1 United States Court of Appeals,

Fifth Circuit.

No. 94-50115.

Summary Calendar.

Helen Ruth MANGES, Plaintiff-Appellant,

v.

McCAMISH, MARTIN, BROWN & LOEFFLER, P.C., McCamish, Martin &

Loeffler, P.C., J. Patrick Deely, and Kevin Warburton, DefendantsAppellees.

Nov. 7, 1994.

Appeal from the United States Dis trict Court for the Western

District of Texas.

Before SMITH, EMILIO M. GARZA and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge:

Plaintiff-Appellant appeals the district court's February 2,

1994 final judgment granting Defendants-Appellees' motion to

dismiss and the court's orders of the same date granting

Defendants-Appellees' motion to dismiss and denying PlaintiffAppellant's motion to remand. We affirm.

FACTS AND PROCEDURAL HISTORY

Helen Ruth Manges ("Helen Manges"), a resident of the State of

Texas, is the wife of Clinton Manges, the sole shareholder of a

company that owned the Duval County Ranch ("Ranch") located in

D uval County, Texas. In 1983, Seattle-First National Bank

("Seattle-First"), a National Banking Association with its

principal place of busine ss in Seattle, Washington and the

Mangeses' largest creditor, filed suit in federal court against the

Mangeses based upon claims relating to promisso ry notes,2

guarantees, loan agreements and transactions involving those

instruments. A compromise and settlement agreement was reached in

1985. Two subsequent federal district court actions concluded with

judgments that found the Mangeses did not have a homestead right,

business or p ersonal, in the Ranch. On August 19, 1988, the

parties submitted to the district court their "Agreed Motion for

Approval and Entry of Final Judgment." The judgment, signed and

dated August 25, 1988, provided that Seattle-First wo uld recover

$55,361,545.72 from the Mangeses, and approved as valid,

enforceable, binding and existing in full force and effect the

parties' "Stipulation and Agreeme nt Concerning Judgment, Stay of

Execution, Foreclosure of Liens, and Satisfaction of Judgment and

Other Obligations Owed to Seattle-First National Bank"

("stipulation and agreement") dated August 14, 1988. The

stipulation and agreement provided, among other t hings, that the

Mangeses would pay Se attle-First $30,000,000 on August 10, 1989.

The stipulation and agreement also contained the following

provision:

The Manges Defendants agree that the jurisdiction and venue of

any suit, hearing, or legal action of any nature, to which

Seattle-First National Bank is a party, one effect of which

could be to halt, enjoin, impair, or hinder the enforcement of

this Agreement, or the enforcement or collection of the Final

Judgment, shall be in the United States District Court for the

Western District of Texas, San Antonio Division.

On October 30, 1990, after the Ma ngeses defaulted on the

$30,000,000 payment, Seattle-First obtained an order of seizure and

sale of the Ranch. A public sale was conducted on January 16,

1991, with Seattle-First being the purchaser. On January 23, 1991,3

an agreed occupancy order was ent ered by the district court,

allowing the Mangeses to continue to reside on the Ranch, subject

to certain conditions, until February 15, 1991.

Asserting that the Mangeses had breached the agreed occupancy

order, J. Patrick Deely, attorney for Seattle-First, applied for

and received a writ of assistance on February 11, 1991 directing

the United States Marshal to seize the Ranch. On February 12,

1991, the Ranch was seized, the Mangeses were evicted, and their

personal property was removed from the Ranch.

On June 4, 1993, Helen Manges filed an action against SeattleFirst in Duval County state district court ("the Seattle-First

case") asserting conversion, violation of the Texas Fair Debt

Collection Act, wrongful foreclosur e/repossession, "promissory

estoppel," civil conspiracy, civil theft and fraud arising out of

the February 12, 1991 seizure. On July 29, 1993, she filed another

lawsuit in Duval County ("the McCamish case") against DefendantsAppellees, members of a professional corporation w ith their

principal offices in San Antonio, Texas, asserting the same causes

of action except for the fraud claim. Both cases were removed to

the United States District Court for the Southern District of Texas

and later transferred to the United States District Court for the

Western District of Texas.

After conducting hearings in Nove m ber 1993, the district

court: 1) denied Helen Manges' motion to remand the McCamish case;

2) granted an unopposed motion to dismiss the claims against the

d efendants in the McCamish case; 3) entered an injunction1 Leffall v. Dallas Independent School Dist., 28 F.3d 521,

524 (5th Cir.1994).

2 Id. (citing Norman v. Apache Corp., 19 F.3d 1017, 1021 (5th

Cir.1994); Carney v. Resolution Trust Corp., 19 F.3d 950, 954

(5th Cir.1994)).

3 Id. (citing Garrett v. Commonwealth Mortg. Corp. of

America, 938 F.2d 591, 593 (5th Cir.1991)).

4 prohibiting Helen Manges from pursuing claims anywhere but in the

Western District; and 4) dismissed the claims against SeattleFirst in the Seattle-First case. Helen Manges did not appeal the

district court's order dismissing her claims against Seattle-First.

