Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-01482/USCOURTS-caed-2_14-cv-01482-5/pdf.json

Parties Involved:
Colonial First Business Development, LLC
Defendant
Colonial First Lending Group, Inc.
Defendant
Flagship Financial Group, LLC
Defendant
Devin Jones
Defendant
Diana McMenemy
Plaintiff
Michael McMenemy
Plaintiff

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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

DIANA McMENEMY, an 

individual, and MICHAEL 

McMENEMY, an individual, 

Plaintiffs, 

v. 

COLONIAL FIRST LENDING GROUP, 

INC., a Utah corporation, 

COLONIAL FIRST BUSINESS 

DEVELOPMENT, LLC, a Utah 

limited liability company, 

DEVIN JONES, an individual, 

FLAGSHIP FINANCIAL GROUP, 

LLC, and DOES 1 through 10, 

Defendants. 

No. 2:14-cv-001482 JAM AC

ORDER GRANTING PLAINTIFFS’ 

MOTION FOR CERTIFICATION OF 

RULING UNDER FRCP 54(b) 

This matter is before the Court on Plaintiffs Diana McMenemy 

and Michael McMenemy’s (“Plaintiffs”) motion to certify (Doc. 

#69) the Court’s October 9, 2014 order (Doc. #50) as a final 

judgment under Rule 54(b) of the Federal Rules of Civil Procedure 

(“FRCP”). Defendant Colonial First Lending Group, Inc. 

(“Defendant CFLG”) opposes (Doc. #80) the motion and Plaintiffs 

filed a reply (Doc. #82). For the following reasons, Plaintiffs’ 

Case 2:14-cv-01482-JAM-AC Document 88 Filed 03/12/15 Page 1 of 7
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motion is granted.1

I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 

Defendants provided mortgage brokerage services to 

Plaintiffs – who are husband and wife – for the purposes of 

obtaining for Plaintiffs a purchase money home loan. FAC ¶ 9. 

Plaintiffs allege that Defendants committed fraud by failing to 

disclose that they were unlicensed to perform broker services and 

by diverting money out of escrow to themselves. FAC ¶ 18. 

On July 3, 2014, Plaintiffs moved for a new summons (Doc. 

#29) to be issued by the Court, so that they could properly serve 

Defendant Colonial First Business Development, LLC (“Defendant 

CFBD”). Defendant CFLG opposed Plaintiffs’ motion (Doc. #34), 

arguing that Defendant CFBD no longer existed. Plaintiffs did 

not file a reply, and Plaintiffs’ counsel did not appear at the 

August 20, 2014 hearing on their motion. Based on the facts and 

arguments before the Court at the time of the hearing, 

Plaintiffs’ motion was denied (Doc. #37). 

On August 28, 2014, Plaintiffs moved for relief from the 

Court’s denial of their motion, under Rule 60(b)(1) of the FRCP. 

Plaintiffs’ counsel argued that his failure to file a reply and 

his failure to appear at the hearing constituted “excusable 

neglect” and that the Court should consider his untimely reply 

brief. He argued that an issue with his email service provider 

had prevented him from learning that the motion for a new summons 

 

1 This motion was determined to be suitable for decision without 

oral argument. E.D. Cal. L.R. 230(g). The hearing was 

scheduled for March 11, 2015. 

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was opposed. His motion for relief under Rule 60(b)(1) did not 

directly address his failure to appear at the hearing, but he has 

explained that he missed the hearing “due to a court appearance 

in another court that took longer than expected.” Mot. at 2-3. 

On October 9, 2014, the Court denied Plaintiffs’ motion for 

relief, applying the four Ahanchian factors and concluding that 

the failures of Plaintiffs’ counsel did not constitute “excusable 

neglect.” Doc. #50 (citing Ahanchian v. Xenon Pictures, Inc., 

624 F.3d 1253 (9th Cir. 2010)). 

II. OPINION 

Pursuant to Rule 54(b) of the FRCP, Plaintiffs now ask the 

Court to certify its October 9, 2014 order, denying Plaintiffs’ 

Motion for Relief under Rule 60(b)(1). Mot. at 1. Plaintiffs 

argue that such certification is appropriate because the Court’s 

order was a final judgment as to Defendant CFBD, and because 

there is no reason to delay the appeal. Mot. at 3. Defendant 

CFLG urges the Court to deny Plaintiffs’ motion, due to the 

futility of the remedy ultimately sought by Plaintiffs. Opp. at 

3. 

Rule 54(b) provides that, “when multiple parties are 

involved [in an action], the court may direct entry of a final 

judgment as to one or more . . . parties only if the court 

expressly determines that there is no just reason for delay.” 

The practical effect of an entry of a final judgment under Rule 

54(b) is that the judgment may be immediately appealed. 

Morrison-Knudsen Co. v. Archer, 655 F.2d 962, 965 (9th Cir. 

1981). 

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In evaluating a Rule 54(b) motion, the Court must first 

determine whether a “final judgment” has been rendered as to a 

particular claim or party. Wood v. GCC Bend, LLC, 422 F.3d 873, 

878 (9th Cir. 2005). Here, Plaintiffs argue that the Court’s 

October 9, 2014 order is a final judgment, because “the Court’s 

decision prevents the Court from even obtaining jurisdiction” 

over Defendant CFBD. Mot. at 4. Defendant CFLG does not oppose 

this argument. Opp. at 2-3. This Court’s denial of Plaintiffs’ 

motion for Rule 60(b)(1) relief is an “ultimate disposition” of 

Plaintiffs’ rights as to Defendant CFBD. Wood, 422 F.3d at 878. 

