Court Opinion

ID: 2964058
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:19:50.061859+00
Date Added: 2024-06-11T11:42:49.700942
License: Public Domain

USCA1 Opinion

	

          April 26, 1996
                                [Not for Publication]
                            United States Court of Appeals
                            United States Court of Appeals
                                For the First Circuit
                                For the First Circuit
                                 ____________________

        No. 95-1949

                                ELIZABETH V. BOGOSIAN,

                                 Plaintiff, Appellee,

                                          v.

                            JAMES H. WOLOOHOJIAN, ET AL.,

                                     Defendants,

                                _____________________

                              WOLOOHOJIAN REALTY CORP.,

                                Defendant, Appellant.
                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

                 [Hon. Francis J. Boyle, Senior U.S. District Judge]
                                         __________________________

                                 ____________________

                                        Before

                                Cyr, Boudin and Stahl,
                                   Circuit Judges.
                                   ______________

                                 ____________________

            William R. Grimm, with whom Robert M. Duffy  and Hinckley, Allen &
            ________________            _______________      _________________
        Snyder, were on brief for appellant.
        ______
            Charles  D.  Ray, with  whom  John  W.  Cannavino  and Cummings  &
            ________________              ___________________      ___________
        Lockwood, were on brief for appellee.
        ________
                                 ____________________

                                 ____________________

                      Per Curiam.  This litigation has already used up an
                      Per Curiam.
                      __________

            enormous amount  of legal talent and  judicial resources over

            its  seven-year life.  The ultimate issue is simply the value

            of  a   minority  shareholder's  stake  in   a  closely  held

            corporation.   Yet, the dispute  has resulted so  far in more

            than 250  entries  on  the  district court  docket  and  four

            district court  orders published  in the  Federal Supplement.

            This is the third occasion on which the numerous protagonists

            of this legal war have brought appeals before us; none of the

            appeals concern the principal issue in  the litigation.  From

            all we can tell, the end is not yet in sight.

                      Now  two district  court judges  have  entered what

            appear to  be conflicting  orders affecting  interim payments

            due to  the appellee.  Orders by a third district judge and a

            magistrate judge also implicate those payments, and a bevy of

            lawyers, for themselves and  for their clients, have asserted

            claims  and  liens  against  the  same  funds.    The  issues

            presented in this appeal could have been resolved without our

            intervention  if the  parties  were disposed  to manage  this

            litigation  with a  view toward  resolving issues  instead of

            proliferating them.

                      In  any case,  there are before  us for  review two

            different  orders  of  the  district  court  entered  on  two

            different  dates.   The  first is  the  July 26,  1995, order

            denying a motion by Woloohijian Realty Corporation ("WRC") to

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            modify the July 13, 1990, order directing WRC to make monthly

            payments  to Bogosian.   The  second is  the August  8, 1995,

            order  releasing funds to Bogosian  that had been  held in an

            escrow  account  pursuant to  a June  8,  1993, order  of the

            magistrate judge.   We  treat the  two orders  separately for

            reasons that will become apparent.

                      1.   There is no apparent  jurisdictional basis for

            immediate  appeal of the August 8 order.   This order, so far

            as  it is  contested on  appeal, merely released  to Bogosian

            funds held under  an escrow established  at the direction  of

            the  magistrate  judge and  held  explicitly  subject to  the

            control of the court.  The district court ruled  (1) that the

            magistrate judge lacked authority to order these funds placed

            in escrow and (2)  even if that course had  been permissible,

            the funds should now be disbursed from escrow to Bogosian.

                      Contrary to appellants'  assumption, this order  is

            not  in form  an injunction  immediately appealable  under 28

            U.S.C.    1292(a)(1).    Sometimes orders  not designated  as

            injunctions  are  so  treated  where  irreparable  injury  is

            threatened,  Carson  v.  American  Brands, 450  U.S.  79,  84
                         ______      ________________

            (1981),  but here  there is  also no  showing of  irreparable

            injury.   The court's  disposition  of funds  within its  own

            control does  not create any  danger that appellants  will be

            held  in contempt by another  judge; nor is  it apparent that

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            this  single  transfer  of  funds to  Bogosian  will  subject

            appellants to the potential for excessive liability.

                      2.    The July  26  order  refusing to  modify  the

            earlier injunction stands on a different footing.  Appellants

            had  urged its  modification,  arguing  that  the  injunction

            (directing them to make payments monthly to Bogosian) clashed

            with a later  directive of  another judge of  the same  court

            directing appellants to  withhold the  monthly payments  from

            Bogosian pursuant  to an attachment  order in favor  of other

            creditors.1   The  refusal   to   modify  an   injunction  is

            ordinarily appealable at once.  Section 1292(a)(1).

                      The  district court  based its  July 26  refusal to

            modify on the  ground that  appellants would not  be held  in

            contempt  for distributing  funds in  the court's  "custody."

            Rhode Island  law is  unsettled  as to  the scope  of the  in
                                                                       __

            custodia legis doctrine.   While we agree that this reasoning
            ______________

            would  likely  apply to  the escrowed  funds,  it is  at best

            debatable  whether in  the present  circumstances unearmarked

            funds  held by  appellants would  meet this  description; and

            assuming that appellants are under a conflicting order not to

            pay  those funds  to  Bogosian, we  think  that the  district

                                
            ____________________

            1.  We  have assumed  this  conflict arguendo  because it  is
                                                 ________
            asserted  by  appellants and  not  directly  disputed by  the
            district court,  the appellee or the  record materials before
            us.   But we note that  the record before us  is not complete
            and are not ourselves ruling that the conflict exists.

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            court's reasoning  does not explain away  the apparent threat

            to appellants.

                      3.   In  remanding  for further  consideration,  we

            think  it  important  to  emphasize that  there  are  serious

            problems  of both  appearance  and fairness  when a  litigant

            seems to be subject to conflicting directives from two judges

            of  the  same court.    However  tangled  and  vexatious  the

            litigation  may  be,  this  apparent  conflict  needs  to  be

            resolved, either by establishing  that the judicial orders do

            not conflict,  or by harmonizing  the appellants' obligations

            to the several claimants to the funds.

                      One solution might be for the court to act promptly

            on the  long-pending interpleader action by  which appellants

            have    sought   to    reconcile   the    alleged   conflict.

            Alternatively,  it  might be  possible  to  consolidate these

            actions before  a single judge so  that he or she  can make a

            binding  determination as  to  the scope  of the  appellants'

            interim  obligations.   Whatever  course  the district  court

            adopts,  we think this aspect of the matter does need careful

            but prompt attention.

                      The appeal  from the August  4, 1995, order  of the

            district court is dismissed.  The July 26, 1995, order of the
                              _________

            district court  is vacated, and  that matter is  remanded for
                               _______                       ________

            further proceedings consistent with this order.

                      It is so ordered.
                      It is so ordered
                      ________________

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