Fourth Circuit Holds That Absent a “Separate Document” Setting Out an Order as a Judgment Under Fed. R. Civ. P 58(a), Deadline for Attorney’s Fee Never Triggered

In CX Reinsurance Co. Ltd. v. Johnson, No. 19-1516 (4th Cir. Oct. 14, 2020), a confused timeline made it unclear whether defendant filed his attorney’s fee petition on time under the local rules. But because the district court failed to set out the judgment in a “separate document” under Fed. R. Civ. P 58(a), the Fourth Circuit finds that there was no final judgment. Hence the local-rule deadline triggered no earlier than when the district court decided defendant’s timely-filed “post-judgment” motion under Fed. R. Civ. P. 59(e).

“[O]n June 4, 2018, CX Re filed a motion for voluntary dismissal of its action,” against a policyholder, “with prejudice under Federal Rule of Civil Procedure 41(a)(2). Johnson opposed this motion, arguing that CX Re was only attempting to avoid a ruling that might adversely affect other related actions.” The district court granted the voluntary dismissal June 15, 2018 and directed the Clerk of Court “to close this case.” Yet “[n]o separate document set out a ‘judgment,’ and the civil docket does not indicate the entry of any ‘judgment.’” On June 18, 2018, the defendant Johnson filed a motion to modify the dismissal order under Fed. R. Civ. P. 59(e). This was denied on June 20, 2018.

Under the Local Rule 109 of the District of Maryland, “any motion requesting the award of attorneys’ fees must be filed within fourteen (14) days of the entry of judgment,” and noncompliance constitutes a “waiver of any claim for attorneys’ fees.” Defendant Johnson filed his fee petition on July 3, 2013—18 days after the dismissal order, but 13 days after the denial of the post-judgment motion. The district court, using the date of granting the voluntary dismissal as the accrual date, held that the fee petition was filed four days too late.  It also held that the post-judgment motion did not toll the 14-day period.

The Fourth Circuit reverses, focusing on the absence of “separate document” memorializing the judgment. “The terms ‘judgment’ and ‘entry of judgment’ are unambiguous procedural terms of art. Although the local rules define neither, the nationwide federal rules do.” The June 15, 2018 order was not a judgment as contemplated by the federal rules. “A judgment should not include recitals of pleadings, a master’s report, or a record of prior proceedings.” Fed. R. Civ. P. 54(a). Moreover, “because the court’s order was not set out in a separate document, the date of entry of judgment on that order was 150 days after the date of the order’s entry in the docket. See Fed. R. Civ. P. 58(c).”

The panel holds that requirement of a separate document plays a role in the administration of civil justice: “to define with precision when a judgment has been entered, since numerous deadlines under the rules — including the 14-day deadline for filing attorneys fees motions — run from that act. To read Local Rule 109.2.a’s use of ‘judgment’ and ‘entry of judgment’ to mean something different from the federal rules’ definitions of those terms would severely undermine the national rules’ purpose of promoting consistency in practice. Indeed, adopting a different meaning of those terms in construing the Local Rule would likely end up denying litigants rights given to them under the federal rules.”

Plaintiff CX also argued that defendant Johnson waived the Rule 58 “separate document” argument by not raising it in the district court. While casting doubt on the waiver argument, the Fourth Circuit holds that it would also adopt Johnson’s alternative argument that the fee petition was timely because the Rule 59(e) motion tolled the 14-day period.

The panel rejects CX’s argument that the Local Rules do not provide for such tolling, because it would bring the Local Rule into conflict with the national rules, which is proscribed by Fed. R. Civ. P. 83. “[T]he district court here concluded that the 14-day period begins to run from the original judgment and not from the date of disposition of any post-judgment motion. Thus, a litigant’s filing of an attorneys fees motion within 14 days after the district court’s disposition of a Rule 59(e) motion is timely under the federal rules but untimely under Local Rule 109.2. Stated otherwise, the district court’s interpretation of its local rules denies litigants rights conferred to them by federal rules, and for that reason, its interpretation is inconsistent with the federal rules and cannot stand.”

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