Source: https://law.justia.com/cases/federal/appellate-courts/F2/912/672/18577/
Timestamp: 2019-08-18 23:13:52
Document Index: 377297537

Matched Legal Cases: ['§ 1101', '§ 1291', '§ 158', '§ 158', '§ 13343', '§ 1291', '§ 1292', '§ 1292', '§ 1292', '§ 158', '§ 1334']

United States Court of Appeals,third Circuit, 912 F.2d 672 (3d Cir. 1990) :: Justia
United States Court of Appeals,third Circuit, 912 F.2d 672 (3d Cir. 1990)
US Court of Appeals for the Third Circuit - 912 F.2d 672 (3d Cir. 1990)
Argued April 24, 1990. Decided Aug. 30, 1990. Rehearing and Rehearing In Banc DeniedOct. 10, 1990
Metro Transportation Company ("Metro"), a taxi company in Philadelphia that has filed in bankruptcy under Chapter 11 of the Bankruptcy Code (11 U.S.C. § 1101 et seq.) brought this action for declaratory judgment in the Eastern District of Pennsylvania to determine whether the liability for third party claims against Metro must be borne by the bankrupt debtor or by three insurance companies ("Insurance Companies"), Underwriters at Lloyd's of London, Henry Ralph Rokeby-Johnson as representative ("Lloyd's"), North Star Reinsurance Corp. ("North Star"), and Northwestern National Insurance Company ("Northwestern") under certain automobile insurance contracts.1
* In every appeal we must first be satisfied that this court has appellate jurisdiction. Indeed, the Supreme Court has admonished the courts of appeals that this must be a threshold inquiry, particularly if jurisdiction is not apparent. Goodyear Atomic Corporation v. Miller, 486 U.S. 174, 108 S. Ct. 1704, 100 L. Ed. 2d 158 (1988) ("Although neither party contests our appellate jurisdiction over this case, we must independently determine as a threshold matter that we have jurisdiction"); See also Baldwin County Welcome Center v. Brown, 466 U.S. 147, 104 S. Ct. 1723, 80 L. Ed. 2d 196 (1984); Brown Shoe Co. v. United States, 370 U.S. 294, 82 S. Ct. 1502, 8 L. Ed. 2d 510 (1962). Where counsel has not satisfied us that jurisdiction is present, we are obliged to raise that issue on our own initiative. Such is the case here.
At oral argument we raised questions concerning the statutory bases for our jurisdiction, the applicability of Fed.R.Civ.Proc. 54(b) to bankruptcy proceedings and whether the order from which the present appeals were taken was final. We also questioned whether the certification by the district court pursuant to Rule 54(b) if applicable, complied with the mandate of Allis-Chalmers v. Philadelphia Electric Co, 521 F.2d 360 (3rd Cir. 1975).
To resolve these questions, we sought supplemental briefing from the parties. Essentially we sought to determine if we could exercise jurisdiction over an appeal based upon the well established rules codified in 28 U.S.C. §§ 1291-1292, or if our jurisdiction over a bankruptcy appeal is governed by 28 U.S.C. § 158(d),2 or both.
In the present appeal, we are reviewing a district court ruling where no bankruptcy court has ever ruled on the relevant issue, and therefore no appeal has been taken under 28 U.S.C. § 158(a) from the bankruptcy court to the district court and then to this court under Sec. 158(d). As we observed in note 1 supra, jurisdiction in this case was transferred without a ruling of the bankruptcy court to the district court prior to trial. Thereafter the issue of liability was decided solely by the district court under its bankruptcy powers pursuant to 28 U.S.C. § 13343 and not as a result of an appeal under Sec. 158(a).
As we stated in U.S. v. Nicolet, Inc., 857 F.2d 202, 204 (3d Cir. 1988):
This result illustrates the gap existing in the procedure Congress created to govern bankruptcy appeals. Section 158(a) grants the district courts appellate authority over rulings entered by bankruptcy judges. Additional review in the courts of appeals of the district judges' appellate disposition is then explicitly authorized in section 158(d). However, no provision addresses the courts of appeals' authority to review orders entered by the district court in their non-appellate bankruptcy role. Therefore, the only available review of original orders entered by the district court lies under the general appeal provision, 28 U.S.C. § 1291.
