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Lincoln Properties, LLC v. American Equity Exchange, Inc.

Supreme Court of Montana

August 27, 2019

LINCOLN PROPERTIES, LLC, Plaintiff and Appellant,
v.
AMERICAN EQUITY EXCHANGE, INC.; and CHRISTOPHER A. FAULKNER, Defendants and Appellees.

          ORDER

         Counsel for Appellant, Lincoln Properties, LLC (Lincoln), has filed a notice of appeal from two orders of the First Judicial District Court, Lewis and Clark County: (1) Order on Cross-Motions for Summary Judgment; and (2) Order on Motion to Correct Judgment. On June 14, 2019, the District Court certified these orders as final for purposes of immediate appeal pursuant to M. R. Civ. P. 54(b).

         Appellee, American Equity Exchange, Inc. (AEEI) objected to Rule 54(b) certification. AEEI argued that the District Court should deny certification because several of Lincoln's causes of action are asserted against all defendants and rely upon common overlapping facts, and none of Lincoln's claims applied solely to AEEI; however, the District Court's summary judgment order pertained only to Lincoln's claims against AEEI, thus leaving unresolved multiple claims against multiple other defendants. AEEI argued that any appellate review of the current ruling resolving claims in AEEI's favor will likely be mooted by adjudication of the remaining claims against the remaining defendants, and thus would avoid requiring this Court to review the same issues a second time.

         The District Court rejected AEEI's argument. It concluded that the claim on which it granted summary judgment in favor of AEEI was "singular to AEEI and has no 'overlap' with the breach of contract, negligence, and misrepresentation claims advanced against Faulkner."[1] The District Court thus concluded that "it is not possible that the stand alone claims made against AEEI will have to be considered in the future."

         Pursuant to M. R. App. P. 4(4)(b), we have reviewed the District Court's June 14 order for compliance with M. R. App. P. 6(6). Rule 6(6) provides that a district court may direct entry of final judgment under Rule 54(b) only upon an express determination that there is no just reason for delay and, "[i]n so doing, the district court must balance the competing factors present in the case to determine if it is in the interest of sound judicial administration and public policy to certify the judgment as final, and the court shall, in accordance with existing case law, articulate in its certification order the factors upon which it relied in granting certification . . . ."

         If a district court abuses its discretion in certifying an order as final under Rule 54(b), we are without jurisdiction to entertain the appeal. Kohler v. Croonenberghs, 2003 MT 260, 317 Mont. 413, 77 P.3d 531. Thus, even if not raised by a party, we will sua sponte determine if the court's certification order meets the criteria we have set forth in Roy v. Neibauer, 188 Mont. 81, 610 P.2d 1185 (1980), and Weinstein v. University of Montana, 271 Mont. 435, 898 P.2d 101 (1995). Kohler, ¶¶ 8-9.

         To meet these criteria, the District Court must do more than "merely recite the magic words" that "there is no just reason for delay." Kohler, ¶ 14 (citation omitted). As set forth in Roy, 188 Mont, at 87, 610 P.2d at 1189, the factors this Court normally considers regarding a Rule 54(b) certification include: (1) the relationship between the adjudicated and unadjudicated claims; (2) the possibility that the need for review might or might not be mooted by future developments in the district court; (3) the possibility that the reviewing court might be obliged to consider the same issue a second time; (4) the presence or absence of a claim or counterclaim which could result in a set-off against the judgment sought to be made final; and (5) miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, triviality of computing claims, expense, and the like. In certifying an order under Rule 54(b), a district court must follow three "guiding principles": (1) the burden is on the party seeking certification to convince the district court that the case is the "infrequent harsh case" meriting a favorable exercise of discretion; (2) the district court must balance the competing factors present in the case to determine if it is in the interest of sound judicial administration and public policy to certify the judgment as final; and (3) the district court must marshal and articulate the factors upon which it relied in granting certification so that prompt and effective review can be facilitated. Kohler, ¶ 16 (citing Roy, 188 Mont, at 87, 610 P.2d at 1189).

         In Kohler, we reversed the District Court's Rule 54(b) certification because it failed to discuss Roy's factors and guiding principles, but was merely a "perfunctory certification." Kohler, ¶ 17. The District Court in Kohler also did not address the concerns raised in Weinstein that "the facts and theories separated for immediate appeal should not overlap with those retained; to the extent they do, the court of appeals is 'deciding' claims still pending in the district court, and may have to cover the same ground when the district court acts on the residue." Kohler, ¶ 18 (quoting Weinstein, 271 Mont, at 442, 898 P.2d at 105).

         In this instance, AEEI raised the concern of overlapping claims in its objection to Rule 54(b) certification below. AEEI noted that several of Lincoln's causes of action were asserted against all defendants and relied upon common overlapping facts, and that none of Lincoln's claims applied solely to AEEI. The District Court granted certification on the basis that Lincoln's claim was singular to AEEI, and did not overlap with the claims against one of the remaining defendants. The District Court did not address the impact of its summary judgment order as it pertained to the multiple common claims against the other multiple defendants, nor did it discuss Roy's factors and guiding principles, or articulate the basis of its determination that there is no just reason for delay as set forth in M. R. App. P. 6(6).

         For these reasons, we conclude the court's certification order is not in substantial compliance with the requirements of Rule 6(6) and our case law interpreting certification orders under Rule 54(b).

         IT IS THEREFORE ORDERED that this appeal is DISMISSED WITHOUT PREJUDICE.

         The Clerk is directed to provide copies of this Order to all counsel of record and Hon. Mike Menahan.

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Notes:

[1] Christopher A. Faulkner was one of fourteen defendants who remained parties to the litigation after the District Court granted summary judgment to AEEI. The District Court did not address the impact of its summary judgment order as it pertained ...


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