Elaine Marshall v. Howard Stern ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 31 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: VICKIE LYNN MARSHALL, No. 17-55789
Debtor, D.C. No. 8:01-cv-00097-DOC
______________________________
ELAINE T. MARSHALL, as independent MEMORANDUM*
executrix of the estate of E. Pierce Marshall,
Plaintiff-Appellee,
v.
HOWARD STERN, as Executor of the
Estate of Vickie Lynn Marshall,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Argued and Submitted December 3, 2018
Pasadena, California
Before: D.W. NELSON and WARDLAW, Circuit Judges, and PRATT,** District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Robert W. Pratt, United States District Judge for the
Southern District of Iowa, sitting by designation.
Like visiting an old friend, we turn once again to this decades-old dispute
over the estate of Texas oil baron J. Howard Marshall II. Vickie Lynn Marshall
(better known as Anna Nicole Smith) filed a compulsory counterclaim in her
bankruptcy proceeding asserting that E. Pierce Marshall tortiously interfered with a
multi-million dollar inter-vivos gift Vickie was to receive from J. Howard,
Vickie’s then-husband and Pierce’s father.1 We held in 2010 that Vickie’s claim
for tortious interference with a gift failed because it required factual showings
precluded by an earlier Texas probate court judgment. Following our opinion and
entry of judgment below, that Texas probate judgment—after having been stayed
for thirteen years—went up on appeal, where the Texas Court of Appeals affirmed
it after making some modifications. Seizing the opportunity, Vickie returned to
California and brought a motion in the district court under Federal Rule of Civil
Procedure 60(b)(5)–(6) for relief from the judgment, grounded on the
modifications to the preclusive Texas judgment. The district court denied the
motion, finding that it was bound by our mandate and did not have jurisdiction in
the case. Vickie appeals.
1
Both Vickie Lynn Marshall and E. Pierce Marshall have since died and are
represented by their estates. For clarity in discussing proceedings that have
occurred over two decades with multiple representatives, we refer to the parties as
“Vickie” and “Pierce,” and to J. Howard Marshall II as “J. Howard.”
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We start with the question of whether the district court had jurisdiction over
Vickie’s Rule 60(b) motion before turning to its merits. We review questions of
jurisdiction over a Rule 60(b) motion de novo. Carriger v. Lewis, 971 F.2d 329,
332 (9th Cir. 1992) (en banc).
First, the district court incorrectly held the rule of mandate eliminated its
jurisdiction here. The rule of mandate proscribes the jurisdiction of the lower court
following an appellate decision, United States v. Thrasher, 483 F.3d 977, 982 (9th
Cir. 2007), and prevents re-litigation of “whatever was before [the] court, and
disposed of by its decree,” In re Sanford Fork & Tool Co., 160 U.S. 247, 255
(1895). The mandate, however, “relates to the record and issues then before the
court, and does not purport to deal with possible later events.” Standard Oil Co. of
Cal. v. United States, 429 U.S. 17, 18 (1976). “[O]nce the appellate mandate has
issued, leave of this court is not required for district court consideration of a Rule
60(b) motion.” Gould v. Mut. Life Ins. Co., 790 F.2d 769, 773 (9th Cir. 1986).
The district court had jurisdiction notwithstanding the mandate. Vickie’s
Rule 60(b) motion was based on “later events” not before us or disposed of by us
in 2010: the Texas Court of Appeals’ modifications to the preclusive judgment in
2015. That we previously reversed and directed judgment for Pierce is irrelevant,
because our decisions are based on legal reasoning, not ipse dixit. A district court
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has jurisdiction to hear even frivolous Rule 60(b) motions, so whether a later event
is material is similarly irrelevant. Standard Oil, 429 U.S. at 18–19.
Second, the district court incorrectly held it lacked jurisdiction to consider
the Rule 60(b) motion because it heard the case through its bankruptcy appellate
jurisdiction and had disclaimed jurisdiction on remand. The bankruptcy court
entered final judgment as a core bankruptcy proceeding under 28 U.S.C. §
157(b)(2)(C), Marshall v. Marshall (In re Marshall), 257 B.R. 35, 40 (Bankr. C.D.
Cal. 2000), and Pierce appealed to the district court under 28 U.S.C. § 158(a)(1),
Marshall v. Marshall (In re Marshall), 264 B.R. 609, 618 (C.D. Cal. 2001). On
appeal, however, the district court determined the bankruptcy court did not have
jurisdiction to enter final judgment but only to submit proposed findings of fact
and conclusions of law. In re Marshall, 264 B.R. at 632–33. The district court
vacated the bankruptcy judgment and held that “final judgment in this non-core
proceeding must be entered by [the district court] rather than the bankruptcy
court.” Id. at 633. The holding that the bankruptcy court lacked jurisdiction was
affirmed twice. See Stern v. Marshall, 564 U.S. 462, 503 (2011); Marshall v. Stern
(In re Marshall), 600 F.3d 1037, 1060–61 (9th Cir. 2010).
