Brian J. Fournier v. Flats Industrial, Inc., et al.

2023 ME 40, 298 A.3d 810

• Court: Supreme Judicial Court of Maine
• Decided: July 25, 2023
• Docket: BCD-22-312
• Status: Published

Opinion

MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2023 ME 40 Docket: BCD-22-312 Argued: May 10, 2023 Decided: July 25, 2023

Panel: STANFILL, C.J., and MEAD, JABAR, HORTON, CONNORS, LAWRENCE, and DOUGLAS, JJ.

BRIAN J. FOURNIER

v.

FLATS INDUSTRIAL, INC., et al.

HORTON, J.

[¶1] Brian Fournier, a shareholder of Flats Industrial, Inc., appeals from

an order entered by the Business and Consumer Docket (Duddy, J.) that

dismissed two of three counts in Fournier’s action against Flats and three other

Flats shareholders, Beth Fournier, Patrick Fournier, and Douglas Fournier

(collectively, the Fourniers). The parties later stipulated to the dismissal of the

remaining count. Flats and the Fourniers contend that Fournier’s notice of

appeal was untimely filed. We agree and dismiss Fournier’s appeal for lack of

jurisdiction without reaching the issues raised in the appeal.

I. BACKGROUND AND PROCEDURAL HISTORY

[¶2] “The following substantive facts are taken from the allegations in

the [operative] complaint and are viewed as if they were admitted, and the 2

procedural facts are drawn from the record.” 20 Thames St. LLC v. Ocean State

Job Lot of Me. 2017 LLC, 2021 ME 33, ¶ 2, 252 A.3d 516 (citation omitted).

[¶3] Flats is incorporated in Delaware, has its principal place of business

in Cleveland, Ohio, and owns a four-mile stretch of railroad in northern Ohio.

Arthur Fournier was the sole shareholder of Flats until he died testate in 2013.

When Arthur died, Flats’s stock was conveyed to his family in the following

manner: his four children, Fournier, Douglas, Patrick, and Catherine (who is not

a party to this action), each received twelve and a half percent, and Arthur’s

widow, Beth, received the remaining fifty percent.1 Fournier and the other

shareholders all reside in Maine. Flats has several bank accounts in Maine.

[¶4] On February 18, 2020, and on other occasions since that date,

Fournier requested to inspect and copy corporate records to determine the

status and financial health of Flats and the value of the shares he owns.

Fournier provided a written demand under oath as required by

Del. Code Ann. tit. 8, § 220(b) (2023). Flats failed to make the requested

documents available for inspection and copying.

[¶5] On or about July 13, 2020, Fournier made a written demand upon

Flats to investigate and bring an action against the Fourniers for breach of

1 According to the record, Beth is the sole officer and director of Flats. 3

fiduciary duty, fraud, and other wrongful acts. See Del. Ch. Ct. R. 23.1. Four days

later, Fournier filed his initial complaint in this action. It contained two counts:

(1) a claim in Count 1 against Flats for failing to disclose records in violation of

Del. Code Ann. tit. 8, § 220(b) and (2) a claim in Count 2 against the Fourniers

for breaching their fiduciary duty.2 Flats and the Fourniers filed an answer with

affirmative defenses. On February 11, 2021, the shareholders of Flats voted not

to bring claims against the Fourniers. The Fourniers did not abstain from this

vote.

[¶6] On March 4, 2021, Fournier amended his complaint with the court’s

permission, see M.R. Civ. P. 15(a), and without objection by the Fourniers. The

2 Fournier’s initial and amended complaints assert that the Fourniers have breached their fiduciary duty to Fournier by

• causing Flats “to refuse [or] fail to perform necessary repairs, maintenance[,] and improvements to Flats’[s] assets . . . despite receiving directive from federal regulatory authorities” to do so;

• “improperly attempt[ing] to pressure a customer to pay for [] repairs, maintenance[,] and improvements, resulting in the loss of one of Flats’[s] three customers”;

• managing and operating Flats in a manner that has devalued the company and wasted its assets;

• failing to hold director or shareholder meetings and lawful votes;

• failing to retain existing customers or identify new customers; and

• “caus[ing] Flats to hire Riverside Management Group” to operate and manage Flats— Riverside does not understand railroads and does not know how to retain existing customers or attract new customers, and Riverside has not responded to or followed up on offers from third parties to purchase Flats and has prevented Fournier from dealing with those parties. 4

first amended complaint repeated the two counts in the original complaint and

added a third count asserting a derivative claim on behalf of the corporation

against the Fourniers. On April 22, 2021, Fournier filed a second motion to

amend his complaint. See M.R. Civ. P. 15(a). Although the Fourniers opposed

the motion, the court again granted leave to amend on May 25, 2021. Fournier’s

second amended complaint—the operative complaint on appeal—contained

the same three counts from the first amended complaint, with additional factual

allegations to support the derivative claim in the third count. On June 4, 2021,

Flats and the Fourniers filed a motion to dismiss Counts 2 and 3 of Fournier’s

second amended complaint, and Fournier opposed the motion. While the

motion was pending, Fournier filed a third motion to amend his complaint to

add a fourth count seeking appointment of a receiver pursuant to Del. Code Ann.

tit. 8, § 291 (2023). Flats and the Fourniers opposed the motion. On

August 12, 2021, the court denied Fournier’s third motion to amend.

