Donahue v. FNMA ( 2020 )

United States Court of Appeals
For the First Circuit
No. 19-1618
JOSEPHINE B. DONAHUE, on behalf of herself and all others so
similarly situated,
Plaintiff, Appellant,
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION;
OCWEN LOAN SERVICING, LLC,
Defendants, Appellees,
82 COBB LANE, LLC,
Defendant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]
Before
Howard, Chief Judge,
Torruella and Barron, Circuit Judges.
Todd S. Dion on brief for appellant.
Marissa I. Delinks and Hinshaw & Culbertson LLP on brief for
appellee Ocwen Loan Servicing, LLC.
August 14, 2020
Barron, Circuit Judge. Josephine Donahue appeals from
a grant of summary judgment to Ocwen Loan Servicing, LLC ("Ocwen")
in her 2017 suit in the District of Massachusetts against Ocwen
and the Government National Mortgage Association ("GNMA").1 We
dismiss the appeal for lack of appellate jurisdiction. See
28 U.S.C. § 1291 (providing federal appellate jurisdiction of
"final decisions" of district courts).
I.
The suit has its origin in a mortgage that Donahue
executed on or about June 22, 2010, in the amount of $484,330, to
Reliant Mortgage Company for her home in Scituate, Massachusetts.
In June of 2014, the mortgage was assigned to Ocwen, and, in
September of 2014, Donahue defaulted on it.
More than a year later, on June 17, 2016, Ocwen sent a
letter to Donahue, who remained in default, that notified her that
a foreclosure sale would occur on July 21, 2016. Ocwen then
conducted an appraisal that indicated that the fair market value
of the property was $500,000, a figure that Donahue disputes.
Ocwen held the foreclosure auction on July 21, 2016. Ocwen was
the highest bidder and paid $482,264 for the property.
1 Donahue misnamed GNMA in the case caption, instead listing
the "Federal National Mortgage Association" as a defendant, but
properly named GNMA in the body of the complaint.
- 3 -
Following the auction, Donahue filed suit on February
27, 2017, under Massachusetts law, against GNMA and Ocwen in
Massachusetts Superior Court. The complaint alleged, first, that
GNMA and Ocwen executed a conveyance of her property on behalf of
another entity without the appropriate Power of Attorney in
violation of Mass. Gen. L. c. 183, § 32 and Mass. Gen. L. c. 183,
§ 4, (Count I). Second, the complaint alleged that the defendants
breached their duty of good faith and reasonable diligence under
Massachusetts contract law (Count II). Third, the complaint
alleged that the defendants breached the mortgage contract and the
covenant of good faith and fair dealing (Count III) under
Massachusetts law. With respect to this claim, the complaint
alleged that the defendants had failed to satisfy regulations of
the United States Department of Housing and Urban Development that
her mortgage contract had incorporated and that created a number
of conditions precedent to foreclosure, including that the
mortgagee "make a reasonable effort to arrange" a face-to-face
interview with the mortgagor before foreclosure, 24 C.F.R.
§ 203.604(b).
With GNMA's consent, Ocwen removed the action to the
District of Massachusetts based on diversity jurisdiction. See 28
U.S.C. § 1332. GNMA never filed an appearance. Ocwen then moved
for summary judgment as to all of Donahue's claims against it, and
the District Court granted that motion on May 20, 2019. The
- 4 -
District Court's judgment, however, did not address Donahue's
then-still-pending claims against GNMA.
The next event of relevance to the issues before us
occurred on June 17, 2019. That was when Donahue filed her notice
of appeal in our Court, in which she sought review of only the
grant of summary judgment to Ocwen on Count III of her complaint.
