F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
AUG 6 2001
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
OKLAHOMA TURNPIKE
AUTHORITY, A Body Corporate and
Politic,
Plaintiff,
v. No. 00-5205
DIANA J. BRUNER, Personally and
as the Personal Representative
of the Estate of Elliott Daniel Bruner;
Defendant-Appellant,
LEDA V. BRUNER, formerly known
as Leda V. Burgess; ELLIOTT
BIM BRUNER; STEVE BRUNER,
also known as Bim Stephen Bruner;
BUREAU OF INDIAN AFFAIRS,
Department of Interior, United States
of America,
Defendants-Appellees,
and
18.31 ACRES OF LAND, More or
Less, Situated in the County of
Tulsa, State of Oklahoma; SON
BILLY, INC., An Oklahoma
Corporation; TULSA COUNTY
BOARD OF COMMISSIONERS;
TULSA COUNTY TREASURER;
JOHN DOE, sued as: Unknown
Owners,
Defendants.
Appeal from the United States District Court
for the Northern District of Oklahoma
(D.C. No. 99-CV-0288-H)
Submitted on the briefs:
Steven M. Harris and Michael D. Davis, Doyle & Harris, Tulsa, Oklahoma, for
Appellant.
Geoffrey M. Standing Bear, Pawhuska, Oklahoma, for Appellees Leda V. Bruner,
Elliot Bim Bruner, and Steve Bruner.
Thomas Scott Woodward, United States Attorney, Cathryn McClanahan, Assistant
United States Attorney, Tulsa, Oklahoma, for Appellee Bureau of Indian Affairs.
Before TACHA, Chief Circuit Judge, McKAY, Circuit Judge, and CUDAHY,
Circuit Judge. *
CUDAHY, Circuit Judge.
Diana Bruner, the widow of Daniel Bruner, brought cross-claims against
Daniel’s parents in a condemnation action that had been instituted by the
*
The Honorable Richard D. Cudahy, United States Circuit Judge for the Seventh
Circuit, sitting by designation.
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Oklahoma Turnpike Authority. 1
Diana’s cross-claims sought to establish her
interest in four tracts of land (two of which were subject to the condemnation
proceeding, and two of which were not) to which Daniel’s parents held title. The
district court entered judgment against Diana, and she appeals.
I.
Daniel Bruner, who is now deceased, was the son of Leda and Bim Bruner,
both of whom are Creek Indians. Diana Bruner is the widow of Daniel Bruner,
and is his estate’s personal representative.
On April 19, 1999, the Oklahoma Turnpike Authority filed a complaint
against various parties, including Diana, Leda and Bim, seeking to use its power
of eminent domain to acquire five tracts of land to which either Leda or Bim held
title. The Authority also sought a determination of the just compensation for this
taking. Shortly after the Authority filed its complaint, Diana filed two cross-
claims against Leda and Bim, seeking a determination of her rights to two tracts
of land which were subject to the condemnation proceeding—Tracts One and
Two—and two tracts of land which were not—Tracts Six and Seven. (Tracts
Three, Four and Five are not at issue in this case.) Although Diana brought her
1
Because the parties are members of the same family, they are identified by their
first names throughout this opinion.
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cross-claims both in her own name and on behalf of Daniel’s estate, for
convenience we will discuss Diana’s arguments as if only Diana is asserting an
ownership interest.
Diana’s first cross-claim sought a determination that, although Leda held
title to Tracts One, Two and Seven, Diana actually owned the tracts because of
the allegedly fraudulent means by which Leda had acquired them. Tracts One,
Two and Seven were originally owned by Leda’s sisters. Daniel wished to
purchase the tracts, but understood that they would lose their restricted (Indian)
status if he bought them. 2
In order to retain the land’s restricted status, Daniel
used wholly-owned corporations to funnel money into Leda’s account in the form
of allegedly inflated pre-paid lease payments. Leda then bought Tracts One and
Seven in her name, allegedly with the (unwritten) understanding that she would
convey legal title to Daniel in the future. Diana claimed that Leda purchased
Tract Two using a similar transactional structure.