[¶7] On September 20, 2021, the court granted Flats and the Fourniers’

motion to dismiss and the order was entered on the docket dismissing Counts

2 and 3 of Fournier’s second amended complaint. The court’s dismissal order,

which is the subject of Fournier’s appeal,3 left Count 1 of Fournier’s second

3 Fournier’s notice of appeal designates the September 20, 2021, dismissal order as the judgment

appealed from. 5

amended complaint—the claim against Flats based on alleged nondisclosure of

records—as the only remaining claim for relief in the action.

[¶8] About a year later, on September 2, 2022, the parties filed and the

court docketed a stipulation of dismissal of Count 1 of Fournier’s second

amended complaint, along with an agreed-upon motion for a protective order.

The stipulation stated that Fournier and Flats, “pursuant to Maine Rule of Civil

Procedure 41(a)(1)(ii), hereby stipulate to the dismissal of Count I of the

operative Complaint in this matter—which is the sole remaining pending Count

in this matter—with prejudice, without costs, expenses, fees, attorney’s fees,

and/or interest, and waiving all rights of appeal.”4 The proposed order filed

with the motion indicated that the purpose of the requested protective order

was to preserve the confidentiality of “documents and/or information

produced pursuant to Paragraph 4 of the Parties’ Release and Settlement

Agreement . . . .” Four days after the stipulation of dismissal was docketed, the

court granted the motion for protective order by signing the proposed

protective order on September 6, 2022. On September 7, 2022, the protective

order was entered on the docket. On September 26, 2022, twenty-four days

after the stipulation of dismissal of Count 1 was filed and docketed and nineteen

4 The parties agree that the waiver of appeal applied only to the stipulated dismissal of Count 1. 6

days after the court’s protective order was docketed, Fournier filed a notice of

appeal from the court’s order dismissing Counts 2 and 3 of his second amended

complaint. See 14 M.R.S. § 1851 (2023); M.R. App. P. 2B(c)(1).

[¶9] On October 24, 2022, Flats and the Fourniers moved to dismiss the

appeal on the ground that Fournier’s notice of appeal was not filed within the

twenty-one-day limit prescribed by the Maine Rules of Appellate Procedure.

M.R. App. P. 2B(c)(1) (“The time within which an appeal may be taken in a civil

case shall be 21 days after entry into the docket of the judgment or order

appealed from, unless a shorter time is provided by law.”). The motion to

dismiss asserted that the appeal deadline began to run on September 2, 2022,

when the stipulation of dismissal was filed and docketed. Fournier’s opposition

to the motion asserted that the appeal period began to run on

September 7, 2022, when the court docketed the protective order. We ordered

that the motion to dismiss the appeal be considered with the merits of the

appeal.

II. DISCUSSION

[¶10] A notice of appeal must be filed within twenty-one days from the

entry in the docket of a final judgment. See M.R. App. P. 2B(c)(1); Bourke v. City

of S. Portland, 2002 ME 155, ¶ 3, 806 A.2d 1255. We require strict compliance 7

with the time limits of M.R. App. P. 2B because it is a prerequisite to our

jurisdiction to entertain an appeal.5 Bourke, 2002 ME 155, ¶ 4, 806 A.2d 1255.

[¶11] An appealable final judgment is a trial court decision that resolves

all claims against all parties. See Kittery Point Partners, LLC v. Bayview Loan

Servicing, LLC, 2018 ME 35, ¶ 6, 180 A.3d 1091 (“Absent an exception to the

final judgment rule, a trial court’s decision is not appealable unless it resolves

all claims against all parties.”); Murphy v. Maddaus, 2002 ME 24, ¶¶ 12-13, 789

A.2d 1281. “It is the consummating effect that identifies an appealable final

judgment.” Estate of Kerwin, 2020 ME 116, ¶ 8, 239 A.3d 623 (quotation marks

omitted).

[¶12] Flats and the Fourniers contend that Fournier’s notice of appeal

was untimely filed because the parties’ stipulation dismissing Fournier’s sole

remaining claim created an appealable final judgment—effective when the

stipulation was docketed because the court did not need to approve the

dismissal or enter a final judgment separately.

[¶13] We have noted that the filing and docketing of a stipulated

dismissal of all remaining pending claims in a civil case pursuant to

5 We have emphasized that failure to learn of the entry of judgment does not insulate a party from

the strict requirements of M.R. App. P. 2B. Bourke v. City of S. Portland, 2002 ME 155, ¶ 4, 806 A.2d 1255; see M.R. App. P. 2B(a)(2). 8

M.R. Civ. P. 41(a)(1)(ii) can create an appealable final judgment without any

action by the court. See, e.g., Larrabee v. Penobscot Frozen Foods, Inc., 486 A.2d

97, 98-99 (Me. 1984); Camplin v. Town of York, 471 A.2d 1035, 1037 n.5

(Me. 1984); Fortney & Weygandt, Inc. v. Lewiston DMEP IX, LLC, 2019 ME 175,

¶ 11 n.7, 222 A.3d 613.6

[¶14] Fournier argues that his appeal is timely because the stipulation of

dismissal and the motion for a protective order “were inextricably intertwined

and, in fact, interdependent,” meaning that the appeal period did not begin to

run until the court had signed and docketed the proposed protective order. For

four reasons, we do not agree.

