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Exchange National Bank of Chicago v. Daniels

May 29, 1985

EXCHANGE NATIONAL BANK OF CHICAGO, PLAINTIFF-APPELLEE,
v.
HAROLD DANIELS AND IRENE DANIELS, DEFENDANTS-APPELLANTS



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 82 C 7710 - Hubert L. Will, Senior District Judge.

Wood and Easterbrook, Circuit Judges, and Dumbauld, Senior District Judge.*fn*

Author: Easterbrook

EASTERBROOK, Circuit Judge.

Harold Daniels is the maker of a $4.5 million note, which his wife Irene Daniels guaranteed. The Danielses (the Borrowers) have a cattle business in New Mexico. They borrowed the money from Exchange National Bank (the Bank) over several years. They used the money to finance that business - and, as it turns out, a joint venture in which they were partners with the two employees of the Bank who negotiated and supervised the loan.

When the Borrowers did not pay, the Bank filed this diversity action to collect. The Borrowers replied that the Bank's employees had promised them that the employees would repay portions of the loan devoted to the joint venture and that the Borrowers need not repay personally. The district court rejected this defense under state law and entered summary judgment for the Bank on the issue of liability. The award, including interest, was approximately $6 million. Some months later, the court awarded attorneys' fees to the Bank, as the note provided. We first must decide whether an appeal from the award of fees, the "final decision" in the case, brings up the disposition of the merits too. We conclude that it does not. We decide on the merits only the challenge to the award of fees which we affirm.

I

The district court's opinion awarding summary judgment to the Bank was rendered on April 25, 1984. On May 10 the court entered a judgment, and it entered an order on May 17 to correct a mistake in adding principal and interest to derive the full award. The judgment does not mention Fed. R. Civ. P. 54(b), but it includes, in the language of that rule, a "finding that there is no just reason for delay." In three places the document refers to itself as a "final judgment." It was not final in the sense of winding up the case, though. It declared that the Bank was entitled to attorneys' fees in an amount still to be determined.

On May 30 the Borrowers sought reconsideration under Fed. R. Civ. P. 59(e). On June 18 they filed both a notice of appeal (No. 84-2037) from the judgment and a motion to enlarge the time within which to file an appeal. The motion contended that there is a conflict among the circuits on the question whether the entry of judgment on the merits is an appealable order when questions of fees remain to be decided; the Borrowers asked the district court to enlarge the time for appeal so that the merits and the questions about fees could be presented in a single appeal.

On June 28 the district court denied the Rule 59 motion as untimely. It "granted" the motion to extend the time for appeal, writing: "Said defendants' time for filing notice of appeal is extended ten (10) days from May 10, 1984." Because the Borrowers had had 30 days from May 10 without this "extension," this was the equivalent of denial. The Borrowers filed a new appeal (No. 84-2232) on July 24.

Finally, on September 26 the district court entered an opinion and order awarding fees and expenses of about $108,000. On October 11 the Borrowers filed a notice of appeal (No. 84-2737) directed to the order awarding fees. The Bank maintains that this is the only effective notice of appeal, and that it presents for our review only issues concerning fees and costs. We agree.

The appeal filed on June 18 (No. 84-2037) is either too late or too early, depending on the effect of the motion for reconsideration. If the motion for reconsideration was timely, then the notice on June 18 was ineffective because the motion suspended the finality of the judgment, making appeal impossible until the court had acted on the motion. Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 74 L. Ed. 2d 225, 103 S. Ct. 400 (1982). If the motion for reconsideration was not timely, then the appeal was out of time. The Borrowers had 30 days to file a notice of appeal, and that time expired on June 9. A trivial or clerical correction to a judgment (such as the order of May 17) does not restart the time for appeal. FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 211-12, 97 L. Ed. 245, 73 S. Ct. 245 (1952). Unless the second order "has disturbed or revised legal rights and obligations which, by its prior judgment, had been plainly and properly settled with finality" (id. at 212), the first order controls the time for appeal. Here the district court corrected its obvious arithmetical error; getting one's sums right is desirable, but a correction of this sort is not an alteration of settled obligations.

The appeal filed on July 24 (No. 84-2232) is timely only if the motion for reconsideration was timely or the district court was required to grant an extension of time. The Borrowers do not argue that the district court was required to give them more time; the disposition of requests for extensions is entrusted to the district court's discretion. It is conceivable that the district judge meant to extend the time until 10 days after its order of June 28, as Fed. R. App. P. 4(a)(5) permits, or to grant the Borrowers an additional ten days to appeal the May 10 order. But the order does not say either thing. The Borrowers did not seek clarification from the district court or discuss the interpretation of the order in their brief here (they mention it only at page 12 of their reply brief, without elaboration); they did not file a new notice within ten days after June 28. We therefore treat the order as ineffectual.

The motion for reconsideration also does not help the Borrowers. Rule 59(e) provides that the motion must be filed within 10 days. The Borrowers missed the time; they did not even file the motion within 10 days of the corrected judgment entered on May 17. The Borrowers say that the motion was timely because the judgment of May 10 was not "final." If the judgment was not "final," though, there was nothing to alter or amend. The time to appeal had not begun to run, the motion of May 30 would not affect the time, the notice of appeal filed on July 24 would be irrelevant, and the ...


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