Court Opinion

ID: 771570
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:53:23+00
Date Added: 2024-06-11T09:52:10.799548
License: Public Domain

235 F.3d 1325 (11th Cir. 2000)
CSX TRANSPORTATION, INC., National Railroad Passenger Corporation, Plaintiffs- Appellants,v.The CITY OF GARDEN CITY, Defendant-Third-Party, Plaintiff-Appellee,ARCO, Inc., Third-Party Defendant.
No. 99-12799.
United States Court of Appeals, Eleventh Circuit.
December 15, 2000.December 29, 2000.

Appeal from the United States District Court for the Southern District of  Georgia, (No. 98-00223-CV-4), B. Avant Edenfield, Judge.
Before ANDERSON, Chief Judge, and DUBINA and HILL, Circuit Judges.
HILL, Circuit Judge:

1
CSX Transportation, Inc. and the National Railroad Passenger Corporation filed  this action against the City of Garden City, Georgia seeking indemnification in  connection with a train/truck collision on the city's construction site. The  district court entered summary judgment for the defendant city based upon  municipal immunity. CSX Transportation, Inc. and the National Railroad Passenger  Corporation bring this appeal.

I.

2
In 1996, the City of Garden City, Georgia (Garden City or the City) decided to  install water and sewer lines along the public rights-of-way that ran across,  under, and parallel to CSX Transportation, Inc.'s (CSX) railroad tracks. The  City contracted with CSX to use CSX's rights-of-ways and agreed to indemnify CSX  for any damages arising out of the City's use of the rights-of-way. Under the  contract, the City agreed to maintain insurance to cover the indemnity  obligations it had assumed.

3
Garden City employed ARCO, Inc. as the general contractor for this project which  employed CARLCO Trucking, Inc. as a sub-contractor. On October 9, 1997, a CARLCO  employee drove a tractor-trailer truck to the City's work site to remove  equipment. As he crossed CSX's tracks, his truck stalled on the tracks where it  was hit by a National Railroad Passenger Corporation (Amtrak) passenger train.  CSX paid damages to passengers on the train and sued Garden City for  indemnification under their agreement. Garden City filed a third-party claim  against its contractor, ARCO.

4
Sometime later, the City filed a motion for summary judgment against CSX,  asserting that it was immune to CSX's claim for damages for a number of reasons.  The district court agreed with the City1 and, on July 12, 1999, granted it  summary judgment. The court noted, however, that Garden City's third-party  complaint against ARCO for indemnification was still pending and "the Clerk  should not close this case." Subsequently, Garden City with the consent of ARCO  and approval of the court, voluntarily dismissed without prejudice its  third-party claim against ARCO. CSX and Amtrak filed this appeal.

5
Concerned about the finality of the summary judgment, this court, on its own  motion, directed the parties to brief and argue the issue of our jurisdiction to  hear this case.

II.

6
To be appealable, an order must either be final or fall into a specific class of  interlocutory orders that are made appealable by statute or jurisprudential  exception. See 28 U.S.C.  1291, 1292; Atlantic Fed. Sav. & Loan Ass'n v.  Blythe Eastman Paine Webber, Inc., 890 F.2d 371, 375-76 (11th Cir.1989). A final  decision is " 'one which ends the litigation on the merits and leaves nothing  for the court to do but execute the judgment.' " Pitney Bowes, Inc. v. Mestre,  701 F.2d 1365, 1368 (11th Cir.1983) (quoting Catlin v. United States, 324 U.S.  229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945)). A judgment that does not  effectively terminate the litigation is not final or immediately appealable  unless the district court certifies the judgment for immediate appeal under  Fed.R.Civ.P. 54(b). See 28 U.S.C.  1291; Williams v. Bishop, 732 F.2d 885,  885-86 (11th Cir.1984); In re Yarn Processing Patent Validity Litigation, 680  F.2d 1338, 1339-40 (11th Cir.1982).

7
We have held many times that a partial adjudication on the merits, followed by a  voluntary dismissal without prejudice of a pending claim, does not effectively  terminate the litigation and, therefore, does not satisfy the finality  requirement of 28 U.S.C.  1291. Ryan v. Occidental Petroleum Corp., 577 F.2d  298, 302-03 (5th Cir.1978). See also State Treasurer v. Barry, 168 F.3d 8, 11-13  (11th Cir.1999); Construction Aggregates, Ltd. v. Forest Commodities Corp., 147  F.3d 1334, 1336-37 (11th Cir.1998); Mesa v. United States, 61 F.3d 20 (11th  Cir.1995). That is what happened in this case. The district court's July 12  entry of summary judgment was a partial adjudication on the merits. It was  followed by the voluntary dismissal without prejudice of the remaining pending  claim-Garden City's third-party claim against ARCO. Therefore, if Ryan applies,  this series of events did not terminate the litigation. 577 F.2d at 302-03  (summary judgment plus a voluntary dismissal without prejudice of a remaining  claim does not effectively terminate litigation).

