United States Court of Appeals,
Fifth Circuit.
No. 94-50115.
Summary Calendar.
Helen Ruth MANGES, Plaintiff-Appellant,
v.
McCAMISH, MARTIN, BROWN & LOEFFLER, P.C., McCamish, Martin &
Loeffler, P.C., J. Patrick Deely, and Kevin Warburton, Defendants-
Appellees.
Nov. 7, 1994.
Appeal from the United States District Court for the Western
District of Texas.
Before SMITH, EMILIO M. GARZA and PARKER, Circuit Judges.
ROBERT M. PARKER, Circuit Judge:
Plaintiff-Appellant appeals the district court's February 2,
1994 final judgment granting Defendants-Appellees' motion to
dismiss and the court's orders of the same date granting
Defendants-Appellees' motion to dismiss and denying Plaintiff-
Appellant's motion to remand. We affirm.
FACTS AND PROCEDURAL HISTORY
Helen Ruth Manges ("Helen Manges"), a resident of the State of
Texas, is the wife of Clinton Manges, the sole shareholder of a
company that owned the Duval County Ranch ("Ranch") located in
Duval County, Texas. In 1983, Seattle-First National Bank
("Seattle-First"), a National Banking Association with its
principal place of business in Seattle, Washington and the
Mangeses' largest creditor, filed suit in federal court against the
Mangeses based upon claims relating to promissory notes,
1
guarantees, loan agreements and transactions involving those
instruments. A compromise and settlement agreement was reached in
1985. Two subsequent federal district court actions concluded with
judgments that found the Mangeses did not have a homestead right,
business or personal, in the Ranch. On August 19, 1988, the
parties submitted to the district court their "Agreed Motion for
Approval and Entry of Final Judgment." The judgment, signed and
dated August 25, 1988, provided that Seattle-First would recover
$55,361,545.72 from the Mangeses, and approved as valid,
enforceable, binding and existing in full force and effect the
parties' "Stipulation and Agreement Concerning Judgment, Stay of
Execution, Foreclosure of Liens, and Satisfaction of Judgment and
Other Obligations Owed to Seattle-First National Bank"
("stipulation and agreement") dated August 14, 1988. The
stipulation and agreement provided, among other things, that the
Mangeses would pay Seattle-First $30,000,000 on August 10, 1989.
The stipulation and agreement also contained the following
provision:
The Manges Defendants agree that the jurisdiction and venue of
any suit, hearing, or legal action of any nature, to which
Seattle-First National Bank is a party, one effect of which
could be to halt, enjoin, impair, or hinder the enforcement of
this Agreement, or the enforcement or collection of the Final
Judgment, shall be in the United States District Court for the
Western District of Texas, San Antonio Division.
On October 30, 1990, after the Mangeses defaulted on the
$30,000,000 payment, Seattle-First obtained an order of seizure and
sale of the Ranch. A public sale was conducted on January 16,
1991, with Seattle-First being the purchaser. On January 23, 1991,
2
an agreed occupancy order was entered by the district court,
allowing the Mangeses to continue to reside on the Ranch, subject
to certain conditions, until February 15, 1991.
Asserting that the Mangeses had breached the agreed occupancy
order, J. Patrick Deely, attorney for Seattle-First, applied for
and received a writ of assistance on February 11, 1991 directing
the United States Marshal to seize the Ranch. On February 12,
1991, the Ranch was seized, the Mangeses were evicted, and their
personal property was removed from the Ranch.
On June 4, 1993, Helen Manges filed an action against Seattle-
First in Duval County state district court ("the Seattle-First
case") asserting conversion, violation of the Texas Fair Debt
Collection Act, wrongful foreclosure/repossession, "promissory
estoppel," civil conspiracy, civil theft and fraud arising out of
the February 12, 1991 seizure. On July 29, 1993, she filed another
lawsuit in Duval County ("the McCamish case") against Defendants-
Appellees, members of a professional corporation with their
principal offices in San Antonio, Texas, asserting the same causes
of action except for the fraud claim. Both cases were removed to
the United States District Court for the Southern District of Texas
and later transferred to the United States District Court for the
Western District of Texas.
After conducting hearings in November 1993, the district
court: 1) denied Helen Manges' motion to remand the McCamish case;
2) granted an unopposed motion to dismiss the claims against the
defendants in the McCamish case; 3) entered an injunction
3
prohibiting Helen Manges from pursuing claims anywhere but in the
Western District; and 4) dismissed the claims against Seattle-
First in the Seattle-First case. Helen Manges did not appeal the
district court's order dismissing her claims against Seattle-First.
Her appeal challenges the district court's denial of her motion to
remand and the dismissal of her lawsuit against Defendants-
Appellees.
