Court Opinion

ID: 196732
Source: CourtListenerOpinion
Date Created: 2011-02-07 03:12:45+00
Date Added: 2024-06-11T13:11:07.123844
License: Public Domain

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                    [Not for Publication]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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