
USCA1 Opinion

	




          February 23, 1993 UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                     ____________          No. 92-2041                       IN RE:  VILLA MARINA YACHT HARBOR, INC.,                                     Petitioner.                                     ____________          No. 92-2051                             CHASE MANHATTAN BANK, N.A.,                                 Plaintiff, Appellee,                                          v.                           VILLA MARINA YACHT HARBOR, INC.                       a/k/a VILLA MARINA YACHT HARBOUR, INC.,                                Defendant, Appellant.                                     ____________                                     ERRATA SHEET               The opinion of  this court  issued on February  2, 1993,  is          amended as follows:               On page 4, line 4 from the bottom, change August 1 to           August 11.          February 2, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-2041                       IN RE:  VILLA MARINA YACHT HARBOR, INC.,                                     Petitioner.                                 ____________________          No. 92-2051                             CHASE MANHATTAN BANK, N.A.,                                 Plaintiff, Appellee,                                          v.                           VILLA MARINA YACHT HARBOR, INC.,                       a/k/a VILLA MARINA YACHT HARBOUR, INC.,                                Defendant, Appellant.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                     [Hon. Carmen C. Cerezo, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                 Selya, Circuit Judge,                                        _____________                            Bownes, Senior Circuit Judge,                                    ____________________                               and Cyr, Circuit Judge.                                        _____________                                 ____________________               Michael J. Rovell, with  whom Lisa I. Fair, Robert  E. Bull,               _________________             ____________  _______________          Law Offices of Michael J. Rovell, Carlos G. Latimer, and Latimer,          ________________________________  _________________      ________          Biaggi, Rachid,  Rodriguez, Suris  & Godreau were  on brief,  for          ____________________________________________          appellant.               Jay  A. Garcia-Gregory,  with  whom Rafael  R.  Vizcarrondo,               ______________________              _______________________          Heriberito J. Burgos-P rez and Fiddler, Gonzalez & Rodriguez were          __________________________     _____________________________          on brief, for appellee.                                 ____________________                                   February 2, 1993                                 ____________________                      BOWNES, Senior Circuit Judge.  This is an appeal by                              ____________________            defendant-appellant Villa Marina Yacht Harbor, Inc. from  the            following order of the district court:                           Defendant  shall  deposit  with  the                      Clerk  of Court,  within  ten  (10)  days                      after  notice,  the  past   due  mortgage                      payment  and  shall continue  making such                      deposits as the payments come due for the                      duration of the  litigation of this case.                      The  Clerk  shall  deposit  them   in  an                      interest-bearing account.                                          I.                                          I.                                  Uncontested Facts                                  Uncontested Facts                                  _________________                      A statement of the uncontested facts leading to the            order compels the conclusion  that there is no merit  to this            appeal.   On  November  22, 1991,  plaintiff-appellee,  Chase            Manhattan Bank, N.A., filed a complaint against Villa Marina.            The complaint sought foreclosure of Chase's mortgage on Villa            Marina property and the collection of monies allegedly due it            from Villa Marina.   Chase alleged, as one of the grounds for            foreclosure,  that Villa  Marina  failed to  timely make  the            monthly mortgage  payments due on  October 1 and  November 1,            1991.  Chase  also requested the  appointment of a  receiver;            this request was referred to a magistrate-judge.                      Villa Marina filed an opposition to the appointment            of a receiver on December 27, 1991.  On January  10, 1992, it            filed an answer and counterclaim.  In its answer Villa Marina            stated:                                         -4-                      . .  . it  is admitted that  VILLA MARINA                      owes CHASE the principal sum and interest                      therein pleaded, minus  the amounts  that                      VILLA  MARINA claims against CHASE in the                      counterclaim  and  the  amounts CHASE  is                      retaining in its escrow account.            In  its answer  and  counterclaim, Villa  Marina alleged  bad            faith termination of the mortgage, breach  of Chase's duty of            good faith and fair dealing by creating a fictitious default,            and filing  the foreclosure action  in breach of  Chase's own            internal manual,  rules, regulations,  and practices.   Villa            Marina estimated its damages as one million dollars.                      On February  10, 1992, Chase moved  for judgment on            the  pleadings  pursuant to  Fed. R.  Civ.  P. 12(c)  and for            dismissal  of  Villa  Marina's  counterclaim.   Villa  Marina            objected to these motions.    