Diana’s second cross-claim sought a declaration that she owned Tract Six,
although Bim held title to it. Tract Six was not restricted at the time of purchase,
but became—and continues to be—restricted because Bim purchased it using
2
Maintaining the restricted (Indian) status of land is generally preferable due to
the tax benefits associated with restricted land. See Bittker & Lokken, Federal Taxation
of Income, Estates & Gifts ¶ 1.2.9 (“Income derived by individual Indians from restricted
allotted land, held in trust by the United States, is subject to numerous exemptions from
taxation based on statute or treaty.”).
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money he received from an unrelated proceeding involving restricted property.
Daniel and Bim then allegedly instituted a lease scheme that allowed Daniel to
repay Bim for purchasing the land. Bim was to convey legal title in Tract Six to
Daniel at Daniel’s request, although this understanding was again not reduced to
writing.
Because Tracts One, Two, Six and Seven were all allegedly purchased with
Daniel’s money, Diana believed that she really owned the tracts. Diana asserted
four theories with respect to each of her ownership claims: (1) that she held title
to the tracts under a resulting/constructive trust theory; (2) that she held title to
the tracts under an equity theory; (3) that the placing of the land restrictions was
void; and (4) that the agreements between Daniel and his parents, calling for them
to convey their title in the land to Daniel, should be approved and enforced by the
court.
On October 13, 1999, the district court orally ruled against Diana on both
of her cross-claims, and on October 19, 1999, entered an order (the October 19
Order) that had been drafted by the government. Not surprisingly, this order
essentially adopted the government’s arguments without elaboration. With regard
to Tracts One and Two, the court ruled that there could be no constructive trust
because the land was, at all relevant times, restricted Indian land. The court
further held that there could be no constructive trust claims “for the reasons cited
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by the United States in its opening brief and reply brief.” Okla. Turnpike Auth. v.
18.31 Acres of Land , No. 99-CV-288-H, slip op. at 1 (D. Okla. Dec. 14, 1999).
While not detailing the reasons provided by the government, the court appears to
have relied primarily on the government’s assertion that restricted land cannot be
encumbered without the approval of the Secretary of the Interior pursuant to the
Supplemental Muscogee (Creek) Allotment Agreement, Act of June 30, 1902, 32
Stat. 500, § 16. With regard to Tracts Six and Seven, the district court ruled that,
for the reasons provided by the government, it was without authority to render an
opinion. The government’s reasons, based on its representations to the district
court, appear to be that (1) the district court lacked jurisdiction over Tracts Six
and Seven because they were not part of the condemnation proceeding and (2) the
court lacked jurisdiction to approve the agreement between Daniel and his parents
to convey the tracts to Daniel on his demand because this jurisdiction lies
exclusively in state court.
On November 5, 1999, Diana filed a motion that asked the district court to
certify the October 19 Order for immediate appeal in accordance with Federal
Rule of Civil Procedure 54(b), which states, in relevant part:
When more than one claim for relief is presented in an action . . . the
court may direct the entry of a final judgment as to one or more but
fewer than all of the claims or parties only upon an express
determination that there is no just reason for delay and upon an
express direction for the entry of judgment.
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The district court denied this motion in an order dated December 14, 1999, stating
that “Defendant has failed to make the threshold showing that the order it seeks to
have converted to a final order pursuant to Rule 54(b) is either ‘final’ or a
‘judgment’ as required by applicable law.” Okla. Turnpike Auth. v. 18.31 Acres
of Land , No. 99-CV-288-H, slip op. at 1 (D. Okla. Dec. 14, 1999).
Diana next filed suit in state court, seeking a determination in her favor of
the issues unresolved by the federal district court. The government removed this
action to federal district court, and at an August 15, 2000 hearing, the district
court apparently indicated that it was prepared to extend the reasoning it had
applied to Tracts One and Two to Tracts Six and Seven. Following this hearing,
the parties agreed to jointly seek certification of the October 19 Order and drafted
an order to this effect, which the district court entered on September 19, 2000.
