Sequatchie Mountain Creditors et al v. Detweiler et al

OCR transcription for search; preserved printed pages are authoritative

The court incorporates by reference in this paragraph and adopts as the findings and orders
of this court the document set forth below.

/S/ RUSS KENDIG

Russ Kendig
United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO

EASTERN DIVISION
IN RE: CHAPTER 11
JOSEPH J. DETWEILER, CASE NO. 09-63377
Debtor . ) ADV.NO. 09-6118
)
SEQUATCHIE MOUNTAIN ) JUDGE RUSS KENDIG
CREDITORS,
Plaintiffs, )
)
Vv. ) MEMORANDUM OF OPINION
) (NOT INTENDED FOR
JOSEPH J. DETWEILER, ) PUBLICATION)
Defendant.

Now before the court is Plaintiffs’ Motion to Reissue Order Granting Motion to
Dismiss in Part and Denying Motion to Dismiss in Part and Denying Motion to Join and
Memorandum Opinion with Additional Language.

The court has jurisdiction of this proceeding pursuant to 28 U.S.C. § 1334 and the
general order of reference entered in this district on July 16, 1984. Venue in this district and
division is proper pursuant to 28 U.S.C. § 1409. This is a core proceeding under 28 U.S.C.

§ 157(b)(2)0).

This opinion is not intended for publication or citation. The availability of this
opinion, in electronic or printed form, is not the result of a direct submission by the court.

FACTS

This court previously considered Defendant’s Motion to Dismiss, docket no. 25, and
Plaintiffs’ First Motion to Join Parties to Adversary Proceeding Pursuant to Rule 7020 of the

Boorec Doc 68 FILED 11/10/11 ENTERED 11/10/11 16:15:45 Page1of5

Federal Rules of Bankruptcy Procedure, docket no. 33. On August 8, 2011, the court entered
a Memorandum of Opinion and accompanying Order Granting Motion to Dismiss in Part and
Denying Motion to Dismiss in Part and Denying Motion to Join. Following entry of the
court’s Memorandum of Opinion and Order, the plaintiffs filed a Motion to Reissue Order
Granting Motion to Dismiss in Part and Denying Motion to Dismiss in Part and Denying
Motion to Join and Memorandum Opinion with Additional Language on August 22, 2011.

The plaintiffs are specifically seeking the addition of language to the Memorandum
of Opinion and Order that there is no just reason for delay such that the plaintiffs can
immediately appeal the Order. Alternatively, the plaintiffs are seeking the addition of
language to the Memorandum of Opinion and Order that the decision involves a controlling
question of law, that there is substantial ground for difference of opinion, and that an
immediate appeal would materially advance the ultimate termination of the litigation.

The defendant filed a Brief in Opposition to Plaintiffs’ Motion on September 16,
2011, arguing that modification of the Memorandum of Opinion and Order is not appropriate
under both Federal Rule of Civil Procedure 54(b) and 28 U.S.C. § 1292(b).

LAW AND ANALYSIS

Federal Rule of Civil Procedure 54(b) provides that

When an action presents more than one claim for relief—whether as a claim,
counterclaim, crossclaim, or third-party claim—or when multiple parties are
involved, the court may direct entry ofa final judgment as to one or more, but
fewer than all, claims or parties only if the court expressly determines that
there is no just reason for delay. Otherwise, any order or other decision,
however designated, that adjudicates fewer than all the claims or the rights
and liabilities of fewer than all the parties does not end the action as to any
of the claims or parties and may be revised at any time before the entry of a
judgment adjudicating all the claims and all the parties rights and liabilities.

The rule “is designed to facilitate the entry of judgment on one or more claims, or
as to one or more parties, in a multi-claim/multi-party action.” Solomon v. Aetna Life
Ins. Co., 782 F.2d 58, 60 (6th Cir. 1986). It “attempts to strike a balance between the
undesirability of piecemeal appeals and the need for making review available at a time
that best serves the needs of the parties. Id. The court should only use the rule following
due deliberation including giving weight and examination to the competing factors. Id. at
60-61. The court must do more than simply recite “no just reason for delay” into the

order. Id.

The Sixth Circuit has adopted a nonexhaustive list of factors that a court must
consider when making a Rule 54(b) determination, which includes:

(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 set-offagainst the
judgment sought to be made final; (5) miscellaneous factors such as delay,
economic and solvency consideration, shortening the time of trial, frivolity
of competing claims, expense, and the like. Depending upon the facts of the

2

09-06118-rk Doc68 FILED 11/10/11 ENTERED 11/10/11 16:15:45 Page 2of5

particular case, all or some of the above factors may bear upon the propriety
of the trial court’s discretion is certifying a judgment as final under Rule

54(b).

Corrosioneering, Inc. v. Thyssen Envtl. Sys., Inc., 807 F.2d 1279, 1283 (6th Cir. 1986)
(quoting Allis-Chalmers Corp. v. Philadelphia Elec. Co., 521 F.2d 360, 364 (3d Cir.

1975).

The plaintiffs set forth just one argument to support a Rule 54(b) determination.
The motion states that this court “may determine that it is more efficient for judicial
economy to resolve this collateral issue relating to the Motion to Join at this point, rather
than at the conclusion of the litigation.” The plaintiffs failed to cite or apply the factors
adopted by the Sixth Circuit to the matter at hand. As a result, the plaintiffs seemingly
ask the court to modify in contravention of the applicable case law.

