Opposition Brief — Davis v. Avco Financial Services, Inc.

N

FILED

No, 84-1087 _ FEB 1 4995

ST seis

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1984

CLEVESTER DAVIS, JIMMIE LEE KING, and

VIRGINIA KING,

Cross-Petitioners,

v.

AVCO FINANCIAL SERVICES, INC.,

Cross-Respondent.

On Cross-Petition For A Writ Of Certiorari

To The United States Court of Appeals

For The Sixth Circuit

CROSS-RESPONDENTS BRIEF IN OPPOSITION

ROBERT G. STACHLER,

Counsel of Record for

Cross-Respondent

TAFT, STETTINIUS &

HOLLISTER

1800 First National Bank Center

Cincinnati, Ohio 45202

(513) 381-2838

[Additional Counsel on inside cover]

ST

COURT INDEX PRESS, INC. — 216 E Ninth Street, Cincinnati, Ohio 45202 — (513) 241-1400

Additional Counsel for Cross-

Respondent:

LAWRENCE D. WALKER

RAYMOND W. LEMBKE

TAFT, STETTINIUS &

HOLLISTER

1800 First National Bank Center

Cincinnati, Ohio 45202

(513) 381-2838

THEODORE M. ROWEN

RICHARD E. WOLFF

SPENGLER, NATHANSON,

HEYMAN, McCARTHY &

DURFEE

1000 National Bank Building

Toledo, Ohio 43604

(419) 241-2201

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES iI

STATEMENT OF THE CASE 1

THE CROSS-PETITION SHOULD BE DENIED 2

I. There Is No Reason —— Particularly In This

Case— For This Court To Decide Once Again

What Constitutes A Security. 2

Il. There Is No Reason — Particularly In This

Case — For This Court To Decide Whether

Recklessness Is Sufficient For Liability Under

$10(b) Of The Securities Act of 1934 And

Rule 10b-5 Promulgated Thereunder. t

Ill. The Unpublished Order Denying The Motion

To Dismiss Presents No Important Or Signifi-

cant Questions. 5

CONCLUSION 10

APPENDIX A

Judgment of United States Court of Appeals for the

Sixth Circuit dated July 10, 1064 .................. la

APPENDIX B

Order of United States Court of Appeals for the

Sixth Circuit dated July 10, 1984 .................. 3a

i.

TABLE OF AUTHORITIES

Cases: Page

Ackermann v. United States, 340 U.S. 193 (1950) . 7, 8

Amfac Mortgage Corp. v. Arizona Mall of Tempe,

Inc., 583 F.2d 426 (9th Cir. 1978) |. | 2,3

Browder v. Department of Corrections, 434 U.S.

257 (1978) ...... Rene | Re ene Pe ere Aree 8

Buckeye Cellulose Corp. v. Braggs Electric Con-

struction Co., 569 F.2d 1036 (8th Cir. 1978) §

Chemical Bank v. Arthur Andersen & Co., 726 F.2d

930 (2d Cir.), cert. denied, —— VU. S. ——, 105

S.Ct. 253, 83 L.Ed. 2d. 190 (1984) _. 3

C. N. S. Enterprises, Inc. v. G & G Enterprises, Inc.,

508 F.2d 1354 (7th Cir.) cert. denied, 423 U. S.

825 (1975) . | 3

Dick v. New York Life Insurance Co., 359 U. S. 437

(1959 )

Expeditions Unlimited Aquatic Enterprises, Inc. v.

Smithsonian Institute, 500 F.2d 808 (D.C. Cir.

ul

1974) | | | 8

Federated Department Stores, Inc. v. Moitie 452

U.S. 394 (1981) Pe ae

Fidelity & Deposit Co. v. Usaform Hail Pool, Inc. 523

F.2d 744 (5th Cir. wits cert. denied, 425 USS.

950 (1976) Home 8

Great Western Bank & Trust v. Kotz, 532 F.2d 1252

(9th Cir. 1976) 3

Harrison v. United States, 711 F.2d 1311 (8th Cir.

