Scanlon v. M v. Super Servant 3

United States Court of Appeals
For the First Circuit

No. 05-1499

EUGENE SCANLON, BIG VEE BOATS INC., DENNIS A. SOKOL,
and INDEMNITY INSURANCE COMPANY OF NORTH AMERICA,

Plaintiffs, Appellants,

v.

M.V. SUPER SERVANT 3, Her Engines, Tackle, Apparel,
Appurtenances, etc., in rem; and DOCKWISE SHIPPING B.V.,
DOCKWISE B.V., AND DOCKWISE N.V., in personam,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND

[Hon. Mary M. Lisi, U.S. District Judge]

Before

Torruella, Circuit Judge,
Campbell, Senior Circuit Judge,
and Howard, Circuit Judge.

Anthony J. Pruzinsky, with whom Hill Rivkins & Hayden LLP,
Norman A. Peloquin, and Law Office of Norman A. Peloquin, II, P.C.,
were on brief, for appellants.
Jeremy J.O. Harwood, with whom Healy & Baillie, LLP, was on
brief, for appellees.

November 8, 2005
 TORRUELLA, Circuit Judge. Plaintiffs herein appeal from

the district court's order compelling arbitration of their maritime

dispute, with the court first staying and then dismissing the case.

We conclude that we lack appellate jurisdiction and therefore

dismiss this appeal.

I.

In July 2002, during a voyage from Palma de Mallorca,

Spain to Newport, Rhode Island, two sailing yachts, the EIVISSA and

the CRASAVITSIA, were damaged while onboard the transportation

vessel M.V. SUPER SERVANT 3. The damage was apparently sustained

when the crew of the SUPER SERVANT were spray painting a portion of

their own ship, near to where the two sailing vessels were stowed.

Apparently some overspray occurred, causing damage to both vessels.

Yacht owners Eugene Scanlon and Dennis Sokol and their

insurer Indemnity Insurance Company of North America ("plaintiffs")

brought an action alleging breach of contract and tort against the

SUPER SERVANT, Dockwise Shipping B.V., Dockwise B.V., and Dockwise

N.V. ("Dockwise," or "defendants") in the United States District

Court for the District of Rhode Island on June 20, 2003. Dockwise

in turn sought to compel arbitration pursuant to 9 U.S.C. § 4 on

the basis of an arbitration clause contained within the written

contracts of carriage, or "booking notes," into which plaintiff

yacht owners and Dockwise had entered prior to undertaking the

voyage. The parties agreed that the arbitration clause at issue

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fell within the scope of the Convention on the Recognition and

Enforcement of Foreign Arbitral Awards ("the Convention"), as

implemented by 9 U.S.C. § 201, et seq. Plaintiffs contended,

however, that an exculpatory clause1 contained within the booking

notes releasing Dockwise from all liability was contrary to U.S.

law and policy and would be implemented under Dutch law,2 thus

1
Clause 7 of the booking note provided in relevant part:

(3) The Yacht Owner shall be liable for
(a) any loss or damage or delay, howsoever caused
and of whatever nature, to or sustained by the Yacht
(including damage to the Yacht's interior), and including
any property on board the Vessel which is operated,
owned, hired or leased by the Yacht Owner, its employees,
servants, agents or subcontractors, regardless of whether
such property is to be shipped or not;
. . .
(d) any loss, costs and damages consequent upon
loss, damage or delay (including delay resulting from
delayed shipment) to the Yacht; all of which shall be for
the account of the Yacht Owner, without recourse to the
Carrier, its servants or agents or insurers.

The Yacht Owner shall defend, indemnify and hold harmless
the Carrier from and against any and all claims, losses,
costs, damages and expenses of every kind and nature
arising from the foregoing.
2
Clause 6 of the booking note provided:

(1) Disputes arising from this Agreement which cannot be
settled amicably, will be referred exclusively to
arbitration in Rotterdam, The Netherlands.

(2) Arbitration in Rotterdam will be conducted in
accordance with the Rules of the Transport and Maritime
Arbitration Association (TAMARA). Insofar as anything
has not been dealt with by the terms and conditions of
this Agreement, the law of the Netherlands shall apply
. . . .