8
As a threshold matter, then, there does not appear to be a final, appealable  order in this case. Inasmuch as neither party had the court certify the July 12  summary judgment for appeal under Rule 54(b), we do not have jurisdiction to  hear this appeal unless there is some other reason why the judgment should be  considered final.

9
CSX argues that we have jurisdiction under the Jetco exception to the finality  rule. Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d 1228, 1231 (5th  Cir.1973). Under this exception, a series of court orders, considered together,  may be said to constitute a final judgment if they effectively terminate the  litigation. Id. In this case, the summary judgment plus the entry of the  voluntary dismissal effectively terminated this litigation, leaving nothing else  for the district court to do, which it recognized by closing the case. CSX  argues that this series of court orders may be considered a final judgment.

10
Furthermore, CSX argues that this series of orders should be considered a final  judgment because if they are not, Garden City and ARCO will receive a windfall.  If there is no final judgment, CSX will forever lose its right to appeal in this  case.2

11
This result, CSX argues, is not required by Ryan and its progeny. The common  theme of these cases is that jurisdiction cannot be manufactured. For example,  when a district court enters an adverse, but otherwise non-appealable, ruling  against a party, that party may seek to appeal the ruling immediately by  dismissing without prejudice his remaining claims-sort of warehousing them for  later revival if needed-attempting to manufacture a final, appealable judgment.  We have consistently rejected such attempts to obtain appellate review of an  otherwise non-final order. See State Treasurer, 168 F.3d at 11-12, 16 (plaintiff  and defendant stipulated to the dismissal without prejudice of remaining  counterclaim and plaintiff sought to appeal); Construction Aggregates, 147 F.3d  at 1335-36 (defendant dismissed remaining counterclaim without prejudice and  then sought to appeal); Mesa, 61 F.3d at 21 (plaintiff dismissed remaining  claims without prejudice and then sought to appeal); Ryan, 577 F.2d at 300  (plaintiff dismissed remaining claims without prejudice and sought to appeal).

12
CSX points out that it is not guilty here of such an attempt to manufacture  jurisdiction. After the summary judgment, it had no remaining claims. Nor did it  participate in any way in Garden City and ARCO's agreement to dismiss without  prejudice Garden City's remaining third-party claim.

13
This case is the mirror image of Ryan, where the parties attempted to  manufacture appealability. Here, Garden City and ARCO appear to have undertaken  to manufacture non-appealability. If there is no final appealable order in the  case, CSX will be deprived of any appellate review of the dismissal of its  lawsuit and will be left holding the proverbial (and unenviable) "bag."

14
We have noted this possibility before. In State Treasurer, we expressed concern  that under the Ryan rule, an appellant not involved in the decision to dismiss a  remaining claim without prejudice and, therefore, not guilty of conspiring to  create jurisdiction, would nonetheless lose his right to appeal. 168 F.3d at 21  (Cox, J., specially concurring). We said then that "[w]hatever the wisdom of  punishing crafty litigants, it is hard to justify punishing their victims." Id.  CSX urges us to transform this concern into a new rule for this circuit.

15
There is some authority for this result. In Schoenfeld v. Babbitt, 168 F.3d  1257, 1265-66 (11th Cir.1999), we held that where the appellant had dismissed  its claims against a defendant without prejudice before the district court  entered judgment for the remaining defendant, Ryan did not apply and that order  was final and appealable.

16
In this case, however, the voluntary dismissal followed the entry of the  non-final order and, therefore, is asserted to come under the rule of Ryan. Even  if the rule is harsh, we are bound to follow it if it applies to this case. The  issue is whether it does apply.3 We conclude that it does not.

17
In this case, a summary judgment was entered against the plaintiff. Then, the  defendant and the third-party defendant stipulated to the dismissal of the  remaining third-party claim. The plaintiff did not participate in any way in the  voluntary dismissal of the third-party claim. The defendant and third-party  defendant agreed to that disposition. As nothing remained pending in the  lawsuit, the district court ordered the Clerk to close the case. The plaintiff  then filed a notice of appeal of the judgment which had been entered against it  prior to the voluntary dismissal.