1983 ) ah ee | is)

Itt.

International Brotherhood of Teamsters vy. Daniel,

439 U.S. 551 (1979)

Klapprott v. United States 335 U.S. 601 (1949)

Lino v. City Investing Co., 487 F.2d 689 (3d Cir.

1973 )

Marine Bank v. Weaver, 455 U.S. 551 (1982) ......

McGovern Plaza Joint Venture v. First of Denver

Mortgage Investors, 562 F.2d 645 (10th Cir. 1977) |.

National Bank of Commerce of Dallas y. All Amer-

ican Assurance Co., 583 F.2d 1295 (5th Cir. 1978) |.

N.L.R.B. v. Pittsburgh Steamship Co., 340 U.S. 498

(1951) : Peanene tet

Parks v. U. S. Life & Credit Co., 677 F.2d 838 (11th

Cir. 1982) «Soret teeiede aie Sage

SEC v. W. J. Howey Co., 328 U.S. 293 (1946) ....

Union Planters National Bank of Memphis, v. Com-

mercial Credit Business Loans, Inc., 651 F.2d 1174

(6th Cir.), cert. denied, 454 U.S. 1124 (1981)

United States v. Johnson, 268 U.S. 220 (1925) .....

United States v. Uni Oil, Inc., 710 F.2d 1078 (5th

Cir. 1983) . eee eee ue

Statutes and Rules

28 U.S.C. § 2101(c)

Sixth Circuit Rule 24

Supreme Court Rule 20

Ol

ba |

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1984

No. 84-1087

CLEVESTER DAVIS, JIMMIE LEE KING, and

VIRGINIA KING,

Cross-Petitioners,

Vv.

AVCO FINANCIAL SERVICES, INC.,

Cross-Respondent.

Cn Cross-Petition For A Writ Of Certiorari

To The United States Court of Appeals

For The Sixth Circuit

CROSS-RESPONDENT’S BRIEF IN OPPOSITION

Cross-Respondent Avco Financial Services, Inc. (hereinafter

“AFS”), opposes the cross-petition for a writ of certiorari

because there are no special or important reasons warranting

this Court’s review of the three questions presented.

STATEMENT OF THE CASE

AFS respectfully refers the Court to the Statement of the

Case contained within AFS’ own Petition in Case No. 84-901.

That provides an objective, neutral, and accurate description

of the proceedings below.

9

THE CROSS-PETITION SHOULD BE DENIED

I. There is No Reason — Particularly In This Case —

For This Court To Decide Once Again What Con-

stitutes A Security

Cross-petitioners seem to want this Court to define once

again what constitutes a “security” for the purposes of the

federal securities laws. As even they observed, it has done

so repeatedly in the past. See Cross-Petition at p. 9 and cases

cited therein. See also International Brotherhood of Team-

sters v. Daniel, 439 U.S. 551, 558 (1979); SEC v. W. J. Howey

Co., 328 U.S. 293, 301 (1946).

Cross-petitioners have failed to present a single reason why

this Court should go through that exercise yet again. The

test is well-settled, and its application necessarily differs with

the facts of each particular case. See Marine Bank v. Weaver,

455 U.S. 551, 560 n. 11 (1982). That circumstance, however,

does not mean that each new set of facts in each new case

warrants or justifies this Court’s review.

The simple fact is: Cross-petitioners have not and could

not have contended that the unanimous holding of the Sixth

Circuit on the question presented was in conflict with a de-

cision of any other Circuit or of this Court. It is not, and

cross-petitioners do not maintain that it is.

What, then, is the purpose for this Court’s review? Cross-

petitioners seem to suggest that this Court should decide which

“test” — the “risk capital” or the “commercial-investment

dichotomy” — should apply in determining whether notes

made by an individual when borrowing money are securities.

However, they do not say which “test” is right, which is

“wrong,” or which supports their view of the case.

These glaring omissions are understandable. Within the

context of individual loans, the analytical distinction cross-

petitioners discuss is one of semantics rather than substance.