Without obtaining the relief sought in their motion, Plaintiffs 

are unable to properly serve Defendant CFBD and none of 

Plaintiffs’ claims against Defendant CFBD are properly before the 

Court. The Court therefore finds that its October 9, 2014 denial 

of Plaintiffs’ motion for relief under Rule 60(b)(1) is a final 

judgment for purposes of Rule 54(b) certification. 

The Court must next determine whether “there is any just 

reason for delay” of an appeal. Wood, 422 F.3d at 878. The 

Ninth Circuit has noted that “[i]t is left to the sound judicial 

discretion of the district court to determine the appropriate 

time when each final decision . . . is ready for appeal.” Id. at 

878. The primary interest to be considered by the Court in 

making this determination is that of “sound judicial 

administration.” Id. at 878. Certification for an immediate 

appeal is only appropriate if the Court finds that both (1) “the 

costs and risks of multiplying the number of proceedings and of 

overcrowding the appellate docket are outbalanced by pressing 

needs of the litigants for an early and separate judgment as to 

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some . . . parties;” and (2) “upon any review of the judgment 

entered under the rule, the appellate court will [not] be 

required to address legal or factual issues that are similar to 

those contained in the claims still pending before the trial 

court.” Morrison-Knudsen Co. v. Archer, 655 F.2d 962, 965 (9th 

Cir. 1981). 

In this case, there is no “just reason for delay” of 

Plaintiffs’ appeal. Wood, 422 F.3d at 878. As required by 

Morrison-Knudsen, the Court specifically finds that the “costs 

and risks of multiplying the number of proceedings and of 

overcrowding the appellate docket are outbalanced by pressing 

needs of the litigants for an early and separate judgment” as to 

Defendant CFBD. Morrison-Knudsen, 655 F.2d at 965. As the 

Court’s October 9, 2014 order essentially results in the 

exclusion of Defendant CFBD from this case – assuming arguendo

that it exists or may otherwise be properly served – the interest 

of judicial economy would not be served by delaying Plaintiffs’ 

contemplated appeal. The completion of proceedings against 

remaining Defendants, only to be followed by Plaintiffs’ appeal 

of the order concerning the service of Defendant CFBD, would 

create a substantial risk of duplication of proceedings and waste 

of judicial resources. By certifying the issue for appeal at 

this time, the Court ensures that the proper scope of Plaintiffs’ 

suit will be known in advance of the deadlines for completion of 

discovery and the filing of dispositive motions. 

Similarly, the Court finds that, in deciding Plaintiffs’ 

appeal, the Ninth Circuit will not “be required to address legal 

or factual issues that are similar to those contained in the 

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claims still pending” before this Court. Morrison-Knudsen, 655 

F.2d at 965. As noted by Plaintiffs, the issue on appeal will be 

narrow and distinct: the Ninth Circuit will only be asked to 

decide whether the Court abused its discretion in finding that 

Plaintiffs’ failure to file a reply brief and failure to appear 

at the August 20, 2014 hearing constituted “excusable neglect” 

under Ahanchian. Mot. at 5. None of the claims currently 

pending before this Court are related to that narrow issue. 

There is little risk that certifying the issue for immediate 

appeal will create duplicative work for the appellate court. 

Defendant CFLG’s reliance on the fact that Defendant CFBD no 

longer exists is misplaced. Defendant CFLG argues that the 

ultimate remedy sought by Plaintiffs – a Court-issued, new 

summons for Defendant CFBD – is futile because the corporation in 

question no longer exists and cannot be properly served. In 

doing so, Defendant CFLG merely re-argues its opposition to 

Plaintiffs’ motion for a new summons, and does not address the 

issue presently before the Court: whether the October 9, 2014 

order should be certified for immediate appeal. 

 For all of these reasons, the Court GRANTS Plaintiffs’ 

motion for certification of its October 9, 2014 ruling, under 

Rule 54(b). The Court’s October 9, 2014 order denying 

Plaintiffs’ motion for relief under Rule 60(b)(1) is a final 

judgment and is immediately appealable to the Ninth Circuit. 

Although Plaintiffs argue that there is “no need to stay the 

action” while the appeal is pending (and that the Court should 

permit “discovery into the relevant conduct of [Defendant CFBD]” 

during the appeal), the Court concludes that this would not serve 

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the interests of judicial economy and would be potentially unfair 

to Defendants. Mot. at 5. Rather, it is more appropriate to 

stay the action until the Ninth Circuit has ruled on Plaintiffs’ 

likely appeal. Such a stay will not take effect until Plaintiffs 

file a notice of appeal with this Court. 

III. ORDER 

For the reasons set forth above, the Court GRANTS 

Plaintiffs’ motion to certify the October 9, 2014 order under 

Rule 54(b). This action will be stayed during the pendency of 

Plaintiffs’ appeal in the Ninth Circuit, but the stay will not 

take effect until Plaintiffs file a notice of appeal with this 

Court. Within 30 days of the Ninth Circuit’s decision on 

Plaintiffs’ likely appeal, the parties are ordered to file a 

joint status report in this matter. 

IT IS SO ORDERED. 

Dated: March 12, 2015 

Case 2:14-cv-01482-JAM-AC Document 88 Filed 03/12/15 Page 7 of 7