USCA1 Opinion

UNITED STATES COURT OF APPEALS

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
____________________

No. 95-1786

TPM HOLDINGS, INC.,

Plaintiff, Appellee,

v.

INTRA-GOLD INDUSTRIES, INC.

and JASPER C. ROWE,

Defendants, Appellants.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Paul J. Barbadoro, U.S. District Judge]

___________________

____________________

Before

Selya, Cyr and Boudin,

Circuit Judges.
______________

____________________

Jasper C. Rowe with

_______________

whom Law Offices of Jasper C. Rowe

_______________________________

was

briefs for appellants.

Daniel P. Schwarz
___________________

with

whom

Christopher Cole
_________________

Phinney, Bass & Green, P.C. were on briefs for appellee.

_______ __________________

____________________

and

Sheeh
_____

July 30, 1996

____________________

Per Curiam.
__________

Intra-Gold Industries, Inc. ("Intra-Gold"),

Texas corporation, appeals from the New Hampshire district

court's grant

Inc.

of summary judgment in favor

("TPM"), in

TPM's action

pendens from the title of

_______

The

lis pendens
____________

brought

England Aggregate

Texas

against TPM

notice of

to

lis
___

and

federal-court action

another party,

Trust, Inc. ("Aggregate Trust"),

Intra-Gold sought enforcement

Aggregate Trust

remove a

property it owns in New Hampshire.

relates to

by Intra-Gold

to

of TPM Holdings,

of an

transfer to

in which

alleged agreement

Intra-Gold certain

New

with

mineral

rights in the New Hampshire property.

The background facts are complex but largely undisputed,

and we

limit our

pertinent

to

description to

this appeal.

In

the transactions

June

1992, TPM

directly

bought

promissory

property

One of

note

and

mortgage interest

3,500

acres of

located in both Freedom and Madison, New Hampshire.

the mortgagors

was Freedom

("Freedom Properties"), a

with Aggregate Trust

the

in

mortgagors

were

Properties Realty

New Hampshire general

as its general partner.

in

default,

and

TPM

Trust

partnership

By late 1992,

had

initiated

foreclosure proceedings.

Intra-Gold claims that in

January 1993, Aggregate Trust

agreed on behalf of Freedom Properties to assign the latter's

mineral rights in

the New Hampshire property

According to Intra-Gold this was part of a

-2-2-

to Intra-Gold.

plan to avoid the

foreclosure;

in return

would

try to arrange

Trust

to retire its

for the

mineral rights,

financing that would

debt to TPM and

Intra-Gold

permit Aggregate

would pay royalties to

Aggregate Trust for the minerals removed.

But

in

February

1993,

Hampshire property--including

the

mortgagors

of

the

Freedom Properties--agreed

deed the property to TPM in lieu

New

to

of foreclosure proceedings.

The agreement reserved in the mortgagors the right to exploit

the minerals for one year and gave them an option to purchase

the

property within one

Intra-Gold

took

the

year for approximately

position that

settlement, Aggregate

Trust had

by

breached

$4 million.

entering

into this

its January

1993

agreement with Intra-Gold.

In July 1994, Intra-Gold filed suit in Texas state court

against

Aggregate

rescission

Trust

of the deed

and

TPM,

seeking

transferring the

damages

property to

and

TPM.

The defendants removed the case to the federal district court

for the

the

Eastern District of

suit,

Intra-Gold

Texas.

The day

placed--without

after bringing

notice

to

TPM

or

application to any court--a notice of lis pendens on the deed

___________

for the New

Hampshire property.

lis pendens in
___________

It

was the filing

the Registry of Deeds in

of this

Carroll County, New

Hampshire that prompted the litigation at issue here.

On November

1,

federal district court

1994,

TPM filed

complaint

in New Hampshire, based

-3-3-

in

the

on diversity

jurisdiction,

seeking a declaration

pendens was not valid under

_______

Rev.

Stat. Ann.

without

adverse party, in

an

agreement to

pointed

out that

of lis
___

the New Hampshire statute.

511-A:8

prior application

that the notice

permits

to

filing a

the court

or

"equity cases for specific

transfer land

N.H.

lis pendens
____________

notice to

the

performance of

or a

unique chattel."

TPM

Intra-Gold's Texas

complaint sought

only

money damages and rescission of the deed from Aggregate Trust

(and

the

other

mortgagors)

granting

the

New

Hampshire

property to TPM.

While

pre-trial

motions

were

pending

in

the

Hampshire action, the Texas district court on April 7,

New

1995,

dismissed with prejudice all

TPM for failure

of Intra-Gold's claims

to state a claim.

against

Fed. R. Civ. P. 12(b)(6).

