Nichols v. The Cadle Company ( 1996 )

USCA1 Opinion

                            UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT



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          No. 96-1777





               SARGENT D. NICHOLS, INDIVIDUALLY AND AS HE IS TRUSTEE OF



                        ANDOVER NORTHWAY REALTY TRUST, ET AL.,



                               Plaintiffs, Appellants,



                                          v.



                                    THE CADLE CO.,



                                 Defendant, Appellee.



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                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF MASSACHUSETTS



                     [Hon. William G. Young, U.S. District Judge]
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                                        Before



                                Selya, Circuit Judge,
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                            Bownes, Senior Circuit Judge,
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                              and Boudin, Circuit Judge.
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               Gilbert R. Hoy, Jr. for appellants.
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               Alvin  S. Nathanson,  with whom  Shannon M.  Fitzpatrick and
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          Nathanson & Goldberg, PC were on brief, for appellee.
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                                  December 19, 1996



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                    Per Curiam.   This  appeal illustrates once  again that
Per Curiam.
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          the  overly generous  use of  Fed. R.  Civ. P.  54(b) by  a well-



          intentioned district  judge can create a  minefield for litigants



          and  appellate courts alike.  Though the appeal itself amounts to



          an exercise in futility, see infra, it should serve as a reminder
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          that haste  makes waste.   There are often  untoward consequences



          when  judges  too readily  acquiesce  in the  suggested  entry of



          "partial" final judgments.



                    The  basic  procedural  facts   are  undisputed.    The



          plaintiffs  owned  valuable  commercial  real estate  located  in



          Peabody,  Massachusetts.  After  their original  lender plummeted



          into receivership,  the defendant Cadle Co.  (Cadle) acquired the



          mortgage  on  the property  from  the  Federal Deposit  Insurance



          Corporation.  Inasmuch as the mortgage note was in arrears, Cadle



          foreclosed on the property and took possession of it.



                    The plaintiffs  sued, claiming inter alia  breach of an
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          agreement  to  forbear  (count  1),  wrongful  interference  with



          economic  relationships (count  2), fraud  (count 3),  and unfair



          trade  practices in  violation of  Mass. Gen.  L. ch.  93A,    11



          (count 5).   The plaintiffs  also sought specific  performance of



          the  supposed  forbearance  agreement (count  4)  and declaratory



          relief (count 6).   All six counts implicated the  mortgage note,



          the foreclosure, and Cadle's conduct  in respect thereto.   Cadle



          denied the plaintiffs' allegations, pointed to the relatively low



          price   that   the  property   had   brought   at  auction,   and



          counterclaimed  for the deficiency that it thought was due on the





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          mortgage note.



                    After discovery had been  conducted, the district court



          granted  partial summary judgment in Cadle's  favor.  This ruling



          dispatched counts  1, 2, 3,  4, and 6  of the complaint,  leaving



          count  5  and  Cadle's   counterclaims  unaffected.    The  court



          thereafter  certified the  judgment as  final under  Rule 54(b).1



          Although the  court made a rote recitation that there was no just



          reason  to delay the entry of judgment, it failed to substantiate



          that  conclusion.     Using  the  district   court's  Rule  54(b)



          certificate  as  a springboard,  the  plaintiffs  prosecuted this



          appeal.



                    It is trite, but  true, that piecemeal appellate review



          invites  mischief.   Because  the    practice  poses  a  host  of



          potential problems  we  have warned,  time and  again, that  Rule



          54(b)  should be  used sparingly.   See, e.g.,  Consolidated Rail
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          Corp.  v. Fore River Ry. Co., 861  F.2d 322, 325 (1st Cir. 1988);
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          Spiegel v.  Trustees of Tufts  Coll., 843 F.2d  38, 43  (1st Cir.
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          1988);  Santa Maria v. Owens-Ill.,  Inc., 808 F.2d  848, 854 (1st
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          Cir. 1986).  We have also admonished that a district court intent


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               1Ordinarily,  a  judgment is  final  (and,  thus, appealable

          under  28 U.S.C.   1291)  only if it  conclusively determines all

          claims of  all parties to  the action.   See generally  Catlin v.
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          United States, 324  U.S. 229,  233 (1945) (stating  that a  final
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          decision  generally is  one  which "ends  the  litigation on  the

          merits  and leaves nothing  for the court  to do but  execute the

          judgment").  Rule 54(b) limns an exception to this principle.  It

          provides in relevant part:   "When more than one claim for relief

          is presented in an action . . . the court may direct the entry of

          a final  judgment as to  one or  more but fewer  than all of  the

          claims or parties . . . upon an express determination  that there

          is no just reason for delay and upon an express direction for the

          entry of [such a] judgment. . . ."



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          upon setting the stage for the fragmentation of appellate  review



          must explain the need for entering an earlier-than-usual judgment



            at least in cases where the explanation is not obvious from the



          record.  See Feinstein v. Resolution Trust Corp., 942 F.2d 34, 39
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          (1st  Cir. 1991);  Spiegel,  843 F.2d  at 43  &  n.4; Pahlavi  v.
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          Palandjian, 744 F.2d 902, 905 (1st Cir. 1984).
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                    In  this  instance  the district  court  volunteered no



          meaningful  explanation for  its  determination  that a  judgment



          should  enter even though a substantial part of the case remained



          untried,2 and  no good reason for the  certification is apparent.



          The  claims adjudicated  on  summary judgment  and certified  for



          appeal are inextricably intertwined  with the claims left pending



          in the district court, and the parties to both sets of claims are



          precisely the  same.  As we predicted in Spiegel, 843 F.2d at 44,
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          "[i]t will be a  rare case where Rule 54(b)  can appropriately be



          applied when  the contestants  on appeal  remain, simultaneously,



          contestants below."   This  case falls within  the generality  of



          that  prediction,  not within  the  long-odds  exception to  it.3


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               2The district court did note in its certificate that all the

          counts  on  which  it   granted  summary  judgment  involved  the

          propriety of the foreclosure.   But that tells us  very little as

          the  claims that remained likewise involved  the propriety of the

          foreclosure.     The  court   also  noted  the   desirability  of

          discharging the lis  pendens that the  plaintiffs had filed,  but
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          gave no  reason to suspect  that any particular  urgency attended

          this discharge.



               3This case offers a testimonial to the wisdom that underlies

          the Spiegel doctrine.   After the appeal had been  fully briefed,
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          the  district court conducted a trial on the remaining claims and

          counterclaims.   Cadle prevailed  across the board.   Immediately

          thereafter  it  moved to  dismiss the  appeal  on grounds  of res

          judicata and collateral  estoppel.   We do not  reach the  issues



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          Finally,  the   record  reflects  no  special   circumstances  or



          overriding equities that might counsel  in favor of permitting an



          immediate appeal from a plainly interlocutory order.



                    We   need  go  no  further.     Since  the  Rule  54(b)



          certificate  in  this case  was  improvidently  granted, we  lack



          appellate jurisdiction.   See Consolidated Rail, 861 F.2d at 326;
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          Spiegel, 843 F.2d at 46.
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                    The appeal  is dismissed without prejudice  for want of
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          appellate jurisdiction.  All parties shall bear their own costs.
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          raised  in the motion to dismiss, but its content illuminates the

          Serbonian  bog into  which  appellate courts  can  be plunged  by

          relaxed  application of the  rigorous standards that  ought to be

          associated with Rule 54(b) certifications.



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