Compare Amfac Mortgage Corp. v. Arizona Mall of Tempe,

“~

Pe

Inc., 583 F.2d 426 (9th Cir. 1978) (risk capital), with, McGov-

ern Plaza Joint Venture v. First of Denver Mortgage Inves-

tors, 562 F.2d 645 (10th Cir. 1977) (commercial-investment

dichotomy) (both cases helding that instruments evidencing

a constructicn loan were not securities). And, under either

“test,” documents evidencing individual loans are not securi-

ties. See Union Planters National Bank of Memphis v. Com-

mercial Credit Business Loans, Inc., 651 F.2d 1174 (6th Cir. ),

cert. denied, 454 U.S. 1124 (1981) (risk capital); Great West-

ern Bank & Trust v. Kotz, 532 F.2d 1252 (9th Cir. 1976) (risk

capital); National Bank of Commerce of Dallas v. All Amer-

ican Assurance Company, 583 F.2d 1295 (5th Cir. 1978)

(commercial-investment dichotomy ); C.N.S. Enterprises, Inc.

v. G & G Enterprises, Inc., 508 F.2d 1354 (7th Cir.), cert.

denied, 423 U.S. 825 (1975) (commercial-investment dich-

otomy); Lino v. City Investing Co., 487 F.2d 689 (3rd Cir.

1973) (commercial-investment dichotomy ) ; Chemical Bank

v. Arthur Andersen & Co., 726 F.2d 930 (2d Cir.), cert. denied,

—— U.S. ——, 105 S.Ct. 253, 83 L. Ed. 2d 190 (1984) (all

“tests” ).

In short, cross-petitioners want this Court to decide an issue

which necessarily would not affect the result below. That

has never been a reason for issuing a writ of certiorari.

4

Il. There Is No Reason — Particularly In This Case —

For This Court To Decide Whether Recklessness Is

Sufficient For Liability Under § 10(b) Of The Secur-

ities Act Of 1934 And Rule 10b-5 Promulgated

Thereunder

Cross-petitioners’ second question presented for this Court's

review is:

Whether under certain circumstances reckless behavior is

sufficient for civil liability under § 10(b) of the Securities

Fxchange Act of 1934 and Rule 1Ob-5.

By the nature of this question, one would presume (1) that

cross-petitioners presented evidence sufficient for a finding of

recklessness, but (2) that the Sixth Circuit, in a decision con-

flicting with that of one or more other Circuits or of this Court,

held that recklessness was insufficient for liability under Rule

10b-5. However, neither circumstance exists here. The ma-

jority opinion states:

Section 10(b) of the Securities Exchange Act of 1934

and Rule 10b-5 provide a private action remedy roughly

equivalent to that existing for fraud at common law.

This remedy is not limited to “sellers,” but applies also

to persons collaterally involved in the transaction who

made misrepresentations to promote the sale of se-

curities with the requisite scienter. Ernst & Ernst v.

Hochfelder, 425 U.S. 185, 96 S. Ct. 1375, 47 L. Ed.

2d 668 (1976). In this circuit recklessness may con-

stitute the required scienter. Mansbach vy. Prescott,

Ball & Turben, 598 F.2d 1017, 1023 (6th Cir. 1979);

Ingram Industries vy. Nowicki, 302 F. Supp. 1060, 1066

(E.D. Ky. 1980). However, the trial judge found neither

deliberate fraud nor recklessness on the part of Avco or

its manager. Therefore, plaintiffs 10b-5 allegations were

not supported by the evidence at trial.°

* See Appendix A to AFS’ Petition in Case No. 84-901 at pp. 10a-11a.

Chief Judge Lively concurred in this holding. See Petition in Case No.

84-901 at p. 23a.

a

Thus, the “question” cross-petitioners present does not exist

in this case. Whether recklessness is or is not sufficient for

liability under § 10(b) of the Securities Exchange Act of 1934

and Rule 10b-5 would not affect cr be determinative of the

result below. Fundamentally, cross-petitioners want an “ad-

visory opinion.” That is hardly a reason for issuing the writ.

