Tma Fund, Inc., A Michigan Corporation v. James Biever and Pamela Biever, 520 F.2d 639, 3rd Cir. (1975)

520 F.
2d 639
TMA FUND, Inc., a Michigan Corporation, Appellant

v.
James BIEVER and Pamela Biever, Appellees.
No. 74-2148.
United States Court of Appeals,

Third Circuit.
Argued May 1, 1975.
Decided July 9, 1975.
Robert W. Maris, John M. Fitzpatrick, Dilworth, Paxson, Kalish, Levy &

Coleman, Philadelphia, Pa., for appellant.
Harvey Bartle, III, Dechert, Price & Rhoads, Philadelphia, Pa., for
appellees.
Before FORMAN, VAN DUSEN and GARTH, Circuit Judges.
OPINION OF THE COURT

GARTH, Circuit Judge
1
TMA Fund, Inc., ("TMA"), a Michigan corporation, brought this action to

recover monies allegedly due it under an agreement and two promissory notes
executed by defendants James and Pamela Biever, residents of Pennsylvania.
The defendants answered TMA's complaint by asserting several defenses,
including lack of consideration, 1 and by filing a counterclaim. Defendants'
counterclaim was filed under section 10(b) of the Securities Exchange Act of
1934, 15 U.S.C. 78j(b), and Rule 10b-5 of the Securities and Exchange
Commission, 17 C.F.R. 240.10b-5. Under the counterclaim, defendants
sought both a declaratory judgment to void the agreement and notes on the
ground of fraud and misrepresentation and an injunction against enforcement of
the agreement and notes. Also sought were the costs of suit and reasonable
attorneys' fees.
Both parties moved for summary judgment with the defendants, however,
expressly moving for summary judgment only "as to plaintiff's complaint."2 On
September 4, 1974, the district court entered an order denying TMA's motion
for summary judgment, granting "defendants' James and Pamela Biever's
motion for summary judgment" and ordering that judgment be entered in favor
of the defendants.3 TMA has appealed from the district court's order and
defendants-appellees have moved before us to quash the appeal. We grant the
motion and dismiss the appeal for lack of a final, appealable order.
The order of the district court on the parties' motions for summary judgment
did not dispose of the Bievers' counterclaim under the Securities Exchange Act
against TMA. The district court's order granted the Bievers' motion for
summary judgment which was expressly limited to TMA's complaint. No
summary judgment was sought by defendants as to their counterclaim. Where
an actual counterclaim is pleaded, as it was here, there is then a multiple claims
action. See Cold Metal Process Co. v. United Engineering & Foundry Co., 351
U.S. 445, 452, 76 S.Ct. 904, 100 L.Ed. 1311 (1956). Accordingly, where the
order granting summary judgment did not adjudicate the counterclaim, all the
claims of all the parties were not decided. The order thus is not a final,
appealable order under 28 U.S.C. 1291. See B. B. Adams General
Contractors, Inc. v. HUD, 501 F.2d 176 (5th Cir. 1974); Oak Construction Co.
v. Huron Cement Co., 475 F.2d 1220 (6th Cir. 1973); 6 J. Moore, Federal
Practice P 54.35(1) at 581-82 & n. 11 (2d ed. 1948).
TMA has argued, however, that the district court's grant of summary judgment
on its complaint in favor of the Bievers has had the effect of disposing of the
counterclaim. In essence, TMA argues that by holding that the notes lacked
consideration, and were therefore unenforceable in this action, the district court
mooted the Bievers' counterclaim that the agreement and notes were void on
the ground of fraud and misrepresentation. TMA also argues that Bievers'
counterclaim, especially as it seeks to recover reasonable attorneys fees, is
frivolous.
We express no opinion on the merits of TMA's contentions challenging the