On motion by TPM, the court followed with an order on May 17,

1995, cancelling the

notice of lis pendens filed

___________

Hampshire Registry of

Deeds.

claims against Aggregate

the

summer of

1995, the

Intra-Gold proceeded

Trust, but after

court

in the New

with its

a bench trial

found in

in

Aggregate Trust's

favor on all claims.

One might think that resolution of the underlying claims

against TPM in

removing

Texas would moot the New

the basis

appealed the Texas

cases

for

the

lis pendens,
____________

decision to the

suggest that a

Hampshire action by

but

Intra-Gold

Fifth Circuit, and

lis pendens remains

___________

some

in effect pending

-4-4-

appeal.

See 54
___

C.J.S. Lis Pendens

____________

26 (1987).

In

all

events, neither party asserts mootness, and there are obvious

practical reasons why--with the Fifth Circuit appeal pending-

-it is

important for TPM

to maintain in force

the district

court's declaration that the lis pendens is invalid.

We thus

___________

resume the chronology.

In the

by

New Hampshire district court,

motion that

claim

because

district

the court

similar

court.

for

reasons

should refuse to

issues were

Intra-Gold

required both by 28 U.S.C.

of "fairness

then

contended

entertain TPM's

before

this

the Texas

result

was

1450--a claim now abandoned--and

and

judicial economy."

alternative, Intra-Gold argued that

the validity of

Intra-Gold argued

the lis pendens.

___________

Texas law should

The

In the

govern

district court denied

this motion in June 1995.

During the June 1995 hearing, the New Hampshire district

court also proposed sua

___

sponte to grant summary judgment

______

on

the merits in favor of

authorized

by

the

TPM, because the lis pendens

___________

New

underlying Texas action

performance of

chattel.

on

statute

was not an equity

an agreement

to

because

the

case for specific

transfer land

or a

unique

In opposition, Intra-Gold conceded this defect, but

argued that

suit

Hampshire

was not

it had filed

December

initiated the

7,

an amended complaint in

1994--over

month

New Hampshire declaratory

-5-5-

after

the Texas

TPM

had

action--which asked

for "an injunction preventing transfer of the property to TPM

or

any third

party and

granting title

to the

property to

[Intra-Gold]."

Unpersuaded, the district court granted summary judgment

in

TPM's favor, explaining simply that

not filed

Intra-Gold

in compliance

with N.H.

the lis pendens "was

___________

Rev. Stat. Ann.

511-A."

now appeals, renewing its earlier claim that, for

prudential reasons of fairness and economy, the New Hampshire

district court should have

remove

the lis pendens.

___________

declined to hear TPM's

action to

Alternatively, Intra-Gold contends

that the amended complaint in the Texas suit falls within the

"specific performance"

pendens statute.
_______

parties and similar

district

piecemeal

subject matter are pending

courts:

tensions,

courts

historical

each

lis
___

Conservation Dist. v.
___________________

resources

possibility

because

of

affairs.

primarily

See,
___

on

e.g.,
____

United States,
______________

To

the same

in different

of

conflicting

concern that the courts

other's

rely

practice.

wasted

the

judgments, and a general

with

New Hampshire

arise when actions involving

litigation,

interfere

the

We discuss the claims in order.

Obvious concerns

federal

exception of

may unduly

resolve

such

sense

and

common

Colorado River Water

______________________

424

U.S.

800,

817

(1976); 28 U.S.C.

Where

1404.

the overlap

between

complete, the usual practice is

the

two

suits

is

nearly

for the court that first had

-6-6-

jurisdiction to

defer.

resolve the

issues and the

other court

to

West Gulf Maritime Ass'n v. ILA Deep Sea Local 24,

_________________________
_______________________

751

F.2d 721, 729

(5th Cir. 1985).

But

where the overlap

between two suits is less than complete, the judgment is made

case

424

by case, see
___

U.S. at

817,

overlap,

the

advantage

and the

Colorado River Water Conservation Dist.,

________________________________________

based on

likelihood

such factors

of

interest of

conflict,

as the

the

each forum in

extent of

comparative

resolving the

dispute.

