Opinion ID: 2574876
Heading Depth: 3
Heading Rank: 2

Heading: It Was an Abuse of Discretion To Enter Partial Final Judgment in Favor of Lithia Hyundai and Lithia Chevrolet Before All Claims Were Adjudicated.

Text: The superior court entered final judgment in favor of Lithia Hyundai and Lithia Chevrolet on April 12, 2007, concluding that no just reasons exist to delay entry of final judgment for those dealerships. Within a week, the consumers filed a motion to amend their complaint accompanied by an amended complaint that added class representatives who had purchased vehicles from the dismissed dealerships. They also filed a motion for reconsideration on the basis of their amended complaint. The superior court denied the consumers' motion for reconsideration and affirmed its entry of final judgment without explicitly ruling on the motion to amend. The consumers argue that the superior court erred in entering final judgment when all claims had not been adjudicated. They assert that the superior court's entry of final judgment was an abuse of discretion because it did not give them an opportunity to amend their complaint by adding new class representatives. They explain that new class representatives have appeared that have the `standing' that the dismissed defendants claimed the previous plaintiffs did not have. Thus, the consumers assert that standing questions are now moot due to the amendment of their complaint, which added new class representatives who had direct dealings with the dismissed dealerships. The dealerships respond that the superior court properly exercised its discretion by entry of final judgment against the consumers because there was no just reason for delay. They argue that a long delay in a party's ability to collect on a judgment is a sufficient basis for a finding that there is no just reason for delay. They also assert that this case does not present the problem of piecemeal appeals that would warrant delaying the entry of final judgment. Civil Rule 54(b) provides that when multiple parties are involved [in an action], the court may direct the entry of a final judgment as to one or more but fewer than all of the ... 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 Johnson v. State, [53] we explained that there must be a good reason for using Rule 54(b). [54] We held that granting Rule 54(b) final judgment was inappropriate where neither party would suffer any appreciable hardship if review awaited final determination of the case. [55] In discussing the general approach the superior court should take in addressing a Rule 54(b) motion, we stated that [t]he finding should not be made simply because counsel request it. There should be some danger of actual hardship caused by delay in entry of final judgment. The court should weigh the general policy against piecemeal appeals against the reasons advanced in favor of the proposed finding. [56] Later, in S & B Mining Co. v. Northern Commercial Co., [57] we quoted Johnson approvingly and held that [e]ntry of [R]ule 54(b) judgment is discretionary; however, the policy against piecemeal litigation is very strong.... [58] We further discussed the standard in Dinsmore-Poff v. Alvord: [59] Typically, use of Rule 54(b) is appropriate only if the party seeking judgment is likely to suffer actual hardship otherwise. But the word typically shows that we have not made hardship a categorical requirement. This accords with the federal view that since it is impossible to catalog all reasons to grant a Rule 54(b) motion, courts have discretion to consider any relevant factor.[ [60] ] More recently, in Cole v. State Farm Insurance Co., [61] we emphasized that partial final judgments deserve careful appellate review because of the law's fundamental aversion to piecemeal appeals. [62] We noted that [t]he device should be used only infrequently and only when there is `some danger of actual hardship caused by delay in entry of final judgment.' [63] Nonetheless, we have upheld Rule 54(b) final judgments under the abuse of discretion standard in some instances. [64] The consumers assert that they had a just reason to delay entry of final judgment: They wanted to amend their complaint and add new class representative plaintiffs who purchased vehicles from Lithia Hyundai and Lithia Chevrolet. In their opposition to the motion for partial final judgment, the consumers specifically requested that the superior court enter final judgment without prejudice if the court was inclined to grant the dealerships' motion. Instead, the superior court found there was no just reason for delay and entered partial final judgment without indicating whether it was with or without prejudice. The superior court provided no reason for denying the consumers the opportunity to amend their complaint. In support of their argument that they should have been allowed to amend their complaint before final judgment, the consumers cite Alyeska Pipeline Service Co. v. Shook. [65] Shook involved an Alaska Wage and Hour Act class action claim in which the class representative plaintiff had already received a large severance payment from his former employer. [66] Based on the sufficiency of the payment, we reversed the order denying summary judgment to the employer and remanded for entry of judgment in favor of the employer on the class representative's individual claim. [67] However, we explained that [t]his result does not require dismissal of the class action. The class should have [an] opportunity to substitute a new class representative. [68] Here, the consumers sought the opportunity to bring in new class representatives to remedy the lack of standing against Lithia Hyundai and Lithia Chevrolet. No reason appears why they should not have been allowed this opportunity. The consumers also argued to the superior court that final judgment should be delayed in order to avoid piecemeal appeals. Johnson requires a balancing of the general policy against piecemeal appeals against the reasons advanced in favor of the proposed finding. [69] There is no indication that the superior court balanced the general policy against piecemeal appeals against the dealerships' asserted reason for entry of final judgmenttheir desire to seek attorney's fees and costs. Rather, the court simply signed the proposed order filed by the dealerships. Without evidence that the superior court fulfilled this important duty under Rule 54(b), we cannot affirm the entry of partial final judgment. As we have stated, there must be a good reason for using Rule 54(b). [70] The superior court here simply stated that it was granting final judgment for the reasons set forth in the dealerships' motion for entry of final judgment. However, the reasons set out in the dealerships' motion fail to reveal hardship or any other valid reason to enter partial final judgment. The dealerships provided the following explanation of the hardship they would face if final judgment was not entered: Lithia Hyundai and Lithia Chevrolet have been forced to incur attorney's fees defending against the bogus claims of consumers who never even stepped foot on these dealerships' lots. A final judgment may enable defendants Lithia Hyundai and Lithia Chevrolet to seek attorney's fees and costs as the prevailing party. There is no justification for delaying consideration of such an award until after the resolution of the plaintiffs' unrelated claims against Lithia Dodge and Lithia [Chrysler]. To the contrary, unnecessarily delaying an award of fees and costs would unfairly prejudice Lithia Hyundai and Lithia Chevrolet, who are entitled as prevailing parties to timely seek the recovery of their fees. The dealerships' arguments regarding the hardship of having to wait for attorney's fees and costs, however, are unconvincing. Lithia Hyundai and Lithia Chevrolet are represented by the same counsel as Lithia Dodge and Lithia Chrysler, and counsel has not indicated any reason why it would constitute hardship for them to wait until the entire case has been decided before requesting attorney's fees as to two of the four dealerships. The consumers are correct that [t]he purported reason for entry of final judgment, advanced by the defendants, to allow the dismissed Lithia defendants to seek attorney's fees and costs ... does not constitute the type of hardship envisioned by the rule or the court in allowing the entry of a final judgment as to some, but not all, of the parties named in the action. Moreover, Lithia Hyundai and Lithia Chevrolet have not sought attorney's fees since entry of final judgment, so their purported hardship appears illusory. The dealerships also argue that a long delay in a party's ability to collect on a judgment is a sufficient basis for a finding that there is no just reason for delay. But the dealerships are not waiting to collect a debt or other type of money judgment, as was the case in Bradford v. First National Bank of Anchorage, where we held that Rule 54(b) final judgment was justified by the long delay in collecting a debt. [71] Thus, their argument fails to reveal hardship or any other reason sufficient to warrant Rule 54(b) final judgment. Because the consumers indicated their intent to amend their complaint and add class representatives with standing against Lithia Hyundai and Lithia Chevrolet, and because the dealerships did not show hardship or any other valid reason for final judgment, it was an abuse of discretion for the court to find that there was no just reason for delay and to enter final judgment under Rule 54(b).