Mark JANAVARAS and Katina Janavaras, individually and Mark Janavaras and Katina Janavaras d/b/a Kosmos Department Store, and the National Bank of Harvey, Plaintiffs and Appellants, v. NATIONAL FARMERS UNION PROPERTY and Casualty Company, Defendant and Appellee.
Civ. No. 890133.
Supreme Court of North Dakota.
Dec. 20, 1989.
ERICKSTAD, C.J., and GIERKE, J., concur.
VANDE WALLE and LEVINE, JJ., concur in the result.
Steven A. Storslee (argued), of Fleck, Mather, Strutz & Mayer, P.C., Bismarck, and David S. Evinger (argued) and Terrence R. Joy (no appearance), of Robins, Kaplan, Miller & Ciresi, Minneapolis, Minn., for defendant and appellee.
LEVINE, Justice.
Mark Janavaras, Katina Janavaras, and the National Bank of Harvey appeal from a partial summary judgment dismissing some of their claims against National Farmers Union Property and Casualty Company [“National“]. We conclude that the trial court improvidently certified the judgment as final pursuant to
On July 30, 1986, fire destroyed the Janavarases’ department store in Harvey, North Dakota. The building and contents were insured by National. The Bank held a mortgage on the building and had a security interest in the store‘s inventory.
National denied coverage, asserting that the Janavarases had either deliberately set the fire themselves or had someone else set it, and that the Janavarases had misrepresented their loss history in the insurance application. Pursuant to a loss payable clause in the insurance contract, National paid the Bank the amount of its mortgage interest but refused to pay the Bank for its security interest in the inventory.
The Janavarases and the Bank commenced this action seeking full coverage for the loss and alleging bad faith in denial of claims and in delaying payment to the Bank on its mortgage claim. National answered, asserting that the fire was intentionally set by the Janavarases or someone acting on their behalf, that the Janavarases concealed or misrepresented their true loss history in the application for insurance, that the policy afforded no coverage to the Bank for its security interest in personal property, and that there had been no bad faith in denial of coverage or delay in payment of the Bank‘s claim. On motions for summary judgment, the trial court dismissed the claims of bad faith relating to National‘s denial of coverage and determined that the loss payable clause in the policy applied only to real estate mortgages and did not provide coverage for the Bank‘s interest in personal property. The court specifically refused to enter a
Despite the lack of a
While the first appeal was pending, the Janavarases and the Bank requested reconsideration of the denial of
The trial court cited the following reasons for issuing the
(1) “[T]he Court‘s principal justification is that all of the valid issues of this case should be tried together rather than by a bifurcated trial or retrial following appellate reversal.”
(2) “The Supreme Court might as well tell counsel and the trial court what issues there are for trial here.”
(3) “[W]ell, frankly, the real reason is to provide the appeal. That appeal then can proceed as to those issues.”2
Essentially, the trial court‘s reasoning expresses concern over the potential of a duplicative second trial and invites this court to render an advisory opinion.
We have recently held that, because it can always be said that a second trial may be required if a district court is ultimately reversed on issues decided on summary judgment before trial, the hope or belief that immediate appellate review might avoid the possibility of two trials is not, absent unusual and compelling circumstances, a sufficient reason for granting
We note that, although not raised by the parties, the presence of a unique or complex con-
Similarly, the trial court‘s suggestion that we “might as well tell counsel and the trial court what issues there are for trial here” is a clear invitation to render an advisory opinion, which does not support the court‘s decision to grant
While improperly relying upon these factors in determining the
“(1) the relationship between the adjudicated and 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 setoff against the judgment sought to be made final; (5) miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense, and the like.” Union State Bank v. Woell, supra, 357 N.W.2d at 238 [quoting Allis-Chalmers Corp. v. Philadelphia Electric Co., 521 F.2d 360, 364 (3d Cir. 1975)].
Assessment of the first two factors in light of the facts in this case militate against an immediate appeal.
The adjudicated and unadjudicated claims presented in this case arise from the same series of transactions and occurrences, are logically related legally and factually, and are closely intertwined. See Union State Bank v. Woell, supra, 357 N.W.2d at 238. The Janavarases and the Bank contend that a second appeal after trial is a foregone conclusion. Presented with a similar situation, we stated in Peterson v. Zerr, supra, 443 N.W.2d at 298-299:
“‘It is uneconomical for an appellate court to review facts on an appeal following a
Rule 54(b) certification that it is likely to be forced to consider again when another appeal is brought after the district court renders its decision on the remaining claims or as to the remaining parties.’ 10 Wright, Miller & Kane, supra, § 2659, at pp. 103-104 [Footnote omitted.] The fact that it is likely an appeal will be taken after an unadjudicated claim is decided which involves the same factual situation as that involved in theRule 54(b) certified appeal clearly militates against granting certification. See Union State Bank v. Woell, supra, 357 N.W.2d at 239.”
There is also the possibility that the primary issue raised on appeal, dismissal of the Janavarases’ bad faith claims, may be mooted by the result of the trial on the remaining claims. It is axiomatic that if the jury determines that the Janavarases intentionally destroyed the building in contravention of the policy, thereby abrogating coverage, there can be no bad faith in denying coverage. “[T]he possibility that a need for review might be mooted by future developments in the trial court ‘is a distinct argument of substantial weight supporting the normal postponement of review until
In Union State Bank v. Woell, supra, 357 N.W.2d at 237, we explained the proper procedure for a trial court faced with a request for
“In considering an application for a 54(b) order, the trial court is to exercise its discretion, ‘weighing the overall policy against piecemeal appeals against whatever exigencies the case at hand may present.’ Panichella v. Pennsylvania Railroad Co., supra, 252 F.2d at 455. Upon requesting Rule 54(b) certification, the burden is upon the proponent to establish prejudice or hardship which will result if certification is denied.... The trial court is to weigh the competing equities involved and take into account judicial administrative interests in making its determination whether or not to certify under the Rule.”
In this case, the trial court was presented with no relevant equitable factors demonstrating unusual prejudice or hardship which could counterbalance the strong policy against piecemeal appeals. The close factual and legal relationship between the adjudicated and unadjudicated claims and the possibility of future developments in the trial court rendering one issue moot weighed against certification. Rather than properly balancing these juridical concerns against the relevant competing equities, the trial court instead relied upon impermissible factors to reach its conclusion that there was no just reason for delay. We conclude that the trial court abused its discretion in granting
For the reasons stated in this opinion, we conclude that the
ERICKSTAD, C.J., VERNON R. PEDERSON, Surrogate Justice, and MESCHKE, J., concur.
VERNON R. PEDERSON, Surrogate Justice, sitting in place of VANDE WALLE, J., disqualified.
MESCHKE, Justice, concurring.
I continue to disagree with remodeling
Encouragingly, the majority recognizes that “the presence of a unique or complex controlling issue of law ... may be a relevant factor ... in the
The majority also recognizes that “age, health, and financial condition” may be equitable factors which can be “unusual and compelling.” Footnote 4. Unhappily, the potential scope and cost of duplicative trials is not factored into that equitable equation. Nonetheless, an intermediate final judgment can eliminate unnecessary evidence, confine the issues, save litigants ex-
Since the trial court‘s decisions here do not settle all of the issues as to some parties as in Zerr, supra and Broadway Park, supra, I am not as uneasy about second-guessing this
Notes
“(b) Judgment Upon Multiple Claims or Involving Multiple Parties. If more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or if multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of that determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all of the claims or the rights and liabilities of fewer than all the parties does not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.”