Vacating judgment does not affect appeal

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A district court cannot extend the time for filing an appeal beyond the 30 days permitted in Rule 4(a)(5) by vacating the judgment, the Seventh Circuit held on Oct. 7.

Properties Unlimited, Inc. Realtors is an Illinois real estate brokerage firm that participated for a number of years as a franchisee of Coldwell Banker Real Estate Corporation, a large national firm. In 1996, Cendant Mobility Services acquired the franchisor of the Coldwell network.

Properties decided that Cendant had made misrepresentations to it, and brought a diversity action in Illinois federal court, but was unsuccessful. On May 24, 2002, the district court entered a Minute Order, accompanied by a Memorandum Opinion dismissing the complaint.

The order was entered on the court’s docket on May 28, but no formal judgment form was prepared. On June 13, more than 10 days after the order was docketed, Properties moved for reconsideration of the May 24 order.

On June 18, Properties followed up with an emergency motion under Rule 60(b)(1) for relief from the May 24 order, or for an extension of time to file a notice of appeal under FRAP 4(a)(5). At that point, the 30-day period for appeal under FRAP 4(a)(1) was due to expire June 27.

The court granted the Rule 4(a)(5) motion, extending the time for appeal until July 26, and denied the Rule 60(b)(1) motion as moot.

On July 24, the district court was still not ready to rule on the merits of the motion to reconsider, and so ordered the May 24 order, reasoning, "we were convinced that the motion for reconsideration merited careful consideration and, if we were to change our views, it made no sense to burden the Court of Appeals with an unnecessary appeal. Accordingly, at a time when an appeal was still timely, it was our intention to vacate any appealable order and to postpone any appeal until the ruling upon the motion for reconsideration determined whether the dismissal would stand."

Ultimately, however, the court denied the motion to reconsider, on Sept. 25. The order read, "We adhere to our original conclusion and deny the motion to reconsider," but said nothing about reinstating the order of May 24.

On Oct. 15, 2002, Properties filed its notice of appeal from the Sept. 25 order. Cendant contested jurisdiction, and Properties responded with another Rule 60(b) motion in district court. The court granted that motion on Feb. 19, 2003. Cendant then cross-appealed from this order.

The Seventh Circuit dismissed Properties’ appeal as untimely, and Cendant’s as moot, in a decision by Judge Diane P. Wood.

Final Judgment

The court first held that the May 24 order, entered on May 28, constituted a final judgment, because it bore all the indicia of a final judgment: it disposed of all claims of all parties; it announced that the dismissals of the counts remaining in the case were with prejudice; and it said nothing that would have hinted that the court expected to see an amendment to the complaint.

The court acknowledged that there was no separate judgment entered on the AO 450 judgment form pursuant to FRCP 58, but noted that it has been well-established for years that the lack of a Rule 58 judgment does not prevent a judgment from being final and appealable. Otis v. City of Chicago, 29 F.3d 1159, 1165 (7th Cir. 1994)(en banc).

Thus, Properties had 30 days from that point in which to file a notice of appeal. Had it filed a motion to reconsider within 10 days of the judgment, the motion would have tolled the time for appeal until the district court ruled on it, pursuant to FRAP 4(a)(4).

Because the motion was not filed until June 13, however, two days after the 10-day period expired, the time for filing a notice of appeal was not tolled, pursuant to FRAP 4(a)(4)(A)(vi). Instead, the district court had discretion to extend the time for filing of appeal, but only up to 30 days, pursuant to FRAP 4(a)(5)(C).

Rather than decide the motion within those 30 days, however, the district court vacated its May 24 order.

The court of appeals found this vacation to be illusory, writing, "But its later action, on September 25, makes it clear that nothing was really vacated. Instead, on that date the court simply denied the motion to reconsider and did not even formally reinstate the May 24 order."

The court declined to address what the result would be if a district court decided "truly" to vacate a final judgment, and restore a case to its docket, but held, "On these facts, we have only a series of moves designed to give a longer period of time for filing an appeal than that provided for in Appellate Rule 4. This was beyond the power of the district court to do."

The court also refused to apply the "unique circumstances doctrine," recognized by the U.S. Supreme Court in Harris Truck Lines, Inc. v. Cherry Meat Packers, Inc., 371 U.S. 215 (1962).

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The doctrine provides, "if a party relies on a district court’s extension of time to file a notice of appeal, and delays an appeal, the court of appeals should not dismiss the appeal because it disagrees with the district court’s finding of excusable neglect. … If the decision to grant an extension is open to second-guessing by the appellate court, the only way a party could protect itself would be to file an appeal within thirty days of the judgment; but the extension of time was supposed to allow the party to defer the decision to appeal."

The Supreme Court clarified the rule in Osterneck v. Ernst & Whinney, 489 U.S. 169, 179 (1989), holding that the party filing late would be excused if he "has received specific assurance by a judicial officer that this act has been properly done."

The Seventh Circuit found that standard was not met, reasoning, "Properties was well-aware of its position at the time it filed its June 18 motion for relief under rule 60(b). it is, and has been for years, pellucidly clear that a motion for reconsideration filed more than 10 days after a final judgment does not toll the time for a Notice of Appeal. It is obvious that Properties knew this, or it would not have asked for extra time for its appeal in the June 18 motion. The fact that the district court later sought to give Properties more than the permissible extra 30 days for filing its appeal through the device of ‘vacating’ the May 24 order does not change the legal effect of what happened. The judge had no power to give Properties any more time to appeal from the May 28 judgment, and it follows that the Notice of Appeal filed on October 15 was late by almost three months."

Accordingly, the court dismissed Properties appeal as untimely, and Cendant’s cross-appeal as moot.

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David Ziemer can be reached by email.