Nichamoff et at v. CitiMortgage, Inc.et al

Filing 53

MEMORANDUM AND ORDER DENIED 49 MOTION for Entry of Partial Final Judgment Under Rule 54(B) MOTION for Entry of Partial Final Judgment Under Rule 54(B) ( Scheduling Conference set for 1/7/2013 at 02:00 PM in Courtroom 9F before Judge Nancy F. Atlas)(Signed by Judge Nancy F. Atlas) Parties notified.(sashabranner, )

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

SETH A. NICHAMOFF, et al.,
Plaintiffs,
v.
CITIMORTGAGE, INC., et al.,
Defendants.

§
§
§
§
§
§
§

CIVIL ACTION NO. H-12-1039

MEMORANDUM AND ORDER
This case is before the Court on the Motion for Entry of Partial Final Judgment
Under Rule 54(b) (“Motion”) [Doc. # 49] filed by Plaintiffs Seth A. Nichamoff and
Heidi J. Seifert, to which Defendant CitiMortgage, Inc. (“CitiMortgage”) filed a
Response [Doc. # 52]. Plaintiffs neither filed a reply nor requested additional time to
do so. Having reviewed the full record and applicable legal authorities, the Court
denies Plaintiffs’ Motion.
I.

BACKGROUND
Plaintiffs obtained an interest-only loan from CitiMortgage through Salomon

Smith Barney. The amount of the loan was $1,500,000.00, secured by an account in
Seifert’s name in which she maintained approximately $600,000.00-$650,000.00. The
parties dispute whether the full account was pledged or only $375,000.00.

P:\ORDERS\11-2012\1039M54b.wpd

121227.0817

In late 2011, Plaintiffs applied with Merrill Lynch to refinance their mortgage.
On November 1, 2011, Merrill Lynch approved Plaintiffs for a 30-year fixed loan at
the rate of 4.75 percent per annum, provided that Plaintiffs would transfer
$250,000.00 to Merrill Lynch. In December 2011, Nichamoff contacted Morgan
Stanley (who had acquired Salomon Smith Barney) to transfer $250,000.00 to Merrill
Lynch. At that time, Morgan Stanley advised Nichamoff that CitiMortgage had
frozen the account and the transfer could not be completed. After much discussion,
Morgan Stanley transferred $208,000.00 in January 2012, followed by an additional
$50,000.00 on February 1, 2012.
Plaintiffs filed this lawsuit, asserting a violation of the Truth in Lending Act
(“TILA”), fraudulent and negligent misrepresentation, a violation of the Deceptive
Trade Practices Act, slander of title, and breach of contract. CitiMortgage filed a
Motion to Dismiss, which was denied as to the breach of contract claim and granted
as to all other claims. See Memorandum and Order [Doc. # 40] entered September 25,
2012.
On October 19, 2012, Plaintiffs filed a Notice of Appeal [Doc. # 45] from the
dismissal of the claims other than the breach of contract claim. More than a month
later, on November 21, 2012, Plaintiffs moved pursuant to Rule 54(b) of the Federal

P:\ORDERS\11-2012\1039M54b.wpd

121227.0817

2

Rules of Civil Procedure for entry of a final judgment on the dismissed claims. The
Motion is ripe for decision.
II.

ANALYSIS
Rule 54(b) provides for entry of a final judgment as to some but not all claims

in a lawsuit “if the court expressly determines that there is no just reason for delay.”
FED. R. CIV. P. 54(b); Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 9 (1980).
Entry of a final judgment pursuant to Rule 54(b) requires a finding that the ruling is
final as “an ultimate disposition of an individual claim entered in the course of a
multiple claims action” and that there is “no just reason for delay” in entering the final
judgment. Curtiss-Wright Corp., 446 U.S. at 7-8.
A Rule 54(b) final judgment “reflects a balancing of two policies: avoiding the
danger of hardship or injustice through delay which would be alleviated by immediate
appeal and avoid[ing] piecemeal appeals.” Eldredge v. Martin Marietta Corp., 207
F.3d 737, 740 (5th Cir. 2000) (internal quotations and citations omitted). “A court
should consider such factors as: “(1) the relationship between the adjudicated and the
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