STANDARDS OF REVIEW
In reviewing the district court's granting of Defendants-
Appellees' motion to dismiss for failure to state a claim, we must
apply the same standard used by the district court.1 "A claim may
not be dismissed unless it appears certain that the plaintiff
cannot prove any set of facts in support of [her] claim that would
entitle [her] to relief."2
"Because removal is an issue of statutory construction, we
review a district court's determination of the propriety of removal
de novo."3
DISCUSSION
Helen Manges contends that because the district court lacked
subject matter jurisdiction in this action, it erred in denying her
motion to remand to state court and in granting Defendants-
1
Leffall v. Dallas Independent School Dist., 28 F.3d 521,
524 (5th Cir.1994).
2
Id. (citing Norman v. Apache Corp., 19 F.3d 1017, 1021 (5th
Cir.1994); Carney v. Resolution Trust Corp., 19 F.3d 950, 954
(5th Cir.1994)).
3
Id. (citing Garrett v. Commonwealth Mortg. Corp. of
America, 938 F.2d 591, 593 (5th Cir.1991)).
4
Appellees' motion to dismiss.4 She argues that her original
petition in state court does not present any federal cause of
action, claim of federal right, or decisive question of law
requiring application of a federal rule of decision. In addition,
she asserts that there is no diversity between the parties because
both she and the Defendants-Appellees are residents of the State of
Texas.
Defendants-Appellees contend that the federal court expressly
retained jurisdiction in the stipulation and agreement and agreed
occupancy order. In support of its contention, Defendants-
Appellees cite to Langley v. Jackson State University.5 In
Langley, the parties to a Title VII employment discrimination case
entered into a settlement agreement.6 The district court dismissed
the action without approving or incorporating the settlement into
the its order, but did indicate that it intended to retain
jurisdiction over future actions brought to enforce the settlement
agreement.7 The plaintiff later filed an action in federal court
claiming the defendant had breached the settlement agreement.8
This Court held that the district court lacked subject matter
4
We have jurisdiction over the district court's denial of
Helen Manges' motion to remand to state court because it is
coupled with the appeal of a final judgment. Id. at 524 n. 1
(citing Jones v. Newton, 775 F.2d 1316, 1317 (5th Cir.1985)).
5
14 F.3d 1070 (5th Cir.1994), cert. den., --- U.S. ----, 115
S.Ct. 61, --- L.Ed.2d ---- (1994).
6
14 F.3d at 1071.
7
Id.
8
Id. at 1072.
5
jurisdiction because it failed to approve or incorporate the
settlement agreement into its dismissal order.9 Defendants-
Appellees argue that unlike Langley, the district court in this
case did approve the stipulation and agreement in its final
judgment. Therefore, because the stipulation and agreement
explicitly provides for exclusive jurisdiction in the federal
court, concurrent jurisdiction in state court is eliminated and the
district court retains subject matter jurisdiction.
We agree that the holding in Langley supports a finding that
a district court may retain subject matter jurisdiction when the
parties' settlement agreement providing for exclusive jurisdiction
in the federal court is approved or incorporated into the district
court's final judgment. The 1988 district court judgment approved
the federal court's exclusive jurisdiction to determine all
questions concerning title, possession and control of the Ranch.
However, in Langley, neither party suggested that the federal
district court did not originally have federal jurisdiction. In
this case, Helen Manges contends that because Defendants-Appellees
reside in Texas, there is no diversity. Therefore, the case was
never properly in federal court in the first place.
We disagree with Helen Manges' contention. Our review of the
record reveals that Helen Manges' original petition filed in state
court against Defendants-Appellees alleges that Defendants-
Appellees acted in violation of the agreed stipulation and
agreement approved by the district court in its 1988 final judgment
9
Id. at 1072-73.
6
and the 1991 agreed occupancy order, which refers back to the 1988
final judgment. Therefore, we find that the district court has
ancillary jurisdiction in this case.
"It is well settled that a federal district court can exercise
ancillary jurisdiction over a second action in order to "secure or
preserve the fruits and advantages of a judgment or decree
rendered' by that court in a prior action."10 Ancillary
jurisdiction is appropriate "where the effect of an action filed in
state court would "effectively nullif[y]' the judgment of a prior
federal action. This is true even where the federal district court
would not have jurisdiction over the second action if it had been
brought as an original suit."11 Because the state action Helen
Manges brought against Defendants-Appellees will have an effect on
the 1991 agreed occupancy order and ultimately the stipulation and
agreement approved by the district court in its 1988 final
judgment, the district court has subject matter jurisdiction in
this case.
CONCLUSION
Because the district court approved the stipulation and
agreement in its 1988 final judgment and the district court has
ancillary jurisdiction in this case, we find that the district
court did not err in denying Helen Manges' motion to remand and in
granting Defendants-Appellees' motion to dismiss for lack of
10
Royal Ins. Co. of America v. Quinn-L Capital Corp., 960
F.2d 1286, 1292 (5th Cir.1992), cert. denied, --- U.S. ----, 114
S.Ct. 1541, 128 L.Ed.2d 193 (1994).
11
Id.
7
subject matter jurisdiction. Accordingly, the judgment of the
district court is AFFIRMED.
8