Cross-petitioners’ real point seems to be that they disagree

with the decision of the District Judge and the three judges of

the Sixth Circuit that there was insufficient evidence to sup-

port a finding or conclusion of recklessness. In other words,

all cross-petitioners want is a determination by this Court that

Judges Lively, Jones, Bertelsman, and Walinsky did not suffi-

ciently or correctly examine, weigh, or review the evidence in

this case.

Once again, that is not a reason warranting the issuance of

a writ. This Court does “not grant certiorari to review evi-

dence and discuss specific facts.” United States v. Johnson,

268 U.S. 220, 227 (1925). See also Dick v. New York Life

Ins. Co., 359 U.S. 437, 447 (1959) (Frankfurter. J., dissent

ing).

Ill. The Unpublished Order Denying The Motion To

Dismiss Presents No Important Or Significant

Questions

Cross-petitioners’ final question pertains to the Sixth Cir-

cuit’s unanimous decision and order denying their motion

to dismiss the appeal. On this cross-petition for a writ of

certiorari, the fundamental question is whether the Sixth Cir-

cuit decision under attack is “of importance to the public as

distinguished from that of the parties...” N.L.R.B. v. Pitts-

burgh Steamship Co., 340 U.S. 498, 502 (1951) (quoting

Layne & Bowler Corp. v. Western Well Works, 261 U.S. 387.

393 (1923)).

By its terms, the order denying cross-petitioners’ motion is

6

only of significance to the parties to this case. It is an unpub-

lished decision expressly governed by Sixth Circuit Rule

2A which provides in pertinent part:

(a) Criteria for Publication

(1) It is the policy of the court that the following cri-

teria shall be considered by panels in determining

whether decisions will be designated for publication in

the Federal Reporter:

(i) whether . ~etablishes a new rule of law, or

alters or modifies an es .ting rule of law, or applies

an established rule to a novel fact situation;

(ii) whether it creates or resolves a conflict of

authority either within the circuit or between this

circuit and another;

(iii) whether it discusses a legal or factual issue

of continuing public interest;

(iv) whether it is accompanied by a concurring

or dissenting opinion;

(v) whether it reverses the decision below, un-

less:

(a) the reversal is caused by an interven-

ing change in law or fact, or,

(b) the reversal is a remand (without

further comment) to the district court of a

case reversed or remanded by the Supreme

Court;

(vi) whether it addresses a lower court or ad-

ministrative agency decision that has been pub-

lished; or,

(vii) whether it is a decision which has been

reviewed by the United States Supreme Court.

(2) Designation for Publication. There shall be a pre-

sumption in favor of publication of signed and per curiam

_

opinions. Such opinions shall be designated for publi-

cation unless a majority of the panel deciding the case

determines otherwise upon consideration of the fore-

going criteria. An order shall not be designated for pub-

lication unless a member of the panel so requests.

(b) Citation of Unpublished Decisions. Citation of un-

published decision by counsel in briefs and oral argu-

ments in this court and in the district courts within this

circuit is disfavored, except for the purpose of establish-

ing res judicata, estoppel, or the law of the case.

Cross-petitioners are complaining about what is essentially

a housekeeping order. On its face, it presents no question or

issue of importance. Under the Sixth Circuit's own procedural

rules, it has little if any precedential value. In the circum-

stances, it most assuredly does not warrant the attention of

this Court.

Cross-Petitioners seek to make the question one of general

importance by saying that this procedural order conflicts with

Ackermann vy. United States, 340 U.S. 193 (1950). But no

conflict exists.

in Ackermann this Court held that Civil Rule 60 does not

provide relief from a party's own “ ‘free, calculated, deliberate

choice’ not to appeal.” Federated Depertment Stores, Inc. v.