Similar analyses can be found in In re Bishop, 856 F.2d 78 (9th Cir. 1988) and In re Louisiana World Exposition, 832 F.2d 1391 (5th Cir. 1987).
Although this case arises under Sec. 1291 rather than Sec. 158(d), "we have consistently considered finality in a more pragmatic and less technical way in bankruptcy cases than in other situations." In re Amatex, 755 F.2d 1034, 1039 (3rd Cir. 1985). In Nicolet as well, we held that "in the bankruptcy setting present in this case, our section 1291 jurisdiction mirrors that under section 158(d)." We recently reaffirmed, in In re Pruitt, 910 F.2d 1160 (3rd Cir. 1990), that in the bankruptcy context the concept of finality should be viewed functionally. See at 1165. "Nonetheless," we warned, "our relaxed view of bankruptcy orders cannot import appellate jurisdiction without some vestige of finality." Id.
Accordingly, to vest jurisdiction in this court where the district court has not disposed of all parties and issues, and absent an appealable injunctive order under 28 U.S.C. § 1292(a), either certification under 28 U.S.C. § 1292(b) must be granted by the district court and by this court, or a Rule 54(b) certification complying with Allis-Chalmers must be ordered, or, in the bankruptcy context, we must be satisfied that the particular adversarial dispute has been resolved to a sufficient degree of finality.4
In Allis-Chalmers Corp. v. Philadelphia Electric Co., 521 F.2d 360, 363 (3d Cir. 1975) we insisted that the district court provide us with reasons adequate to support a Rule 54(b) certification.
A proper exercise of discretion under Rule 54(b) requires the district court to do more than just recite the 54(b) formula of "no just reason for delay." The court should clearly articulate the reasons and factors underlying its decision to grant 54(b) certification. "... It is essential ... that a reviewing court have some basis for distinguishing between well-reasoned conclusions arrived at after a comprehensive consideration of all relevant factors, and mere boiler-plate approval phrased in appropriate language but unsupported by evaluation of the facts or analysis of the law...." Protective Committee v. Anderson, 390 U.S. 414, 434, 88 S. Ct. 1157, 1168, 20 L. Ed. 2d 1 (1968).
We are not alone in establishing these requirements for a Rule 54(b) order. Since Allis-Chalmers, other courts of appeals have adopted this requirement; Pahlavi v. Palandjian, 744 F.2d 902 (1st Cir. 1984); Arlinghaus v. Ritenour, 543 F.2d 461 (2d Cir. 1976); Rothenberg v. Security Management Co., Inc., 617 F.2d 1149 (5th Cir. 1980); Solomon v. Aetna Life Insurance Co., 782 F.2d 58 (6th Cir. 1986); United States General, Inc., v. Albert, 792 F.2d 678 (7th Cir. 1986); Hayden v. McDonald, 719 F.2d 266 (8th Cir. 1983).
that the Interlocutory Orders involve a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal may materially advance the ultimate termination of the litigation; and ... that this Court's Memoranda and Orders dated July 7, 1989 and October 24, 1989 are Certified for Appeal pursuant to Title 28 U.S.C. § 1292(b).
Our review of an appeal from the grant of a motion for summary judgment is plenary. Where factual controversies exist, disputes over material facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). However, where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, or where the facts are not disputed, there is no genuine issue for trial. Matsushita Electrical Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S. Ct. 1348, 1355-56, 89 L. Ed. 2d 538 (1986). Thus, where the facts are undisputed, we must determine whether the district court properly analyzed the relevant legal principles governing the dispute.