In response, our Court, on August 7, 2019, issued an
order to show cause concerning our appellate jurisdiction. The
concern about our jurisdiction arose from the fact that the
District Court's grant of summary judgment to Ocwen as to all of
Donahue's claims against it did not address Donahue's then-still-
pending claims against GNMA. The show-cause order stated that
"the orders appealed from do not appear to be final or appealable
on an interlocutory basis" and thus that:
[T]his court does not appear [to] have jurisdiction to
review this appeal, absent certification pursuant to
Fed. R. Civ. P. 54(b). See 28 U.S.C. §§ 1291, 1292;
Barrett ex rel. Est. of Barrett v. United States, 462
F.3d 28, 32 (1st Cir. 2006) (stating that a district
court's order disposing of fewer than all defendants is
not ordinarily final and appealable when it lacks a Rule
54(b) certification).
See Fed. R. Civ. P. 54(b) ("[W]hen multiple parties are involved,
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. Otherwise, any
order or other decision, however designated, that adjudicates
- 5 -
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 and may be revised at any time before the entry
of a judgment adjudicating all the claims and all the parties'
rights and liabilities."). The order required Donahue to either
voluntary dismiss her appeal or "show . . . why this appeal should
not be dismissed for lack of jurisdiction."
On August 9, 2019, Donahue filed a notice of voluntary
dismissal in the District Court of her claims against GNMA. The
District Court did not enter any further orders or judgments, and
Donahue did not file a new notice of appeal. Donahue then filed
a response to the show cause order in our Court on August 21, 2019.
In that response, she stated that her appeal should go forward
because GNMA "never responded to the original complaint nor are
they the mortgagee in the case and the Appellant has requested
they be dismissed from the case."
II.
Donahue contends that the judgment below from which she
now appeals is a "final decision" within the meaning of 28 U.S.C.
§ 1291, because she has voluntarily dismissed her claims against
GNMA pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i).
The subsection of Rule 41 that Donahue relied on provides that a
plaintiff may "dismiss an action without a court order by filing:
(i) a notice of dismissal before the opposing party serves either
- 6 -
an answer or a motion for summary judgment; or (ii) a stipulation
of dismissal signed by all parties who have appeared." Fed. R.
Civ. P. 41(a)(1)(A) (emphasis added). We do not doubt that "an
action" under Rule 41(a)(1)(A)(i) can refer to all claims a
plaintiff has brought against a single defendant in a multi-
defendant suit rather than only all claims against all defendants
in such a suit. See Cabrera v. Municipality of Bayamón, 622 F.2d
4, 5-6 (1st Cir. 1980) (so applying the phrase "an action" in Rule
41(a)(1)(A)); see also Pedrina v. Chun, 987 F.2d 608, 609–10 (9th
Cir. 1993) (reading Rule 41(a) as "[p]ermitting a plaintiff to
dismiss fewer than all of the named defendants"); Plains Growers,
Inc. v. Ickes–Braun Glasshouses, Inc., 474 F.2d 250, 254–55 (5th
Cir. 1973) (same); Young v. Wilky Carrier Corp., 150 F.2d 764, 764
(3d Cir. 1945) (same).2 Nevertheless, the concern about our
2 Although the Second Circuit once found that Rule
41(a)(1)(A)(i) did not allow a plaintiff to dismiss the claims
against just one defendant in a multidefendant case, see Harvey
Aluminum, Inc. v. Am. Cyanamid Co., 203 F.2d 105, 108 (2d Cir.
1953), the Circuit has since noted that Harvey Aluminum "has been
criticized and is now against the weight of authority," and that
it might have gone too far. Wakefield v. N. Telecom, Inc., 769
F.2d 109, 114 n.4 (2d Cir. 1985); see also Thorp v. Scarne, 599
F.2d 1169, 1176 (2d Cir. 1979) (limiting Harvey Aluminum to its
"extreme" facts).
- 7 -
appellate jurisdiction that prompted the show-cause order
persists.
