West Hills Farms, LLC v. ClassicStar, LLC et al

Filing 795

MEMORANDUM OPINION & ORDER, Defendants' (769 in 5:06-cv-00243-JMH-REW, 2353 in 5:07-cv-00353-JMH-REW) MOTION to Alter Judgment by John Parrot,(2352 in 5:07-cv-00353-JMH-REW, 768 in 5:06-cv-00243-JMH-REW) MOTION to Alter Judgment by Tony Ferguson, GeoStar Corporation, Thom Robinson, GRANTED IN PART AND DENIED IN PART; (2) Plaintiffs' (772 in 5:06-cv-00243-JMH-REW, 2357 in 5:07-cv-00353-JMH-REW) MOTION for Judgment by Arbor Farms, LLC, Jaswinder Grover, Monica Grover, MacDonal d Stables LLC, Nelson Breeders, LLC, West Hills Farms, LLC Entry of Rule 54(B) Certification GRANTED; (3) Court's earlier statement in Amended JGM of 11/8/2011 that jgm in favor of plts on claims was final and appealable is STRICKEN AND H ELD FOR NAUGHT; Order of JGM to be entered separately; (4) Clerk shall return to active docket w/ respect to cross claims of Dfts; (5) w/in 10 days, parties to cross claims shall file briefs re (a) intent to pursue cross claims; (b) if cross claims now moot; (c) whether cross claims ready for JURY TRIAL on 6/5/2012 and length of trial. Signed by Judge Joseph M. Hood on 3/30/2012.Associated Cases: 5:07-cv-00353-JMH-REW, 5:06-cv-00243-JMH-REW(STB)cc: COR,D,JC

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
IN RE CLASSICSTAR MARE LEASE
LITIGATION

)
)
)
and
)
)
WEST HILLS FARMS, LLC, et al., )
)
Plaintiffs,
)
)
v.
)
)
CLASSICSTAR, LLC, et al.,
)
)
Defendants.
)

MDL No. 1877
Master File:
Civil Action No. 07-353-JMH

Civil Action No. 06-243-JMH
MEMORANDUM OPINION AND ORDER

*** *** ***
This matter is before the Court upon the Motions of GeoStar
Corporation, Tony Ferguson, Thom Robinson, and John Parrott to
Alter or Amend the Court’s Judgment entered with respect to
Plaintiff’s claims [DE 768 and 769].

Plaintiffs have filed a

Response to those motions [DE 771] and a Motion for Entry of Rule
54(b) Certification [DE 772].

Defendants have filed a response to

Plaintiffs’ Motion [DE 781] and replies in further support of their
Motions [DE 780].

Plaintiffs have filed a Reply [DE 782] in

further support of their Motion.
Defendants argue that this court erroneously certified as
final and appealable that judgment entered on October 11, 2011 [DE
760] and as amended on November 8, 2011 [DE 767] because (1) it did
so without offering a reasoned analysis for its decision to do so

and (2) Defendants’ cross-claims have not yet been resolved and
remain pending. In their response and by their Motion for Entry of
a certification under Fed. R. Civ. P. 54(b), Plaintiffs concede
that

the

Court

certification
Defendants,

in

must

offer

light

however,

a

reasoned

of

the

pending

Plaintiffs

urge

analysis

for

cross-claims.
the

Court

to

such

a

Unlike
enter

a

certification on the grounds that the Court has adjudicated all of
Plaintiffs’ claims against all Defendants and there is no just
cause for delay the final disposition of those claims, even in
light of Defendants’ cross-claims.
As an initial matter, the Court has adjudicated all of
Plaintiffs' claims against all Defendants and, frankly, there is
nothing more to say about them.

Those defendants who have filed

cross-claims based on breach of fiduciary duty, fraud, fraud in the
inducement, aiding and abetting, conversion and misappropriation,
breach of contract, unjust enrichment, and theories of contribution
and indemnity against one another may have claims which "arise from
the same operative facts as the plaintiffs' claims," but the
resolution of them will not and does not impact their liability –
joint and several or individual – to Plaintiffs.
The rules explicitly provide "this court may direct entry of
a final judgment as to one or more, but fewer than all, claims or
parties," Fed. R. Civ. P. 54(b), under appropriate circumstances.
While

"[t]he

District

Court

cannot,

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in

the

exercise

of

its

discretion, treat as ‘final' that which is not ‘final' within the
meaning of § 1291[, . . .] the District Court may, by the exercise
of its discretion in the interest of sound judicial administration,
release for appeal final decisions upon one or more, but less than
all, claims in multiple claims actions...." Sears Roebuck & Co. v.
Mackey, 351 U.S. 427, 437-38 (1956).