Thus, in an unexplained, but probably proper, reversal of its previous position
that it lacked jurisdiction over Tracts Six and Seven, 3
the district court
announced:
The parties now agree that the disposition of the issues presented
and decided by the October 19, 1999 Order regarding Tracts 1
3
The district court’s certification order does state that the court entered an order
on August 24, 2000, in which it determined that it possessed jurisdiction over Diana’s
claims to Tracts Six and Seven. However, the parties have not placed the August 24,
2000 order in the record on appeal, and we are thus unsure of the district court’s reason
for reversing its prior determination that it did not have jurisdiction over Tracts Six and
Seven.
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and 2 would apply with equal force to the removed quiet title
action concerning Tracts 6 and 7. In the interest of judicial
economy, this Court agrees that these issues should be presented
to the Court of Appeals for decision pursuant to Federal Rule of
Civil Procedure 54(b).
Okla. Turnpike Auth. v. 18.31 Acres of Land , No. 99-CV-288-H at 3 (D. Okla.
Sept. 19, 2000). The district court concluded by stating:
The parties are hereby granted leave to proceed to the U.S. Court
of Appeals regarding this Court’s dismissal of October 19, 1999
and the reasoning of this Court in so ruling. Should the appellate
court sustain Claimant’s objection, both the condemnation action
[involving Tracts One and Two] and the removed state court
action [involving Tracts Six and Seven] shall proceed to consider
the Claimant’s claims. Otherwise, the dismissal of October 19,
1999 shall be upheld and the reasoning therein shall apply with
equal force to dismissal of the removed state action.
Id. Diana appeals.
II.
On appeal, Diana argues that the district court erred by ruling that the tracts
could not be encumbered without approval from the Secretary of the Interior.
However, we do not reach the substance of Diana’s argument, and instead dismiss
the appeal without prejudice because the district court improperly certified the
appeal under Federal Rule of Civil Procedure 54(b).
1.
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Because both parties jointly sought certification under Rule 54(b), it is not
surprising that neither party now disputes the propriety of the court’s decision to
certify its order. However, “[i]f the parties do not raise the question of lack of
jurisdiction, it is the duty of the federal court to determine the matter sua sponte.”
Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974).
Accordingly, we turn our attention to the question whether the district court
properly certified the October 19 Order under Rule 54(b).
The purpose of Rule 54(b) “is to avoid the possible injustice of a delay in
entering judgment on a distinctly separate claim or as to fewer than all of the
parties until the final adjudication of the entire case by making an immediate
appeal available.” 10 Charles A. Wright et al., Federal Practice and Procedure:
Civil 2d § 2654 at 33 (1982). However, Rule 54(b) “preserves the historic federal
policy against piecemeal appeals,” Sears, Roebuck & Co. v. Mackey , 351 U.S.
427, 438 (1956)—a policy that promotes judicial efficiency, expedites the
ultimate termination of an action and relieves appellate courts of the need to
repeatedly familiarize themselves with the facts of a case. Thus, “[t]he rule
attempts to strike a balance between the undesirability of more than one appeal in
a single action and the need for making review available in multiple-party or
multiple-claim situations at a time that best serves the needs of the litigants.” 10
Charles A. Wright et al., Federal Practice and Procedure: Civil 2d § 2654 at 35
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(1982).
“Rule 54(b) entries are not to be made routinely . . . .” Great American
Trading Corp. v. I.C.P. Cocoa, Inc. , 629 F.2d 1282, 1286 (7th Cir. 1980) (cited
with approval in Livesay v. Shollenbarger , 19 F.3d 1443 (table), 1994 WL 56923,
at **2 (10th Cir. 1994)); see also Curtiss-Wright Corp. v. General Elec. Co. , 446
U.S. 1, 10 (1980) (“sound judicial administration does not require that Rule 54(b)
requests be granted routinely”). Indeed, “trial courts should be reluctant to enter
Rule 54(b) orders since the purpose of this rule is a limited one: to provide a
recourse for litigants when dismissal of less than all their claims will create undue
hardships.” Gas-A-Car, Inc. v. Am. Petrofina, Inc. , 484 F.2d 1102, 1105 (10th
Cir. 1973). Thus, a certification under Rule 54(b) is only appropriate when a
district court adheres strictly to the rule’s requirement that a court make two
express determinations. First, the district court must determine that the order it is
certifying is a final order. See Fed.R.Civ.P. 54(b); Curtiss-Wright Corp. 446 U.S.
at 7. Second, the district court must determine that there is no just reason to
delay review of the final order until it has conclusively ruled on all claims
presented by the parties to the case. See Fed.R.Civ.P. 54(b); Curtiss-Wright
Corp., 446 U.S. at 8.
