                           In the
 United States Court of Appeals
              For the Seventh Circuit
                        ____________

No. 04-1952
RANDALL S. GOULDING, personally
and as trustee of The Goulding Trust,
                                           Plaintiff-Appellant,
                              v.

GLOBAL MEDICAL PRODUCTS HOLDINGS,
INC., formerly known as 37Point9,
                                          Defendant-Appellee.

                        ____________
       Appeal from the United States District Court for the
          Northern District of Illinois, Eastern Division.
     No. 02 C 8727—Sidney I. Schenkier, Magistrate Judge.
                        ____________
  ARGUED DECEMBER 3, 2004—DECIDED JANUARY 4, 2005
                   ____________




 Before FLAUM, Chief Judge, and EASTERBROOK and
WILLIAMS, Circuit Judges.
  EASTERBROOK, Circuit Judge. This suit has dragged on
despite being settled. A magistrate judge (presiding by con-
sent under 28 U.S.C. §636) brokered the settlement in July
2003. Defendant (which we call 37Point9, its name at the
time) was to pay $45,000 in two installments, after which
the suit was to be dismissed; it was free to tender stock in
2                                                No. 04-1952

lieu of cash, and plaintiff (which we call “the Trust”) was
free to reject the shares and stand on its entitlement to
money. If 37Point9 did not perform on schedule, the Trust
was entitled to resume the litigation.
  The first tender was of stock, which the Trust sold for a
net of $22,388. The second tender also was of stock, which
the Trust rejected as not worth enough. Another tender of
the same certificates was made and again refused. Goulding
asserted that 37Point9 needed to adopt a corporate reso-
lution to allow its sale. Instead of returning to court, as the
settlement contemplated (37Point9 failed to pay cash after
the Trust rejected the stock), the Trust reopened discus-
sions—but this time outside of the magistrate judge’s ear-
shot. The Trust contends that an oral agreement was reached
in January 2004 calling for payment in 9.5 million tradeable
shares of 37Point9. (At the time, 37Point9 stock was worth
scarcely more than the paper the shares were printed on;
9.5 million shares had a market price of $22,500.) The Trust
agreed to accept market risk of a price shortfall and reap
the benefit of any appreciation. Another tender (the same
certificates had been sent to the Trust twice before) was
made in January 2004; for a third time the Trust returned
the shares, deeming them not eligible for public sale under
the federal securities laws. Soon the price of 37Point9’s stock
rose 25-fold in over-the-counter trading. The Trust then
demanded back the same certificates it had thrice rejected.
Instead 37Point9 sent cash. Next the Trust turned to the
magistrate judge, asking for specific performance of the
January 2004 agreement. The court concluded that a
novation had not been effected. It rejected as not credible
the testimony of trustee Randall Goulding and added that,
even if Goulding were to be believed, the parties had not
agreed on all material terms. The magistrate judge stated
that, by adding interest to its belated cash payment,
37Point9 would fulfil its obligations under the July 2003
settlement. After 37Point9 ponied up the interest, the
district court dismissed the complaint.
No. 04-1952                                                 3

  Jurisdictional problems dog both the claim and the ap-
peal. We start with the latter. The magistrate judge entered
two pertinent orders: the first concluded that 37Point9’s
cash payment satisfied the July 2003 settlement and would
support dismissal of the Trust’s complaint if 37Point9 added
interest; the second observed that interest had been paid
and actually dismissed the complaint. Inexplicably, the Trust
appealed from the first but not the second, although the
second order is the final decision. Defendant asks us to
dismiss the appeal on the ground that the Trust’s notice of
appeal did not identify the final decision. See Fed. R. App.
P. 3(c)(1)(B). Inexplicably, the Trust ignored this argument
in its briefs. As it happens, however, 37Point9 is wrong on
this subject: a notice of appeal identifying an interlocutory
decision but filed after final judgment has been entered
does present for appellate review the specified interlocutory
decision, though nothing else. See Foman v. Davis, 371 U.S.
178 (1962); Chaka v. Lane, 894 F.2d 923 (7th Cir. 1990).
  The other jurisdictional problem, which both sides missed,
is more substantial. Disputes about settlement contracts
must be resolved in state court, unless they independently
satisfy the requirements of federal jurisdiction. See Kokkonen
v. Guardian Life Insurance Co. of America, 511 U.S. 375
(1994); Peacock v. Thomas, 516 U.S. 349 (1996). The Trust’s
original claim met the amount-in-controversy requirement
of the diversity jurisdiction. 28 U.S.C. §1332(a). The sup-
posed novation of January 2004 does not; that bargain (if
the parties reached one) replaces the chose in action with
an entitlement to stock worth $22,500, less the costs (in-
cluding the time value of money) required to make the shares
marketable. See Sarnoff v. American Home Products Corp.,
798 F.2d 1075, 1078 (7th Cir. 1986). That the stock rose
rather than fell afterward does not change the stakes for
jurisdictional purposes. If the Trust wanted to invest in
37Point9 stock, it was free to accept cash and purchase
shares in the open market. It can’t use litigation to get the
potential for appreciation while avoiding all risk of loss.
4                                                 No. 04-1952

   Kokkonen adds that the court’s ancillary jurisdiction
includes a settlement that the court has either entered as
a judgment or reserved authority to enforce. That covers the
July 2003 settlement, even though it was for $45,000. But
the supposed January 2004 bargain was reached outside
the court’s auspices, was not presented to or approved by
the magistrate judge, and therefore cannot be enforced
under the supplemental jurisdiction. See Bender v. Allegra,
130 F.3d 990 (11th Cir. 1997); cf. Ford v. Neese, 119 F.3d
560, 562 (7th Cir. 1997). Nor can the Trust take advantage
of the possibility that, by delaying its protest until the price
of the shares exceeded $75,000, and then demanding
specific performance so that it could sell immediately and
realize a locked-in gain, the jurisdictional amount could be
satisfied. Although the supposed bargain was for specified
certificates, the Trust no longer wants these; it demands
that 37Point9 issue new certificates, which it plans to trade
a year hence using the SEC’s Rule 144. (Put to one side that
this demand would require 37Point9 to violate the Securi-
ties Act of 1933, because §4(1), the private-placement
exemption from registration, 15 U.S.C. §77d(1), is not
available when the issuer knows that the buyer plans to
resell in public markets.) Stock goes up and down; the best
estimate of stock’s future value is its value at the time of
the transaction—here, $22,500 less expenses.
  There remains the possibility that in January 2004 the
parties jointly rescinded the July 2003 settlement, leaving
nothing for the magistrate judge to implement. Because
dismissal of the Trust’s suit was contingent on 37Point9’s
performance of its obligations under the agreement, this
would imply that the Trust has an entitlement to continue
with the litigation. But that it not what the Trust wants,
nor did the Trust appeal from the order of dismissal. Its
decision to appeal from an interlocutory order, rather than
the dismissal, limits the issues open to decision in this court.
The Trust seeks to hold onto the money and obtain appreci-
No. 04-1952                                                5

ated stock to boot. That’s a remedy the district court cannot
provide. The Trust has the benefit of the settlement
approved by the court; given Kokkonen, that is the limit of
federal judicial authority. And given the judgment dismiss-
ing the complaint because the July 2003 agreement had been
fulfilled, the law of preclusion (res judicata) brings the
parties’ dispute to an end; Goulding should not try to pro-
long the agony by suing on the supposed novation in state
court.
                                                  AFFIRMED


A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit




                    USCA-02-C-0072—1-4-05
