Court Opinion

ID: 6326894
Source: CourtListenerOpinion
Date Created: 2022-03-25 15:00:37.34342+00
Date Added: 2024-06-11T09:22:18.194021
License: Public Domain

Appellate Case: 21-5022     Document: 010110662673       Date Filed: 03/25/2022     Page: 1
                                                                                   FILED
                                                                       United States Court of Appeals
                       UNITED STATES COURT OF APPEALS                          Tenth Circuit

                              FOR THE TENTH CIRCUIT                           March 25, 2022
                          _________________________________
                                                                          Christopher M. Wolpert
                                                                              Clerk of Court
  KRISTINA CONSULTING GROUP,
  LLC, a Colorado limited liability company;
  KRISTINA HOGAN,

        Plaintiffs - Appellants,

  v.                                                          No. 21-5022
                                                   (D.C. No. 4:19-CV-00437-JFH-JFJ)
  DEBT PAY GATEWAY, INC.,                                     (N.D. Okla.)
  a California corporation,

        Defendant - Appellee,

  and

  DECISION ONE DEBT RELIEF, LLC,
  an Oklahoma limited liability company; D1
  SERVICING GROUP, LLC, a New York
  limited liability company; ESSENTIAL
  STRATEGIC PARTNERS GROUP, INC.,
  a New York corporation; SECURE
  ACCOUNT SERVICE LLC, an Arizona
  limited liability company; VERITAS
  LEGAL PLAN, INC., a Florida
  corporation,

        Defendants.
                          _________________________________

                                ORDER AND JUDGMENT*

        *
         After examining the briefs and appellate record, this panel has determined
 unanimously to honor the parties’ request for a decision on the briefs without oral
 argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
 submitted without oral argument. This order and judgment is not binding precedent,
 except under the doctrines of law of the case, res judicata, and collateral estoppel. It
Appellate Case: 21-5022     Document: 010110662673         Date Filed: 03/25/2022    Page: 2

                          _________________________________

 Before MATHESON, BALDOCK, and PHILLIPS, Circuit Judges.
                   _________________________________

        Kristina Consulting Group, LLC., and Kristina Hogan (collectively, “KCG”)

 appeal the district court’s order dismissing appellee Debt Pay Gateway, Inc. (“DPG”).

 We dismiss the appeal for lack of jurisdiction.

                                     I. BACKGROUND

        KCG asserted state-law claims against six defendants in Oklahoma state court.

 After KCG settled with Secure Account Service, LLC, another defendant, Veritas Legal

 Plan, Inc., removed the case to federal court. Upon removal, the district court dismissed

 DPG for lack of personal jurisdiction. KCG then voluntarily dismissed Veritas with

 prejudice under a settlement agreement and eventually sought to appeal DPG’s dismissal.

        To facilitate an appeal, KCG moved the district court to certify the order

 dismissing DPG as final decision under Fed. R. Civ. P. 54(b).1 KCG also

 contemporaneously dismissed without prejudice defendants Decision One Debt Relief,

 LLC; D1 Servicing Group, LLC; and Essential Strategic Partners Group, Inc. The district

 court did not rule on the Rule 54(b) motion. KCG filed its notice of appeal anyway ten

 may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
 and 10th Cir. R. 32.1.
        1
          Fed. R. Civ. P. 54(b) states: “When an action presents more than one claim
 for relief . . . the court may direct entry of a final judgment as to one or more, but
 fewer than all, claims or parties only if the court expressly determines that there is no
 just reason for delay.”

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 months after the dismissal of DPG and five months after KCG voluntarily dismissed the

 remaining defendants.

        Before briefing, we directed KCG to obtain a Rule 54(b) certification or a final

 judgment, noting that a party generally may not manufacture finality by voluntarily

 dismissing claims without prejudice. KCG returned to the district court and sought an

 emergency Rule 54(b) certification. In response, the district court purported to enter a

 separate judgment, stating that (1) DPG was dismissed, (2) KCG voluntarily dismissed its

 claims against all remaining defendants, and (3) the judgment was the final disposition of

 the case. The parties proceeded to brief the merits of this appeal.2

                                        II. DISCUSSION

        Before we may address the merits, we must first evaluate our jurisdiction. See

 Frank v. Crawley Petroleum Corp., 992 F.3d 987, 992 (10th Cir. 2021). In particular, we

 must assess the finality of the order dismissing DPG in light of KCG’s voluntary

 dismissals of other defendants without prejudice.

                         A. Finality and Manufactured Jurisdiction

        “Under 28 U.S.C. § 1291, we have jurisdiction to review all final decisions of the

 district courts of the United States. A decision is final when it ends the litigation on the

        2
         In district court, on September 22, 2020, KCG moved for entry of default
 against Decision One under Fed. R. Civ. P. 55(a), and the clerk did so the next day.
 But on October 8, 2020, KCG “dismiss[ed] without prejudice their claims against”
 Decision One. Aplt. App. at 218. KCG did not request or apply for entry of default
 judgment against Decision One under Fed. R. Civ. P. 55(b), and the district court did
 not enter one. The court’s separate judgment on April 6, 2021, referred to its order
 dismissing DPG and “not[ed] that Plaintiff has voluntarily dismissed its claims
 against all remaining Defendants.” Aplt. App. at 227.

