JAMESON, District Judge:
This is a consolidated appeal in two cases involving a claim of A & R Lumber Sales, Inc. for damages to its truck in a collision with Southern Pacific Transportation Company's train. We conclude that in No. 75-1783 there was no judgment from which an appeal could properly be taken and dismiss the appeal without prejudice. In No. 75-1784 A & R failed to assert a compulsory counterclaim in a prior action, and we affirm the summary judgment of dismissal entered by the district court.
On January 11, 1973 a Southern Pacific train collided with a truck owned by A & R, being driven by Ray Baker. Baker and Luse, a Southern Pacific employee, were injured, and both the truck and train were damaged.
Luse brought suit against Southern Pacific and A & R in an Oregon state court and recovered a judgment against them on July 9, 1974.
On June 18, 1973 Baker brought suit against Southern Pacific in an Oregon state court. Southern Pacific removed the action to federal district court and filed a counterclaim against Baker, joining A & R pursuant to Rule 13(h), F.R.Civ.P. At the conclusion of the trial the jury attributed 75% of the fault for the accident to Southern Pacific. On October 29, 1974 a judgment was entered in favor of A & R on Southern Pacific's counterclaim. In the meantime Baker had settled his claim against Southern Pacific.
On the day judgment was entered in Baker v. Southern Pacific, A & R brought suit against Southern Pacific in an Oregon state court for damage to its truck. Southern Pacific removed to federal court and moved for summary judgment on the ground that A & R's claim was a compulsory counterclaim involved in the prior action since it involved the same collision adjudicated against Southern Pacific on its counterclaim against Baker and A & R. Affidavits filed by A & R in opposition to the motion disclosed, inter alia, that A & R's liability insurer had handled A & R's defense of Southern Pacific's counterclaim in the Baker case.
On February 27, 1975, the district court granted Southern Pacific's motion for summary judgment in the suit filed by A & R. A & R then filed a motion in Baker v. Southern Pacific to amend its reply to Southern Pacific's counterclaim to add a claim for damages to A & R's truck.
No formal judgment or other document was entered disposing of A & R's motion.
Contentions on Appeal
In its brief on this appeal, A & R contended that (1) the district court erred in holding that A & R's claim in its action against Southern Pacific (No. 75-1784) was barred because it was a compulsory counterclaim which should have been asserted in Baker v. Southern Pacific; and (2) if A & R's claim was in fact a compulsory counterclaim, the court erred and abused its discretion in denying A & R's motion for leave to amend its reply to assert its claim in Baker v. Southern Pacific (No. 75-1783).
In its brief, A & R conceded that its action against Southern Pacific in No. 75-1784
Rule 13(a), F.R.Civ.P. states in pertinent part:
This circuit adheres to the rule that "[u]nder Rule 13(a) a party who fails to plead a compulsory claim against an opposing party is held to have waived such claim and is precluded by res judicata from bringing suit upon it again". Dragor Shipping Corp. v. Union Tank Car Co., 378 F.2d 241, 244 (9 Cir. 1967).
The purpose underlying Rule 13(a) was well stated by the Supreme Court in Southern Construction Co., Inc. v. Pickard, 371 U.S. 57, 60, 83 S.Ct. 108, 110, 9 L.Ed.2d 31 (1962):
This case presents exactly the type of situation that Rule 13(a) was designed to prevent. A & R's claim No. 75-1784 against Southern Pacific was a compulsory counterclaim in the Baker case and should have been asserted therein. Having failed to assert it there, A & R has waived the claim and cannot maintain a separate action on it. The district court was correct in entering summary judgment in favor of Southern Pacific dismissing the action in No. 75-1784.
In its brief A & R argued further that the claim was not a compulsory counterclaim since (1) its insurers were indispensable parties to a counterclaim by A & R in the Baker suit, and (2) Unigard, one of the insurers, had controlled the litigation and should not have been required to assert a claim of A & R against Southern Pacific as a counterclaim. These contentions were not urged in oral argument. In any event we find them without merit.
With respect to the first ground, in Oregon, as in most states and federal courts, an insured may maintain an action against a tortfeasor for the entire loss, unless the tortfeasor objects and demands joinder of the partially subrogated insurer. See Laushway v. State, 238 Or. 352, 395 P.2d 110, 111 (1964); 3A Moore's Federal Practice (2d Ed.) § 17.09[2.-1]. Southern Pacific did not object and A & R's insurers were not indispensable parties to a counterclaim in Baker.
As to the second ground, A & R cites the case of Reynolds v. Hartford Accident and Indemnity Co., 278 F.Supp. 331 (S.D.N.Y. 1967), which held that a liability insurer, defending on behalf of its insured a suit arising out of an automobile accident, was not required to assert a counterclaim for personal injuries to the insured. That case is not controlling here, however, since the insurer in that case had no interest in the insured's counterclaim, having paid no part of the insured's loss. Unigard, on the other hand, had paid A & R a portion of the damages to its truck and therefore would have shared in any recovery against Southern Pacific. Unigard thus had a sufficient interest in the claim for damage to A & R's truck to have asserted the claim as a counterclaim in Baker.
Denial of Motion to Amend Reply
In Baker v. Southern Pacific (No. 75-1783) A & R appealed from the "Recommendation and Order denying plaintiff's motion to amend the reply". This is not a judgment from which an appeal may be taken under either Rule 54(a) or Rule 58 of the Federal Rules of Civil Procedure. Nor is it a "final decision" under 28 U.S.C. § 1291, which is the jurisdictional basis of this appeal.
A & R's motion for leave to file an amended reply "adding claims for property damage" was made "pursuant to Rule 15(a)" of the Federal Rules of Civil Procedure and for "support of this motion" A & R relied on "Rule 15(a) and Rule 13(i)".
An order denying a motion to amend is not a "judgment" from which an appeal may be taken under Rule 54(a). "An order denying a motion under Rule 60(b) is final and appealable." 6 Wright and Miller § 2871, p. 858. It is not clear, however, whether A & R made a proper Rule 60(b) motion for relief from the judgment which had been entered three months prior to the filing of its motion.
In any event, no final judgment was entered from which an appeal might be taken from an order denying relief under Rule 60(b). Rule 58 of the Federal Rules of Civil Procedure requires that "[e]very judgment shall be set forth on a separate document" and that "[a] judgment is effective only when so set forth . . . ." Rule 58 was intended to eliminate doubt as to what constituted a final judgment "by requiring that there be a judgment set out on a separate document — distinct from any opinion or memorandum — which provides the basis for the entry of judgment". Notes of Advisory Committee on 1963 Amendments to Rules. The rule "must be mechanically applied in order to avoid new uncertainties as to the date on which a judgment is entered". United States v. Indrelunas, 411 U.S. 216, 222, 93 S.Ct. 1562, 1565, 36 L.Ed.2d 202 (1973).
Even if the "Recommendation and Order" denying the motion to amend may be construed as denying relief under Rule 60(b), the district court's notation at the bottom of the magistrate's memorandum would not satisfy the requirements of Rule 58. Consequently this court has no jurisdiction of the appeal.
The summary judgment in No. 75-1784 is affirmed, and the appeal in No. 75-1783 is dismissed without prejudice.
Rule 13(i) reads:
`This represents a mechanical change that would be subject to criticism for its formalism were it not for the fact that something like this was needed to make certain when a judgment becomes effective, which has a most important bearing, inter alia, on the time for appeal and the making of post-judgment motions that go to the finality of the judgment for purposes of appeal.' 6A J. Moore, Federal Practice ¶ 58.04[4.-2], at 58-161 (1972)." 411 U.S. at 220-221, 93 S.Ct. at 1564.