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rendering the arbitration agreement unenforceable under the narrow

exception set forth in Art. II., § 3 of the Convention.3

On February 25, 2004, the district court entered an order

to compel arbitration and stay the action in its entirety during

the pendency of arbitration. The district court found that the

exculpatory clause did not place the arbitration agreement within

the Convention's narrow § 3 exception as it has been construed in

this circuit and advised plaintiffs that their argument was

"premature" and would be "more properly presented if, and when, the

arbitrator applies [the exculpatory clause] and judicial

enforcement of the arbitration award is sought."

More than four months later, on July 1, 2004, plaintiffs

moved to amend the order of February 25 so as to certify an

interlocutory appeal pursuant to 28 U.S.C. § 1292(b). At the time

of that filing, plaintiffs acknowledged that in reliance upon the

advice of their Dutch law expert, they had not commenced

arbitration proceedings in the Netherlands as required by the

3
Under the Convention:

(3) The court of a Contracting State, when seized of an
action in a matter in respect to which the parties have
made an agreement within the meaning of this article,
shall, at the request of one of the parties, refer the
parties to arbitration, unless it finds that the said
agreement is null and void, inoperative or incapable of
being performed.

Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, Art. II, § 3, as implemented by 9 U.S.C. § 201.

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booking note and the order of the district court. Their expert had

apparently warned that the arbitrator would apply Dutch law and

that the exculpatory clause would be enforced under Dutch law.

Plaintiffs sought to appeal in part because their claims were now

time-barred under the applicable arbitration provisions. The

district court denied the motion as untimely.

Thereafter on August 17, 2004, plaintiffs requested

"reconsideration and clarification" of the denial of interlocutory

appeal pursuant to Fed. R. Civ. P. 60(b)(6), and were again denied.

In that motion, plaintiffs provided no new information with which

the court might reconsider its previous denial of § 1292 relief but

added a completely new request for a lift of the stay of

proceedings and dismissal in favor of defendant.

On February 11, 2005, the district court requested a

status report on this case, and, on March 15, plaintiffs moved for

dismissal in favor of defendants. The district court granted the

motion for dismissal on the following day. This appeal followed.

II.

The threshold question in this case is whether this court

has jurisdiction to hear an appeal brought by a party which has

consented to the very judgment from which it then appeals. Several

circuits refuse appellate jurisdiction in such cases. See, e.g.,

Tel-Phonic Servs., Inc. v. TBS Int'l, Inc., 975 F.2d 1134, 1137

(5th Cir. 1992) ("A party will not be heard to appeal the propriety

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of an order to which it agreed."); Stewart v. Lincoln-Douglas Hotel

Corp., 208 F.2d 379, 381 (7th Cir. 1953) ("It is a generally

accepted rule of long standing that a party who agrees or consents

to the entry of an order or judgment thereby waives his right to

claim that the trial court committed error in the entry of the

order."); Marks v. Feist, 8 F.2d 460, 462 (2d Cir. 1925) ("So far

as this record shows, the complaint was dismissed on the

plaintiff's motion, and the decree entered was in effect a decree

by consent. And from such a decree the plaintiff cannot appeal.").

Although this circuit generally holds a party who

consents to a judgment to have waived the right of appeal, we have

allowed a limited exception: "'it is possible for a party to

consent to a judgment and still preserve [its] right to appeal' a

previous ruling on a contested matter in the case, as long as it

'reserve[s] that right unequivocally." BIW Deceived v. Local S6,

Industrial Union of Marine and Shipbuilding Workers of America,

IAMAW District Lodge 4, 132 F.3d 824, 828 (1st Cir. 1997) (quoting

Coughlin v. Regan, 768 F.2d 468, 469-70 (1st Cir. 1985)).

In BIW Deceived, we held that plaintiff-appellants had

preserved their right to appeal despite having successfully sought

dismissal below because the record clearly reflected "the

plaintiffs' unequivocal intention" to seek review. Id. In order

to apply the "unequivocal intention" standard in this case, it is

helpful to revisit BIW Deceived in some detail. In that case, the

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Bath Iron Works Union ("BIW") had hired several electricians and

pipefitters, allegedly under false pretenses. When they were laid

off, the former employees brought suit in Maine state court, and

defendant BIW removed to federal court. When plaintiffs' motion

for remand was denied, they made three separate submissions to the

court regarding their intentions to appeal. First, they moved for

entry of "a final and appealable judgment" in favor of defendants,

but were denied. Id. In the status conference which followed,

"plaintiffs represented . . . that they desired the entry of final

judgment in order to 'appeal the [district court's] preemption

ruling.'" Id. Finally, upon renewed motion for dismissal,

plaintiffs "solicited the entry of a 'final judgment, without

prejudice to the plaintiff's right to seek appeal.'" Id. On

appeal, we were convinced that the record "clearly show[ed] the

plaintiffs' unequivocal intention." Id. Such is not the present

case.