When determining if an order

should be certified as final and appealable under Rule 54(b), this
Court may consider this non-exhaustive list of factors:
(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-off against the judgment sought
to be made final; (5) miscellaneous factors
such
as
delay,
economic
and
solvency
considerations, shortening the time of trial,
frivolity of competing claims, expense, and
the like.
Gen. Acquisition, Inc. v. GenCorp., Inc., 23 F.3d 1022, 1027 (6th
Cir. 1994); Corrosioneering, Inc. v. Thyssen Environmental Sys. 807
F.2d 1279, 1283 (6th Cir. 1986) (citations omitted); Solomon v.
Aetna Life Ins. Co., 782 F.2d 58, 61 n.2 (6th Cir. 1986); Day v.
NLO, Inc., 3 F.3d 153, 155 (6th Cir. 1993).
Considering first the relationship between the adjudicated
claims

and

unadjudicated

claims,

indemnity

and

liability

are

interrelated but also necessarily considered by the Court in series

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because "indemnity is collateral to and dependent upon a finding of
liability." Corrosioneering, Inc. v. Thyssen Env't Sys., Inc., 807
F.2d 1279, 1284 (6th Cir. 1986).

Notably, the present case is not

in the same posture as that in Corrosioneering, Inc., upon which
Defendants rely in urging the Court not to enter a certification of
finality.

There, the Court of Appeals determined it was improper

to review "a question of indemnity…prior to the consideration on
appeal of the question of whether any liability exists" because a
later determination of liability by the district court could moot
the indemnification issue.

Id.

In other words, while many of the

same facts go to the issues presented in Plaintiffs' claims as they
do with respect to Defendants cross-claims, there is no possibility
that the need for review of the liability issue might be mooted by
future developments in the district court in a decision on the
cross claims.
Similarly, the Court of Appeals would not need to reconsider
the issue of Defendants' liability to Plaintiffs if and when the
issue of Defendants’ obligations and liability one to another are
decided and subsequently subjected to appeal.

Nor do any of the

cross-claims carry with them the possibility of set-off from the
amount of judgment awarded to Plaintiffs.
All told, the strongest argument in Defendants' favor is that,
by

forcing

Plaintiffs

to

wait

until

to

appeal

until

the

cross-claims are resolved, Defendants can conserve their resources

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on appeal.

However, considering the distinct nature of the

theories

recovery

of

for

the

Plaintiffs'

claims

and

the

cross-claims between Defendants, the conservation of resources to
be had is limited.

Further, while it is not dispositive of the

issue before the Court by any means, the Court does note that
Plaintiffs have already endured a great burden and expense in
obtaining

the

certification
execution.

Judgment.
is

that

the

"An

important

entry

of

effect

judgment

of

a

permits

54(b)
prompt

When no substantial reason appears why a litigant

should not be entitled to collect upon a claim adjudicated in its
favor immediately, the appellate courts will sustain the entry of
judgment upon that claim by the trial court."

Bank of Lincolnwood

v. Fed. Leasing, Inc., 622 F.2d 944, 951 (7th Cir. 1980). Here, in
light of the factors set forth above, Plaintiffs should not be
forced to further delay collection of their Judgment and await the
outcome of claims asserted amongst the very defendants who injured
them. See id. at 951-52.
Ultimately, Defendants are correct insofar that Fed. R. Civ.
P. 54(b) demands an express and reasoned determination as to why
there is no just reason to delay appellate review when the Court
decides upon "entry of final judgment as to one or more but fewer
than all the claims or parties in a case," Gen. Acquisition, Inc.,
23 F.3d at 1026.

Rudd Constr. Equip. Co., Inc. v. Home Ins. Co.,

711 F.2d 54, 56 (6th Cir. 1983).

The Court has done so here.

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Accordingly, IT IS ORDERED:
(1)

that Defendants' Motions to Alter or Amend the Court's

October 11, 2011 Judgment [DE 768 and 769] are GRANTED IN PART and
DENIED IN PART;
(2)

that

Plaintiffs'

Motion

for

Entry

of

Rule

54(b)

Certification [DE 772] is GRANTED;
(3)

that the Court's earlier statement, set forth in the

Amended Judgment of November 8, 2011 [DE 765], that the judgment in
favor of Plaintiffs on their claims was final and appealable is
STRICKEN AND HELD FOR NAUGHT.

An order of judgment, setting forth

the required certification under Fed. R. Civ. P. 54(b) as of this
date, shall be entered separately.
IT IS FURTHER ORDERED:
(4)

that the Clerk shall return this matter to the active

docket with respect to the cross-claims of the Defendants;
(5)

that, within ten (10) days of entry of this order, the

parties to the cross-claims shall file briefs advising the Court of
(a) whether they have any intent to pursue their cross-claims,
particularly in light of their failure to mention them during
pretrial conference and proceedings or to submit jury instructions,
(b) whether any of the cross-claims are now moot or otherwise
unavailable in light of the Court's earlier decisions with respect
to Plaintiffs' claims, and (c) whether these cross-claims stand
ready for trial on June 5, 2012, and the anticipated length of
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trial.
This the 30th day of March, 2012.

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