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 merits and leaves nothing for the court to do but execute the judgment.” Eastom v. City

 of Tulsa, 783 F.3d 1181, 1184 (10th Cir. 2015) (internal quotation marks omitted).

        Generally, a party may not “manufacture finality by obtaining a voluntary

 dismissal without prejudice of some claims so that others may be appealed.” Spring

 Creek Expl. & Prod. Co. v. Hess Bakken Inv. II, LLC, 887 F.3d 1003, 1015 (10th Cir.

 2018). For example, in Cook v. Rocky Mountain Bank Note Co., 974 F.2d 147, 147-48

 (10th Cir. 1992), the plaintiff dismissed without prejudice two of her claims so she could

 appeal the district court’s dismissal of a third claim with prejudice, despite the district

 court’s denial of her Rule 54(b) motion. We dismissed the appeal, reasoning that “[a]

 plaintiff cannot be allowed to undermine the requirements of Rule 54(b) by seeking

 [voluntary] dismissal of her remaining claims and then appealing the claim that was

 dismissed with prejudice.” Id. at 148; see also Heimann v. Snead, 133 F.3d 767, 769

 (10th Cir. 1998) (per curiam) (“Parties may not confer appellate jurisdiction upon us by

 obtaining a voluntary dismissal without prejudice of some claims so that others may be

 appealed.”).

        There are exceptions to this rule. A decision may be final when

             A claim dismissed without prejudice was predicated on a claim that was
              dismissed with prejudice. See Jackson v. Volvo Trucks N. Am., Inc.,
              462 F.3d 1234, 1238 (10th Cir. 2006) (holding that state civil conspiracy
              claim dismissed without prejudice was final and appealable because the
              underlying predicate tort claims were dismissed with prejudice).

             The statute of limitations has run on claims dismissed without prejudice.
              See Bragg v. Reed, 592 F.2d 1136, 1138 (10th Cir. 1979); cf. Eastom,
              783 F.3d at 1183-85 (holding that dismissal was not final where the statute
              of limitations had not run on the last remaining claim voluntarily dismissed
              without prejudice).

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             Claims remain against unserved defendants. In Bristol v. Fibreboard
              Corp., 789 F.2d 846 (10th Cir. 1986) (per curiam), we held that unresolved
              claims against two unserved defendants did not “prevent” the finality of a
              prior decision, but failure to enter judgment on a third defendant who was
              served did prevent the prior decision from being final. Id. at 847-48. But
              in Adams v. C3 Pipeline Construction Inc., 17 F.4th 40 (10th Cir. 2021), we
              explained that “the district court’s expectation of further proceedings
              against unserved defendants means its dismissal of served defendants is not
              final.” Id. at 55 n.4.

                                       B. Application

        Here, KCG settled with Secure Account Service and Veritas, and the district court

 dismissed DPG for lack of personal jurisdiction. KCG sought to appeal DPG’s dismissal.

 It voluntarily dismissed without prejudice its claims against remaining defendants

 Decision One Debt Relief, D1 Servicing, and Essential Strategic Partners under Fed. R.

 Civ. P. 41(a)(1)(A)(i).3 Under Rule 41(a)(1)(A)(i), a “plaintiff may dismiss an action

 without a court order by filing . . . a notice of dismissal before the opposing party serves

 either an answer or a motion for summary judgment.”4 None of the remaining defendants

        3
         KCG’s notices of dismissal appear to contain typos because they reference
 “Fed. R. Civ. P. 41(a)(a)(1).” Aplt. App. at 218, 220; see Fed. R. Civ. P. 41(a);
 Schmier v. McDonald’s LLC, 569 F.3d 1240, 1241 (10th Cir. 2009) (noting Rule
 41(a)(1)(i) was “restyled in 2007 as Rule 41(a)(1)(A)(i)”).
        4
          Although Rule 41(a)(1)(A) refers to dismissal of the “action,” the rule
 permits the dismissal of fewer than all parties so long as all claims against a
 particular party are dismissed. See Piperliners Local Union No. 798 v. Ellerd,
 503 F.2d 1193, 1199 (10th Cir. 1974) (recognizing that plaintiffs could voluntarily
 dismiss all of their claims against defendants by stipulation under Rule 41(a), leaving
 the district court with jurisdiction only over counterclaim); 8 Moore’s Federal
 Practice ¶ 41.21[3][a] (2021) (“A voluntary dismissal may be taken against fewer
 than all defendants, as long as all claims are dismissed as against each one affected.
 The term action has not been construed so broadly as to encompass the entire
 controversy against all parties pending before the district court, but includes only the
 entirety of claims against any single defendant.” (citations and footnotes omitted)).

