Citations
- 478 F.3d 767
Full opinion text
EASTERBROOK, Chief Judge.
Cadleway Properties and Ossian State Bank filed suits in state court to foreclose on security interests that Richard A. Mag-ley and several of his businesses had given to secure loans. The Small Business Administration, a guarantor on some of these loans, removed both proceedings, which were consolidated in federal court. The current appeal arises from a dispute between Cadleway and Ossian State Bank about which of them is the beneficiary of Magley’s guaranty of a loan to 5620 Industrial Road, LLC. Cadleway is the creditor, but the district court held that the Bank receives the proceeds of the guaranty because Cadleway sold the Bank a package of other notes, one of them secured by a mortgage that contains a “dragnet clause.” The district court treated this clause, which says that any security granted by the borrower in the future may be applied not only to this loan but also to any other indebtedness to the same lender, as assigning to the Bank all security interests within the dragnet’s scope.
On appeal, Cadleway and the Bank debate whether the ruling reflects a correct understanding of Indiana law. Neither side discussed either the district court’s jurisdiction to make such a decision (which does not affect the SBA) or our jurisdiction to entertain an immediate appeal. At oral argument, therefore, we directed each side to file supplemental memoranda on the multiple jurisdictional issues that dog this appeal. These have been received, and it is now clear that the appeal must be dismissed for want of jurisdiction.
At least 15 banks, governmental bodies, natural persons, corporations, and limited liability companies are parties to the litigation in the district court. The SBA’s rights apparently have been adjudicated, and many (if not all) of the parcels of real estate have been sold at auction. But the district court has not entered a final judgment. Who owes how much to whom remains to be resolved. The lawyers for Cadleway and the Bank saw the controversy about who benefits from Magley’s guaranty of the loan to 5620 Industrial Road, LLC, as a discrete dispute, and they asked the court to enter a judgment under Fed. R.Civ.P. 54(b). The district court obliged but did not explain why such a partial final judgment is appropriate. Neither the district judge nor the parties analyzed the relation between this issue and the rest of the litigation, which remains on the district court’s docket.
Rule 54(b) allows a district court to enter a judgment that resolves either (i) all aspects of the litigation concerning particular parties, or (ii) all aspects of a discrete controversy within a larger litigation. Ca-dleway and the Bank agree that the first option does not apply; both Cadleway and the Bank are parties to other aspects of this litigation. Therefore we must decide whether the dispute about who benefits from Magley’s guaranty is sufficiently discrete that an appeal now would not lead to duplicate or overlapping appellate proceedings later. See Horn v. Transcon Lines, Inc., 898 F.2d 589 (7th Cir.1990); United States v. Ettrick Wood Products, Inc., 916 F.2d 1211 (7th Cir.1990).
The answer is no, for a fundamental reason: the district judge has not specified who is entitled to what relief. Cadle-way did not begin this litigation in quest of a declaratory judgment about ownership; it wants money from Magley. So does the Bank. Does Magley owe any money on this guaranty? The district court has not decided. It has held so far that whatever Magley owes goes to the Bank rather than Cadleway, but it has not decided whether Magley owes even l