Phoenix Leasing v. Cable One CATV

Opinion

Phoenix Leasing v. Cable One CATV CV-91-164-B 01/13/93 P

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

Phoenix Leasing, Incorporated

v. Civil No. 91-164-B

Cable One CATV, Limited Partnership; Northern One CATV, Inc.

O R D E R

Plaintiff instituted this diversity action against

defendants on April 23, 1991, to enforce a loan agreement which

plaintiff claims is in default. Defendants responded by filing

nine-count counterclaim, essentially alleging plaintiff caused

the default, which the court dismissed on March 31, 1992, for

failure to state a claim upon which relief could be granted.

Presently before the court is defendants' motion under Federal

Rule of Civil Procedure 5 4 (b) for the entry of final judgment on

the matters decided adversely to them. For reasons stated below

the court denies defendants' motion. FACTS

A complete presentation of the events surrounding this suit

is provided in the court's March 31, 1992, Order. For purposes

of addressing defendants' present motion, the relevant facts are

as follows.

Plaintiff, a California corporation which specializes in

leasing high technology eguipment and in making secured loans to

commercial borrowers, entered into a loan agreement with

defendant Cable One CATV. Northern One CATV is a general partner

in Cable One CATV. Less than one year later, plaintiff filed

this action alleging defendants were in default under the

agreement. Defendants counterclaimed alleging, among other

things, that plaintiff caused the default at issue. Plaintiff

moved to dismiss the counterclaim pursuant to Federal Rule of

Civil Procedure 12(b)(6), and the court granted the motion on

March 31, 1992. Defendants subseguently moved for

reconsideration of the March Order and for leave to amend their

counterclaim, but the court denied their motion on August 20,

1992. Defendants now

move for entry of final judgment of the Order dismissing their

counterclaims and denying them leave to amend.

2 DISCUSSION

In certain instances. Federal Rule of Civil Procedure 5 4 (b)

permits the entry of final judgment, and thus early appeal, of a

particular claim or counterclaim in a multi-claim suit. See

Fed. R. Civ. P. 54(b); Geiselman v. United States, 961 F.2d 1, 4

(1st Cir), cert. denied, 113 S. C t . 261 (1992). Coexisting with

Rule 5 4 (b), however, is a long-settled prudential policy "against

allowing numerous interim dispositions throughout an action."

Consolidated Rail Corp. v. Fore River Ry., 861 F.2d 322, 325 (1st

Cir. 1988). Final judgments under the rule should therefore "not

be indulged as a matter of routine or as a magnanimous

accommodation to lawyers or litigants." Spiegel v. Trustees of

Tufts College, 843 F.2d 38, 42 (1st Cir. 1988) . Rather, they

should be reserved for the infreguent cases where "the need for

early and separate judgment as to a particular claim truly

outweighs the risk of flooding the appellate docket."

Consolidated Rail Corp., 861 F.2d at 325; see also Allis-Chalmers

Corp. v. Philadelphia Elec. Corp., 521 F.2d 360, 364 (3d Cir.

1975) .

In considering a Rule 54 (b) motion, the court must first

review the finality of the guestioned ruling. Consolidated Rail

Corp., 861 F.2d at 325; Spiegel, 843 F.2d at 42. If a ruling is

3 final, the court must then determine whether it is appropriate

for the decision to be appealed immediately. Consolidated Rail

Corp., 861 F.2d at 325. This is a case-specific inquiry which

requires "an assessment of the litiqation as a whole, and a

weiqhinq of all factors relevant to the desirability of relaxinq

the usual prohibition aqainst piecemeal appellate review . . . ."

Spiegel, 843 F.2d at 43; see also Consolidated Rail Corp., 861

F.2d at 325. Circumstances which stronqly counsel aqainst the

application of Rule 54(b) include situations where (1) the

parties on appeal remain, concurrently, parties below; (2) the

factual and legal issues raised in the adjudicated and

unadjudicated claims are inextricably linked; and (3) the need

for appellate review may be mooted by future developments. See

Spiegel, 843 F.2d at 44-46.

In the present case, the court's previous Order dismissing

the counterclaim and denying leave to amend fully disposed of

defendants' substantive claims and thus appears to satisfy the

finality prong of the inquiry. Nevertheless, the court finds

that the circumstances surrounding this case make the application

of Rule 54(b) improper.

First, even if the court were to grant defendants' motion

and an early appeal is taken, the action brought by plaintiff

4 would still remain pending for trial in this court with exactly

the same parties. In such a situation, where the parties on

appeal remain, concurrently, parties below, " [a]pplication of

Rule 5 4 (b) is particularly inappropriate . . . ." Consolidated

Rail Corp., 861 F.2d at 326.

Second, the factual and legal elements of the dismissed and

surviving claims are inextricably interwoven. The complaint and

counterclaim stem from the same series of events: plaintiff

commenced this action based on allegations that the loan was in

default, while defendants responded that, among other things, it

was plaintiff's acts or omissions which created the default at

issue in the complaint. Such a similarity in either legal or

factual issues "militates strongly against invocation of Rule

54(b)." See Spiegel, 843 F.2d at 45.

Finally, nothing submitted by defendants suggests this is

the unusual case in which there is a pressing, exceptional need

to relax the general prohibition against piecemeal appellate

review. In their motion for entry of final judgment under Rule

54(b), defendants' principal argument is that "if the order is

not certified, the factual issues litigated, and a subseguent

appeal remanded, collateral factual issues would have to be

relitigated in the context of defendant's counterclaims.

5 essentially trying twice what should have been tried once." The

First Circuit Court of Appeals, however, has rejected this

reasoning, stating that "[t]o entertain an early appeal just

because reversal of a ruling made by the district court might

transpire and might expedite a particular appellant's case would

defoliate Rule 54(b)'s protective corpse." Id. at 46.

Because defendants' motion should be denied for the reasons

stated above, the court need not address plaintiff's remaining

arguments.

CONCLUSION

Defendants' Motion for Entry of Final Judgment of Dismissal

of Counterclaim and Denial of Leave to Amend (document no. 52) is

denied.

SO ORDERED.

Paul Barbadoro United States District Judge

January 13, 1993

cc: Charles W. Grau, Esg. Jeffrey Karlin, Esg. Joseph Demko, Esg.