OPINION
Before BOOCHEVER, C. J., and RABIN-OWITZ, CONNOR, BURKE and MATTHEWS, JJ.
MATTHEWS, Justice.
Nu-State Paving, Inc. sued to foreclose a lien on property owned by the Johnsons, and others. Nu-State alleged that it had performed labor and supplied materials for the benefit of the property until October 9, 1974 and that the lien on which enforcement was sought was filed May 17, 1975. The lien was filed pursuant to AS 34.35.-070.
The lien was filed more than 90 days
after Nu-State ceased work on the property and was therefore untimely under part (b) of the statute. Nu-State contended, however, that it was timely under part (d) because no notice of completion had been filed and the lien was thus filed within 90 days after the filing of such notice.
The Johnsons denied any personal obligation to Nu-State and filed affirmative defenses attacking the constitutionality of AS 34.35.070(d) through (f). Those subsections were added to Alaska’s lien law by Chapter 89 of the 1974 Session Laws. The Johnsons claimed that Chapter 89 was void because there existed no record that it had received an affirmative vote of a majority of the membership of each house of the Alaska Legislature as required by Article II, Section 14 of the Alaska Constitution;
because the ayes and nays on final passage of the act were not entered in the journal of each house as required by Article II, Section 14; and because the act was so incomprehensible as to violate due process requirements, especially when construed with the existing subsections of AS 34.35.070.
The State of Alaska was allowed to intervene in order to defend the constitutionality of the act.
It moved for partial summary judgment, contending that the act was properly enacted and was sufficiently understandable, correctly interpreted, to escape constitutional infirmity.
The State’s motion was granted and the court entered an order dismissing the John-sons’ affirmative defenses concerning the constitutionality of subsections (d) through (f). The order prepared by the state and signed by the court contained a determination that there was no just reason for delay in entering final judgment concerning the
Johnsons’ constitutional defenses and expressly directed the entry of final judgment. The effect of the order was to dispose of all of the issues in which the state was interested and because of the finding that there was no just reason for delay and the express direction for entry of judgment, the order became a final judgment under Civil Rule 54(b). The Johnsons have appealed from the order. Nu-State’s claim for enforcement of its lien against the Johnsons remains to be tried in Superior Court.
We believe that the court abused its discretion in finding no just reason for delay and in directing the entry of final judgment. We therefore remand with directions to vacate that finding and direction.
The general rule governing appeals is that they may be taken only after the entire case is disposed of on all substantive issues.
This rule has at least two purposes. First, it is a rule of judicial economy. Issues which seem important at intermediate stages in litigation may become insignificant or moot when the final judgment is entered. Also, interlocutory review often causes delay and needless expense. Second, the rule is designed to insure that the questions presented on appeal have a full factual and legal setting in which the practical effect of the parties’ contentions may be weighed. Piecemeal adjudication of some, but not all points of law governing a ease carries the risk that important considerations may be overlooked which would have been perceived had the entire case been presented.
We stated in
City of Fairbanks v, Schaible,
352 P.2d 129, 130 (Alaska 1960):
[T]he policy of permitting appeals only from final decisions has been demonstrated to be sound. To allow interlocutory review without restriction would be unwise, because in many cases this would add to the delay of litigation and would result in decisions on points that might otherwise be disposed of during the course of the litigation without substantial prejudice to anyone. The interlocutory issue which seemed so crucial at the time may fade into insignificance as the case progresses.
We have several times reaffirmed this general policy against piecemeal appeals.
GAAB v. City of Anchorage,
504 P.2d 1027, 1030 (Alaska 1972);
Green v. State,
462 P.2d 994, 1002 (Alaska 1969);
Stokes v. Van Seventer,
355 P.2d 594, 595 (Alaska 1960). The final judgment requirement also prevails in the federal appellate system.
It is sometimes important that review not be delayed until all questions are decided by the trial court. Our Appellate Rules 23 and 24 provide for review of interlocutory orders in the discretion of this court where it appears that there are important and substantial reasons for deviating from the final judgment rule.
In cases involving multiple claims or multiple parties, Civil Rule 54(b) grants the power to the Superior Court in its discretion to make final an order determining at least one claim or the entire interest of at least one party.