A hearing  was held before  the            magistrate-judge  on  March 5,  1992,  which encompassed  all            pending matters.  On  March 12, the magistrate-judge issued a            report and  recommended to the  district court that  it grant            Chase's motions  for judgment on the  pleadings and dismissal            of the  counterclaim.  On  the same day  the magistrate-judge            also issued  an order appointing  a receiver.   Villa  Marina            promptly filed  an emergency  petition for writ  of mandamus,            petition for a stay of the orders, and a motion to vacate the            appointment of the receiver.                      By  order dated May 4,  1992, issued on  May 5, the            district court vacated the magistrate-judge's  appointment of            a  receiver because this action "was beyond both the scope of                                         -5-            our referral and  the scope  of his statutory  powers."   The            district court then considered  the matter de novo.   It held                                                       __ ____            that "Chase has failed to meet the threshold requirements for            granting  the  appointment  of  a receiver  as  an  equitable            remedy."  On May 18,  1992, the district judge issued  a six-            page   order   in  which   she   reviewed   the  report   and            recommendations  of  the  magistrate.    The  district  court            declined   to  follow   the  magistrate-judge's   report  and            recommendations.   It denied Chase's motions  for judgment on            the pleadings and dismissal of the counterclaim.                      On July  1, 1992,  the district judge,  sua sponte,                                                              ___ ______            issued the order which is the basis of this appeal.  Prior to            that part of  the order  directing Villa Marina  to make  its            monthly  mortgage payments  into  court,  the district  judge            stated:                           A  review  of our  order  entered on                      May 18,  1992  reveals   that  the   last                      paragraph   was  inadvertently   omitted.                      Accordingly,  the May  18, 1992  order is                      amended to add the following:  (Defendant                      ordered to make monthly mortgage payments                      into court).                      On  July 16, 1992,  Villa Marina moved  to amend or            alter the  district court order  of May 18.   The motion  was            denied on  August 6, 1992, and  entered on August 11.   Villa            Marina  appealed the July 1  order of the  district court and            the court's  denial of its motion to amend or alter the order            of May 18.   Recognizing that  there might be  a question  of                                         -6-            appealability  of  these  orders,  Villa Marina  also  sought            appellate review by filing a petition for writ of mandamus.1                                         II.                                         II.                                       Analysis                                       Analysis                                       ________                      The  crux of  Villa Marina's  argument is  that the            district court lacked authority  to issue the order requiring            the deposit  of the mortgage payments with the court.  In its            brief, Villa Marina asserts that it "is at a loss to find the            jurisdictional basis  for the  order" [Appellant's  Brief, p.            11], because  there is no  specific provision in  the federal            rules  expressly  authorizing its  issuance  and  because the            court  acted  without  a  motion pending.    This  contention            ignores  the inherent  power possessed  by a  district court,            "not governed by  rule or statute,  to manage the  litigation            before  it."  Zebrowski v. Hanna, 973 F.2d 1001, 1003-04 (1st                          _________    _____            Cir.  1992).    "[T]he  rules   of  civil  procedure  do  not            completely describe and limit the power of district courts  .            . .  ."  HMG Property  Investors v. Parque  Indus. Rio Canas,                     _______________________    ________________________            847  F.2d 908, 915 (1st Cir.  1988) (quoting Brockton Savings                                                         ________________            Bank v. Peat,  Marwick, Mitchell &  Co., 771 F.2d 5,  11 (1st            ____    _______________________________            Cir. 1985), cert. denied, First United Fund, Ltd. v. Brockton                        _____ ______  _______________________    ________            Savings  Bank, 475  U.S. 1018  (1986)).  The  district courts            _____________                                            ____________________            1    Chase has  suggested in  its  brief that  Villa Marina's            appeal was not timely filed.  For purposes of this opinion we            find that it was.                                         -7-            "retain the inherent power to do what is necessary and proper            to  conduct  judicial  business  in  a satisfactory  manner."            Aoude  v.  Mobil Oil  Corp., 892  F.2d  1115, 1119  (1st Cir.            _____      ________________            1989).  This  inherent power is  "rooted in the  chancellor's            equity powers[] to process litigation to a just and equitable            conclusion."  Id. (citation omitted).                            ___                      We have repeatedly  recognized this inherent  power            of the  district  court as  encompassing the  power to  order            various types  of "administrative"  actions:  to  require the            posting  of   security  for  costs  when   warranted  by  the            circumstances  of  a  case,   Aggarwal  v.  