United States Court of Appeals, Second Circuit.: No. 1311, Docket 95-7925

91 F.
3d 385
35 Fed.R.Serv.3d 1352
Roselyn KAHN, Jan Kahn, individually and as custodian for

Brad Michael Kahn and Brendan Adam Kahn under the
Uniform
Gifts to Minors Act, Craig Kahn, individually and as
custodian for Alex Kahn under the Uniform Gifts to Minors
Act, Jan Kahn and Craig Kahn as Trustees for and on behalf
of Four Seasons Manufacturing Co., Inc., Pension Trust & Jan
and Craig's Window Factory, Ltd., by its Trustee Ronald
Lipshie, Plaintiffs-Appellants,
v.
CHASE MANHATTAN BANK, N.A., Thomas J. Greene,
Woodmere
Securities, Inc., Richard Kahn, Bruce C. Black,
Sheppard Messing, Jeffrey P. Berg,
Matthias & Berg and Michael R. Matthias,
Defendants-Appellees.
No. 1311, Docket 95-7925.
United States Court of Appeals,

Second Circuit.
Argued April 19, 1996.
Decided Aug. 7, 1996.
Frederick R. Dettmer, New York City (Karen M. Streisfeld, Law Office of

Frederick R. Dettmer, New York City, Neil Friedkin, Lamendola &
Friedkin, Great Neck, NY, of counsel), for Plaintiffs-Appellants.
Andrew R. Kosloff, New York City (Kent T. Stauffer, Litigation
Division, The Chase Manhattan Bank, N.A., of counsel), for DefendantAppellee Chase Manhattan Bank, N.A.
Scott K. Nigro, Long Beach, NY, for Defendant-Appellee Richard Kahn.
Kenneth M.H. Hoff, Matthias & Berg, Los Angeles, CA, for DefendantsAppellees Matthias & Berg, Jeffrey P. Berg and Michael R. Matthias.
Before: MINER, McLAUGHLIN and LEVAL, Circuit Judges.
MINER, Circuit Judge:
Plaintiffs appeal from an order of the United States District Court for the
Southern District of New York (McKenna, J.) denying their motion for leave to
amend their complaint to add additional plaintiffs. The district court found that
the claims of the additional plaintiffs did not relate back to the date of the filing
of the complaint pursuant to Fed.R.Civ.P. 15(c) and therefore that the claims of
the additional plaintiffs were time-barred under the applicable statutes of
limitations.
For the reasons set forth below, we dismiss the appeal.
BACKGROUND
3
On April 27, 1990, plaintiffs-appellants Roselyn Kahn, Jan Kahn, Craig Kahn,
Four Seasons Manufacturing Co., Inc. Pension Trust, and Jan and Craig's
Window Factory, Ltd. (together, the "Plaintiffs") commenced this action
against defendants Bruce C. Black, Thomas J. Greene, Gruntal & Co., Inc.
("Gruntal"), Richard Kahn, Sheppard Messing, Woodmere Securities, Inc.
("Woodmere"), Chase Manhattan Bank, N.A. ("Chase"), Jeffrey P. Berg,
Michael R. Matthias, and Matthias & Berg (together, the "Defendants"). In their
complaint, the Plaintiffs alleged that the Defendants had engaged in various
schemes to defraud them and others. Pleading six separate causes of action, the
Plaintiffs alleged: (1) that the Defendants had violated the Racketeer
Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. 1961 et seq.;
(2) that all the Defendants except for Gruntal had violated section 10(b) of the
Securities Exchange Act of 1934, 15 U.S.C. 78j(b); (3) that all the
Defendants except for Gruntal had committed common law fraud; (4) that
Black, Messing, Greene, and Chase had committed common law conversion;
(5) that Berg, Matthias, and Matthias & Berg had committed legal malpractice;
and (6) that Berg, Matthias, Matthias & Berg, Black, and Woodmere had
committed common law constructive fraud.
In July of 1990, the Defendants moved to dismiss the complaint. On March 29,
1991, the district court dismissed the Plaintiffs' RICO claims against Gruntal
and Chase, dismissed all the claims of Roselyn Kahn against Berg, Matthias,
and Matthias & Berg, and dismissed the section 10(b) claims against Berg,
Matthias, Matthias & Berg, and Chase. However, the district court granted the
Plaintiffs leave to replead the section 10(b) claims against each of the
Defendants. Accordingly, on April 29, 1991, the Plaintiffs filed an amended
complaint (the "first amended complaint"), setting forth the same six causes of
actions alleged in the original complaint.
5
In March of 1995, Chase moved for summary judgment on the section 10(b)
claim and the state law claims against it. On April 6, 1995, the Plaintiffs moved
for leave to amend the first amended complaint, pursuant to Fed.R.Civ.P. 15(a),
to add Laurence LoScalzo, Constance LoScalzo, Kenneth Boklan, Dix Hills
Equities Group, Inc., and Dix Hills Air (together, the "Additional Plaintiffs") as
parties. The proposed second amended complaint alleged that Black and the
other Defendants defrauded the Additional Plaintiffs by engaging in schemes
that were nearly identical to the schemes that the Defendants used to defraud
the Plaintiffs.
These claims of the Additional Plaintiffs, however, were time-barred under the
applicable statutes of limitations. Consequently, the Plaintiffs argued that the
claims of the Additional Plaintiffs related back to the date of the filing of the
original complaint, pursuant to Fed.R.Civ.P. 15(c). The Plaintiffs asserted that
the Additional Plaintiffs had not been previously joined in the action due to a