Moitie, 452 U.S. 394, 401 (1981) (quoting Ackermann, 340

U.S. at 198). See also Parks vy. U.S. Life & Credit Co., 677

F.2d 838, 840 (11th Cir. 1982) (“An unsuccessful litigant

may not rely on appeals by others and share in the fruits of

victory by way of a Rule 60(b) motion.”).

However, when a litigant has not freely or deliberately de-

cided not to appeal, Civil Rule 60 “vests power in courts ade-

quate to enable them to vacate judgments whenever such

action is appropriate to accomplish justice,” Klapprott v.

United States, 335 US. 601, 614-15 (1949). Accordingly,

Civil Rule 60 can appropriately result in an extension of the

time for appeal when special circumstances exist and no

§

prejudice results to the opposing party. See e.g., Buckeyc

Cellulose Corp. v. Braggs Electric Construction Co., 569 F.2d

1036 (8th Cir. 1978); Fidelity & Deposit Co. v. Usaform Hail

Pool, Inc., 523 F.2d 744 (5th Cir. 1975), cert. denied, 425 U.S.

950 (1976); Expeditions Unlimited Aquatic Enterprises, Inc.

v. Smithsonian Institute, 500 F.2d 808 (D.C. Cir. 1974).

This Court has stated that rulings under Civil Rule 60 are

reviewable “only for abuse of discretion.” Browder vy. Direc-

tor, Department of Corrections, 434 U.S. 257, 263 n. 7 (1978).

That is the sole question cross-petitioners have raised: Did

the District Judge and then the three judges of the Sixth

Circuit abuse their discretion? Fundamentally, all cross-

petitioners want is this Court to review the same record as

the Sixth Circuit for an alleged abuse of discretion. That is

no reason for issuing a writ.

In any event, there was no abuse here. There was no evi-

dence or even a contention that AFS made a “free, calcu-

lated, or deliberate choice” not to appeal and, therefore, this

Court’s holding in Ackermann is inapplicable. All that oc-

curred was a minor error in a timely filed notice of appeai.

The facts are: (1) Avco Corporation and all of its subsid-

iaries, including AFS, were represented by the same attorneys

in the District Court; (2) at the conclusion of plaintiffs’ case,

all defendants were dismissed except for AFS and Lee Mc-

Cormick; (3) the District Court's findings of fact and conclu-

sions of law dismissed Lee McCormick and left AFS as the

only defendant; (4) judgment was entered against “Avco”:

and (5) the attorneys for Avco Corporation and its subsid-

iaries filed a timely notice of appeal.

This whole matter is nothing more than a tempest in a

teapot. During oral argument before the Sixth Circuit, cross-

petitioners’ counsel acknowledged that he knew that AFS

was the only remaining defendant and that defense counsel

had obviously intended that AFS be the appellant. In short,

there was no prejudice here. The District Judge found only

9

one defendant liable; the attorneys for that defendant filed a

timely notice of appeal; and the plaintiffs, through their

counsel, knew who was really appealing.

The designation of Avco Corporation as appellant in the

notice did not in these circumstances deprive cross-petitioners

of fair notice of the appeal. The original notice was sufficient,

and the error could have been corrected in the court of

appeals. Harrison v. United States, 715 F.2d 1311 (8th Cir.

1983) (court of appeals mandate recalled and amended to

include party whose name was inadvertently omitted from

notice of appeal in consolidated cases); United States v. Uni

Oil, Inc., 710 F.2d 1078, 1080 n.1 (5th Cir. 1983) (govern-

ment’s notice of appeal from dismissal of indictment held

not defective as to defendants omitted from notice caption

when government “plainly demonstrated an intention to ap-

peal from the entire order” ).

As with their first two, cross-petitioners third question

does not and cannot impact anyone but the parties to this

case. Fundamentally, all cross-petitioners seek is a review of

the record to determine whether the four judges below

abused their discretion. The cross-petition should be denied.°

* Cross-petitioners, AFS submits, are hardly in a position to argue

timeliness before this Court. All petitions for rehearing were denied by

the Sixth Circuit on September 7, 1984. AFS petitioned this Court on

December 5, 1984 for a writ to review the judgment and opinion of

the Sixth Circuit in favor of cross-petitioners and against AFS [la]. AFS

did not petition from the order denying cross-petitioners’ motion to

dismiss [3a.] The time for petitioning to this Court is ninety days after

a Circuit’s denial of a petition for rehearing or thirty days after an

earlier petition from the same judgment or order. See 28 U.S.C.