P:\ORDERS\11-2012\1039M54b.wpd

121227.0817

3

the judgment sought to be made final; [and] (5) miscellaneous factors such as delay,
economic and solvency considerations, shortening the time of trial, frivolity of
competing claims, expense, and the like.” Abecassis v. Wyatt, 2010 WL 2671576, *2
(S.D. Tex. June 30, 2010) (Rosenthal, J.) (quoting Akers v. Alvey, 338 F.3d 491, 495
(6th Cir. 2003)). Rule 54(b) motions are disfavored and should be granted only “when
there exists some danger of hardship or injustice through delay which would be
alleviated by immediate appeal.” PYCA Indus., Inc. v. Harrison County Waste Mgmt.,
81 F.3d 1412, 1421 (5th Cir. 1996).
In this case, the relationship between the dismissed claims and the remaining
breach of contract claim is a close one. Indeed, the dismissed claims and the
remaining claim are based on the same factual scenario. Although Plaintiffs focus on
their desire to appeal the dismissal of the Truth in Lending Act claim as time-barred,
the statute of limitations issue on the TILA claim depends on whether Seibert’s entire
account was pledged from the time the Security Agreement was entered into in
November 2006, or whether CitiMortgage changed the requirements at a later time
within the statute of limitations.
The need for appellate review might be mooted by a number of potential future
developments in the district court. The parties could settle the remaining breach of
contract claim in a global settlement that addresses the dismissed claims as well.

P:\ORDERS\11-2012\1039M54b.wpd

121227.0817

4

Either party could obtain summary judgment on the breach of contract claim,
potentially mooting the need for a separate appeal of the dismissed claims. The
breach of contract claim could be tried before any appeal of the dismissed claims is
completed, again possibly mooting the issues on appeal.
The Court is most persuaded, however, by the delay and economic factors.
Plaintiffs have not shown the existence of any hardship or injustice that could result
from delay and which would be alleviated by an immediate appeal. Instead, Plaintiffs
state summarily that “certification will provide the quickest resolution of this matter.”
See Motion, p.2. The only hardship identified is that “Plaintiffs in this case do not
want to endure the time and expense of trial” before obtaining appellate review which,
they believe, may have an impact on settlement negotiations. See id. at 3. Defendant,
on the other hand, would be required to spend time and money on the appeal of the
dismissed claims while simultaneously defending the remaining breach of contract
claim which Plaintiffs have declined to dismiss voluntarily. Plaintiffs have identified
no reason that this case should be treated any differently from most other cases in
which some claims are dismissed prior to others. As a result, the Court cannot
conclude that the efficiency of having a single appeal at the conclusion of the entire
lawsuit should be ignored in favor of the extraordinary procedure of a Rule 54(b) final
judgment on the dismissed claims.

P:\ORDERS\11-2012\1039M54b.wpd

121227.0817

5

Plaintiffs have failed to demonstrate that they will suffer some hardship or
injustice if the appeal of the dismissed claims is delayed. Based on its consideration
of relevant factors and its balancing of competing interests, the Court declines to enter
a Rule 54(b) final judgment on the dismissed claims.
III.

CONCLUSION AND ORDER
The Court has considered the factors relevant to a decision whether to enter a

Rule 54(b) final judgment, and has balanced the cost and inconvenience of piecemeal
review against the danger of injustice from delay. Finding that there is no danger of
hardship or injustice from delay, the Court declines to exercise its discretion to direct
the entry of a final judgment as to the dismissed claims. It is hereby
ORDERED that Plaintiffs’ Motion for Entry of Partial Final Judgment [Doc.
# 49] is DENIED. It is further
ORDERED that counsel shall appear before the Court on January 7, 2013, at
2:00 p.m. for a status and scheduling conference.
SIGNED at Houston, Texas, this 27th day of December, 2012.

P:\ORDERS\11-2012\1039M54b.wpd

121227.0817

6