Here, the

breach

of

heart of

contract

the Texas

claim

against

action was

Aggregate

Intra-Gold's

Trust.

determining the validity of the lis pendens required the

___________

Hampshire district court to assess

there might be a good

New

the merits of this claim,

case for deferring to the Texas

But the New Hampshire court

If

suit.

was asked only to decide whether

Intra-Gold's

Texas

specific performance

suit

of an agreement

unique chattel" under

required

constituted

an assessment

an "equity

to transfer land

N.H. Rev. Stat. Ann.

of the

nature
______

case

of the

511-A:8.

for

or a

This

claims being

made, not their merit, and could not realistically be said to

interfere with the Texas court's authority or conduct of

its

case.

Only

slightly more troublesome is the argument that the

validity of the lis pendens

___________

suit.

was being litigated in the Texas

Formally this was true, since a

-7-7-

few days after filing

the

New Hampshire

suit, TPM

also brought

a motion

in the

Texas district court seeking cancellation of the lis pendens.

___________

And indeed,

after

claims against TPM,

the lis pendens.

____________

the Texas

court

dismissed

that court did issue an

But

beneath this surface

Intra-Gold's

order to cancel

resemblance the

two courts were addressing very different issues.

Neither

party has shown

that the Texas

district court

ever

had before

comply with the

that

it a

claim that

the lis pendens did

____________

New Hampshire statute.

Instead it

not

appears

TPM simply requested that, if the Texas court dismissed

Intra-Gold's claims,

there

would no

it also

longer be

there was little risk of

court's

cancel the

any litigation

lis pendens
___________

since

pending.

If so,

conflict posed by the New Hampshire

resolution of the

independent issue of

whether the

lis pendens complied with New Hampshire state law.

___________

We turn now to the

merits of the New Hampshire district

court's decision on summary judgment that the lis pendens was

___________

invalid.

pendens
_______

The

district court

was not filed

said that

in compliance with

the notice

of lis
___

the New Hampshire

statute, a

But, as

point that

already noted,

Intra-Gold has effectively

Intra-Gold argues

complaint did seek such specific

that its

performance.

conceded.

amended

While this is

itself an issue open to dispute, for us the anterior question

is

whether an amended complaint--even within N.H. Rev. Stat.

-8-8-

511-A--can

revive

and salvage

an

earlier,

invalid lis
___

pendens.
_______

It does

ever decided

that

not appear the New Hampshire

this issue,

the answer

Equity Corp.,
____________

is no.

but cases

476 N.E.2d 276

to the

from elsewhere

suggest

E.g., 5303 Realty Corp. v.

____ __________________

appear severe or formalistic.

counterweight

state courts have

(N.Y. 1984).

This

O & Y
_____

result may

But it may also be viewed as a

obvious

dangers

inherent

in

lis
___

pendens scheme that allows a party to wield this considerable

_______

power without

prior application

to any court,

and with

judicial assessment of the merits of the underlying suit.

no

The purpose

of a

purchasers that there

title

to real

subject

property

statute, as in

of

the

to notify

is pending litigation that

and that

to the judgment.

marketability

to a

lis pendens is
____________

the

danger of abuse

take

This cloud on title can impair the

property.

Under

the

has led courts to require

New Hampshire

done without resort

specified circumstances.

with lis pendens statutes.

___________

may affect

purchaser will

many states, this can be

court, under

potential

The

resulting

strict compliance

E.g., S. Utsunomiya Enters., Inc.

____ ___________________________

v. Moomuku Country Club, 866 P.2d 951, 963 (Haw. 1994); E & E
____________________
_____

Hauling, Inc. v.
______________

County of DuPage, 396

_________________

(Ill. App. Ct. 1979).

N.E.2d 1260,

1266

Consistent with this strict-compliance

approach, we see

no reason why an invalid lis pendens should

___________

be made valid by

-9-9-

a later
_____

amendment

to

complaint.

Where

the

original

complaint does not support the lis pendens, it is easy enough

___________

for the

plaintiff who files

new lis pendens

___________

amended

an amended complaint to

based upon that new complaint.

complaint alone

to breathe

previously invalid lis pendens

___________

and unfair prejudice.

the original

along with the

error and

life

file a

Allowing an

into an

could easily cause

earlier,

confusion

Since the plaintiff is responsible for

is free

to file

a new

amended complaint, this outcome

lis pendens
___________

appears well

warranted.

Of course, lacking precedent from a New Hampshire court,

we can

only make

our best assessment

court would resolve the issue.

as to

how the

state

And there are other contexts

in which a later act can revive an earlier, otherwise defunct

claim.

See, e.g., Fed. R. Civ. P. 15(c).

___ ____

But in the present

context, we think

mentioned,

and the

that the practical considerations

general

instance

that

already

lis pendens
____________

applicant turn square corners, carries the day for TPM.

Affirmed.
_________

-10-10-