude the dismissal of Warmus’s action. In Amerson , this court affirme d the district court’s dismissal on abstention principles of a plaintiff’s claims for equitable and monetary relief in a section 1983 action arising from termination of her parental rights. We explained:
Although the holding of Quackenbushprecludes the dismissal on abstenti on principles of a damages action, . . . a clos e reading of the case indicates that a plaintiff’s incidenta l insertion of a general claim for damages will not suffice t o prevent the dismissal of a § 1983 case where the da mages sought ca nnot be awarded without first declaring unconstitutional a state court judgment on a matter committed to the states.

Id. at 513 (internal quotation omitted). In Amerson , “we recognize[d] tha t the abstention holding of Fair Assessment is ver y limited.” Id. However,
we beli eved that the case was “very analogous to the case at hand[,] ” because plaintiff’s "claims in effect require[d] a preliminary declaration that t he state court judgment terminating her parental rights [wa] s invalid.” Id.

The officials assert that Amerson is applicable here becaus e resolution of Warmus’s damages claims would requ ire a declaration that the state court rehabilitation order was invalid. Warmus responds that Amerso n is distinguishable. He first notes that

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unlike Amerson , his damages claims are not incid ental to equitable claims, but are his only claims. He points out that in Amerson this cour t observed “that it appear[ed] beyond dispute that most all of [plaintiff’s] claims for relief [were] equitable in nature.” Id. at 512. Moreover , Warmus argues that resolution of his damages claims will not invalidate th e order of r ehabilitation. Warmus asserts that he is not attacking th e rehabilitation order, conceding that as of September 30, 1992 AFSLIC was oper ating in a hazardous condition. Rather, Warmus asserts that hi s federa l action challenges the actions of the officials preceding th e rehabilitation order. He acknowledges that he challenged the conduct of MDI officials during the state court rehabilitat ion proceedings. However, Warmus argues that the conduct was not “so inextricably intertwined with the st ate court determination [as to rehabilitation] as to necessitat e reviewof that decision.” Id. at 513 (citing District of Columbia Court of Appeals v. Feldman , 460 U.S. 462, 482 & n.16 (1983)). Warmus notes tha t a special master agre ed with him that because of certain conduct, the MDI
was es topped from disapproving an accounting methodology and that th e
mas ter’s factual findings were not reviewed because the state trial an d appellate courts found them irrelevant as a matt er of law. See Angoff II , 891 S.W.2d at 836 (“[r]egardless of this Special Master’s finding,” AFSLIC still oper ating in a hazardous condition); Angoff I , 869 S.W.2d at 9 2 (estoppel could not be “asserted for the creation of a right”) (internal quotation omitted). We agree with Warmus that his case does not fall within the “ver y limited” Amerson/Fair Assessment exception to Quackenbush , Amerson , 94 F.3 d at 513, and thus dismissal of his action is not permitted. Warmus asserts that a sta y is unnecessary because resolution of his claims would no t interfere with the ongoing rehabilitation procee dings. However, he admits that there is no

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record evidence in support of his assertion and recognizes that a remand to the d istrict court for consideration of the question whether a n abstention-based stay is warranted may be appropriate. The officials assert that a remand would be unnecessary if this court
were to ho ld that the officials are entitled to qualified or absolut e immunity. The officials note that they raised the immunity defenses in th e district court, but that the court did not address them, and that thi s court may affirm on any basis appearing in the record. See Sawdon v

. Uniroyal Goodrich Tire Co. , 100 F.3d 91, 93 (8th Cir. 1996). The official s claim that by placing AFSLIC into rehabilitation, they were performin g discretionary functions in good faith and thus are immune. Warmus respond s that he is not challenging the officials' decision to place the compan y into r ehabilitation, but their alleged bad faith actions which cause d AFSLIC to become insolvent. We recent ly noted that “whether an officer is entitled to qualified immunity[often] requires a 'fact-intensive' inquiry.” Prosser v. Ross , 70 F.3d 1005, 1006 (8 th Cir. 1995) (quoting Reece v. Groose , 60 F.3d 487, 490 (8th Cir. 1995)). In addition, the Supreme Court has made clear “that
a defe ndant, entitled to invoke a qualified-immunity defense, may no t appeal a district court’s summary judgment order insofar as that orde r determines whether or not the pretrial record se ts forth a 'genuine' issue of fact for trial.” Johnson v. Jones , 115 S. Ct. 2151, 2159 (1995). The Court noted that "the existence, or non-existence of a triable issue o f fact--is the kind of issue that trial judges, not appellate judges , confr ont almost daily[,]” id. at 2157, and concluded that “wise use o f appellate resources[] argue in favor of limiting interlocutory appeals of 'qualified immunity' matters to cases presenting more abstract issues of law.” Id . at 2158. Thus, we decline to “consider the qualified immunity defense in the first instance,

### At oral argument, counsel advised the court th at Warmus is in 1 

### bankru ptcy. On remand, in addition to considering immunity an d abs tention issues, the district court may wish to explore th e effect, if any, Warmus’s bankruptcy has on this proceeding.
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Accordingly, we remand this matter t o the district court for further proceedings. 1

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.