A two-tiered standard of review is applied to a district court’s Rule 54(b)
certification. The district court’s determination of the certified order’s finality is
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subject to de novo review because it is a question of law. See Curtiss-Wright
Corp., 446 U.S. at 10; Livesay, 19 F.3d 1443 (table), 1994 WL 56923, at **2;
Sussex Drug Prods. v. Kanasco, Ltd., 920 F.2d 1150, 1153 (3d Cir. 1990); 19
James Wm. Moore et al., Moore’s Federal Practice ¶ 202.06[4] (3d ed. 1999).
However, the district court’s determination that there is no just reason for delay is
reviewed only for abuse of discretion. See Curtiss-Wright Corp., 446 U.S. at 10;
Livesay, 19 F.3d 1443 (table), 1994 WL 56923, at **2 n.5; 19 James Wm. Moore
et al., Moore’s Federal Practice ¶ 202.06[4] (3d ed. 1999).
2.
Of primary concern in this case is whether the October 19 Order is final so
that an appeal under Rule 54(b) may be taken. To be considered “final,” an order
must be “‘final’ in the sense that it is ‘an ultimate disposition of an individual
claim entered in the course of a multiple claims action.’” Curtiss-Wright Corp. ,
446 U.S. at 7 (quoting Sears, Roebuck & Co. , 351 U.S. at 436). While the exact
definition of “claim” for purposes of Rule 54(b) is unsettled, see Samaad v. City
of Dallas , 940 F.2d 925, 930-32 (5th Cir. 1991), a “claim” is generally understood
to include all factually or legally connected elements of a case. See Buckley v.
Fitzsimmons , 919 F.2d 1230, 1237 (7th Cir. 1990) (vacated on other grounds by
502 U.S. 801); cf. Smith v. Benedict , 279 F.2d 211 (7th Cir. 1960) (the term
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“claim” refers to a cause of action); Atkins, Kroll (Guam), Ltd. v. Cabrera , 277
F.2d 922, 924 (9th Cir. 1960) (the term “claim” refers to a cause of action). This
notion of connectedness also appears in Moore’s Federal Practice 3d § 202.06[2],
which states:
[A] judgment is not final unless the claims disposed of are
separable from the remaining claims against the same parties.
Separability is an elusive term, and no reliable litmus test exists
for determining when a claim is a distinct claim of relief. Courts,
however, have concentrated on two factors: (1) the factual
overlap (or lack thereof) between the claims disposed of and the
remaining claims, and (2) whether the claims disposed of and the
remaining claims seek separate relief.
(emphasis in original); see also Curtiss-Wright Corp. , 446 U.S. at 8 (district court
should “consider such factors as whether the claims under review were separable
from the others remaining to be adjudicated”). Thus, a judgment is not final for
the purposes of Rule 54(b) unless the claims resolved are distinct and separable
from the claims left unresolved.
Here, Diana presents four claims that are so intertwined (have so much factual
overlap) as to be inseparable. The facts with regard to each tract of land are perhaps
sufficiently unique that a technically distinct claim attaches to each tract: Daniel used
different companies to funnel different sums of money to his parents so that they could
purchase different tracts of land. However, the facts as they are material to the district
court’s view of how it should dispose of the case are identical: each tract of land is
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restricted, which, as currently understood by the district court,4 requires the Secretary of
the Interior’s approval before it may be encumbered. In addition, while Diana employs a
variety of legal theories in arguing for relief, the relief she seeks—the declaration that she
is the true owner of the land—is identical with regard to each tract of land. Accordingly,
the facts giving rise to Diana’s four claims are so overlapping that the certification under
Rule 54(b) of an order disposing of only two of the claims was error.