Ponce  School  of                                          ________      _________________            Medicine,  745 F.2d 723, 726  (1st Cir. 1984),  Hawes v. Club            ________                                        _____    ____            Escuetre El  Commandante, 535 F.2d 140, 143  (1st Cir. 1976);            ________________________            to modify discovery-related protective  orders for so long as            such order  is in effect,  Public Citizen  v. Liggett  Group,                                       ______________     _______________            Inc.,  858 F.2d 775, 782  (1st Cir. 1988),  cert. denied, 488            ____                                        _____ ______            U.S. 1030 (citing various  other jurisdictions as support for            same proposition); to reconsider its orders, Burns v. Watler,                                                         _____    ______            931 F.2d 140, 145 (1st Cir. 1991); to stay pending litigation            when  efficacious management  of docket  reasonably requires,            Marquis v. F.D.I.C., 965 F.2d  1148, 1154-55 (1st Cir. 1992);            _______    ________            to  permit  jury  view  of  places  or  objects  outside  the            courtroom,  United States v.  Passos-Paternina, 918 F.2d 979,                        _____________     ________________            986 (1st  Cir. 1990), cert. denied,  111 S. Ct.  1637, 111 S.                                  _____ ______            Ct.  2808, 111  S. Ct.  2809 (1991);  to  fashion appropriate                                         -8-            sanctions  for  abuses  of  the judicial  process,  including            dismissal,  Zebrowski v.  Hanna,  973 F.2d  at 1003-04,  R.W.                        _________     _____                          ____            International Corp. v.  Welch Foods Inc., 937  F.2d 11, 19-20            ___________________     ________________            (1st Cir. 1991).                      In  deciding the  propriety of  the order  at issue            here, we accept the district court's statement that  the pay-            into-court order of July 1 was inadvertently omitted from its            order of  May 18.   The  May 18  order makes it  unmistakably            clear  that the  issues in  controversy between  the parties,            including those  raised in Villa  Marina's counterclaim, will            be tried on the merits.   In light of Villa Marina's explicit            admission in its answer that "it owes Chase the principal sum            and  interest  therein pleaded,"  an  order  directing it  to            deposit  the  monthly  mortgage payments  into  an  interest-            bearing  court  account  as  they  become  due  would not  be            unusual; in fact, it would be routine.  We hold that the July            1  amendment was  wholly  within the  inherent administrative            powers  of the district court and did not constitute an abuse            of discretion.                      Even if,  for purposes  of this case,  we view  the            order as  a preliminary  injunction,2 as Villa  Marina urges,                                            ____________________            2 We need not consider whether the district court's order is,            indeed, an  appealable injunction, and we  express no opinion            on that matter.  Because the case is straightforward, and the            party in  whose favor the jurisdictional  issue would operate            is  entitled  to prevail  on the  merits,  we elect  to forgo            unnecessary  work and  to  bypass the  question of  appellate            jurisdiction.  See,  e.g., Secretary of  the Navy v.  Avrech,                           ___   ____  ______________________     ______                                         -9-            there is  no basis for overturning  it.  Indeed, we  are at a            loss  to  understand  why  Villa Marina  opposes  the  order.            Contrary to Villa Marina's assertion,  it is not a "windfall"            to Chase.  The  payments do not go to Chase; they  go into an            interest-bearing court account.  Until the case is decided on            the merits, neither Chase nor Villa Marina can use the money.            And, if  there had  been no  attempted foreclosure by  Chase,            wrongful  or  justified, Villa  Marina  would  be making  the            monthly mortgage payments to Chase.  Indeed, Villa Marina, in            its  motion  to amend  or  alter the  appealed  order, stated            explicitly:                      Villa Marina nevertheless  is willing  to                      post the funds directly to Chase if Chase                                                       __                      reinstates the mortgage and  Villa Marina                      is allowed to  pursue its  counterclaims.                      (footnotes not now pertinent)            As  the case  now  stands, the  mortgage continues  in effect            pending a  hearing on the merits  including the counterclaim.            Villa Marina has received  all it requested.  The order  is a            paradigm  case of preserving the  status quo with  no harm to                                              ______ ___            either party pending a hearing on the merits.                      Because  Villa  Marina  has  advanced  no plausible            reason  for this appeal, we find it frivolous and award costs            and attorney fees for  this appeal to appellee Chase.   Chase                                            ____________________            418 U.S. 676, 677-78 (1974) (per curiam); In re D.C. Sullivan                                                      ___________________            Co., 843 F.2d 596, 598 (1st Cir. 1988).            ___                                         -10-            shall  file its fee petition within the time fixed under, and            in the form contemplated by, 1st Cir. Loc. R. 39.2.                           So ordered.                           So ordered.                           ___________                                         -11-
