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United Bonding Insurance Co. v. Stein

decided: May 9, 1969.

UNITED BONDING INSURANCE COMPANY
v.
LOUIS STEIN, BETTY STEIN, AND LEE G. BRAUNSTEIN, A/K/A L. G. BRAUNSTEIN, APPELLANTS



Van Dusen, Aldisert and Stahl, Circuit Judges.

Author: Per Curiam

Opinion OF THE COURT

Appellants were parties to a written indemnity agreement with the United Bonding Insurance Company, which had posted performance and maintenance, labor and material payment bonds as surety on a construction project. Prior to issuing these bonds, United had insisted upon and received an indemnity agreement from the individual appellants requiring them to stand ready to deposit collateral upon the request of United and to hold United harmless in the event it incurred losses on its surety bonds.

When the contractor was adjudicated a bankrupt and was unable to meet its construction obligations, United called upon the appellants to deposit the collateral in accordance with the agreement. Their refusal to do so prompted this action.

In its complaint in the court below, United asked for the following relief: (1) an order for specific performance of the deposit-of-collateral provision requiring appellants to deposit the sum of $75,000 as collateral; (2) an order requiring the appellants to exonerate appellee from liability under the bonds; (3) an award against the appellants in such amounts as should be determined to be the liability of the appellee-surety under the bonds.

After a motion by appellants to dismiss the action had been denied, appellee filed a motion for summary judgment requesting "partial Summary Judgment in its favor requiring defendants to deposit with plaintiff the sum of $75,000.00" in accordance with the indemnity agreement and "partial Summary Judgment in the sum of $49,948.96, being the amount of claims actually paid by the plaintiff [bonding company] prior to the filing of this Motion."

The district court granted relief on the request for the deposit of collateral but denied any further relief. The court said, in the opinion by Judge Kirkpatrick:

"The first part of the motion for summary judgment is granted and judgment may be entered in favor of the plaintiff ordering the deposit of $75,000 as collateral in accordance therewith.

"As to the second part of the motion for summary judgment it is clear that there are unresolved issues upon which, in my judgment, it would be improper and unwise to enter a summary judgment before full discovery has been had. Therefore, partial summary judgment in the amount prayed for is denied."

These appeals are from the order of the court granting the "partial summary judgment" for the deposit of collateral.

At oral argument on these appeals we indicated to the parties that there was a serious question as to whether this order was appealable.*fn1 We permitted the parties to argue the appeals on the merits, and asked for supplemental memoranda directed specifically to the question of appealability. Able counsel for the parties have supplied excellent briefs on this point.

Congress has directed that "The courts of appeals shall have jurisdiction of appeals from all final decisions of the district courts." 28 U.S.C.A. ยง 1291. Federal Rule 54(b) provides that when more than one claim for relief is presented in an action, judgment on less than all the claims shall not be deemed final -- and thus appealable -- unless the district court so determines and directs. In addition, Rule 54(b) expressly states that:

"In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."

Read together, Section 1291 of Title 28 and Federal Rule 54(b) thus present two essential ingredients for rendering a judgment final. First, the substance of the matter litigated and upon which the order is entered must be "final" within the statutory conception of Section 1291,*fn2 and second, in a multiple claim ...


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