mistake by their attorney, Eric Moss. In support of the motion, the Additional
Plaintiffs asserted that they had retained Moss to commence an action against
the Defendants in 1990, at the same time that the Plaintiffs retained Moss to
pursue their claims against the Defendants. The Additional Plaintiffs contended
that Moss' failure to name them as plaintiffs in the original complaint was a
mistake that was caused by Moss' serious illness and subsequent death in 1993.
On August 17, 1995, the district court granted Chase's motion for summary
judgment to the extent of dismissing the 10(b) claim against Chase, and denied
Chase's motion to dismiss the state law claims against it. The district court also
denied the Plaintiffs' motion for leave to amend the first amended complaint.
The court found that the claims of the Additional Plaintiffs did not relate back
to the date of the original complaint under Rule 15(c). Because the claims of
the Additional Plaintiffs, without relation-back, were time-barred under the
applicable statutes of limitations, the district court concluded that it would be
futile to grant the Plaintiffs leave to amend the complaint under Rule 15(a). The
Plaintiffs then filed the instant appeal, claiming that the district court erred in
determining that the claims of the Additional Plaintiffs did not relate back and
therefore that the district court erred in denying its motion to amend the first
amended complaint.
DISCUSSION
8
Although the appellees have not argued the issue, we must determine whether
we have jurisdiction to review the district court's order denying the Plaintiffs'
motion for leave to amend their complaint. See Petereit v. S.B. Thomas, Inc.,
63 F.3d 1169, 1175 (2d Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1351,
134 L.Ed.2d 520 (1996). This Court's jurisdiction is defined by statute and
generally is limited to appeals from final judgments of the district court
pursuant to 28 U.S.C. 1291 and from certain interlocutory orders pursuant to
28 U.S.C. 1292.
We lack jurisdiction to hear this appeal under 1291 because the district court's
August 17, 1995 order is not a final judgment. Rule 54(b) of the Federal Rules
of Civil Procedure sets forth the requirements for the entry of a partial final
judgment in multi-claim or multi-party actions. Under Rule 54(b), an order that
"adjudicates fewer than all the claims or the rights and liabilities of fewer than
all the parties" is not a final judgment unless the district court makes "an
express determination that there is no just reason for delay and ... an express
direction for the entry of judgment." "Strict adherence to the certification
requirements of Rule 54(b) has been our consistent view." In re Martin-Trigona,
763 F.2d 135, 139 (2d Cir.1985). The district court's August 17th order did not
dispose of all the Plaintiffs' claims against each of the Defendants. Moreover,
the district court did not certify its August 17th order by making an express
determination that there was no just reason for delay or by directing entry of
judgment pursuant to Rule 54(b).
10
Because the August 17th order did not dispose of all claims against all parties
and because there was no Rule 54(b) certification, the August 17th order
remains interlocutory and is not appealable. See HBE Leasing Corp. v. Frank,
48 F.3d 623, 632 (2d Cir.1995) (holding that order that did not resolve all the
claims in the action was interlocutory and was not appealable because there
was no Rule 54(b) certification); see also Martin-Trigona, 763 F.2d at 139
(dismissing appeal for lack of jurisdiction where the defendant appealed from
an order disposing of only a portion of the case and the district court had not
certified the appeal pursuant to Rule 54(b)); DeNubilo v. United States, 343
F.2d 455 (2d Cir.1965) (dismissing appeal for lack of jurisdiction where the
plaintiffs appealed from an order denying their motion to amend their
complaint and the district court had not certified the appeal pursuant to Rule
54(b)).1
11
The portion of the district court's August 17th order denying the Plaintiffs'
motion to amend their complaint could not have been certified under Rule 54(b)
in any event. To be certified under Rule 54(b), an order must possess the
"degree of finality required to meet the appealability requirements of 28 U.S.C.
1291." Acha v. Beame, 570 F.2d 57, 62 (2d Cir.1978). This degree of finality
is "defined as a judgment 'which ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment.' " Id. (quoting Catlin v.
United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945)). In
the present case, the Plaintiffs appeal from only the portion of the district
court's order denying their motion to amend their complaint. It is well-settled
that "[a]n order denying leave to amend a complaint is not a 'final decision'
within the meaning of 28 U.S.C. 1291." DeNubilo, 343 F.2d at 456-57.
Accordingly, the district court's denial of the Plaintiffs' motion to amend their
complaint would not be certifiable pursuant to Rule 54(b).
12
Nor do we have jurisdiction to hear this appeal pursuant to 1292(b), 2 since

