B2 Opportunity Fund, LLC v. Trabelsi et al

Filing 194

Judge Richard G. Stearns: ORDER entered. re 192 USCA Order for a Statement of Reasons in Support of the Entry of Separate and Final Judgment pursuant to Fed. R. Civ. P. 54(b). (RGS, law2)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 17-10043-RGS
B2 OPPORTUNITY FUND, LLC
v.
NISSIM TRABELSI ET AL.
STATEMENT OF RESONS IN SUPPORT
OF RULING ON VSTOCK’S MOTION FOR ENTRY
OF JUDGMENT PURSUANT TO FED. R. CIV. P. 54(B)
November 30, 2017
STEARNS, D.J.
On October 6, 2017, this court granted defendant VStock Transfer
LLC’s Motion for Entry of Separate and Final Judgment pursuant to Fed. R.
Civ. P. 54(b), finding no just reason for delay, Dkt #181. B2 subsequently
appealed that order to the Court of Appeals for the First Circuit 1, along with
this court’s previous ruling granting VStock’s Motion to Dismiss, see B2
Opportunity Fund, LLC v. Trabelsi et al., 2017 WL 4684028 (D. Mass. Oct.
18, 2017).2 On November 29, 2017, the Court of Appeals retained jurisdiction

1

See USCA No. 17-2072.

In that opinion, the court provided a detailed factual overview of the
events that gave rise to this dispute, and the court need not repeat those facts
in this order.
2

of B2’s appeal, but remanded the case to this court for the limited purpose of
providing a statement of reasons in support of its entry of judgment pursuant
to Fed. R. Civ. P. 54(b). See Spiegel v. Trustees of Tufts College, 843 F.2d
38, 43 (1st Cir. 1988) (noting that in granting such a motion, the district court
“should ordinarily make specific findings setting forth the reasons” for entry
of separate and final judgment).
Rule 54(b) “permits the entry of final judgment as to fewer than all the
parties or claims in a multi-party action, thus clearing the way for earlierthan-usual appeals, ‘upon an express determination that there is no just
reason for delay’ in entering judgment.” Maldonado-Denis v. CastilloRodriguez, 23 F.3d 576, 579 (1st Cir. 1994) (quoting the Rule). The First
Circuit uses a two-step approach in determining whether entry of separate
and final judgment is appropriate. “First, the ruling underlying the proposed
judgment must itself be final in the sense that it disposes completely either
of all claims against a given defendant or of some discrete substantive claim
or set of claims against the defendants generally.”

Id. at 580.

That

requirement is satisfied with respect to VStock: the only claims in the case
brought against VStock were dismissed in their entirety by this court’s
October 18, 2017, order. See Trabelsi, 2017 WL 4684028 (dismissing B2’s

2

10b-5 claim for failing to adequately plead scienter and dismissing B2’s
remaining state law claims against VStock for lack of personal jurisdiction).
“Once the finality hurdle has been cleared, the district court must
determine whether, in the idiom of the rule, ‘there is no just reason for delay’
in entering judgment.” Spiegel, 843 F.2d at 43. As the First Circuit has
noted, “[t]he second step of the Spiegel pavane is harder to master. It
requires tracing the interrelationship between, on one hand, the legal and
factual basis of the claims undergirding the proposed judgment (i.e., the
jettisoned claims), and on the other hand, the legal and factual basis of the
claims remaining in the case.” Maldonado-Denis, 23 F.3d at 580. In Spiegel,
while recognizing that “the integers which comprise this calculus will vary
from case to case,” the First Circuit cited a Third Circuit opinion which it
found to provide a “general compendium” of factors “helpful as a guide.”
Spiegel, 843 F.2d at 23 n.3 (citing Allis-Chalmers Corp. v. Philadelphia
Electric Co., 521 F2d 260, 364 (3d Cir. 1975)). Allis-Chalmers, in turn,
suggested that the following factors might prove relevant:
[T]he 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,
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shortening the time of trial, frivolity of competing claims,
expense, and the like.
Allis-Chalmbers, 521 F.2d at 364.
The court is of the view that all of these factors counsel in favor of an
immediate entry of judgment for VStock and a corresponding certificate of
appealability to B2 for its claims against VStock under Rule 54(b). The
allegations of this case center on an alleged stock fraud perpetrated by
Nissim Trabelsi. Following the court’s grant of VStock’s Motion to Dismiss 3,
the only remaining claims in the case are claims against Trabelsi, his wife,
and various artificial entities controlled or operated by Trabelsi.4 These
claims include: (1) a 10b-5 claim against Trabelsi for securities fraud; (2)
common-law fraud claims against Trabelsi and his wife, Aliza, both
In an earlier order, the court dismissed a series of claims against
another group of defendants – attorney C. Parkinson Lloyd and his Utah law
firm, Kirton McConkie, P.C. – for lack of personal jurisdiction. See B2
Opportunity Fund v. Trabelsi, 2017 WL 3707383 (D. Mass. Aug. 28, 2017).
3