§ 2101(c); Supreme Court Rule 20. The “cross-petition” here was filed

on January 2, 1985 — well beyond the ninety-day limitation.

10

CONCLUSION

For the foregoing reasons, the cross-petition for a writ of

certiorari to the United States Court of Appeals for the Sixth

Circuit should be denied.

Respectfully submitted,

Robert G. Stachler,

Counsel of Record for

Cross-Respondent

Taft, Stettinius & Hollister

1800 First National Bank Center

Cincinnati, Ohio 45202

(513) 381-2838

Additional Counsel for

Cross-Respondent:

Lawrence D. Walker

Raymond W. Lembke

Taft, Stettinius & Hollister

1800 First National Bank Center

Cincinnati, Ohio 45202

(513) 381-2838

Theodore M. Rowen

Richard E. Wolff

Spengler, Nathanson, Heyman,

McCarthy & Durfee

1000 National Bank Building

Toledo, Ohio 43604

(419) 241-2201

APPENDIX A

NOS. 82-3553

82-3572

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

[Filed July 10, 1984]

CLEVESTER DAVIS; JIMMIE LEE KING; and

VIRGINIA ANN KING,

Plaintiffs-Appellees,

Cross-Appellants,

v.

AVCO FINANCIAL SERVICES, INC.,

Defendant-Appellant,

Cross Appellee,

LEE McCORMICK,

Defendant.

Before: LIVELY, Chief Judge; JONES, Circuit Judge; and

BERTELSMAN, District Judge.

JUDGMENT

ON APPEAL from the United States District Court for the

Northern District of Ohio.

THIS CAUSE came on to be heard on the record from the

said District Court and was argued by counsel.

la

2a

ON CONSIDERATION WHEREOF, It is now here ordered

and adjudged by this court that this case is affirmed with

regard to the findings of liability of certain class members

under § 12(2) and reversed and remanded for further pro-

ceedings indicated in this opinion.

Each party is to bear its own costs on this appeal.

ENTERED BY ORDER OF THE COURT

John P. Hehman, Clerk

/s/ JOHN P. HEHMAN, Clerk

ISSUED AS MANDATE: September 17, 1984

COSTS: None

3a

APPENDIX B

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

Sixth Circuit Rule 24 limits citation to specific situations.

Please see Rule 24 before citing in a proceeding in a court in

the Sixth Circuit. If cited, a copy must be served on other

parties and the court.

This notice is to be prominently displayed if this decision is

reproduced.

82-3553

82-3572

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

[Filed July 10, 1984)

CLEVESTER DAVIS; JIMMIE LEE KING;

and VIRGINIA ANN KING,

Plaintiffs-Appellees,

Cross-Appellants,

Vv.

AVCO FINANCIAL SERVICES, INC.,

Defendant-Appellant,

LEE McCORMICK,

Defendant.

ORDER

Before: LIVELY, Chief Circuit Judge, JONES, Circuit Judge,

and BERTELSMAN, District Judge®

* Hon. William O. Bertelsman, Judge, United States District Court

for the Eastern District of Kentucky, sitting by designation.

4a

This securities fraud case was initiated in 1973. The original

defendants included Avco Financial Services, Inc. and other

Avco subsidiaries and affiliates, which were separate corporate

entities.

Trial began before District Judge Walinski of the Northern

District of Ohio on August 3, 1979. At the conclusion of the

plaintiffs’ case, the other Avco subsidiaries and affiliates were

dismissed, leaving only Avco Financial Services, Inc. and its

manager Lee McCormick as defendants.

On March 30, 1981, the district court entered its judgment in

favor of the plaintiffs for $167,072.57 against “the defendant

AVCO.”