18
Under these circumstances, the rule of Ryan is inapplicable. Because the  appellant did not participate in the voluntary dismissal of the remaining  claims, there was no collusion between it and the parties dismissing the  remaining claim. Therefore, there was no attempt to manufacture jurisdiction. On  the contrary, the plaintiff/appellant stands to lose all right to appeal if the  rule of Ryan applies under these circumstances. Additionally, in the future,  parties could deliberately manipulate the proceedings to make the rule of Ryan  apply to cut off their adversary's right to appeal.4

19
We conclude that Ryan was not intended to apply to the circumstances of this  case. The voluntary dismissal, with or without prejudice, of a defendant's  remaining third-party claim in an otherwise terminated lawsuit does not bar the  plaintiff's right to appeal a judgment against it. Under these circumstances,  the summary judgment plus the voluntary dismissal of the remaining claim in the  case satisfies the finality requirement of Rule 54(b) for the purpose of  terminating the litigation. See Jetco, 473 F.2d at 1231.

20
CSX was not involved in any way in the voluntary dismissal of Garden City's  remaining third-party claim against ARCO. Accordingly, Garden City's voluntary  dismissal of its third-party claim against ARCO effectively terminated this case  in the district court.5 Accordingly, we conclude that Ryan does not apply to  this case. Nor shall we extend it to apply to this case. We have jurisdiction  over this appeal.

III.

21
The indemnification contract between CSX and Garden City provided that the City  would assume liability for all claims arising out of its construction in CSX's  rights-of-way. It, in effect, required the City to waive its sovereign immunity  vis-a-vis CSX in connection with any claims against CSX arising out of the  City's construction project.

22
Georgia law, however, forbids a city from waiving its sovereign immunity unless  it has insurance to fund any liability it might thereby incur.6 The relevant  statute provides:

23
[a] municipal corporation shall not waive its immunity by the purchase of  liability insurance ... unless the policy of insurance issued covers an  occurrence for which the defense of sovereign immunity is available, and then  only to the extent of the limits of such insurance policy.

24
O.C.G.A.  36-33-1.

25
The district court concluded, therefore, that "the indemnification agreement  here is barred by municipal immunity-except to the extent that the City obtained  insurance to cover it." Because CSX made no showing in the district court that  Garden City procured or had any such insurance,7 the district court held that  its agreement to indemnify CSX was ultra vires and null and void. See Precise v.  City of Rossville, 261 Ga. 210, 403 S.E.2d 47 (1991).

26
While on appeal, CSX moved to supplement the record in this case to show that  Garden City participates in the Georgia Interlocal Risk Management Agency  (GIRMA) fund which provides it coverage up to $1,000,000 against "all sums which  [Garden City] shall be obligated to pay as money damages by reason of liability  imposed upon [Garden City] by law or assumed by [Garden City] under contract or  agreement." CSX argued in its motion that the grant of summary judgment was in  error because the City does have the requisite insurance to enable it  effectively to waive its sovereign immunity. A panel of this court denied the  motion. CSX renewed this motion on appeal in its brief and at oral argument.

27
We rarely enlarge the record on appeal to include material not before the  district court which has labored without the benefit of the proffered material.  See Hormel v. Helvering, 312 U.S. 552, 556, 61 S.Ct. 719, 85 L.Ed. 1037 (1941);  Kemlon Products & Dev. Co. v. United States, 646 F.2d 223, 224 (5th Cir.1981).   We do, however, have the inherent equitable power to allow supplementation of  the appellate record if it is in the interests of justice. Young v. City of  Augusta, Georgia ex rel DeVaney, 59 F.3d 1160, 1168 (11th Cir.1995). This is a  matter left to our discretion. Dickerson v. Alabama, 667 F.2d 1364, 1367 (11th  Cir.1982). We decide on a case-by-case basis whether a particular appellate  record should be supplemented. Ross v. Kemp, 785 F.2d 1467, 1474-75 (11th  Cir.1986).

28
A primary factor which we consider in deciding a motion to supplement the record  is whether acceptance of the proffered material into the record would establish  beyond any doubt the proper resolution of the pending issues. Dickerson, 667  F.2d at 1367. In this case, the district court held that the City's failure to  procure insurance rendered its agreement to indemnify CSX null and void. The  existence or non-existence of insurance, then, was pivotal to the district  court's resolution of this case. Under these circumstances, we are persuaded  that supplementation of the record on this issue is in the interests of justice.  See Cabalceta v. Standard Fruit Co., 883 F.2d 1553, 1555 (11th Cir.1989) (a  consideration of all the relevant information is necessary to make an informed  and final decision).