In the case before us, plaintiffs failed "unequivocally"

to reserve their right to appeal within the meaning of the standard

established in BIW Deceived, and thus we are compelled to conclude

that they have forfeited that right. Although plaintiffs maintain

that they have made a "concerted, consistent, and ultimately

effective effort" to reserve their right to appeal throughout this

case, the record does not support their assessment. In their

March 15, 2005 motion, plaintiffs sought dismissal in favor of

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defendants "in the interest of finality," making no mention of

their intent to appeal. Not only did they fail specifically to

solicit a dismissal in the unequivocal language of BIW Deceived

("without prejudice to the plaintiff's right to seek appeal"), but

their employment of the word "finality" verged on the disingenuous

if in fact they sought dismissal solely for the purpose of mounting

an appeal, which they now claim to have done. It is insufficient

that plaintiffs at one point in the course of the proceedings

expressed a desire to appeal. The declaration of intent to appeal

must be made concurrently with the motion for dismissal. It is at

this point that they were required unequivocally to reserve their

right to appeal.

Plaintiffs contend that their motion for dismissal did

not expressly state their intention to seek review because

defendants "would have objected" if that purpose had been made

plain. This is almost certainly the case, as plaintiffs' wish to

seek relief in the U.S. courts rather than in an arbitral court in

the Netherlands was precisely the subject of the action below.

Such an argument merely emphasizes plaintiffs' inappropriate

tactics. The decision on the motion was for the district court to

make.

Plaintiffs dismiss the unequivocal intention standard as

simply a matter of "magic words" and evidence of defendants'

"efforts to elevate form over substance." And although it is

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without doubt that courts do, on occasion, favor bright-line rules

at the expense of equitable results, we are confident that this is

not such an instance. The general principle that a party cannot

appeal from a judgment to which he has consented finds roots in

some of the fundamental public policy priorities of the federal

judiciary: conserving judicial resources and avoiding delay.

Plaintiffs improperly rely on this court's determination

that "the proper way to appeal an interlocutory order is to move

for a voluntary dismissal with prejudice." John's Insulation, Inc.

v. L. Addison and Associates, Inc., 156 F.3d 101, 107 (1st Cir.

1998). Plaintiffs misapply John's Insulation when they gloss over

the additional requirements it imposes: namely, that such dismissal

must be sought without delay, and that the intent to appeal must be

made explicit.

[P]laintiffs may sometimes find that an
interlocutory ruling has so damaged their case
that seeing it to trial would be a waste of
resources. However, in such situations, the
proper course of action is not to delay the
proceedings, but to file a motion for
voluntary dismissal with prejudice, stating
explicitly that the purpose is to seek
immediate review of the interlocutory order in
question. Such a voluntary dismissal has the
virtues of giving the defendants and the
district court notice of the plaintiff's
intentions, and of preventing excessive delay.

Id. (emphasis added).

Plaintiffs' intent to appeal was not made explicit in

their motion for dismissal. Plaintiffs expressed a desire to have

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the case dismissed as early as August 17, 2004, but they did so

ineptly, tacking the submission on to the end of a "motion for

reconsideration" (when dismissal had not been under consideration

in the previous order) rather than submitting a proper motion to

dismiss. Their March 15, 2005 motion explicitly requested a lift

of the stay of proceedings and entry of a judgment of dismissal "in

the interest of finality" and made no mention of their intent to

seek review, immediate or otherwise.

Rather than filing immediately for voluntary dismissal

with prejudice as directed by John's Insulation, plaintiffs filed

a dilatory motion for interlocutory appeal under 28 U.S.C. § 1292

(b), which the district court denied as untimely. Although

plaintiffs in this case did ultimately file a motion for voluntary

dismissal with prejudice, they did not do so until March 15, 2005

-- more than one year after the original order to compel

arbitration and stay proceedings. It was not until the district

court requested a status report in February 2005 that plaintiffs

managed to effectively request -- and obtain -- dismissal of this

action, but they failed explicitly to reserve their right to

appeal.

III.

For the foregoing reasons, we find that this court is

without appellate jurisdiction to review the merits of this case.

Dismissed.

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