That concern remains not because Donahue voluntarily
dismissed her claims against GNMA only after she had filed a notice
of appeal in our Court. It is true that, generally, "[t]he filing
of a notice of appeal is an event of jurisdictional significance
-- it confers jurisdiction on the court of appeals and divests the
district court of its control over those aspects of the case
involved in the appeal." Griggs v. Provident Consumer Disc. Co.,
459 U.S. 56, 58 (1982) (emphasis added); see also 16A Charles Alan
Wright & Arthur R. Miller, Federal Practice & Procedure § 3949.1
(5th ed. 2020) ("The general principle is that the filing of the
appeal transfers authority over matters encompassed in the appeal
to the court of appeals. As to such matters, the district court
will lack power to act during the pendency of the appeal."). But,
no divestiture of the district court's jurisdiction occurs "if the
notice of appeal is defective in some substantial and easily
discernible way (if, for example, it is based on an unappealable
order) or if it otherwise constitutes a transparently frivolous
attempt to impede the progress of the case." United States v.
Brooks, 145 F.3d 446, 456 (1st Cir. 1998); see Rivera-Torres v.
Ortiz Vélez, 341 F.3d 86, 96 (1st Cir. 2003) ("The defendants'
notice of appeal was patently meritless, and therefore failed to
divest the district court of jurisdiction in the first instance.");
- 8 -
Wright & Miller, supra, § 3949.1 ("The weight of authority holds
that an appeal from a clearly non-appealable order fails to oust
district court authority.").
Thus, the notice of appeal that Donahue filed did not
bar her from voluntarily dismissing her claims against GNMA
pursuant to Rule 41(a)(1)(A)(i). That notice of appeal was
patently meritless at that time precisely because her claims
against GNMA were then still pending. See Fed. R. Civ. P. 54(b)
("[A]ny order or other decision . . . 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
and may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties' rights and
liabilities.").
The concern about our appellate jurisdiction persists
because Donahue needs us to do more than merely ignore her notice
of appeal. She also needs us to count it after we have ignored it
and, in doing so, to treat it as if it had been filed after the
decision below became final. For, otherwise, she will not have
filed a notice of appeal from a final decision at all. See 28
U.S.C. § 1291 ("The courts of appeals . . . shall have jurisdiction
of appeals from all final decisions of the district courts of the
United States."); Fed. R. App. P. 3 ("An appeal permitted by law
- 9 -
as of right from a district court to a court of appeals may be
taken only by filing a notice of appeal with the district clerk.").
Certain provisions of the Federal Rules of Appellate
Procedure do expressly permit us to treat a notice of appeal that
has been filed before the decision below was "final" as if it had
been filed after the decision became "final." See, e.g., Fed. R.
App. P. 4(a)(2) (stating that "[a] notice of appeal filed after
the court announces a decision or order -- but before the entry of
the judgment or order -- is treated as filed on the date of and
after the entry"); Fed. R. App. P. (4)(a)(4)(B)(i) ("If a party
files a notice of appeal after the court announces or enters a
judgment -- but before it disposes of any motion listed in Rule
4(a)(4)(A) -- the notice becomes effective to appeal a judgment or
order, in whole or in part, when the order disposing of the last
such remaining motion is entered."). These exceptions, however,
do not apply here, and Donahue does not argue otherwise.
That is not to say that Donahue is without any authority
on her side. In IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049,
1055 & n.5 (2d Cir. 1993), for example, the Second Circuit treated
the plaintiff's notice of appeal of an otherwise non-final district
court decision as one that was "premature" when filed but that
"ripened" into a valid notice of appeal upon the voluntary
dismissal of the remaining party. The Second Circuit acknowledged
that no exception in the Federal Rules of Appellate Procedure
- 10 -
authorized such treatment. See id. (explaining that both Fed. R.
App. P. 4(a)(4) and Fed. R. App. P. 4(a)(2) were inapplicable to
the appeal at issue). But, it still held that it had had "appellate
jurisdiction" because the notice of appeal was properly deemed to
have been "premature" but then to have "ripened." Id. at 1055.
