A Rule 54(b) Quandary

What does one do when the chancellor adds language to a ruling on a particular issue to the effect that it is certified as a final, appealable judgment, although the ruling leaves intact the lawsuit between the parties?

That is the quandary that confronted the Northeast Mental Health-Mental Retardation Commission in a case it filed against V.M. Cleveland to void a lease that it considered unreasonable. Cleveland filed a counterclaim asking for damages for breach of contract and for a declaration that the lease was enforceable. Both parties filed motions for summary judgment. The chancellor denied the Commission’s motion in toto, but granted Cleveland’s motion in part, ruling only that the lease was enforceable, and denying the remainder of the motion because there were genuine issues of material fact, etc. After he ruled on the two R56 motions, the judge added, on his own initiative, that “Insofar as the enforceability of the contract, the court certifies that this is a final decision, appealable pursuant to MRCP 54(b).”

Faced with uncertainty as to what it should do, the Commission filed both an MRAP 5 application for an interlocutory appeal, and an MRAP 3 notice of appeal. The agency frankly admitted to the court that it was unsure which was the appropriate avenue, if any, to take vis a vis an appeal.

On November 21, 2013, the MSSC denied the petition for interlocutory appeal, leaving the MRAP 3 appeal pending before the COA. The COA decided the case of Commission v. Cleveland with fairly predictable results on December 3, 2013. Judge Maxwell’s opinion for the court, lays it out:

¶12. Only final judgments may be appealed. Harris v. Waters, 40 So. 3d 657, 658 (¶3) (Miss. Ct. App. 2010). “A final, appealable[] judgment is one that adjudicates the merits of the controversy which settles all issues as to all the parties and requires no further action by the lower court.” Walters v. Walters, 956 So. 2d 1050, 1053 (¶8) (Miss. Ct. App. 2007) (emphasis added and internal quotation marks omitted).

¶13. “Rule 54(b) provides an exception to the final-judgment rule.” Harris, 40 So. 3d at 658 (¶4). Under this rule, the trial court may “direct the entry of a final judgment as to one or more but fewer than all of the claims or parties[.]” M.R.C.P. 54(b). “According to the official comment to Rule 54(b), the basic purpose of the rule ‘is to avoid the possible injustice of a delay in entering judgment on a distinctly separate claim or as to fewer than all of the parties until the final adjudication of the entire case by making an immediate appeal available.’” Harris, 40 So. 3d at 658 (¶5) (emphasis added) (quoting M.R.C.P. 54(b) cmt.).

¶14. However, for a judgment or order to be eligible for Rule 54(b) finality, “the case [must] include either multiple claims, multiple parties, or both, and . . . either one or more but fewer than all the claims [must] have been decided, or . . . all the rights and liabilities of at least one party [must] have been adjudicated.” M.R.C.P. 54(b) cmt. The comment makes clear that “[d]espite its apparently broad scope, Rule 54(b) may be invoked only in a relatively select group of cases and applied to an even more limited category of decisions.” M.R.C.P. 54(b) cmt. And “[a] decision that leaves a portion of the claim pending as to all defendants does not fall within the ambit of Rule 54(b).” M.R.C.P. 54(b) cmt. …

¶15. The chancellor’s grant of partial summary judgment did not decide a claim between the two parties. Rather, it merely decided an issue within their claims—whether the contract was enforceable. This decision resulted in the denial of summary judgment to the Commission. And the denial of summary judgment is an interlocutory order that may only be appealed by permission. Hinds Cnty. v. Perkins, 64 So. 3d 982, 984 (¶7) (Miss. 2011). The chancellor’s decision also led to the partial grant of summary judgment in favor of Cleveland. But none of Cleveland’s claims were fully resolved. The chancellor was clear in his order that, despite the contract being enforceable as a matter of law, full summary judgment could not be granted because there were still “genuine issues of material fact” concerning whether the Commission could validly take actions to rescind the contract.

¶16. Because the chancellor’s decision left a portion of Cleveland’s claim pending, the chancellor’s order did not fall within that “limited category of decisions” in which Rule 54(b) may be applied. M.R.C.P. 54(b) cmt. Thus, the Rule 54(b) certification is invalid, and the decision that is the subject of this appeal is not a final, appealable judgment. Lacking jurisdiction to address the merits of the chancellor’s decision, we dismiss the appeal.

Not having the benefit of the entire record, we are at somewhat of a disadvantage, but, if I understood the opinion correctly, the judge did finally adjudicate a key issue of Cleveland’s case, which was whether the contract was enforceable. I can understand why the chancellor thought the parties should have a shot at appellate review of that issue, since it was a major pivot point upon which both cases turned. If it were upheld, major litigation, time and expense could be avoided. If reversed, the litigation might be ended. Either appellate ruling might quite possibly have avoided a retrial in a subsequent appeal.

All that being said, I understand the COA’s position. Since most of Cleveland’s case remained unresolved, the explicit language of R54(b) was not satisfied.

I said here only last week that I wondered why all the confusion over R54(b) and how to remove the uncertainty once and for all. I don’t think this is the case that does the job.