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Ltd. v. Nu-West Industries Inc.

sur motion filed: May 17, 1991.

CLARENDON LTD.,
v.
NU-WEST INDUSTRIES, INC., APPELLANT



On Appeal from the United States District Court for the District of Delaware; D.C. Civil No. 90-00113.

Sloviter, Chief Judge, Cowen and Garth, Circuit Judges.

Author: Sloviter

Opinion OF THE COURT

SLOVITER, Chief Judge

Defendant/appellant Nu-West Industries, Inc. ("Nu-West") has appealed to this court from summary judgment entered against it and in favor of plaintiff/appellee Clarendon Ltd. ("Clarendon"). This matter was listed for disposition on April 11, 1991. On April 9, counsel for Clarendon informed the court in writing that the parties were in the course of settlement negotiations and, in all likelihood, would come to a settlement agreement and file a Stipulation of Dismissal pursuant to Fed. R. App. P. 42(b). This court agreed to hold the matter c.a.v.*fn1 for two weeks, which was extended for an additional week at Clarendon's request.

The parties have now filed a joint motion for approval of stipulation and order for dismissal of appeal. The parties have agreed not only that the appeal be dismissed with prejudice but "that the District Court judgment be vacated and the case be remanded for dismissal with prejudice." The stipulation further states that "the parties have fully resolved, compromised and settled all disputes between them, relating to this matter, thereby rendering this appeal entirely moot."

The joint motion raises two issues: first, whether this court will vacate a district court order when such action is part of a settlement reached on appeal, and second, whether the matter is now moot within the purview of United States v. Munsingwear, Inc., 340 U.S. 36, 95 L. Ed. 36, 71 S. Ct. 104 (1950).

I.

Clarendon commenced an action against Nu-West in the United States District Court for the District of Delaware for breach of contract. The complaint alleged that Nu-West had guaranteed a loan obligation of its wholly-owned subsidiary, Nu-South Industries, which then filed for Chapter 7 bankruptcy. Nu-West claimed that the document at issue was not a binding contract. The parties filed cross-motions for summary judgment. The district court denied Nu-West's motion and granted Clarendon's motion, entering judgment in its favor. This appeal followed.

After briefing was completed but before this court disposed of the appeal, the parties reached a settlement and filed the joint motion to dismiss the appeal. The stipulation invoked Rule 42(b) of the Federal Rules of Appellate Procedure.

Rule 42(b) provides two distinct paths to voluntary dismissal in the Court of Appeals. Under the first path,

If the parties to an appeal or other proceeding shall sign and file with the clerk of the court of appeals an agreement that the proceeding be dismissed, specifying the terms as to payment of costs, and shall pay whatever fees are due, the clerk shall enter the case dismissed, but no mandate or other process shall issue without an order of the court.

Fed. R. App. P. 42(b).

As is evident from the Rule, no action by this court is necessary or contemplated under this route. The parties may make whatever arrangement they agree on and need not ...


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