In addition, in DL Resources, Inc. v. FirstEnergy
Solutions Corp., 506 F.3d 209, 214-16 (3d Cir. 2007), the Third
Circuit ruled similarly with respect to a notice of appeal filed
after the district court had entered a judgment order setting forth
an unspecified damages award. The Third Circuit found that, even
though Rule 4(a)(2) was "inapplicable" because the appellee
"appealed from an order that had been entered and was not final,"
id. at 213, the defendant's otherwise premature notice of appeal
"ripened" after the appeal was filed when the district court
entered an amended judgment that quantified the damages award, id.
at 216. Thus, FirstEnergy held on that basis that it had
jurisdiction to hear the appeal under 28 U.S.C. § 1291. Id.3
The ripening logic these cases deploy has some appeal
(no pun intended). It saves an appellant from having to file an
additional notice. It thereby both ensures that the finality rules
3While Donahue invokes Herrmann and Ocwen cites FirstEnergy,
we also note that the Seventh Circuit has ruled similarly in
Garwood Packaging, Inc. v. Allen & Co., 378 F.3d 698, 701 (7th
Cir. 2004) (finding appellate jurisdiction in circumstances like
those presented here "based on Rule 4(a)(2)").
- 11 -
do not become a trap for the unwary and obviates the need for
starting an appeal over from scratch based on a technicality.
We decline on our own, however, to treat a notice of
appeal in such a now-you-see-it, now-you-don't, now-you-see-it-
again way. The plain language of Rules 3 and 4 of the Federal
Rules of Appellate Procedure as to when a notice of appeal must be
filed -- at least when read in conjunction with 28 U.S.C. § 1291
-- does not comfortably accommodate the conclusion that a notice
of appeal filed following a non-appealable order may be treated as
if it actually had been filed following an appealable order. See
Fed. R. App. P. 3(a) ("An appeal permitted by law as of right from
a district court to a court of appeals may be taken only by filing
a notice of appeal with the district clerk within the time allowed
by Rule 4."); Fed. R. App. P. 4(a) ("In a civil case . . . the
notice of appeal required by Rule 3 must be filed with the district
clerk within 30 days entry of the judgment or order appealed from,"
with certain types of appeals granted a more flexible timing
requirement.). Moreover, if we were to treat a notice of appeal
that is patently meritless in such a springing manner, we would
run into another problem. We would render seemingly superfluous
the existing, expressly limited exceptions in those two rules that
allow for ripening in specified circumstances. After all, we would
be holding that a notice of appeal from a non-appealable order may
be later treated as it had been filed from an order that
- 12 -
subsequently became appealable even when no provision of the
Federal Rules of Appellate Procedure expressly authorizes such
treatment.
We note, too, that this approach hardly can be said to
set a trap, even though it is admittedly not as forgiving of
mistakes as is the one that embraces the logic of ripening outside
the circumstances expressly recognized by the rules themselves.
We have long made clear that a notice of appeal that is plainly
ineffective does not divest the district court of jurisdiction.
See Rivera-Torres, 341 F.3d at 96 ("The defendants' notice of
appeal was patently meritless, and therefore failed to divest the
district court of jurisdiction in the first instance."). Thus, an
appellant who jumps the gun by filing a notice of appeal before
the decision below was final is on notice that she is not without
options to correct the mistake. Upon realizing it, she may cure
the finality problem that renders the notice of appeal of no
consequence and then, in accord with the plain terms of Rules 3
and 4, file a timely notice of appeal from the now final decision.
That way, there can be no risk of confusion about what exactly is
being appealed, given that the notice of appeal that secures our
jurisdiction then would follow rather than precede the decision
below from which review is sought. See Kotler v. Am. Tobacco Co.,
981 F.2d 7, 10–11 (1st Cir. 1992) ("Fed. R. App. P. 3(c) . . .
requires, inter alia, that a notice of appeal 'designate the
- 13 -
judgment, order or part thereof appealed from.' The rule's commands
are jurisdictional and mandatory."); Fed. R. App. P. 3(c) ("The
notice of appeal must . . . designate the judgment, order, or part
thereof being appealed."); see also Kotler v. Am. Tobacco Co., 926
F.2d 1217, 1221 (1st Cir. 1990) (explaining that the court of
appeals is "not limited to the four corners of the notices [of
appeal], but may examine them in the context of the record as a
whole"), vacated on other grounds by 505 U.S. 1215 (1992).
III.
The appeal is dismissed for lack of jurisdiction.
- 14 -