ORDER ON MOTION OF CITY NATIONAL BANK FOR RULE 54(b) CERTIFICATION OF ORDER ON MOTION FOR PARTIAL SUMMARY JUDGMENT AND DISMISSAL WITH PREJUDICE OF REMAINING CLAIMS
MIKE K. NAKAGAWA, Bankruptcy Judge.
On September 5, 2018, the court heard the Motion of City National Bank for Rule 54(b) Certification of Order on Motion for Partial Summary Judgment and Dismissal with Prejudice of Remaining Claims ("54(b) Motion"). The appearances of counsel were noted on the record. After arguments were presented, the matter was taken under submission.
BACKGROUND
On June 17, 2010, a voluntary Chapter 11 petition was filed by Charleston Associates, LLC ("Debtor"), in the United States Bankruptcy Court for the District of Delaware ("Delaware Bankruptcy Court"). (ECF No. 1).1
On November 24, 2010, Debtor commenced an adversary proceeding against RA Southeast Land Company, LLC ("RAS") and City National Bank ("CNB"), by filing a "Complaint for Declaratory Judgment" in the Delaware Bankruptcy Court. (AECF No. 1). The focal point of this dispute ("RAS Adversary Proceeding") between the Debtor, its previous lender (CNB), and the purchaser from the lender (RAS), is on the rights with respect to certain undeveloped land located in Las Vegas, Nevada ("Undeveloped Land").
On December 29, 2010, the Delaware Bankruptcy Court entered an order transferring venue of the RAS Adversary Proceeding to Nevada, where it was assigned Adversary No. 10-01452-LBR. On February 25, 2011, Debtor filed an amended complaint ("Complaint") framed as six "counts," i.e., causes of action or claims for relief. (AECF No. 37). Count I, apparently against both RAS and CNB, seeks a declaration that the Debtor, not RAS, is the Declarant under the REA.2 Count II against both RAS and CNB seeks a declaration that both defendants violated the automatic stay and that sanctions for the violation are appropriate.
Additionally, Count III of the Complaint, against only RAS, seeks a declaration that RAS separately violated the automatic stay by removing various signs from the Undeveloped Land.3 Count IV against only RAS alleges that RAS intentionally interfered with the Debtor's Contractual relationships with its tenants. An additional Count IV against only RAS alleges that RAS tortiously interfered with prospective economic advantage. Mis-numbered Count V against both RAS and CNB alleges slander of title with respect to the Undeveloped Land.
On March 28, 2011, CNB answered the Complaint, and also asserted a counterclaim ("CNB Counterclaim"). (AECF No. 54). The counterclaim is framed as six separate claims for relief against the Debtor: First — Breach of Contract, Second — Breach of Implied Covenant of Good Faith and Fair Dealing, Third —Declaratory Relief, Fourth — Fraudulent Inducement, Fifth — Negligent Misrepresentation, and Sixth — Slander of Title.4
On March 29, 2011, RAS also answered the Complaint, and also asserted a single counterclaim seeking declaratory relief and damages ("RAS Counterclaim"). (AECF No. 56). In its counterclaim, RAS alleges, inter alia, that "Charleston and CNB entered into an agreement ("Settlement Agreement") under which, among other things, Charleston agreed to a "friendly foreclosure" under which it would not contest CNB's efforts to cause there to be a Trustee's sale of the Undeveloped Property under the Deed of Trust." RAS Counterclaim at ¶ 15. It further alleges that "On August 11, 2009, pursuant to the Settlement Agreement, the Trustee's sale of the Undeveloped Land took place. Through a credit bid CNB acquired the Undeveloped Land and the inseparable right to become the successor Declarant pursuant to Section 1.5 of the REA." Id. at ¶ 16. Moreover, RAS alleges that "By deed recorded on October 4, 2010, RAS acquired the Undeveloped Land from CNB." Id. at ¶ 24. As of the result of the Debtor's conduct interfering with RAS's receipt and enjoyment of the Declarant Rights, see id. at ¶ 18, the prayer of RAS's counterclaim seeks entry of "an order (1) declaring that RAS Southeast Land Company, LLC is the Declarant under the REA, (2) declaring the Post-Foreclosure Amendment of the REA null and void, (3) declaring that the filing of the Post-Foreclosure Amendment constitutes slander of title, and (4) awarding RA Southeast Land Company, LLC damages, costs of suit, and reasonable attorneys fees." Id. at 7:14-18.
On April 21, 2011, Debtor filed answers to the RAS Counterclaim and the CNB Counterclaim. (AECF Nos. 63 and 65).
