Moody National Bank of Galveston v. GE Life and Annuity Assurance Company

Post-judgment motions addressing costs or attorney’s fees are considered collateral issues – even when the costs or attorney’s fees are included in the final judgment – and do not toll the time for filing an appeal. Moody National Bank of Galveston v. GE Life and Annuity Assurance Company, ___ F.3d ___, No. 03-41237 (5th Cir. Aug. 24, 2004).

Moody National Bank of Galveston (“Moody”) filed suit against GE Life and Annuity Assurance Company (“GE”) seeking to recover the proceeds of a life insurance policy. GE filed for summary judgment in the district court, which was granted on June 30, 2003. The district court also ordered the parties to bear its own costs and attorney’s fees. On July 14, 2003, GE filed a motion styled “Motion to Alter or Amend the Judgment under Federal Rule of Civil Procedure 59(e)” and only sought to have all costs and fees taxed against Moody. On July 30, 2003, the district court denied the motion. On August 27, 2003, Moody filed its Notice of Appeal

Generally, a timely filed Rule 59(e) motion to amend or reconsider the judgment will toll the time for filing an appeal – which is 30 days after the judgment or order appealed from is entered – until the district court disposes of the motion. However, motions addressing costs and attorney’s fees are generally made pursuant to Rule 54 and are considered collateral to the judgment so as to not toll the time period for filing an appeal.

Moody argued that even though GE only sought to assess costs against Moody, the motion was nevertheless a Rule 59(e) motion because the district court’s ruling that each party should bear its own costs and attorney’s fees was included in the final judgment.

The Fifth Circuit initially instructed that the styling of the motion is immaterial, and it is the motion’s substance, and not its form, which controls. The fashioned the issue: whether a motion to allocate costs, which would otherwise be characterized as a Rule 54(d) motion, becomes a Rule 59(e) motion to alter or amend where the district court awarded costs as part of its final judgment.

The Fifth Circuit looked to the U.S. Supreme Court’s decision in Budinich v. Becton Dickinson and Co., 486 U.S. 196 (1988), where it was held that a claim for attorney’s fees is not part of the merits of an action to which the fees pertain. The Fifth Circuit also considered Samaad v. City of Dallas, 922 F.2d 216 (5th Cir. 1991), where the plaintiffs’ counsel filed a post-judgment motion to allocate costs as well as a timely Notice of Appeal. The plaintiffs’ counsel, however, only named the lead plaintiff in the notice of appeal. Following the district court’s order granting the motion for costs as to the lead plaintiff, the plaintiffs’ counsel sought to amend his Notice of Appeal to identify all remaining plaintiffs. The Fifth Circuit concluded it only had jurisdiction to hear the appeal of the lead plaintiff because the amended Notice of Appeal was untimely. Indeed, the Fifth Circuit held that Budinich “made it patent that a motion for costs or attorney’s fees is not to be deemed a Rule 59 motion, even where the cost or fee award might be viewed as an integral part of the merits.”

Finally, the Court considered Appellate Rule 4(a)(4) which was amended in 1993 to include among the motions that will toll the time for filing a notice of appeal motions for attorney’s fees under Rule 54 if the district court extends the time to appeal under Rule 58.

Rule 58(c)(1) provides that “Entry of judgment may not be delayed, nor the time for appeal extended, in order to tax costs or award fees, except as provided in Rule 58(c)(2).” Rule 58(c)(2) then provides that for the limited circumstances under which a post-judgment motion for attorney’s fees will extend the time for appeal and makes no provision for extending the time for appeal relating to taxing of costs. The Fifth Circuit concluded that “Because Rule 58(c)(2) is silent on post-judgment motions addressing costs, the intent of the rule is clear: a post-judgment motion addressing costs will not extend the time for appeal.”