On April 29, 1981, defendants’ counsel filed its notice of

appeal. The notice stated that “[nJotice is hereby given that

defendant AVCO Corporation” appealed from the district

court’s March 30th judgment. In June 1981 the plaintiffs filed

a motion with this court to dismiss “AVCO Corporation’s”

appeal for lack of jurisdiction, since “AVCO Corporation” had

prevailed at the district court level and therefore lacked

standing to appeal.

Defendants’ counsel responded to the plaintiffs’ motion to

dismiss by filing two sets of motions, one with this court and

another with the district court. Defendants requested this

court to stay consideration of plaintiffs’ motion to dismiss, to

amend the April 29 notice of appeal to substitute “AVCO Fi-

nancial Services, Inc.” as appellant in place of “AVCO Corpo-

ration,” and to remand the case to the district court to enable

the district court to act upon defendants’ F.R.Civ.P. 60(a)

and (b) motions.

The defendants’ Rule 60(a) and (b) motions filed with the

district court requested that court to grant relief from its

March 30th judgment, to correct the defendants’ notice of

appeal, to relieve the defendants from the proceeding of

the notice of appeal, and/or to reconsider and vacate the

5a

March 30th judgment. In July 1981, Judge Walinski filed an

affidavit with this court that he was favorably disposed toward

the defendants’ Rule 60 motions.

This court dismissed “AVCO Corporation’s” appeal in Octo-

ber 1981. We found that because Avco Corporation was not

injured by the district court’s judgment against Avco Financial

Services, it lacked standing to appeal that judgment. We

therefore ordered that Avco Corporation’s appeal be dis-

missed for lack of jurisdiction. We further ordered that Avco

Corporation’s motions to remand the case to the district court,

to amend the notice of appeal, and to stay consideration of

plaintiffs motion to dismiss were denied as moot. (emphasis

supplied ).

Following this court’s disposition of Avco Corporation’s ap-

peal, defendants renewed their Rule 60(b) motions before the

district court. In August, 1982 the district court granted those

motions. Accordingly, the district court vacated its March 30,

1981 judgment, and on August 16, 1982 entered a nearly

identical revised judgment in plaintiffs favor against “defen-

dant AVCO Financial Services, Inc.” Defendants subsequently

filed a timely notice of appeal from the district court’s August

16th amended judgment.

DISCUSSION

Plaintiffs now argue that Avco Corporation’s April 29, 1981

notice of appeal deprived the district court of jurisdiction to

rule on defendants’ Rule 60 motions and it was therefore an

abuse of discretion for that court to enter its revised order of

August 16, 1982. Plaintiffs contend that the district court in

effect improperly used Rule 60 to perfect the defendants’

appeal and therefore the appea! is improper and this court

lacks jurisdiction because the appeal was not timely under Rule

4 of the Rules of Appellate Procedure.

We find that the district court acted within its discretion

6a

under F.R.Civ.P. 60(a) in correcting what was essentially a

clerical error in the March 30, 1981 judgment. Rule 60(a)

permits a district court to correct mistakes in judgments on

the motion of aay party or on its own initiative.

During the pendency of an appeal after an appeal is

docketed, under Rule 60(a) a district court may make cor-

rections with the leave of the appellate court. Under the facts

of this case, we previously found that this court lacked juris-

diction over Avco Corporation’s purported appeal. Thus, in

retrospect, the district court regained jurisdiction over this

case and acted within its discretion in amending the March

30th judgments since there was no longer any appeal pending

before this court once Avco Corporation’s appeal had been dis-

missed.

Since the district court’s revised judgment of August 16, 1982

was within its discretion, defendants’ August 30, 1982 notice of

appeal was timely under Rule 4 of the Rules of Appellate

Procedure. Accordingly, we overrule plaintiffs’ motion to

dismiss the appeal of Avco Financial Services, Inc.

ENTERED BY ORDER OF THE COURT

/s/ JOHN P. HEHMAN, Clerk