United States District Court, D. Colorado
FIREMAN'S FUND INSURANCE COMPANY, a California corporation, Plaintiff,
STEELE STREET LIMITED II, a Colorado limited partnership, Defendant.
A. Brimmer Chief United States District Judge
matter is before the Court on Plaintiff's Motion to
Certify the Court's February 13, 2019 Order Under Federal
Rule of Civil Procedure 54(b), or, Alternatively, 28 U.S.C.
§ 1292(b) [Docket No. 56].
case arises out of an insurance dispute. The insurance
policy in question, issued by plaintiff, covers “direct
physical loss of or damage to” a commercial building at
250 Steele Street in Denver, Colorado. Docket No. 55 at 1.
The policy contains an appraisal provision. Id. at
1-2. Defendant made a claim under the policy for damage
allegedly caused by a hailstorm. Id. at 2. Among the
damages claimed was damage to the building's brick
facade, including flaking of the bricks (the “brick
claim”). Id. Plaintiff issued payment for some
damage caused to the building, but did not make any payment
for the brick claim. Id.
April 21, 2017, plaintiff filed this lawsuit. Docket No. 1.
Plaintiff's sole claim for relief is for a declaratory
judgment that the brick claim is not included within the
appraisal provision of the insurance policy, that defendant
is not entitled to an appraisal of the brick claim under the
insurance policy, and that plaintiff is not obligated to
participate in an appraisal of the brick claim under the
insurance policy. Id. at 9, ¶ 64. In its
answer, defendant asserted five counterclaims: (1)
enforcement of the policy's appraisal provision; (2)
breach of contract; (3) statutory bad faith under Colo. Rev.
Stat. §§ 10-3-1115 and 1116; (4) common law bad
faith; and (5) a declaratory judgment that defendant is
excused from appearing at an examination under oath. Docket
No. 11 at 20-27, ¶¶ 19-49.
parties filed cross-motions for partial summary judgment.
Plaintiff asked the Court to declare that the brick flaking
is not “direct physical loss” or
“damage” within the meaning of the policy and
therefore is not subject to appraisal. Docket No. 35 at 6-8.
Defendant asked the Court to determine the opposite and to
stay all proceedings pending the completion of the appraisal
process. Docket No. 43 at 13. On February 13, 2019, the Court
entered an order (the “Order”) resolving the
parties' cross-motions for summary judgment. Docket No.
55. As relevant here, the Court concluded that “the
insurance contract requires the parties to participate in an
appraisal of the loss on the brick claim, ” and denied
plaintiff's motion for partial summary judgment on that
basis. Id. at 7. The Court administratively closed the
case pending completion of the appraisal process.
Id. at 9-10.
February 22, 2019, plaintiff filed this motion. Plaintiff
requests that the Court certify the Order as a “final
judgment” pursuant to Fed.R.Civ.P. 54(b). Docket No.
56. In the alternative, plaintiff requests that the Court
certify the Order for interlocutory appeal pursuant to 28
U.S.C. § 1292(b). Id. Defendant opposes the
motion. Docket No. 67.
asks the Court to consider two alternative grounds for
permitting an appeal: Fed.R.Civ.P. 54(b) and 28 U.S.C. §
1292(b). Only one ground can apply, because Rule 54(b) and
§ 1292(b) “address two different
situations.” Ultra-Precision Mfg. Ltd. v. Ford
Motor Co., 338 F.3d 1353, 1359 (Fed. Cir. 2003) (citing
10 Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane,
Federal Practice & Procedure § 2658.2 (3d
ed. 1998)). Section 1292(b) applies “only to orders
that would be considered interlocutory even if presented in a
simple single-claim, two-party case, ” while Rule 54(b)
applies only to orders that would be considered
“final” for purposes of 28 U.S.C. § 1291 if
presented in an action having the same limited dimensions.
See 10 Wright, Miller, and Kane, Fed. Prac.
& Proc. § 2658.2 (4th ed. April 2019 update). A
decision is final for purposes of § 1291 if it
“ends the litigation on the merits and leaves nothing
for the court to do but execute the judgment.”
Catlin v. United States, 324 U.S. 229, 233 (1945);
McClendon v. City of Albuquerque, 630 F.3d 1288,
1292 (10th Cir. 2011) (citing Catlin). If this
action were limited to the claims that were the subject of
the Order - plaintiff's declaratory judgment claim and
defendant's first and fifth counterclaims - the Order
would be considered final for purposes of § 1291. The
Order determined that plaintiff was required to participate
in the appraisal process, enforced the appraisal provision
against plaintiff, and found that defendant was required to
appear at an examination under oath. See Docket No.
55. The Order is therefore final with respect to
plaintiff's declaratory judgment claim and
defendant's first and fifth counterclaims because, if the
action were limited to those claims, there would be nothing
remaining for the Court to do with those claims but to
execute the judgment. Thus, § 1292(b) does not apply,
and the Court turns to the Rule 54(b) analysis.
