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Nagle v. Alspach

filed: October 25, 1993; As Amended November 9, 1993.

MARY NAGLE; JAMES A. SHERTZER; S. ENOLA GOCHENAUER; ALAN SHAFFER; EUGENE C. ADAMS; GEORGE F. WILT; MICHAEL E. WILT; DANIEL H. SHERTZER AND JAMES A. SHERTZER AND DANIEL H. SHERTZER, EXECUTORS UNDER THE WILL OF ELVA A. SHERTZER, DECEASED
v.
DAVID E. ALSPACH, TRUSTEE IN BANKRUPTCY FOR RIMAR MANUFACTURING, INC.; JACQUES H. GEISENBERGER, JR.; MARVIN KRASNY; ADELMAN & LAVINE; ADELMAN, LAVINE, KRASNY, GOLD & LEVIN; AND RIMAR MANUFACTURING, INC. V. PAUL R. ROSEN; SPECTOR, COHEN, HUNT & ROSEN, P.C.; SPECTOR, COHEN, GADON & ROSEN; ALAN S. FELLHEIMER; FELLHEIMER, KRAKOWER & EICHEN; FELLHEIMER, EICHEN & GOODMAN AND ROBERT I. MARTIN MARY NAGLE, JAMES A. SHERTZER, S. ENOLA GOCHENAUER, ALAN SHAFFER, EUGENE C. ADAMS, GEORGE F. WILT, MICHAEL E. WILT, DAN H. SHERTZER, AND JAMES A. SHERTZER AND DANIEL H. SHERTZER, EXECUTORS UNDER THE WILL OF ELVA A. SHERTZER, DECEASED AND RIMAR MANUFACTURING, INC., APPELLANTS



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA. (D.C. Civil No. 85-00645).

Before: Greenberg, Nygaard and Rosenn, Circuit Judges.

Author: Nygaard

Opinion OF THE COURT

NYGAARD, Circuit Judge.

The plaintiff-shareholders of Rimar Manufacturing, Inc., filed derivative claims for negligence and legal malpractice against Rimar Manufacturing, Inc., Rimar's bankruptcy trustee and his attorneys. They contended that the trustee and his counsel had negligently failed to file a lawsuit on behalf of Rimar within the time permitted by the statute of limitations. The district court granted summary judgment in favor of the defendants on four separate grounds, and plaintiffs now appeal. The plaintiffs, however, challenge only two of the four Conclusions reached by the district court which form the basis of its summary judgment. Since they have not challenged two independent bases of the district court's decision, they have waived the opportunity to have them reviewed on appeal and the summary judgment for defendants must stand.*fn1 Accordingly, we will affirm.

In addition, when we determined this appeal to be frivolous, we gave counsel the opportunity to address whether damages were appropriate under Federal Rule of Appellate Procedure 38, and if so, in what amount and whether appellants or their counsel should be responsible for paying them. After considering the supplementary material, we find no justification for the frivolous appeal. We will award costs and attorneys' fees to appellees as compensation for defending a frivolous appeal.

I.

The district court ruled against plaintiffs for four reasons. The court found: (1) the shareholders' claims were barred by the statute of limitations; (2) the shareholders were collaterally estopped from relitigating the issue of Rimar's damages; (3) they were collaterally estopped from relitigating the trustee's and his counsel's negligence; and (4) the shareholders lacked standing to pursue their claims on behalf of the bankrupt corporation. Each of the separate grounds is factually supported and legally sufficient to support the summary judgment, yet plaintiffs challenge only two in this appeal: the statute of limitations and collateral estoppel on the issue of Rimar's damages.

Under Fed. R. App. P. 28(a)(3), (5), the appellant is required to list the issues raised on appeal and present an argument in support of them. We said in Simmons v. City of Philadelphia, 947 F.2d 1042, 1065 (3d Cir. 1991) that "absent extraordinary circumstances, briefs must contain statements of all issues presented for appeal, together with supporting arguments and citations." Appellants here do not attempt to argue extraordinary circumstances which might excuse their failure to either list or brief these issues. When an issue is either not set forth in the statement of issues presented or not pursued in the argument section of the brief, the appellant has abandoned and waived that issue on appeal. Kost v. Kozakiewicz, 1 F.3d 176, 182-83 & n.3 (3d Cir. 1993); Institute for Scientific Info., Inc. v. Gordon & Breach, Science Publishers, Inc., 931 F.2d 1002, 1011 (3d Cir. 1991); 16 Charles A. Wright, et al., Federal Practice and Procedure § 3974, at 421 (1977 & Supp. 1993, at 690) (issue must be raised in both the issues and argument sections of the brief); see also Lunderstadt v. Colafella, 885 F.2d 66, 78 (3d Cir. 1989) (raising issue for first time in reply brief insufficient to preserve for review); Daggett v. Kimmelman, 811 F.2d 793, 795 (3d Cir. 1987) (same). Here, appellants completely fail to even mention collateral estoppel and only casually mention standing in one sentence. This is insufficient to preserve the issue for review on appeal. Simmons, 947 F.2d at 1066; see Frank v. Colt Indus., Inc., 910 F.2d 90, 100 (3d Cir. 1990); Lunderstadt, 885 F.2d at 78; Jackson v. University of Pittsburgh, 826 F.2d 230, 237 (3d Cir. 1987) (citing cases), cert. denied, 484 U.S. 1020, 108 S. Ct. 732, 98 L. Ed. 2d 680 (1988).

Because the plaintiffs have not contested two of the four independent grounds upon which the district court based its grant of summary judgment, each of which is individually sufficient to support that judgment, we must affirm. See Williams v. Leach, 938 F.2d 769, 772-73 (7th Cir. 1991) (judgment of district court affirmed when only one of two independent grounds supporting it challenged on appeal).

II.

A.

Because this appeal appeared to have been doomed to failure from the moment the plaintiff-appellants' brief was filed in this court, and hence frivolous, we gave counsel for appellees the opportunity to submit a supplemental brief to address whether they should be awarded damages under Fed. R. App. P. 38, and if so, to submit evidence to support the damages they claimed. We gave counsel for appellant an opportunity to respond and contest the propriety of awarding damages and the amount claimed by appellees. Moreover, we directed counsel for appellants to give his authority for filing a notice of appeal on behalf of Rimar Manufacturing, Inc., a prevailing party whom he did not represent. Finally, we requested counsel for appellants to give reasons, if any, why damages, if awarded to appellees, should not be assessed against him personally.

Not surprisingly, appellees do contend that they have suffered a loss by virtue of this frivolous appeal and should be awarded compensatory damages under Fed. R. App. P. 38. They also submitted affidavits supporting the ...


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