29
Garden City objects to this supplementation on the grounds that CSX knew of the  GIRMA coverage prior to the entry of summary judgment and could have introduced  it into the record in opposition to the City's motion for summary judgment. The  City, however, never argued to the district court that its contract to indemnify  CSX was void because it had not honored its agreement to procure the requisite  insurance. In its motion for summary judgment, the City cited a host of reasons  why its agreement to indemnify CSX was void, but lack of insurance was not one  of them.8

30
The district court's opinion, which found the lack of insurance fatal to the  agreement, was the first time the issue was clearly raised. Relying on an  affidavit by a former mayor who stated that Garden City "did not appropriate any  monies to fund the City's indemnification obligation," the trial court concluded  that no insurance existed to cover the City's potential liability to CSX.  Summary judgment was entered on July 12, 1999. CSX appealed on August 6, 1999,  and filed the motion to supplement the record on September 23, 1999.

31
While we rarely exercise our authority to enlarge the appellate record, the  Supreme Court has reminded the appellate courts that:

32
[T]he rules of practice and procedure are devised to promote the ends of  justice, not to defeat them. A rigid and undeviating judicially declared  practice under which courts of review would invariably and under all  circumstances decline to consider all questions which had not previously been  specifically urged would be out of harmony with this policy. Orderly rules of  procedure do not require sacrifice of the rules of fundamental justice.

33
Hormel, 61 S.Ct. at 721.

34
Under the circumstances of this case, we conclude that the motion to supplement  the record should be granted. Since the district court never had the opportunity  to consider what effect, if any, the City's participation in the GIRMA fund has  on the City's indemnification agreement with CSX, we shall remand the case to  the district court so that it may consider this fact before determining whether  Garden City effectively waived its immunity by its agreement to indemnify CSX.  We express no opinion on the outcome of that review.

IV.

35
We hold that the summary judgment and the voluntary dismissal considered  together effectively terminated this litigation in the district court, and we  have jurisdiction over this appeal. We hold that CSX's motion to supplement the  record on appeal is due to be granted. Accordingly, the motion to supplement the  record is GRANTED, the entry of summary judgment is VACATED and the case is  REMANDED to the district court for proceedings consistent with this opinion.

NOTES:

1
 Although for a different reason, as we discuss later.

2
 CSX could ask the district court to certify the July 12 order and judgment as  final under Fed.R.Civ.P. 54(b), but there is no guarantee that the court will  grant their request. See State Treasurer, 168 F.3d at 20 (Cox, J. specially  concurring) (the entry of judgment under 54(b) is not a matter of right and is  committed to the sound discretion of the district court).

3
 Garden City concedes that whether the rule of Ryan applies to render voluntary  dismissals of third-party claims non-final is an issue of first impression in  this circuit.

4
 In State Treasurer, Judge Cox hypothesized just such a possibility: a plaintiff  who seeks to cut off her opponent's right to appeal, files a meritless claim  along with her valid one. Before the court can rule on her claims, she  voluntarily dismisses the meritless claim. After judgment in her favor, her  opponent is left with no right to appeal because, under Ryan, the voluntary  dismissal is not a final order. 168 F.3d at 21. This scenario has, fortunately,  been forestalled by our decision in Babbitt, 168 F.3d at 1266.

5
 Garden City argues that because it claimed indemnity including attorneys fees  against ARCO, it may revive this claim at any time since its dismissal was  without prejudice. We express no opinion on that issue, but note that if the  City is correct, then it holds the key to the presently locked door to CSX's  appeal even more firmly in its grip since it can resurrect that right by  reviving and prosecuting its claim for fees to judgment.

6
 Otherwise, the taxpayers of the city would have to foot the bill.

7
 CSX never produced any evidence to counter the City's claim that it never  "purchased" the necessary insurance, and the district court held that this fact  was established under S.D.Ga. Local Rule 56.1. The City did not, however, deny  that it "had" insurance which might cover this claim. In fact, they identified  the "insurance policy" offered now by CSX in response to an interrogatory asking  for any policy which might cover the claim.

8
 The City argued that the indemnity agreement was void because it: unlawfully  waives the City's municipal immunity; creates an unlawfully lengthy obligation  of Garden City; creates an unlawful public debt; impermissibly grants a  gratuity; and violates public policy. Since we shall remand this case for  reconsideration of the issue of immunity in view of the existence of the GIRMA  policy, we shall not consider the issues of unlawful obligation and public debt  as they may depend on the existence of insurance coverage. We find no merit in  the remaining arguments advanced by the City.