the district court did not utilize that provision to certify for immediate appeal its
order denying the Plaintiffs' motion to amend the first amended complaint. See
D'Ippolito v. Cities Serv. Co., 374 F.2d 643, 648 (2d Cir.1967) (holding that "
[n]o appeal lies from the order denying permission to amend [the complaint] in
the absence of certification" under 1292(b) or Rule 54(b)); DeNubilo, 343
F.2d at 456-57 (same).
13
Finally, the district court's order is not immediately appealable under the
"collateral order" exception to the final judgment rule set forth in Cohen v.
Beneficial Indus. Loan Corp., 337 U.S. 541, 546-47, 69 S.Ct. 1221, 1225-26,
93 L.Ed. 1528 (1949). Under Cohen, an interlocutory order is immediately
appealable if, inter alia, the order would "be effectively unreviewable on appeal
from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98
S.Ct. 2454, 2458, 57 L.Ed.2d 351 (1978). In the present case, we would not be
foreclosed from reviewing the district court's denial of the Plaintiffs' motion to
amend their complaint on an appeal from a final judgment. See Richardson
Greenshields Secs., Inc. v. Lau, 825 F.2d 647, 651 (2d Cir.1987). Accordingly,
the collateral order exception does not apply to this case. See DeNubilo, 343
F.2d at 456-57 (holding that the collateral order exception does not apply to an
order denying a motion to amend a complaint).
CONCLUSION
14
In view of the foregoing, we dismiss the appeal for lack of jurisdiction.
We are not persuaded by the Plaintiffs' reliance on Lockett v. General Finance
Loan Co., 623 F.2d 1128 (5th Cir.1980). Lockett held that an order denying
leave to amend a complaint was final because the plaintiffs' action against a
newly sought defendant would otherwise be time-barred. But in that case the
district court did certify the appeal under Rule 54(b), id. at 1129, which the
court below did not. We thus find Lockett inapposite, and otherwise decline to
follow it
2
Section 1292(b) provides in part:

When a district judge, in making in a civil action an order not otherwise
appealable under this section, shall be of the opinion that such order involves a
controlling question of law as to which there is substantial ground for difference
of opinion and that an immediate appeal from the order may materially advance
the ultimate termination of the litigation, he shall so state in writing in such
order. The Court of Appeals which would have jurisdiction of an appeal of such
action may thereupon, in its discretion, permit an appeal to be taken from such
order, if application is made to it within ten days after the entry of the order....

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United States Court of Appeals, Second Circuit.: No. 1311, Docket 95-7925

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91 F.

Roselyn KAHN, Jan Kahn, individually and as custodian for

United States Court of Appeals,

Frederick R. Dettmer, New York City (Karen M. Streisfeld, Law Office of

For the reasons set forth below, we dismiss the appeal.

Nor do we have jurisdiction to hear this appeal pursuant to 1292(b), 2 since

In view of the foregoing, we dismiss the appeal for lack of jurisdiction.

We are not persuaded by the Plaintiffs' reliance on Lockett v. General Finance

Section 1292(b) provides in part:

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