Rule 54(b) represents a modification of an earlier finality rule. Before the adoption of Rule 54(b) of the Federal Rules, from which our Rule has been taken, each case was considered to be a single judicial unit. Where multiple claims were presented in the same case and some but not all claims were adjudicated, no appeal could be taken. It became apparent that under the Federal Rules, which encourage joinder of multiple claims and multiple parties in the same action, the losing party in some multiple claim or multiple party cases should be able to appeal without waiting for a determination of other claims. It was in response to this that Rule 54(b) was formulated.
Sears, Roebuck & Co. v. Mack-ey,
351 U.S. 427, 76 S.Ct. 895, 100 L.Ed. 1297 (1955).
There are two important limitations on the use of Rule 54(b). The first is that there must be a final decision on at least one claim or as to the entire interest of at least one party. The single judicial unit may be subdivided no further than that. Second, there must be a good reason for using Rule 54(b).
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OPINION
Before BOOCHEVER, C. J., and RABIN-OWITZ, CONNOR, BURKE and MATTHEWS, JJ.
MATTHEWS, Justice.
Nu-State Paving, Inc. sued to foreclose a lien on property owned by the Johnsons, and others. Nu-State alleged that it had performed labor and supplied materials for the benefit of the property until October 9, 1974 and that the lien on which enforcement was sought was filed May 17, 1975. The lien was filed pursuant to AS 34.35.-070.
The lien was filed more than 90 days
after Nu-State ceased work on the property and was therefore untimely under part (b) of the statute. Nu-State contended, however, that it was timely under part (d) because no notice of completion had been filed and the lien was thus filed within 90 days after the filing of such notice.
The Johnsons denied any personal obligation to Nu-State and filed affirmative defenses attacking the constitutionality of AS 34.35.070(d) through (f). Those subsections were added to Alaska’s lien law by Chapter 89 of the 1974 Session Laws. The Johnsons claimed that Chapter 89 was void because there existed no record that it had received an affirmative vote of a majority of the membership of each house of the Alaska Legislature as required by Article II, Section 14 of the Alaska Constitution;
because the ayes and nays on final passage of the act were not entered in the journal of each house as required by Article II, Section 14; and because the act was so incomprehensible as to violate due process requirements, especially when construed with the existing subsections of AS 34.35.070.
The State of Alaska was allowed to intervene in order to defend the constitutionality of the act.
It moved for partial summary judgment, contending that the act was properly enacted and was sufficiently understandable, correctly interpreted, to escape constitutional infirmity.
The State’s motion was granted and the court entered an order dismissing the John-sons’ affirmative defenses concerning the constitutionality of subsections (d) through (f). The order prepared by the state and signed by the court contained a determination that there was no just reason for delay in entering final judgment concerning the
Johnsons’ constitutional defenses and expressly directed the entry of final judgment. The effect of the order was to dispose of all of the issues in which the state was interested and because of the finding that there was no just reason for delay and the express direction for entry of judgment, the order became a final judgment under Civil Rule 54(b). The Johnsons have appealed from the order. Nu-State’s claim for enforcement of its lien against the Johnsons remains to be tried in Superior Court.
We believe that the court abused its discretion in finding no just reason for delay and in directing the entry of final judgment. We therefore remand with directions to vacate that finding and direction.
The general rule governing appeals is that they may be taken only after the entire case is disposed of on all substantive issues.
This rule has at least two purposes. First, it is a rule of judicial economy. Issues which seem important at intermediate stages in litigation may become insignificant or moot when the final judgment is entered. Also, interlocutory review often causes delay and needless expense. Second, the rule is designed to insure that the questions presented on appeal have a full factual and legal setting in which the practical effect of the parties’ contentions may be weighed. Piecemeal adjudication of some, but not all points of law governing a ease carries the risk that important considerations may be overlooked which would have been perceived had the entire case been presented.
We stated in
City of Fairbanks v, Schaible,
352 P.2d 129, 130 (Alaska 1960):
[T]he policy of permitting appeals only from final decisions has been demonstrated to be sound. To allow interlocutory review without restriction would be unwise, because in many cases this would add to the delay of litigation and would result in decisions on points that might otherwise be disposed of during the course of the litigation without substantial prejudice to anyone. The interlocutory issue which seemed so crucial at the time may fade into insignificance as the case progresses.
We have several times reaffirmed this general policy against piecemeal appeals.