Type of PIP Claims UM Claims Liability claim Claims From 92883 92883 92883 to 42684 42684 42684 Insurance Northwestern Northwestern Northwestern Companies North Star North Star North Star liable Lloyd's Lloyd's Lloyd's Type of PIP Claims UM Claims Liability claim Claims From 42684 42684 42684 To 92884 92884 92884 Insur. Com North Star North Star North Star liable Lloyd's Lloyd's Lloyd's
Based on this statute, Northwestern claims that " [o]ne of the implied and 'clearly necessary' powers implicit in this grant, is the PUC's right to reject, cancel, compile and maintain those filings. Therefore, when the PUC canceled Northwestern's Form E effective September 28, 1983, it acted within its power." (Northwestern brief at 89-2008, p. 20)
In Pennsylvania, "the filings and all underlying insurance contracts speak for themselves." (See In re Valmar, 38 F. Supp. 618 (E.D. Pa. 1941); Scott v. Bryn Mawr Arms, Inc., 454 Pa. 304, 312 A.2d 592 (1973)). Additionally, Pennsylvania case law makes it clear that no administrative agency can alter or modify any statute enacted by the Legislature; Serefeas v. Nationwide Insurance Co., 338 Pa.Super. 587, 488 A.2d 48 (1985). Thus the district court correctly determined that, absent a specific statute or regulation to the contrary, no administrative agency in the Commonwealth had the authority to determine or modify the contractual rights of the insurers under their policies.
The No-fault Act makes insurance mandatory for all owners of motor vehicles, but allows self-insurance subject to the approval of the insurance commissioner. See 40 P.S. Sec. 1009.104(a) (b). Similarly, as the court in Modesta observed, the Legislature granted SEPTA the authority to self-insure. 503 Pa. at 441 n. 2, 469 A.2d at 1022 n. 2. As a common carrier Yellow Cab may also self-insure if it meets the criteria established by the Public Utility Commission. 52 Pa.Code Sec. 29.104(d).
Nor can Lloyd's attempted distinction between the insurer who issues the policy [Lloyd's] and the insurer who certifies the Form E [North Star], be found in Pennsylvania law. The thrust of the controlling statute (40 Pa.S.A. Sec. 1009.209) which speaks in terms of " [a] contract of insurance" provides to the contrary, stating:
The case originally proceeded in bankruptcy court, but was transferred to the district court when the bankruptcy court took the position that a jury trial might be needed and the bankruptcy court stated that it was not authorized to conduct such trial. The issue as to whether a bankruptcy court may conduct a jury trial has yet to be decided by this court, and has been reserved by the Supreme Court in Granfinanciera, S.A. v. Nordberg, --- U.S. ----, 109 S. Ct. 2782, 106 L. Ed. 2d 26 (1989). The Second Circuit recently ruled that jury trials by the bankruptcy courts are permitted; see In re Ben Cooper 896 F.2d 1394 (2d Cir.), cert. granted, --- U.S. ----, 110 S. Ct. 3269, 111 L. Ed. 2d 779 (1990). The Eighth Circuit has stated its disagreement with this rule; In re United Missouri Bank Of Kansas City, 901 F.2d 1449 (8th Cir. 1990)
28 U.S.C. § 158(d) states:
28 U.S.C. § 1334 states in relevant part:
Other courts of appeals have interpreted the finality requirement found in both Sec. 158(d) and Sec. 1291 differently. Compare In re Morse, 805 F.2d 262 (7th Cir. 1986) and In re Vause, 886 F.2d 794 (6th Cir. 1989) and In re Compton Corp., 889 F.2d 1104 (Temp.Emer. Ct. App. 1989) with In re Wood and Locker, Inc., 868 F.2d 139 (5th Cir. 1989) and In re Hawaii Corp., 796 F.2d 1139 (9th Cir. 1986)
Northwestern claims before us that there are outstanding factual issues left to be resolved as to whether Metro procured its insurance policy through fraud. The record does not reveal that this issue was raised in the district court. We therefore do not address it on appeal; See Newark Stereotypers' Union No. 18, v. Newark Morning Ledger Co., 397 F.2d 594 (3d Cir. 1968)
[The insurance companies' own] actions have now created an ambiguity as to the rights and responsibilities of the insurers. Although " [a] court is not authorized to construe a contract in such a way as to modify the plain meaning of its words ..." "where ambiguities are contained in an insurance policy, the Pennsylvania 'rule' requires that they be construed in favor of the insured." The interpretations of insurance contracts, in general, are "designed to promote coverage and to fulfill the dominant purpose of providing indemnification. In a word, ... to maximize coverage for the insured."