On May 10, 2011, CNB filed a motion for summary judgment on all claims against it in the Debtor's Complaint, i.e., Count I, Count II, and Count V, as well as on CNB's Third Counterclaim for declaratory relief. (AECF No. 68).
On May 11, 2011, RAS filed a motion for summary judgment on all claims against it in the Debtor's Complaint, i.e., Count I, Count II, Count III, both Counts IV, and Count V, as well as on RAS's counterclaim. That summary judgment motion by RAS did not request that the damages, costs of suit, and reasonable attorney's fees sought in the prayer of the RAS Counterclaim be awarded by summary judgment. (AECF No. 75).
On June 20, 2011, Debtor filed a combined opposition to both summary judgment motions along with a countermotion for partial summary judgment on Counts I and II of its Complaint. As previously mentioned at 3, supra, those two Counts seek a declaration that the Debtor possessed the Declarant Rights under the REA, and that both CNB and RAS violated the automatic stay by foreclosing on the Undeveloped Land and taking other actions thereafter. (AECF No. 92).
On July 11, 2011, RAS filed a reply in support of its summary judgment motion combined with an opposition to the Debtor's countermotion. (AECF No. 110). On the same date, CNB also filed its reply and opposition. (AECF No. 112).
On July 25, 2011, a hearing was conducted on the summary judgment motions as well as the countermotion. The motions by CNB and RAS were denied. The countermotion by the Debtor was granted.
On October 5, 2011, an Order on Motions for Summary Judgment was entered, denying the summary judgment motions of CNB and RAS, and granting the countermotion for summary judgment brought by the Debtor. (AECF No. 120).
On December 1, 2011, an order was entered certifying the Order on Motion for Summary Judgment under FRCP 54(b). (AECF No. 145). On the same date, a Partial Summary Judgment was entered. (AECF No. 146). Additionally, a Supplemental Order on Summary Judgment Motions was entered.5 (AECF No. 147).6
On December 14, 2011, RAS filed a notice of appeal. (AECF No. 151).7 On the same date, CNB also filed a notice of appeal. (AECF No. 153).8
On December 15, 2011, CNB filed an election for its appeal to be heard by the United States District Court for the District of Nevada ("USDC"). (AECF No. 156).9
On September 28, 2012, an order was entered by the Delaware Bankruptcy Court confirming the Debtor's Chapter 11 plan of reorganization ("Plan"). (ECF Nos. 725 and 809). Pursuant to the confirmed plan, New Boca Syndications Group, LLC ("New Boca") acquired the shopping center, see Plan, Art. II., A., 8, which generates rental proceeds from its various tenants. In addition to acquiring the shopping center, New Boca assumed the Debtor's liability for the claims asserted by CNB and RAS in the RAS Adversary Proceeding. See Plan, Art. VII., C.
On January 15, 2013, the Delaware Bankruptcy Court entered an order transferring venue of the Chapter 11 proceeding to Nevada, where it was assigned Case No. 13-10499-LBR.10
On July 25, 2013, the USDC entered an order reversing the Nevada bankruptcy court's Prior PSJ Order ("Reversal Order"). (USECF No. 70;11 AECF No. 207).
On August 23, 2013, Debtor filed a notice appealing the Reversal Order to the United States Court of Appeals for the Ninth Circuit ("Ninth Circuit").12 (USECF No. 78).
On January 25, 2016, the Ninth Circuit affirmed the USDC's Reversal Order ("Circuit Order"). 632 Fed. Appx. 362 (9th Cir. 2016).13
On February 17, 2016, after expiration of the period for filing a petition for rehearing under FRAP 41(b), the Ninth Circuit mandate to the USDC was entered. (USECF No. 108).
On March 3, 2016, the USDC entered an order spreading the Ninth Circuit mandate on the record in the case. (USECF No. 111).
On October 5, 2017, an order was entered scheduling ten non-consecutive trial days for the instant adversary proceeding, between September 4, 2018 and October 4, 2018. (AECF No. 513). The order also scheduled a pretrial conference to be conducted on August 15, 2018, and also set forth various discovery deadlines.
On March 26, 2018, CNB filed a Motion for Partial Summary Judgment ("Partial MSJ"). (AECF No. 580). CNB sought summary judgment on its First Counterclaim and Second Counterclaim, i.e., for breach of contract and breach of the implied covenant of good faith and fair dealing, against both the Debtor and New Boca.
On May 14, 2018, Debtor filed an opposition to the Partial MSJ. (AECF No. 593).
On May 24, 2018, CNB filed a reply in support of the Partial MSJ. (AECF No. 599).
On June 5, 2018, a hearing was conducted on the Partial MSJ and the matter was taken under submission.
