## Facts

- Cycles, Ltd. owned certain truck trailers and leased them to W. J. Digby under an agreement requiring return of the trailers at the end of the lease arrangement.
- In August 1980, the business relationship collapsed and Digby refused to return the trailers.
- Navistar Financial Corp. had financed Cycles’ purchase of the trailers and held Cycles’ installment note and the trailers’ certificates of title.
- In early 1983, Navistar transferred the certificates of title to Digby in exchange for full payment of Cycles’ installment note.
- Cycles sued Navistar in federal district court, alleging Navistar converted the trailers by transferring the title certificates to Digby.
- The district court initially ruled for Cycles and entered a document labeled “Final Judgment” awarding damages, reasoning that transferring title documents put the trailers further out of Cycles’ reach and that Navistar knew or should have known Cycles owned the trailers.
- Navistar timely filed post-judgment motions under Rules 52(b) and 59(e), which remained unresolved for several years while related Digby litigation proceeded.
- After developments in later Digby litigation, the district court reversed its earlier ruling and entered judgment for Navistar, apparently because it believed the later court’s findings controlled.

## Issues

1. Whether the district court retained authority to revise its earlier judgment where Rule 52(b) and Rule 59(e) motions were timely filed and left pending.
2. Whether the district court erred by treating findings in later related litigation as binding in this separate action, thereby compelling reversal of its prior decision.
3. Whether Navistar’s transfer of the certificates of title to Digby constituted conversion (left for reconsideration on remand).

## Decision

- The Fifth Circuit vacated the district court’s revised judgment for Navistar and remanded.
- The court held the district court had power to revise its earlier ruling because the pending Rule 52(b) and 59(e) motions prevented the 1989 judgment from becoming final and appealable.
- The court held the district court erred by revising its decision on the belief that it was bound by contrary findings from later litigation, rather than exercising independent judgment.
- The Fifth Circuit did not finally resolve the conversion merits and directed reconsideration without treating the later litigation as dispositive.

## Legal Principles

- A timely Rule 52(b) or Rule 59(e) motion suspends finality for appellate purposes; while such motions remain pending, the district court retains jurisdiction to revise its judgment.
- A court may not treat factual findings or legal conclusions from a separate proceeding as binding absent a valid basis under preclusion doctrines; revision of a judgment based solely on an assumed obligation to follow another court’s findings is error.
- When an earlier related judgment is vacated for lack of jurisdiction, it generally lacks the finality required to support issue or claim preclusion.

## Conclusion

The Fifth Circuit held that the district court could reconsider its earlier ruling because the judgment was not final while post-judgment motions remained pending, but vacated the revised judgment because the court incorrectly treated later related litigation as binding; the case was remanded for an independent merits determination.


Cycles, Ltd. v. Navistar Fin. Corp., 37 F.3d 1088 (5th Cir. 1994)