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 had filed an answer or a motion for summary judgment. Neither D1 Servicing nor

 Essential Strategic Partners had been served nor did the district court expect further

 proceedings against them. Their dismissal without prejudice likely has no impact on the

 finality of the DPG dismissal order. See Bristol, 789 F.2d at 847-48; Adams, 17 F.4th at

 55 & n.4. But because Decision One was served, we must determine whether KCG’s

 voluntary dismissal of Decision One without prejudice renders the DPG dismissal order a

 final decision. We conclude it does not.

        We confronted similar circumstances in Eastom. There, the plaintiff sued three

 defendants. One of them, Mr. McFadden, declared bankruptcy, which automatically

 stayed the claim against him. 783 F.3d at 1182. After the district court granted summary

 judgment for the two other defendants and declined to exercise supplemental jurisdiction

 over state-law claims, the plaintiff appealed the summary judgment order. See id. at

 1183. But because the claim against Mr. McFadden continued to be stayed, we directed

 the plaintiff to show cause why the appeal should not be dismissed for lack of jurisdiction

 absent entry of final judgment as to all parties. Id. The plaintiff returned to the district

 court and voluntarily dismissed the claim against Mr. McFadden without prejudice. Id.

 The plaintiff then responded to our show-cause order, arguing that his voluntary

 dismissal made the summary judgment order a final decision because his claim against

 Our decision in Gobbo Farms & Orchards v. Poole Chemical Co., 81 F.3d 122, 123
 (10th Cir. 1996), is not to the contrary. There, we rejected use of Rule 41(a) to
 dismiss fewer than all claims in the action, but all of the claims were asserted against
 only one defendant. See id.

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 Mr. McFadden was time-barred. Id. We dismissed the appeal, ruling that Oklahoma’s

 savings statute, Okla. Stat. tit. 12, § 100, provided an additional year for the plaintiff to

 reassert his claim. See 783 F.3d at 1183. The plaintiff then waited one year from the

 time of his voluntary dismissal and then filed a second appeal. Id. We again dismissed

 because the bankruptcy stay continued to toll the statute of limitations on the claim

 against Mr. McFadden. See id. at 1184.

        Under Eastom, this appeal must be dismissed if KCG could reassert any of its

 claims against Decision One. One of KCG’s claims alleged that Decision One breached

 its fiduciary duties arising out of a limited power of attorney that KCG granted to

 Decision One in executing a “Business Debt Resolution Agreement.” Aplt. App. at 31,

 para. 104. It is unclear whether this claim was premised upon (1) the express written

 terms of the power of attorney and the agreement or (2) on implied fiduciary duties

 arising out of the power of attorney and the agreement. But in either case, the statute of

 limitations is five years. See Okla. Stat. tit. 12, § 95(A)(1) (providing five-year

 limitations period for claims based on a written contract, agreement, or promise); id.

 § 95(A)(12) (providing five-year catchall limitations period for claims “not hereinbefore

 provided for”); Belcher v. Kaye, 222 F.2d 216, 220 (10th Cir. 1955) (applying

 Oklahoma’s five-year catchall provision to a claim for breach of fiduciary relationship

 arising out of a partnership agreement).

        KCG alleged that (1) Decision One first contacted it in May 2017, see Aplt. App.

 at 19, para. 40; (2) it executed the power of attorney and the agreement on June 28, 2017,

 id. at 31, para. 104; and (3) it cancelled its enrollment in Decision One’s program in

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 November 2018, id. at 28, para. 86. Given the time of these events, the five-year

 limitations period has not expired, and KCG could still reassert this claim. The DPG

 dismissal order thus is not a final decision.

        The district court purported to enter final judgment under Fed. R. Civ. P. 58. But

 the court’s designation of an order is not dispositive on the issue of finality. Indeed,

 absent a Rule 54(b) certification, “any order or other decision, however designated, that

 adjudicates fewer than all the claims or the rights and liabilities of fewer than all the

 parties[,] does not end the action as to any of the claims or parties.” Fed. R. Civ. P. 54(b)

 (emphasis added). We recognized as much in Heimann, where, despite the district

 court’s statement that the matter was “final and immediately appealable,” we concluded

 there was no final decision because the district court had not issued a decision on the

 merits of counterclaims dismissed without prejudice. 133 F.3d at 768-79; see also Moya

 v. Schollenbarger, 465 F.3d 444, 450 n.7 (10th Cir. 2006) (“We reemphasize that bare

 terminology in a district court order is not determinative [of the finality of a decision].”);

 Tri County Tel. Ass’n v. Campbell, 2021 WL 4447909, at *10-11 (10th Cir. 2021)

 (unpublished) (reaching a similar conclusion under the same analysis where the district

 court stated “it had resolved all claims in th[e] case, and the case shall remain closed”

 (brackets and internal quotation marks omitted)).5 Here, therefore, the district court’s

 order purporting to enter final judgment did not render the DPG dismissal order a final,

 appealable decision.

        5
         We may cite unpublished decisions for their persuasive value. See Fed. R.
 App. P. 32.1; 10th Cir. R. 32.1(A).

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                                     III. CONCLUSION

       We dismiss this appeal for lack of jurisdiction.

                                              Entered for the Court

                                              Scott M. Matheson, Jr.
                                              Circuit Judge

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