The Defendant, in his brief, argues that the plaintiffs do not attempt to present an
argument as to why the court should utilize Rule 54(b), what the “no just cause for delay”
is, and why an appeal cannot resolve the issue following the final determination of the

case.

Notwithstanding the plaintiffs’ lack of argument in support of the motion, this
court agrees with the plaintiffs that a Rule 54(b) determination is appropriate. In reaching
this conclusion, the court applies the factors set forth by the Sixth Circuit.

First, the court examines the relationship between the adjudicated and
unadjudicated claims. The court denied the plaintiffs’ motion to join additional plaintiffs.
The plaintiffs allege that the claims asserted against the defendant arise from the same
transaction or series of transactions and contain questions of law or fact common to the
plaintiffs and those seeking to be plaintiffs. Additionally, the plaintiffs’ motion to join
parties argues that this common question of law and fact is the reason that the state court
claim is a class action suit. For these reasons, the court’s denial of the motion to join and

the remaining claims are closely related.

Second, the court reviews whether the possibility that the need for review might
or might not be mooted by future development in the trial court. The court finds that the
need for review is not likely to be rendered moot. The additional plaintiffs that the court
declined to join in the proceeding believe that they hold a claim against the defendant.
Due to the nature of the claim and the similarity of that claim to the one asserted by the
plaintiffs in this proceeding, any future developments in this court are not likely to moot
the need for review. In fact, future developments in this court are more likely to increase
the need for review until the issue regarding the joinder of additional plaintiffs is finally
resolved. The only variable is the effect of a judgment for the existing plaintiffs or the
defendant, which could cause different complications.

Third, because the issue on appeal deals with the denial of a motion to join parties
to this proceeding, it is unlikely that the reviewing court would have to consider this issue
twice. The only way that this issue may arise again is if the plaintiffs again want to join
additional parties to the action. The plaintiffs, however, have made no indication that this

may be the case.

With respect to the fourth factor, the court finds that it is not applicable to this
proceeding.

09-06118-rk Doc68 FILED 11/10/11 ENTERED 11/10/11 16:15:45 Page 3of5

Finally, the court finds that an immediate appeal is appropriate to avoid a waste of
judicial time and resources. It is clear that if this motion is not granted, the possibility
arises that the plaintiffs continue the litigation and then the same litigation would have to
be repeated again should the additional plaintiffs be joined on appeal. To move forward
without the additional plaintiffs and before a determination by a reviewing court of the
appropriateness of the denial of the motion to join risks a waste of judicial time and

assets.

Further, other courts deciding Rule 54(b) determinations guide the court in its
decision. See, e.g, Mott v. Lucas, No. 1:10CV0164, 2011 U.S. Dist. LEXIS 94072 (N.D.
Ohio Aug. 23, 2011) (making Rule 54(b) determination for order granting qualified
immunity to defendants as to plaintiffs claim for malicious prosecution); U.S. Citizens
Ass’n v. Sebelius, No. 5:10CV1065, 2011 U.S. Dist. LEXIS 30071 (N.D. Ohio Feb. 28,
2011) (certifying under Rule 54(b) immediate appeal of order of dismissal of some, but
not all, counts of plaintiff's complaint); Woods v. Willis, No. 3:09CV2412, 2011 US.
Dist. LEXIS 13662 (N.D. Ohio Feb. 13, 2011) (granting motion for certification of final
judgment under Rule 54(b) for dismissal based on plaintiff's lack of standing); Wrinn v.
Johnson, No. 3:06CV2188, 2007 U.S. Dist. LEXIS 69633 (N.D. Ohio Sept. 20, 2007)
(certifying under Rule 54(b) immediate appeal of order dismissing some, but not all,

defendants).

After weighing the competing factors and reviewing Rule 54(b) determinations of
other courts, the court finds that no just reason exists to delay entry of final judgment
against the plaintiffs as to their motion to join.

There is no reason for the court to address the plaintiffs’ alternative request for
relief under 28 U.S.C. § 1292(b)! since the court finds that Rule 54(b) certification is

appropriate.

Further, the court sua sponte finds that it is in the interest of justice to stay all
further proceedings in this adversary case pending a decision on plaintiffs’ appeal.

CONCLUSION

Based on the foregoing, the court will enter an order concurrently with this
opinion certifying that its Order, docket no. 50, is a final and appealable order disposing
of the plaintiffs’ motion to join. The order will grant the plaintiffs leave to appeal the
court’s denial of the motion to join and will stay all further proceedings in this adversary

case pending a decision on plaintiffs’ appeal.

# # #

'Plaintiffs’ Motion to Reissue seeks alternative relief under 28 U.S.C. § 158(a).
However, the court believes that plaintiffs intended to cite 28 U.S.C. § 1292(b) instead.
In either case, the court need not address relief under either section because the court

grants the Rule 54(b) certification.

09-06118-rk Doc68 FILED 11/10/11 ENTERED 11/10/11 16:15:45 Page4of5

Service List:

Peter G. Tsarnas
Goldman & Rosen, Ltd.
11 South Forge Street
Akron, OH 44304

Scott M Zurakowski

PO Box 36963

4775 Munson St NW
Canton, OH 44735-6963

Anthony J DeGirolamo
116 Cleveland Ave., N.W.
Suite 307

Canton, OH 44702

09-06118-rk Doc68 FILED 11/10/11 ENTERED 11/10/11 16:15:45 Page5of5