Her appeal challenges the district court's denial of her motion to

remand and t he dismissal of her lawsuit against DefendantsAppellees.

STANDARDS OF REVIEW

In revie wing the district court's granting of DefendantsAppellees' motion to dismiss for failure to state a claim, we must

apply the same standard used by the district court. 1 "A claim may

not be dismissed unless i t appears certain that the plaintiff

cannot prove any set of facts in support of [her] claim that would

entitle [her] to relief." 2

"Be cause removal is an issue of statutory construction, we

review a district court's determination of the propriety of removal

de novo." 3

DISCUSSION

Helen Manges contends that because the district court lacked

subject matter jurisdiction in this action, it erred in denying her

motion to remand to state court and in granting Defendants-4 We have jurisdiction over the district court's denial of

Helen Manges' motion to remand to state court because it is

coupled with the appeal of a final judgment. Id. at 524 n. 1

(citing Jones v. Newton, 775 F.2d 1316, 1317 (5th Cir.1985)).

5 14 F.3d 1070 (5th Cir.1994), cert. den., --- U.S. ----, 115

S.Ct. 61, --- L.Ed.2d ---- (1994).

6 14 F.3d at 1071.

7 Id.

8 Id. at 1072.

5 Appellees' motion to dismiss. 4 She argues that her original

petition in state court does not present any federal cause of

action, claim of federal right, or decisive question of law

requiring application of a federal rule of decision. In addition,

she asserts that there is no diversity between the parties because

both she and the Defendants-Appellees are residents of the State of

Texas.

Defendants-Appellees contend that the federal court expressly

retained jurisdiction in the stipulation and agreement and agreed

occupancy order. In support of its contention, DefendantsAppellees cite to Langley v. Jackson Sta te University. 5 In

Langley, the parties to a Title VII employment discrimination case

entered into a settlement agreement. 6 The district court dismissed

the action without approving or incorporating the settlement into

the its order, but did indicate that it intended to retain

jurisdiction over future actions brought to enforce the settlement

agreement. 7 The plaintiff later filed an action in federal court

claiming the defendant had breached the settlement agreement. 8

This Court held that the district court lacked subject matter9 Id. at 1072-73.

6

jurisdiction because it failed to approve or incorporate the

settlement ag r eement into its dismissal order. 9 DefendantsAppellees argu e that unlike L angley, the district court in this

case did approve the stipulation and agreement in its final

judgment. Therefore, because the stipulation and agreement

explicitly provides for exclusive j u risdiction in the federal

court, concurrent jurisdiction in state court is eliminated and the

district court retains subject matter jurisdiction.

We agree that the holding in Langley supports a finding that

a district court may retain subject matter jurisdiction when the

parties' settlement agreement providing for exclusive jurisdiction

in the federal court is approved or incorporated into the district

court's final judgment. The 1988 district court judgment approved

the federal court's exclusive jurisdiction to determine all

questions concerning title, possession and contro l of the Ranch.

However, in Langley, neither party suggested that the federal

district court did not originally have federal jurisdicti on. In

this case, Helen Manges contends that because Defendants-Appellees

r eside in Texas, there is no diversity. Therefore, the case was

never properly in federal court in the first place.

We disagree with Helen Manges' contention. Our review of the

record reveals that Helen Manges' original petition filed in state

court against Defendants-Appellees alleges that DefendantsAppellees acted in violation of t he agreed stipulation and

agreement approved by the district court in its 1988 final judgment10 Royal Ins. Co. of America v. Quinn-L Capital Corp., 960

F.2d 1286, 1292 (5th Cir.1992), cert. denied, --- U.S. ----, 114

S.Ct. 1541, 128 L.Ed.2d 193 (1994).

11 Id.

7 and the 1991 agreed occupancy order, which refers back to the 1988

final judgment. Therefore, we find that the district court has

ancillary jurisdiction in this case.

"It is well settled that a federal district court can exercise

ancillary jurisdiction over a second action in order to "secure or

preserve the fruits and advanta ges of a judgment or decree

r endered' by that court in a prior action." 1 0 Ancillary

jurisdiction is appropriate "where the effect of an action filed in

state court would "effectively nullif[y]' the judgment of a prior

federal action. This is true even where the federal district court

would not have jurisdiction over the second action if it had been

brought as an original suit." 11 Because the state action Helen

Manges brought against Defendants-Appellees will have an effect on

the 1991 agreed occupancy order and ultimately the stipulation and

agr eement approved by the district court in its 1988 final

judgment, the district court has subject matter jurisd iction in

this case.

CONCLUSION

Because the d istrict court approved the stipulation and

agreement in its 1988 final judgment and the district court has

ancillary jurisdiction in this case, we find that the district

court did not err in denying Helen Manges' motion to remand and in

granting Defe ndants-Appellees' motion to dismiss for lack of8

subject matte r jurisdiction. Accordingly, the judgment of the

district court is AFFIRMED.