Another way of understanding why Diana’s claims are inseparably intertwined is
to recognize that the district court was not really certifying the merits of Diana’s claims to
Tracts One and Two, but rather Leda and Bim’s affirmative defense to Diana’s
claim—that any encumbrance on the tracts requires the Secretary of the Interior’s
approval. In general, “Rule 54(b) does not allow for certification of a defense.” W.L.
Gore & Assocs., Inc. v. Int’l Med. Prosthetics Research Assocs., Inc., 975 F.2d 858, 863
(Fed. Cir. 1992); see also Flynn & Emrich Co. v. Greenwood, 242 F.2d 737, 741 (4th Cir.
1957). However, a defense may be certified when, as here, the defense is “implicitly and
indirectly” certified with the claim against which it is raised. W.L. Gore, 975 F.2d at 863.
Nonetheless, if a certain defense is applicable to all claims in an action—as the district
court now understands the situation to be here—then we believe that the district court
must adjudicate all the claims, not just certain selected claims, before an appeal may be
4
Because we lack jurisdiction over this appeal, we decline to address the merits of
the district court’s determinations.
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taken. Failure to follow all these steps unacceptably multiplies the burden imposed on the
appellate court, presumably for the convenience of the district court, which, if affirmed on
appeal, can be assured of its proposed disposition of the remaining claims. Accordingly,
because the district court has only partially disposed of a class of claims that, as the
district court now understands them, are so factually related that they should instead be
disposed of together, we lack jurisdiction to hear this appeal.5
3.
We conclude by briefly examining whether the district court’s certification order
adequately articulated the determinations of finality and no just reason for delay that are
required by Rule 54(b). While the rule’s requirement that these determinations be stated
explicitly in the district court’s certification order is to some extent a formality, the
requirement does provide district courts with one last opportunity to discover errors in
their decision to certify an order for appeal. It is thus not surprising that the district
court’s certification order nowhere states that the October 19 Order is final, for in
5
28 U.S.C. §1291 only confers jurisdiction over final decisions of district courts,
and as we have discussed, the district court has not certified a final judgment under Rule
54(b). Further, we will not read the district court’s failed attempt to certify the October
19 Order under Rule 54(b) as a certification for interlocutory appeal under 28 U.S.C.
§1292(b) because the language of the district court’s certification order does not meet the
requirements of §1292(b). See Rodabaugh v. Cont’l Cas. Co., 62 F.3d 1429, 1995 WL
471082, at ** 2 (10th Cir. Aug. 10, 1995) (unpublished). Thus, under no statutory
provision do we posses jurisdiction to hear the merits of Diana’s appeal.
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attempting to make this determination the court would presumably have caught the errors
earlier discussed. In addition, given that the district court’s certification order reversed an
earlier order in which it held that the October 19 Order was not final, we believe that the
district court should not only have made an express determination of finality, but also
explained what circumstances have intervened to cause it to believe that the October 19
Order was now final. Accordingly, the district court’s order failed to adequately
determine whether, and for what reasons, the October 19 Order was “final.”
With respect to the requirement that the district court determine whether there is no
just reason for delay, the district court’s certification order states that certification is “in
the interest of judicial economy” and “encourage[s] a speedy resolution.” These
statements are not the magic phrase required by Rule 54(b)—which looks to whether
there is “no just reason for delay”—and, more importantly, are problematic because they
are conclusory and not supported by any reasoning. See 19 James Wm. Moore et al.,
Moore’s Federal Practice § 202.06[3] (3d ed. 2000) (noting circuit split regarding
requirement that district court supply reasoning for conclusion that certification is
appropriate). However, in light of the dispositive errors noted earlier, it is unnecessary to
decide whether the district court properly determined that there was no just reason for
delay.
III.
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For the foregoing reasons, we DISMISS this appeal without prejudice and
REMAND for further proceedings consistent with this opinion.
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