Fed.R.Civ.P. 54(b), the district court may direct the entry
of a final judgment as to one or more but fewer than all of
the claims in a multiclaim case when “there is no just
reason for delay.” Fed.R.Civ.P. 54(b). In order to
direct entry of judgment under Rule 54(b), a court must find
that three prerequisites are met: “(1) multiple claims;
(2) a final decision on at least one claim; and (3) a
determination by the district court that there is no just
reason for delay.” Jordan v. Pugh, 425 F.3d
820, 826 (10th Cir. 2005). To be a final judgment for
purposes of Rule 54(b), the claims resolved must be
“distinct and separable from the claims left
unresolved.” Okla. Turnpike Auth. v. Bruner,
259 F.3d 1236, 1243 (10th Cir. 2001). In determining whether
to enter judgment pursuant to Rule 54(b), the Court is to
“weigh[ ] Rule 54(b)'s policy of preventing
piecemeal appeals against the inequities that could result
from delaying an appeal.” Stockman's Water Co.,
LLC v. Vaca Partners, L.P., 425 F.3d 1263, 1265 (10th
Cir. 2005). Ultimately, the granting of a Rule 54(b) motion
is left to the sound discretion of the trial court, which
“must take into account judicial administrative
interests as well as the equities involved.”
Curtiss-Wright Corp. v. General Electric Co., 446
U.S. 1, 8 (1980).
parties dispute whether the Order constitutes “a final
decision on at least one claim” for purposes of Rule
54(b). See Jordan, 425 F.3d at 826; Docket No. 56 at
3-6; Docket No. 67 at 5-6. However, even assuming
arguendo that the Order is a final judgment,
plaintiff has failed to show that the balance of equities
favors certification. Plaintiff argues that administrative
interests weigh in favor of an immediate appeal because it is
more efficient to address the appraisal issue before the
appraisal occurs. See Docket No. 56 at 7. Plaintiff,
however, does not explain how an immediate appeal would be
more efficient for the Tenth Circuit. The remaining claims in
this lawsuit relate to plaintiff's alleged failure to
perform under the terms of the insurance policy in
determining the amount of loss, which necessarily incorporate
the appraisal issue. If the Court certified the Order
pursuant to Rule 54(b), the Tenth Circuit would likely hear
two appeals regardless of how it ruled on the appraisal
issue. The remaining claims would not be mooted by either a
favorable or unfavorable ruling on the first appeal, and
either party would be free to take a second appeal upon
resolution of the remaining claims. This is not a situation
where a favorable result to plaintiff on appeal would
effectively resolve the entire case or a related proceeding.
Cf. United Bank of Pueblo v. Hartford Accident and Indem.
Co., 529 F.2d 490, 493 (10th Cir. 1976) (certification
appropriate where reversal of the trial court's finding
would moot a third-party action).
makes much of the Court's decision to stay proceedings
pending completion of the appraisal. See Docket No.
56 at 5 (arguing that the stay is an “effective
bifurcation” of the action). The Court concluded that a
stay was appropriate because it would be more efficient to
complete the appraisal process and “resolve key factual
issues” before proceeding with discovery. See
Docket No. 55 at 9. The Court did not stay the action for the
purpose of further litigating whether the appraisal is
required at all. Finally, plaintiff suggests that
certification is appropriate from the administrative
perspective because “[t]he Tenth Circuit should be
given an opportunity either to interpret [Ins. Co. of
N.A. v. Baker, 268 P. 585 (Colo. 1928), ] or decide how
the Colorado Supreme Court would rule on the issue.”
See Docket No. 71 at 7. This argument is not
persuasive. The purpose of Rule 54(b) is not to give the
circuit court “an opportunity” to rule on a
question of law whenever a party thinks that question
particularly important. This Court not certifying an
immediate appeal does not preclude the Tenth Circuit from
reaching plaintiff's argument on an appeal taken at the
conclusion of this case and is consistent with the Tenth
Circuit's expressed policy against piecemeal review.
See Stockman's Water, 425 F.3d at 1265.
the administrative interests weighing against a piecemeal
appeal, the Court turns to plaintiff's interests in order
to determine whether they overcome the administrative
interests. Plaintiff argues that continuing with the
litigation will lead to an “indefinite” delay in
resolving its questions related to the scope and right of an
appraisal, which would “greatly prejudice
[p]laintiff.” See Docket No. 56 at 6. However,
plaintiff does not explain the nature or extent of the
prejudice. See id. The Court is also mindful that,
as defendant points out, it may suffer equal or greater
prejudice by the certification of a piecemeal appeal that
would delay resolution of its amount of loss - a concrete
financial interest. See Docket No. 67 at 7 (noting
that the damage at issue occurred approximately four years
the “strong federal policy against piecemeal review,
” the fact that an appeal of the order would not lead
to a resolution of the remaining counterclaims, and no
showing by plaintiff that it would an undue hardship, the
Court finds that the equities do not weigh in favor of
certifying the order as final. See 10 Wright,
Miller, and Kane, Fed. Prac. & Proc. §
2659; Stockman's Water, 425 F.3d at 1265;
see also Okla. Turnpike, 259 F.3d at 1242
(“[T]rial courts should be reluctant to enter Rule
54(b) orders since the purpose of this rule is a limited one:
to provide a recourse for litigants when dismissal of less
than all their claims will create undue hardships.”
(quotations omitted)). It is therefore
that Plaintiff's Motion to Certify the Court's
February 13, 2019 Order Under Federal Rule of Civil Procedure
54(b), or, Alternatively, 28 ...