The SD Supreme Court handed down one decision this morning,
holding inter alia:
1) Appeal Dismissed, Rule
54(b) requirements not satisfied
Summary follows:
FIRST NATIONAL BANK v. INGHRAM, 2022 S.D. 2: Plaintiff Bank
filed suit to foreclose on real estate and for replevin of business
property. Defendants counterclaimed
fraud, deceit, breach of contract and breach of fiduciary duty. The trial court ruled favorably for the bank
on its claims, certifying its decision as final for purpose of appeal pursuant
to SDCL 25-6-54(b). Defendants
appealed. The SD Supreme Court dismissed
the appeal because the “certification order” did not adequately satisfy the
requirements of Rule 54(b). This
decision is unanimous with opinion authored by Justice Kern.
Due to the importance of this ruling, I am reproducing Rule
54(b) below, together with quoted material found in ¶¶ 31 & 37 of the Court’s opinion:
SDCL
15-6-54(b) provides:
When
multiple claims for relief or 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 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 such determination and direction, any order or
other form of decision, however designated, which adjudicates ewer than all the
claims or the rights and liabilities of fewer than all the parties shall 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 g all the claims and the rights and liabilities of all
the parties.
And the entirety of ¶31:
[¶31.]
While a “court may enter a final judgment on a single issue in a multi-claim
case under SDCL 15-6-54(b),” we have repeatedly held that courts should not
routinely enter such judgments and that they are only appropriate when
justified by special circumstances. Stromberger Farms, Inc., 2020 S.D.
22, ¶ 22, 942 N.W.2d at 256. “Rule 54(b) certification is not a procedural
formality.” Weisser v. Jackson Twp. of Charles Mix Cnty., 2009 S.D. 43,
¶ 4, 767 N.W.2d 888, 889. The purpose of Rule 54(b) certification is to
“improve[ ] [the] administration of justice,” not to provide “a courtesy or
accommodation to counsel.” Davis v. Farmland Mut. Ins. Co., 2003 S.D.
111, ¶ 13, 669 N.W.2d 713, 718 (citation omitted). To further this purpose, we
have identified three principles to guide a court in a Rule 54(b) analysis:
(1) the burden is on the party seeking final certification to
convince the trial court that the case is the “infrequent harsh case” meriting
a favorable exercise of discretion; (2) the trial court must balance the
competing factors present in the case to determine if it is in the best
interest of sound judicial administration and public policy to certify the
judgment as final; (3) the trial court must marshal and articulate the factors
upon which it relied in granting certification so that prompt and effective review
can be facilitated.
Nelson v.
Est. of Campbell, 2021 S.D. 47, ¶ 27,
963 N.W.2d 560, 568 (quoting Davis, 2003 S.D. 111, ¶ 13, 669 N.W.2d at
718–19). Nelson also notes several factors that may bear upon a court’s
decision to allow Rule 54(b) certification, including:
(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 [trial] 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.
Id. ¶ 28, 963 N.W.2d at 568–69 (citation omitted).
And a portion of ¶ 37:
[¶37.] … We
have repeatedly held that a court “must include a reasoned statement in support
of its determination . . . where the justification for the certificate is not
apparent.” Jacquot, 2010 S.D. 84, ¶ 14, 790 N.W.2d at 503 (citation
omitted). This mandatory requirement is missing from the record before us.
This decision may be accessed at