At the present time, this court lacks jurisdiction over those claims
because Trabelsi filed a Notice of Appeal in the Court of Appeals on July 25,
2017. See USCA 17-1715. That appeal challenged a ruling by this Court
striking portions of Trabelsi’s answer that sought to add counterclaims and
cross-claims against the lawyer defendants and against B2, see Dkt #153. B2
moved to dismiss that appeal on July 28, 2017, arguing that “(1) the order
appealed from is not a final decision on the merits; (2) the District Court did
not order an entry of judgment as to fewer than all claims for all parties
pursuant to Fed. R. C. P. 54(b); and (3) the order appealed from is not a
collateral or interlocutory order reviewable under any exception to the
finality rule.” See USCA No. 17-1715. The First Circuit has yet to take any
action on the motion to dismiss the appeal.
4
4

individually and as Trustees of the Mazzal Living Trust; (3) conversion; (4)
specific performance under an ill-fated Stock Purchase Agreement that was
intended to govern the transactions in dispute; (5) breach of contract against
Trabelsi; (6) a declaratory judgment concerning real property in Taunton,
Massachusetts, allegedly belonging to Trabelsi; (7) unjust enrichment; and
(8) Mass. Gen. Laws ch. 93A claims against both Trabelsis as individuals and
as trustees.
This court, in granting VStock’s Motion to Dismiss, ruled that there
was no support in the record for B2’s theory that VStock was in cahoots with
Trabelsi to commit securities fraud, and rejected B2’s other theories
purporting to show the requisite scienter on the part of VStock.

The

remaining claims against Trabelsi have nothing to do with VStock because
they concern Trabelsi himself or properties or assets owned by Trabelsi and
his wife, Aliza, both individually and in trust. Similarly, there is no possibility
“that the need for review [in the Court of Appeals] might . . . be mooted by
future developments in the district court,” because any future proceedings
against the Trabelsi defendants (following the resolution of their current
appeal in the First Circuit) will not affect VStock, which has been dismissed
as a party.

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Additionally, there are no counter-claims or cross-claims involving
VStock that “could result in set-off against the judgment sought to be made
final.” 5 The judgment at issue is VStock’s dismissal as a party, rather than a
monetary judgment. Finally, this ruling allows B2 the opportunity to appeal
this court’s ruling on the securities claim and personal jurisdiction issues
with respect to VStock without waiting for the resolution of Trabelsi’s
unrelated and eccentric cross-claims and counterclaims.

See Allis-

Chalmbers, 521 F.2d at 364 (noting that “miscellaneous factors” to consider
may include “frivolity of competing claims”).
The court therefore finds that “there is no just reason for delay,” Fed.
R. Civ. P. 54(b), and that this case presents the paradigmatic example of
where a “decision[] in a multi-claim action should be sent upstairs
immediately.” Spiegel, 843 F.2d at 43.
SO ORDERED.
/s/ Richard G. Stearns
__________________________
UNITED STATES DISTRICT JUDGE

By contrast, Trabelsi sought to file cross-claims against Lloyd and
KMC, the lawyer defendants. These claims are currently before the First
Circuit in the related appeal, and for this reason the court, in a separate order
(Dkt #193), has denied Lloyd and KMC’s Motion for Entry of Separate and
Final Judgment without prejudice for lack of jurisdiction.
6
5