On July 24, 2018, a Memorandum Decision on Motion for Partial Summary Judgment ("Memorandum Decision") was entered along with an order granting partial summary judgment in favor of CNB on Counts I, II, and V of the Amended Complaint, as well as the First Claim for Relief and the Third Claim for Relief in the CNB Counterclaim ("CNB PSJ Order"). (ECF Nos. 617 and 618). The order denied without prejudice the Second Claim for Relief in the CNB Counterclaim. The order further awarded the amount of $6,851,030.98 in favor of CNB and against the Debtor as damages under the First Claim of Relief in the CNB Counterclaim.
On July 30, 2018, CNB filed the instant 54(b) Motion that was noticed to be heard on September 5, 2018. (ECF Nos. 629 and 630).
On August 23, 2018, Debtor filed an opposition to the 54(b) Motion ("Opposition"). (ECF No. 635).
On August 29, 2018, CNB filed a reply to the Debtor's Opposition ("Reply"). (ECF No. 636).
DISCUSSION
By the instant motion, CNB seeks to dismiss with prejudice its Second Claim for Relief, Fourth Claim for Relief, Fifth Claim for Relief, and Sixth Claim for Relief in its Counterclaim. See 54(b) Motion at 11:2-5. More important, CNB seeks to certify the CNB PSJ Order pursuant to FRCP 54(b), so that a final judgment can be entered as to all claims between the Debtor and CNB. Id. at 11:5-7. Regardless of whether the court certifies the CNB PSJ Order under FRCP 54(b), CNB requests dismissal of the aforementioned portions of its Counterclaim. Debtor does not oppose the requested dismissal but does oppose the certification request. RAS does not oppose either aspect of the relief requested by CNB.
FRCP 54(b) is entitled "Judgment on Multiple Claims or Involving Multiple Parties" and clearly applies to the RAS Adversary Proceeding that involves both multiple claims and multiple parties. It also is clear that the CNB PSJ Order did not resolve the claims between the Debtor and RAS that are alleged in the Complaint as well as the RAS Counterclaim. The specific language of the rule is as follows:
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 of a 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.
FED.R.CIV.P. 54(b) (emphasis added).
The determination of whether there exists "no just reason for delay" in the entry of a judgment lies in the discretion of the trial court. See Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 8 (1980). The trial court "must take into account judicial administrative interests as well as the equities involved." Id. This may include such factors as "whether the claims under review are separable from others remaining to be adjudicated and whether the nature of the claims already determined was such that no appellate court would have to decide the same issues more than once even if there were subsequent appeals." Id.
In this instance, all claims between the Debtor and CNB have been resolved as a result of the CNB PSJ Order and the dismissal with prejudice of the remaining claims for relief in the CNB Counterclaim. As there are no claims between CNB and RAS, the inquiry under FRCP 54(b) is whether there is a just reason to delay entry of a judgment in favor of CNB while the RAS Adversary Proceeding is completed between the Debtor and RAS.
Because the Reversal Order and the Circuit Order directed that summary judgment be awarded in favor of RAS on the allegations of the Complaint as well as the RAS Counterclaim, see Memorandum Decision at 14:2 to 15:23, the rule of mandate will require that judgment be entered in favor of RAS. Id. at 17:19-22.14 With respect to RAS, the only remaining issues are the amount of damages, costs of suit, and attorney's fees to be awarded on its Counterclaim. Id. at 17:22-23. At the hearing on the instant 54(b) Motion, counsel for RAS represented that an appropriate motion would be filed by RAS in the near future seeking entry of judgment in favor of RAS pursuant to the Reversal Order and Circuit Order.
The damages, costs of suit and attorney's fees to be awarded to RAS are clearly separable from the amounts awarded to CNB by the CNB PSJ Order. Debtor's liability to both RAS and CNB already has been established under the law of the case doctrine. A later appeal of an award in favor of RAS will not require an appellate court to decide the same issue more than once. Entry of a final judgment in favor of CNB obviously will reduce the number of parties remaining in the RAS Adversary Proceeding.
Under these circumstances, the court concludes that there is no just reason to delay entry of a judgment in favor of CNB.15
IT IS THEREFORE ORDERED that the Motion of City National Bank for Rule 54(b) Certification of Order on Motion for Partial Summary Judgment and Dismissal with Prejudice of Remaining Claims Docket No. 629, be, and the same hereby is, GRANTED.
IT IS FURTHER ORDERED that counsel for City National Bank shall submit a form of judgment on the Complaint in this adversary proceeding, as well as its Counterclaim in this adversary proceeding, consistent with the determinations of this court.
