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International Fidelity Insurance Co. v. La Porte Construction, Inc.

United States District Court, D. Utah

October 17, 2017


v.
LA PORTE CONSTRUCTION, INC., et al., Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING MOTION TO DIRECT ENTRY OF FINAL JUDGMENT UNDER RULE 54(B)

          Jill N. Parrish, United States District Court Judge.

         Before the Court is Plaintiff International Fidelity Insurance Company's (“IFIC”) Motion to Direct Entry of Final Judgment Under Rule 54(b) (ECF No. 71). IFIC asks the Court to enter a final judgment as to the claims dismissed by the Court's March 2, 2017 Memorandum Decision and Order (ECF No. 69). The Dismissed Defendants[1] do not oppose the relief IFIC seeks. However, they seek certain safeguards if IFIC succeeds on appeal. For the reasons set forth below, the Court grants IFIC's motion subject to the safeguards requested by the Dismissed Defendants.

         I. BACKGROUND

         This dispute arises out of Plaintiff IFIC's attempt to enforce an Indemnity Agreement against more than sixty defendants. Benjamin Logue was involved in the La Porte Construction Project, and he secured contractor and performance bonds from IFIC. IFIC prepared certain Resolutions and an Indemnity Agreement, and Mr. Logue unilaterally executed the Resolutions and Indemnity Agreement purportedly on behalf of the Dismissed Defendants, unilaterally representing to IFIC that he was the managing member of each of the Dismissed Defendants.

         But each of the Dismissed Defendants' publicly available articles of organization identify them as a single-purpose LLC with a clearly delineated single purpose. The Dismissed Defendants do not have a financial, material, or beneficial interest in the La Porte Construction Project. Nor was Mr. Logue the managing member of any of the Dismissed Defendants (with the exception of Andalucia Properties). And none of the Dismissed Defendants authorized Mr. Logue to execute the Resolutions or Indemnity Agreement on their behalf.

         After difficulties arose with the completion of the La Porte Construction Project, IFIC served La Porte with a Notice of Default and Termination and made a demand under the bonds. IFIC also sued to enforce its purported rights under the Indemnity Agreement on claims of indemnity, specific performance, and quia timet relief.

         The Dismissed Defendants moved to dismiss IFIC's claims against them on the grounds that Mr. Logue lacked authority to execute the Resolutions or Indemnity Agreement on their behalves. After a hearing and extensive briefing, this Court agreed and converted the Dismissed Defendants' motions to dismiss into motions for summary judgment.

         The Court granted the Dismissed Defendants' motions, finding, among other things, that (1) “[n]one of the Movants ever authorized Mr. Logue to sign the Indemnity Agreement or Resolution on their behalf, ” (2) that “Mr. Logue lacked authority as a matter of law to execute the Indemnity Agreement on behalf of each Movant, ” and (3) that IFIC had expressly disclaimed any argument that Mr. Logue had apparent authority to execute the Resolutions or Indemnity Agreement. IFIC now asks the Court for an entry of final judgment on the dismissed claims pursuant to Federal Rule of Civil Procedure 54(b).

         II. DISCUSSION

         Rule 54(b) is an exception to the final-judgment rule. Waltman v. Georgia-Pacific, LLC, 590 Fed. App'x 799, 808 (10th Cir. 2014). Under the Rule, a district court may direct a final judgment as to one or more but fewer than all of the claims or parties (thus making a ruling immediately appealable), so long as the court determines “that there is no just reason for delay.” Fed.R.Civ.P. 54(b). To be proper, a Rule 54(b) certification must contain three features: (1) it must stem from a lawsuit involving multiple claims; (2) it must represent a final decision as to at least one of the claims; and (3) it must include the district court's express determination “that there is no just reason for delay.” Waltman, 590 Fed. App'x at 809-10 (quoting Fed.R.Civ.P. 54(b)). If one of the three features is lacking, the court of appeals will not have jurisdiction. Id.

         A. Lawsuit Involving Multiple Claims

         The lawsuit involves multiple claims against multiple defendants. Thus, the first requirement for a Rule 54(b) certification is satisfied.

         B. Final Decisions on at the Claims at Issue

         To be considered “final, ” an order must be “‘final' in the sense that it is ‘an ultimate disposition of an individual claim entered in the course of a multiple claim action.'” Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 7 (1980) (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956)). As such, “a judgment is not final for the purposes of Rule 54(b) unless the claims resolved are distinct ...


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