Case ID: br_597/html/0899-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

IN RE: EPD INVESTMENT CO., LLC and Jerrold S. Pressman, Debtors,
    Jason M. Rund, Chapter 7 Trustee, Plaintiff, v. John C. Kirkland, et al., Defendants.
    CV 18-8317 DSF Bankr. No.: 12-ap-02424 ER
    United States District Court, C.D. California.
    Signed March 25, 2019
    Corey Ryan Weber, Michael Wolfe Davis, Brutzkus Gubner Rozansky Seror Weber LLP, Steven T. Gubner, Brutzkus Gubner, Woodland Hills, CA, for Plaintiff.
    Joel A. Goldman, Clark and Trevithick, Los Angeles, CA, Lewis Raymond Landau, Attorney at Law, Calabasas, CA, for Defendant.
    Order DENYING Motion to Trustee for Entry of Final Judgment Pursuant to Rule 54(b) (Dkt. 40)
    Dale S. Fischer, United States District Judge Plaintiff Jason M. Rund, the Chapter 7 Trustee, moves the Court to enter a final judgment pursuant to Federal Rule of Civil Procedure 54(b) against Defendant Poshow Ann Kirkland, in her capacity as trustee of the Bright Conscience Trust (BC Trust), on the first claim for relief to disallow or equitably subordinate the BC Trust's four proofs of claim. The Court deems this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78 ; Local Rule 7-15. The motion is DENIED.
    I. FACTS AND PROCEDURAL BACKGROUND
    Rund brings six claims for relief against both Kirkland and the trustee of the BC Trust. See Adv. No. 2:12-ap-02424-ER, Dkt. 234, Fourth Am. Compl. (FAC). Rund's First Claim is for disallowance of proof of claim; the remaining claims are for avoidance and recovery of allegedly fraudulent transfers. See id.
    On February 17, 2018, the bankruptcy court filed a Report and Recommendation (R & R) and proposed findings recommending this Court enter final judgment in favor of Rund as to some of the claims. See Adv. No. 2:12-ap-02424-ER, Dkt. 341 (R & R). At the same time, the bankruptcy court issued a Memorandum of Decision (MOD) indicating it intended to grant Plaintiff's Motion for Summary Adjudication (MSA) on Count One for equitable subordination. See Adv. No. 2:12-ap-02424-ER, Dkt. 340 (MOD), at 3. In its MOD, the bankruptcy court stated:
    [C]ertain of the issues relevant to this matter are addressed in the [R & R] that the Court has transmitted to the District Court in connection with the Trustee's [MSA] as to the second, third, and sixth claims for relief. To the extent those issues are not stated herein, they are incorporated by reference.
    Id. at 6. The bankruptcy court concluded: "The findings set forth herein will not become the order of the Court until the District Court acts upon the [R & R] submitted in connection with the Trustee's related [MSA] with respect to his fraudulent transfer claims." Id. at 17.
    This Court rejected the R & R and denied Rund's motion for reconsideration. See Case No. CV 18-1413 DSF, Dkts. 22, 27. After the R & R was rejected, the bankruptcy court stated:
    Once the District Court has entered findings with respect to Mr. Kirkland, the Bankruptcy Court can then try the claims against the BC Trust. If the Bankruptcy Court tried claims against the BC Trust prior to the District Court's trial of claims against Mr. Kirkland, findings by the Bankruptcy Court with respect to common issues of fact could prejudice Mr. Kirkland.
    See Adv. No. 2:12-ap-02424-ER, Dkt. 371, at 3-4. On December 17, 2018, this Court withdrew the reference to the bankruptcy court as to the entire adversary proceeding. See Dkt. 27.
    II. DISCUSSION
    Federal Rule of Civil Procedure 54(b) provides:
    When an action presents more than one claim for relief-whether as a claim, counterclaim, crossclaim, or third-party claim-or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.
    "Judgments under Rule 54(b) must be reserved for the unusual case in which the costs and risks of multiplying the number of proceedings and of overcrowding the appellate docket are outbalanced by the pressing needs of the litigants for an early and separate judgment as to some claims or parties." Morrison-Knudsen Co. v. Archer, 655 F.2d 962, 965 (9th Cir. 1981). "A similarity of legal or factual issues will weigh heavily against entry of judgment under the rule, and in such cases a Rule 54(b) order will be proper only where necessary to avoid a harsh and unjust result, documented by further and specific findings." Id."[S]ound judicial administration does not require that Rule 54(b) requests be granted routinely." Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 10, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980).
    When deciding a motion pursuant to Rule 54(b), a court must first determine whether a final judgment has been rendered as to fewer than all of the claims or parties; then it must determine whether there is no just reason to delay entry of judgment on those claims. Fed. R. Civ. P. 54(b).
    No final judgment has been rendered as to any claim against the BC Trust. See Curtiss-Wright, 446 U.S. at 7, 100 S.Ct. 1460 (in the context of Rule 54(b), a "final judgment" is "an ultimate disposition of an individual claim entered in the course of a multiple claims action."). This Court has made no ruling since it withdrew the reference. The bankruptcy court's MOD was not a final judgment. The MOD itself provides that it would become an order of the court if and only if the district court adopted the R & R, which did not occur. The bankruptcy court's own statement that-because the claims against the BC Trust and the claims against John Kirkland involve common issues of fact-it would try the claims against the BC Trust only after this Court tried the claims against John Kirkland confirms that the bankruptcy court did not render a final judgment in its MOD. See Adv. No. 2:12-ap-02424-ER, Dkt. 371, at 3-4.
    Because there has not been an ultimate disposition of any claim against the BC Trust, it is not appropriate for the Court to enter judgment under Rule 54(b).
    III. CONCLUSION
    Plaintiff's motion for entry of judgment under Rule 54(b) is DENIED.
    
      
      The Court set out the basic facts of the case in a previous order. See Dkt. 27, at 2.
    
    
      
      Page numbers refer to the docket pagination.
    
   IT IS SO ORDERED.