counterclaim as either moot or frivolous. These contentions should be
addressed in the first instance by the district court which has not as yet ruled
upon them. We, as an appellate court, should not resolve these issues here.
Since this is an action involving multiple claims and the order lacks the
requisite finality to be appealable within the meaning of 1291, it is an
interlocutory order and may only be appealed from if the district court makes
an appropriate certification that there is no just reason for delay and expressly
directs the entry of judgment. Fed.R.Civ.P. 54(b). The record reveals that
although the district court granted the defendants' summary judgment motion
on plaintiff's main claim on the grounds that consideration was lacking, it failed
to certify that judgment under Rule 54(b). Our jurisdiction attaches on the date
when the notice of appeal is filed in the district court from an appealable order.
See, Fed.R.App.P. 3(a). If the jurisdictional prerequisites are not satisfied as of
that date, we have no recourse but to dismiss the appeal. Oak Construction Co.
v. Huron Cement Co., 475 F.2d at 1221; see Austracan, (U.S.A.) Inc. v. M/V
Lemoncore, 500 F.2d 237 (5th Cir. 1974); United Bonding Ins. Co. v. Stein,
410 F.2d 483, 486 (3d Cir. 1969). Here, neither the jurisdictional requirements
of 28 U.S.C. 1291 nor the jurisdictional requirements of Rule 54(b) were met
when the notice of appeal was filed. As the Supreme Court has stated,
"Jurisdiction is power to declare the law, and when it ceases to exist, the only
function remaining to the court is that of announcing the fact and dismissing
the cause." Ex Parte McCardle, 74 U.S. (7 Wall.) 506, 514, 19 L.Ed. 264
(1868).4
7
We will thus grant the appellees' motion to dismiss the appeal and remand the
case to the district court for further proceedings consistent with this opinion.
Also asserted as defenses were: (1) that there was a failure of consideration for
the agreement and the two notes and (2) that TMA obtained the agreement and
the two notes through fraud and misrepresentation
The district court's description of the circumstances surrounding the making of
the agreement and the two notes and the failure of the Bievers to make the
installment payments due under them is set forth in its opinion. TMA Fund, Inc.
v. Biever, 380 F.Supp. 1248 (E.D.Pa.1974).
Record, Document No. 26, TMA Fund, Inc. v. Biever, supra; App.248a
Record, Document No. 29, TMA Fund, Inc. v. Biever, supra; App.261a
We expressly decline to retain jurisdiction pending the filing of a Rule 54(b)

certificate. We believe the proper procedure is to dismiss the appeal, with
allowance to the parties to seek another appeal should the proper certification
subsequently be granted by the district court. This second appeal may be heard
on the record and briefs prepared for the first appeal, as supplemented by the
new judgment and certificate. The time for bringing this second appeal would
run from the entry of the new order. See Austracan (U.S.A.), Inc. v. M/V
Lemoncore, 500 F.2d 237, 241 (5th Cir. 1974); Williams v. Bernhart Bros.
Tugboat Serv., Inc., 357 F.2d 883 (7th Cir. 1966); Wolfson v. Blumberg, 340
F.2d 89 (2d Cir. 1965); Island Serv. Co. v. Perez, 255 F.2d 559, 561-62 (9th
Cir. 1957); District 65 v. McKague, 216 F.2d 153 (3d Cir. 1954); 10 C. Wright
& A. Miller, Federal Practice and Procedure; Civil 2660 at 88-89 (1973). But
see Anderson v. Robinson, 494 F.2d 45 (5th Cir. 1974)
We emphasize here that we express no opinion as to whether this case is a
proper one for the application of a Rule 54(b) certification. See Boer v. BorgWarner Corp., 364 F.2d 907 (3d Cir. 1966).

Tma Fund, Inc., A Michigan Corporation v. James Biever and Pamela Biever, 520 F.2d 639, 3rd Cir. (1975)

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Tma Fund, Inc., A Michigan Corporation v. James Biever and Pamela Biever, 520 F.2d 639, 3rd Cir. (1975)

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520 F.

TMA FUND, Inc., a Michigan Corporation, Appellant

United States Court of Appeals,

Robert W. Maris, John M. Fitzpatrick, Dilworth, Paxson, Kalish, Levy &

OPINION OF THE COURT

TMA Fund, Inc., ("TMA"), a Michigan corporation, brought this action to

We express no opinion on the merits of TMA's contentions challenging the

We expressly decline to retain jurisdiction pending the filing of a Rule 54(b)

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