Tharaldson Ethanol Plant I, LLC v. VEI Global, Inc., 2014 ND 94

VEI provided design/CM services for an ethanol plant owned by Tharaldson Ethanol; parties settled disputed fees in April 2009 for $1,350,000 and incorporated a promissory note signed by Tharaldson Financial (TFG).
The promissory note required an initial $200,000 payment (made) and monthly $100,000 payments thereafter, with a $150,000 final payment conditioned on plant production; TFG defaulted after the initial payment.
Tharaldson Ethanol/TFG sued VEI (breach of contract, warranty, negligence, and declaratory relief) in August 2012; VEI counterclaimed to enforce the promissory note.
VEI moved for partial summary judgment seeking enforcement of the note for $1,150,000 (reserving the contested $150,000 final payment); the district court granted partial summary judgment for VEI.
After entry of judgment, the district court certified the partial judgment as final under N.D.R.Civ.P. 54(b); Tharaldson Ethanol/TFG appealed the certification decision.
The Supreme Court concluded the district court abused its discretion in granting Rule 54(b) certification and dismissed the appeal, directing the district court to vacate the certification portion of its judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether district court properly certified partial summary judgment under N.D.R.Civ.P. 54(b)	Certification inappropriate because case is not unusual/compelling and VEI failed to show certification prejudice or hardship	Certification appropriate because VEI would suffer prejudice/hardship from delayed collection of a large unpaid debt; promissory note litigation is distinct from remaining claims	Court held certification was improvident; district court abused discretion and must vacate 54(b) certification
Whether recoupment/setoff defenses preclude enforcement of the promissory note	Tharaldson parties argued TFG has interest in Ethanol’s claims and can assert recoupment/setoff against VEI’s note enforcement	VEI argued recoupment/setoff unavailable because TFG lacked interest in Ethanol’s claims; note enforceable as separate obligation	Court noted the claims are legally and factually intertwined and recoupment/setoff arguments weigh against certification; did not reach merits of enforcement because 54(b) certification reversed

Pifer v. McDermott, 816 N.W.2d 88 (2012) (Rule 54(b) reserved for unusual cases where denying immediate appeal causes demonstrated prejudice)
Citizens State Bank-Midwest v. Symington, 780 N.W.2d 676 (2010) (54(b) should not be routinely granted)
Brummund v. Brummund, 758 N.W.2d 735 (2008) (abuse-of-discretion standard for reviewing Rule 54(b) certifications)
Bulman v. Hulstrand Constr. Co., 503 N.W.2d 240 (1993) (potential mootness is a just reason for delay in 54(b) analysis)
Peterson v. Zerr, 443 N.W.2d 293 (1989) (uneconomical for appellate court to review facts twice after 54(b) certification)
Union State Bank v. Woell, 357 N.W.2d 234 (1984) (factors a court should consider in 54(b) analysis)
Capps v. Weflen, 826 N.W.2d 605 (2013) (54(b) requires unusual/compelling circumstances)
City of Mandan v. Strata Corp., 819 N.W.2d 557 (2012) (54(b) not appropriate where remaining proceedings may moot the certified issues)