Without a final judgment or other appealable order, the district court
properly treated the bankruptcy court’s judgment as proposed findings pursuant to
28 U.S.C. § 157(c)(1). Marshall v. Marshall (In re Marshall), 275 B.R. 5, 10
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(C.D. Cal. 2002); see Exec. Benefits Ins. Agency v. Arkison, 573 U.S. 25, 36 (2014)
(upholding the use of § 157(c)(1) to submit proposed findings). In so doing, the
district court no longer exercised bankruptcy appellate jurisdiction through §
158(a)(1). Rather, the district court entered judgment pursuant to its original
jurisdiction in bankruptcy matters. See 28 U.S.C. § 1334(b); see also 28 U.S.C. §
157(c)(1) (“[T]he bankruptcy judge shall submit proposed findings . . . and any
final order or judgment shall be entered by the district judge[.]”). The district
court’s statement, in denying the Rule 60(b) motion—that it heard this case as an
appellate bankruptcy matter—was therefore incorrect. Similarly, the district
court’s 2013 remand to dismiss the underlying bankruptcy adversary proceeding
could not disclaim the court’s otherwise proper original jurisdiction.2
We therefore have jurisdiction under 28 U.S.C. § 1291, our general grant of
jurisdiction to hear appeals from “final decisions of the district courts of the United
States.” We do not, as Vickie argues, have jurisdiction under 28 U.S.C. §
158(d)(1), because that provision only authorizes appeals from district court orders
entered under 28 U.S.C. § 158(a).
2
We reject Pierce’s argument that, under Wellness International Network,
Ltd. v. Sharif, 135 S. Ct. 1932 (2015), the parties knowingly and voluntarily
consented to bankruptcy court jurisdiction on remand. Pierce vigorously and
successfully challenged the bankruptcy court’s jurisdiction, and cannot now enjoy
“the luxury of waiting for the outcome” by claiming consent after securing a
decision in his favor. Roell v. Withrow, 538 U.S. 580, 590 (2003).
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We may affirm on any ground supported by the record below. Saldana v.
Occidental Petrol. Corp., 774 F.3d 544, 551 (9th Cir. 2014). In her Rule 60(b)
motion, Vickie argues our 2010 holding has been undermined by the modifications
to the Texas probate judgment. See Cal. Med. Ass’n v. Shalala, 207 F.3d 575,
577–78 (9th Cir. 2000) (explaining a Rule 60(b)(5) motion requires showing
changes to the earlier preclusive judgment “remove[d] the underpinnings” of the
later judgment).3 We disagree, and conclude that the Texas judgment was not
modified in a way that impacts our prior holding.
The Texas Court of Appeals’ opinion, entered in 2015, discusses three issues
relevant here. See generally Stern v. Marshall, 471 S.W.3d 498 (Tex. App. 2015).
First, the Texas Court of Appeals affirmed the probate court’s jurisdiction over
Pierce’s declaratory judgment action deciding Vickie’s rights to J. Howard’s
estate. Id. at 517–22. The probate court therefore properly had jurisdiction to
decide the issues we found preclusive, including whether Vickie had an expectancy
of a gift from J. Howard when he died. Second, the Texas Court of Appeals
changed references to Vickie having “abandoned” her claims to having
3
Vickie’s motion also claimed to be brought under Rule 60(b)(6), which
allows the district court to grant relief from a judgment for “any other reason that
justifies relief.” Vickie relies solely on modifications to the probate judgment,
however, and that event goes to Rule 60(b)(5), not (b)(6). See Cmty. Dental Servs.
v. Tani, 282 F.3d 1164, 1168 (9th Cir. 2002) (explaining Rule 60(b)(6) is for
situations when relief is not available within another prong of Rule 60(b)).
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“nonsuited” them. Id. at 522–23. We have always referred to Vickie as nonsuiting
her claims, so this is immaterial. See Marshall, 600 F.3d at 1046, 1063–64. Third,
the Texas Court of Appeals clarified that claims against Pierce personally were
outside the probate court’s jurisdiction and modified parts of the probate judgment
that appeared to say otherwise. Stern, 471 S.W.3d at 523–26. These changes
would go to claim preclusion, or whether the specific claim brought by Vickie was
already litigated in Texas. Our prior opinion, however, relied on issue preclusion,
or whether certain underlying factual and legal questions were already litigated in
Texas. Marshall, 600 F.3d at 1061. The Texas Court of Appeals affirmed the
probate court’s jurisdiction to adjudicate issues relating to J. Howard’s estate,
including those we previously found precluded Vickie’s claim. Stern, 471 S.W.3d
at 525–26. None of the foregoing impacts our prior issue-preclusion analysis, and
we see no reason to disturb our prior judgment.4
AFFIRMED.
4
We deny Pierce’s motions to dismiss this appeal, certify it to the Texas
Supreme Court, and supplement the record.
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