GAAB v. City of Anchorage,
504 P.2d 1027, 1030 (Alaska 1972);
Green v. State,
462 P.2d 994, 1002 (Alaska 1969);
Stokes v. Van Seventer,
355 P.2d 594, 595 (Alaska 1960). The final judgment requirement also prevails in the federal appellate system.
It is sometimes important that review not be delayed until all questions are decided by the trial court. Our Appellate Rules 23 and 24 provide for review of interlocutory orders in the discretion of this court where it appears that there are important and substantial reasons for deviating from the final judgment rule.
In cases involving multiple claims or multiple parties, Civil Rule 54(b) grants the power to the Superior Court in its discretion to make final an order determining at least one claim or the entire interest of at least one party.
Rule 54(b) represents a modification of an earlier finality rule. Before the adoption of Rule 54(b) of the Federal Rules, from which our Rule has been taken, each case was considered to be a single judicial unit. Where multiple claims were presented in the same case and some but not all claims were adjudicated, no appeal could be taken. It became apparent that under the Federal Rules, which encourage joinder of multiple claims and multiple parties in the same action, the losing party in some multiple claim or multiple party cases should be able to appeal without waiting for a determination of other claims. It was in response to this that Rule 54(b) was formulated.
Sears, Roebuck & Co. v. Mack-ey,
351 U.S. 427, 76 S.Ct. 895, 100 L.Ed. 1297 (1955).
There are two important limitations on the use of Rule 54(b). The first is that there must be a final decision on at least one claim or as to the entire interest of at least one party. The single judicial unit may be subdivided no further than that. Second, there must be a good reason for using Rule 54(b).
In order to activate Rule 54(b), the trial court must find “no just reason for delay.” Such a finding should be premised on considerations similar to those governing this court’s exercise of discretion in considering petitions for review from interlocutory orders under Appellate Rules 23 and 24.
The finding should not be made simply because counsel request it. There should be some danger of actual hardship caused by delay in entry of final judgment. The court should weigh the general policy against piecemeal appeals against the reasons advanced in favor of the proposed finding. The committee which drafted Federal Rule 54(b) noted that the rule was not intended to be a wholesale substitute for the single judicial unit concept, but that it provided “a discretionary power to afford a remedy in the infrequent harsh case . .”
That the federal counterpart of our Rule 54(b) should be sparingly used
has been recognized by the federal courts.
E. g., Panichella v. Pennsylvania Railroad Co.,
252 F.2d 452, 455 (3rd Cir. 1958);
Campbell v. Westmoreland Farm, Inc.,
403 F.2d 939, 942 (2nd Cir. 1968).
The present occasion was clearly not one in which the special finding required by Civil Rule 54(b) was appropriately made. Neither the state nor the Johnsons will suffer any appreciable hardship if review awaits the final determination of this case. If we should hold that the 1974 amendments are unconstitutional, the Johnsons still would have to defend Nu-State’s contract claim against them.
We are advised that the state legislature has by rule changed its voting practices in a manner consistent with the practices which the Johnsons contend are required by Article II, Section 14 of the Alaska Constitution. Therefore, it is unlikely that the validity of future legislation will be affected if the Johnsons should prevail on their appeal after the entire case is decided by the Superi- or Court.
Moreover, there is a substantial relationship between the Johnsons’ claim that the statute is so incomprehensible as to be unconstitutional and the actual application of the statute to Nu-State’s claim. For example, the state contends that the apparently conflicting deadlines of subsections (b) and (d) can be reconciled if (d) is read to apply only where a notice of completion is in fact filed.. If that is the proper construction, then it would seem that Nu-State’s lien claim would fail entirely and the Johnsons would have no right or need to raise the constitutionality of the statute before this court. Thus, this situation is that if the Johnsons are right they will prevail on the lien claim and if the state is right, the Johnsons will also prevail. There will be no appeal, at least by the parties now before us, on the constitutional questions presented if the ordinary manner of proceeding is followed. This is a persuasive reason for deferring review until the entire case is decided.
Moreover, the case is here in an entirely abstract setting. We do not know how the statute will actually be applied. And the lienor, Nu-State, is not a party to this appeal. Our holding would not be res judicata as to Nu-State, and another appeal might well be necessary.
Furthermore, we see no benefits to be gained by deviating from the normal finality rule. As we have noted, if we should find the 1974 amendments unconstitutional, there still would be a trial in Superior Court on Nu-State’s contract claim against the Johnsons. Assuming our decision came before trial, it is difficult to see how it could significantly shorten the trial or make it less expensive.
The case is remanded to the Superior Court with directions to vacate that portion of its order finding no just reason for delay and directing entry of final judgment.