Caribbean Mgmt. Grp., Inc. v. Erikon LLC

966 F.3d 35

CARIBBEAN MANAGEMENT GROUP, INC., Plaintiff, Appellee,

v.ERIKON LLC, Defendant, Appellant.

No. 19-1421

United States Court of Appeals, First Circuit.

July 17, 2020

Iván Aponte-González, Héctor J. Quiñones Inserni, and García, Aponte & Quiñones, LLC on brief for appellant.

Eugene F. Hestres and Bird Bird & Hestres, P.S.C. on brief for appellee.

Before Thompson, Selya, and Barron, Circuit Judges.

SELYA, Circuit Judge.

A money judgment (even a money judgment for several million dollars) may not be worth the paper on which it is written if the judgment creditor does not undertake timely enforcement action. This case, in which the judgment creditor slept upon its rights until the prescribed period for execution of judgments had elapsed, illustrates the point. Given the judgment creditor's failure to act in a timeous manner, we affirm the district court's denials of both its motion for leave to execute on the judgment and its motion for reconsideration.

I.Background

We briefly rehearse the relevant facts and travel of the case. In 2006, Erikon LLC (Erikon) sold its interest in a development project in Aguadilla, Puerto Rico, to Caribbean Management Group, Inc. (CMG). As part of the consideration for the purchase, CMG executed a promissory note payable to Erikon for $7,500,000. David Wishinsky Kerr (Wishinsky) personally guaranteed CMG's indebtedness.

A dispute soon arose over CMG's obligations under the note, and CMG and Erikon sued each other in the United States District Court for the District of Puerto Rico. After the cases were consolidated, the parties reached a settlement and requested that the district court enter a consent judgment in Erikon's favor against CMG and Wishinsky, jointly and severally, for $7,500,000 (plus $50,000 in attorneys' fees). The court entered the stipulated judgment on March 25, 2008.¹

Erikon immediately encountered strong headwinds in collecting on the judgment. By September of 2008, CMG and Wishinsky had paid only $250,000 toward satisfaction of the judgment. At Erikon's request, the district court issued a writ of attachment on two parcels of land owned by CMG and/or Wishinsky, together with an order authorizing the public sale of those parcels. The record contains no indication that the judicially authorized sale ever took place.

Endeavoring to explore other avenues for collecting on the judgment, Erikon repeatedly sought to take Wishinsky's deposition. Erikon's efforts stalled, but in February of 2009, CMG, Wishinsky, and Erikon reached an agreement regarding payment of the balance owed on the judgment. CMG and Wishinsky committed to making monthly payments and, as long as they complied, Erikon agreed not to execute on the judgment. Pursuant to this arrangement, CMG and Wishinsky paid Erikon an additional $2,900,000 over the next twenty-two months.

CMG and Wishinsky stopped making payments in January of 2011. Even so, Erikon made no meaningful effort to collect the balance of the judgment for approximately two years. We fastforward to early 2013, at which time Wishinsky's attorney, who also represented Caribbean Seaside Heights Properties, Inc. (Seaside), an entity affiliated with the Aguadilla development project, approached Erikon. They discussed both the outstanding balance owed on the judgment and a separate claim that Seaside was bent on bringing against Erikon for expenses incurred in the course of the Aguadilla project. These discussions went nowhere, and Seaside sued Erikon in May of 2013. During the pendency of the Seaside litigation, further attempts to reach a global settlement came to naught.

Harking back to the original case, Erikon moved in April of 2014 for the appointment of a special master to conduct the public sale of the attached parcels of real estate. The following February, the district court denied the motion without prejudice. The court determined that Erikon's effort to execute on the judgment was untimely under Rule 51.1 of the Puerto Rico Rules of Civil Procedure (P.R.R. 51.1) because more than five years had passed since the judgment became final. The court invited Erikon, if it so desired, to move for leave to execute on the judgment out of time.

Erikon did not take up the court's invitation then and there. Instead, Erikon turned its attention to defending the Seaside litigation. In July of 2016, the court presiding over the Seaside litigation entered summary judgment in Erikon's favor. Seaside appealed and, during the pendency of the appeal, Seaside and Erikon engaged in three court-ordered settlement conferences. Although they were not parties to the Seaside litigation, CMG and Wishinsky participated in some of these negotiations in an attempt to reach a global settlement. When the settlement talks failed, we affirmed the summary judgment. See Caribbean Seaside Heights Props., Inc. v. Erikon LLC, 867 F.3d 42, 45 (1st Cir. 2017).

