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Century Surety Co. v. 350 W.A.

June 11, 2008


The opinion of the court was delivered by: M. James Lorenz United States District Court Judge


On February 5, 2007, the magistrate judge granted the parties' joint motion to modify the Case Management Order. [doc. #46] As part of that Order, a final pretrial conference date was set for February 25, 2008. In the meantime, plaintiff filed two motions for summary judgment and a motion for entry of a stipulated judgment, which the Court granted.*fn1 (See Order filed September 25, 2007 [doc. #73].) As a result of the Court's Order, the stipulated judgment was entered. [doc. #74] The issue addressed in the motion for entry of the stipulated judgment was whether the parties' Bond Agreement and associated agreements were enforceable and whether Blackburn's and 350 W.A. breached the Bond Agreement. Standing alone, the stipulated judgment did not reach the merits of any of the claims or counterclaims found in the pleadings. Instead, the Court considered the merits of the claims and counterclaims in deciding plaintiff's motion for summary adjudication.*fn2 As the Court recognized in its September 25, 2007 Order, plaintiff's remaining claim for rescission had not been included in plaintiff's motion for summary judgment; therefore, plaintiff's claim for rescission remained pending.

On October 25, 2007, Blackburn and 350 W.A. LLC ("350") filed a notice of appeal with respect to the stipulated judgment. The appeal was limited to the stipulated judgment and did not encompass any other portions of the case or orders entered.

Prior to the final pretrial conference, the parties were ordered to brief certain issues because of the unusual procedural situation presented by the appeal of the stipulated judgment, the grant of the motion for partial summary judgment and the pendency of the claim for rescission. The parties were to address whether the appeal of the stipulated judgment divested the Court of jurisdiction; whether the stipulated judgment required Rule 54(b) certification*fn3 ; and whether the final Pretrial Conference on the rescission claim should be stayed during the pendency of the appeal of the stipulated judgment.

In response to the order to show cause, 350 argued that the remaining rescission claim could go forward independently of the appeal of the stipulated judgment and that Rule 54(b) certification was not needed because the appeal was not interlocutory. Nevertheless, in their response, 350 seeks certification under Rule 54(b) of the stipulated judgment. Additionally, 350 seeks Rule 54(b) certification of the Court's Order that granted Century's motion for summary adjudication contending the coverage decision should be immediately appealable along with the stipulated judgment.*fn4

Century responded to the OSC by indicating that it believed that the pending stipulated judgment appeal had no bearing on the remaining claim seeking rescission. Consequently, Century contends the rescission claim can and should go forward notwithstanding the appeal of the stipulated judgment. Century also states that it has no objection to a request for Rule 54(b) certification with respect to the stipulated judgment and the Court's September 25, 2007 Order granting plaintiff's motion for summary adjudication.

The parties therefore agree that judicial economy and conservation of the parties' resources would be benefitted with a single consolidated appeal of the coverage issue and the stipulated judgment.


A. Rule 54(b) Standard

Federal Rule of Civil Procedure 54(b) provides an exception to the general principle that a final judgment is proper only after the rights and liabilities of all the parties to the action have been adjudicated. Rule 54(b) allows the court to enter final judgment as to one or more claims or parties "only if the court expressly determines that there is no just reason for delay." FED. R. IV. P. 54(b).*fn5 Judgments under Rule 54(b) are intended for unusual cases only:

Judgments under Rule 54(b) must be reserved for the unusual case in which the costs and risks of multiplying the number of proceedings and of overcrowding the appellate docket are outbalanced by pressing needs of the litigants for an early and separate judgment as to some claims or parties.

Frank Briscoe Co., Inc. v. Morrison-Knudsen Co., Inc., 776 F.2d 1414, 1416 (9th Cir. 1985) (quoting Morrison-Knudsen Co., Inc. v. Archer, 655 F.2d 962, 965 (9th Cir.1981)).

There are two factors to consider in ordering Rule 54(b) certification. Curtis-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 10 (1980); AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 954 (9th Cir. 2006). The court must take into account the overlap of factual and legal issues between those claims disposed of under Rule 54(b) and those still pending before the trial court. Id. The court must then assess the equities that weigh in favor and against certification. Id. The Ninth Circuit has held that these factors require the court to make "specific findings" setting forth the reasons for certifying judgment under Rule 54(b). Morrison-Knudsen Co., Inc. v. Archer, 655 F.2d 962, 965 (9th Cir. 1981). A Rule 54(b) certification is appropriate if it will aid "expeditious decision" of the case. ...

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