[¶15] The first reason is that the continued pendency of a motion at or

after the entry of judgment does not necessarily prevent the judgment from

being final. See True v. Harmon, 2015 ME 14, ¶ 4 n.1, 110 A.3d 650 (“Although

the court never explicitly ruled on Harmon’s cross-motion to modify, the court’s

6 Federal courts observe the same principle under the counterpart federal rule, Fed. R. Civ. P. 41(a)(1)(A)(ii), although some have held that a voluntary dismissal of remaining claims generally must be with prejudice in order to result in an appealable final judgment. See United States v. Gila Valley Irrigation Dist., 859 F.3d 789, 797 (9th Cir. 2017) (“[T]he general rule in this circuit is that voluntary dismissals without prejudice do not create appealable, final judgments.” (quotation marks omitted)); see also Bechuck v. Home Depot U.S.A., Inc., 814 F.3d 287, 295 (5th Cir. 2016); Chappelle v. Beacon Commc’ns Corp., 84 F.3d 652, 653-54 (2d Cir. 1996). The court in Chappelle noted that other circuit courts of appeals have not required that a voluntary dismissal be with prejudice in order to create an appealable final judgment. Chappelle, 84 F.3d at 654. We have not been called on to consider the question, nor need we here, because Fournier stipulated to the dismissal of his sole remaining pending claim with prejudice. 9

conclusion that it lacked subject matter jurisdiction functioned as a final

judgment on all pending motions.”). The second reason is that neither the

stipulation nor the motion mentions the other. In other words, there is nothing

in either indicating that the effect of the stipulation was intended to be

conditioned on the granting of the motion, or that the docketing of the

stipulation should be deferred until after the motion was granted. The third

reason is that motions for protective orders are not among the motions that, if

timely filed, toll the running of the appeal deadline until they have been acted

upon.7 See M.R. App. P. 2B(c)(2). The qualifying motions in civil actions are

those made pursuant to M.R. Civ. P. 50(b), M.R. Civ. P. 52(a)-(b), and M.R. Civ. P.

59. M.R. App. P. 2B(c)(2). Motions for protective orders do not qualify.8

See M.R. App. P. 2B(c)(2).

[¶16] The fourth reason is that a pending motion that is collateral to the

judgment—in other words, one that would not affect the judgment regardless

of how the motion is decided—does not prevent a judgment that resolves all

7 Parties may also file a motion with the court to enlarge the time for appeal if good cause is shown.

M.R. App. P. 2B(d). Additionally, “if an appeal is timely filed after entry of judgment, but prior to filing a post-judgment motion or during consideration of the post-judgment motion, the appeal is valid to preserve (1) any issues arising prior to judgment . . . and (2) any issues arising in the course of consideration of the post-judgment motions.” Alexander, Maine Appellate Practice § 2B.4 at 57 (6th ed. 2022).

8 Whether the court had jurisdiction to enter the protective order is not before us. 10

claims as to all parties from being final. See Hutchinson v. Pfeil, 105 F.3d 562,

565-66 (10th Cir. 1997); see, e.g., Cooper v. Salomon Brothers Inc., 1 F.3d 82,

84-86 (2d Cir. 1993) (concluding that a motion for Rule 11 sanctions on an

attorney was collateral to the final judgment in the case and that the court could

exercise jurisdiction over the final decisions in the case); Battryn v. Indian Oil

Co., 472 A.2d 937, 938 n.1 (Me. 1984) (holding that finality was achieved when

all other claims, except an outstanding unqualified order against attorney to

pay a sum of money to defendant’s counsel, were disposed of by the court). Our

civil rules reflect that principle in providing that a pending request for attorney

fees does not affect the finality of a judgment unless the request is “integral” to

the relief sought in the case. See M.R. Civ. P. 54(b)(1)-(2). Because the parties’

motion for a protective order did not affect the judgment on any claim in the

case, it was collateral to the judgment.

[¶17] Accordingly, we are required to conclude that the continued

pendency of the motion did not prevent the docketing of the stipulation of

dismissal from creating an appealable final judgment. Because Fournier’s

appeal was filed after the deadline for appeal had expired, we do not have

jurisdiction to entertain his appeal. 11

The entry is:

Appeal dismissed for lack of jurisdiction.

Brendan P. Rielly, Esq. (orally), Jensen Baird, Portland, for appellant Brian J. Fournier

Brett R. Leland, Esq. (orally), Verrill Dana LLP, Portland, for appellees Flats Industrial, Inc., Beth Fournier, Douglas Fournier, and Patrick Fournier

Business and Consumer Docket docket number CV-2020-32 FOR CLERK REFERENCE ONLY