In July of 2017, Erikon at long last moved for leave to execute on the judgment and renewed its request for appointment of a special master. The district court denied the motion, reasoning that Erikon had waited to file its motion until more than six years after CMG and Wishinsky's final payment in January of 2011 and that Erikon had failed to justify the delay of more than two years since the denial of its first request to appoint a special master. Erikon moved for reconsideration of this order under Federal Rule of Civil Procedure 59(e). While Erikon calls this filing a "Motion to Set Aside Order Pursuant to FRCP 59(e)," the filing was technically a motion to alter or amend the judgment, see Fed. R. Civ. P. 59(e), and we refer to it as a motion for reconsideration. The nomenclature has no bearing on the outcome of this appeal.

The court summarily denied the motion for reconsideration. This timely appeal followed.²

II.Analysis

Our discussion proceeds in three parts. We begin by ironing out two wrinkles that relate to our appellate jurisdiction and the scope of our review. With the surface smoothed, we turn sequentially to the district court's denial of Erikon's motion for leave to execute on the judgment and its denial of Erikon's motion for reconsideration.

A.Appellate Jurisdiction

We start with two questions that relate to our appellate jurisdiction. The first concerns the contours of our jurisdiction under 28 U.S.C. § 1291 — a statutory provision that allows circuit courts to review "appeals from all final decisions of the district courts." The parties — who agree on little else — both tell us that the district court's order denying Erikon's motion for leave to execute on the judgment was a final order and, thus, fit for review. Despite this assurance, though, we have some independent responsibility to examine potential jurisdictional infirmities before proceeding to the merits. See Me. Med. Ctr. v. Burwell, 841 F.3d 10, 15 (1st Cir. 2016).

A district court order is final if it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Whitfield v. Municipality of Fajardo, 564 F.3d 40, 45 (1st Cir. 2009) (quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945) ). When evaluating the finality of an order entered after judgment, courts generally treat the post-judgment proceeding as if it were a lawsuit distinct from the suit that generated the underlying judgment. See, e.g., United States v. Parker, 927 F.3d 374, 380 (5th Cir. 2019) ; JPMorgan Chase Bank, N.A. v. Winget, 920 F.3d 1103, 1106 (6th Cir. 2019) ; Star Ins. Co. v. Risk Mktg. Grp., 561 F.3d 656, 659 (7th Cir. 2009). Consequently, an order entered after judgment is final if it leaves the district court with no further work to resolve the post-judgment dispute and, thus, ends the post-judgment proceeding. See Whitfield, 564 F.3d at 45 ; Romero Barcelo v. Brown, 655 F.2d 458, 461 (1st Cir. 1981).

Here, the order denying Erikon's motion for leave to execute on the judgment ended the pending dispute between the parties over Erikon's post-judgment collection efforts. Erikon sought the appointment of a special master to conduct a public sale of the attached parcels of land, and CMG opposed this request. The order definitively resolved this dispute in CMG's favor: the court ruled that the five-year period for execution of judgments under Puerto Rico law had expired and denied leave to execute on the judgment out of time. That order effectively barred Erikon from continuing to seek to execute on the judgment and left no additional work for the court to do. Because the order terminated Erikon's post-judgment execution efforts, we conclude that it comprised a final order, immediately appealable under 28 U.S.C. § 1291. See Sobranes Recovery Pool I, LLC v. Todd & Hughes Constr. Corp., 509 F.3d 216, 220 (5th Cir. 2007) (holding that order refusing to permit judgment creditor to execute on judgment was final); TDK Elecs. Corp. v. Draiman, 321 F.3d 677, 678 (7th Cir. 2003) (same).

This conclusion does not end the inquiry into our appellate jurisdiction. We also must untie a jurisdictional knot largely attributable to poor draftsmanship. A notice of appeal must specify the orders and/or judgments that the appellant wishes to challenge. See Fed. R. App. P. 3(c)(1)(B). Erikon's notice of appeal specifies only the order denying its motion for reconsideration, yet its brief asks us to vacate the order denying its motion for leave to execute on the judgment as well. This mismatch raises an obvious question about whether the notice of appeal suffices to confer appellate jurisdiction to review the underlying order.

As a general rule, a circuit court's jurisdiction extends only to review of the orders and judgments specifically enumerated in the notice of appeal. See Rojas-Velázquez v. Figueroa-Sancha, 676 F.3d 206, 209 (1st Cir. 2012). But general rules typically admit of exceptions, and an appellant's failure to designate a particular order in the notice of appeal does not necessarily deprive us of jurisdiction...