Opinion
Case No. 3:01CV7203
November 21, 2002
ORDER
This is a diversity case in which the plaintiff, Schmidt, Long and Associates (SLA), claims that the defendant, United Parcel Service (UPS) breached a contract in which UPS promised to pay SLA a contingent fee for monies recovered by SLA from health care insurers for underpayments by those insurers to UPS of monies to which UPS was entitled. In addition, UPS filed a counterclaim, alleging, inter alia, that it was induced by fraud on SLA's part to enter into the contract. UPS seeks damages, and such other relief as may be deemed appropriate.
In an earlier order, I granted UPS' motion for summary judgment as to SLA's claims. Proceedings relating to UPS' counterclaim were held in abeyance pending that ruling. Pending is a motion by SLA for certification under Fed.R.Civ.P. 54(b), permit it to take an immediate appeal from my ruling dismissing its claims. UPS opposes that motion.
For the reasons that follow, SLA's motion for Rule 54(b) certification shall be denied.
My ruling on UPS' motion for summary judgment resolved only SLA's claims for breach of contract. That ruling was premised on the assumption that the contract was valid — i.e., had not been procured, as UPS alleges, by fraud on the part of SLA. UPS, in opposing SLA's Rule 54(b) motion, makes clear that it wishes to proceed forthwith on its fraud and other claims, and to recover substantial damages that it claims resulted from SLA's fraud. In support of its motion for Rule 54(b) certification, SLA argues principally that immediate appeal is appropriate because the issues adjudicated thus far, and which it wishes to have reviewed immediately on appeal, are separate and distinct from the issues raised by UPS' counterclaim.
I agree: thus far, I have interpreted the contract in light of certain undisputed facts relating primarily to the timing of UPS' recovery of funds from its health insurers. UPS's counterclaim raises issues that largely involve extra-contractual acts on SLA's part, including, inter alia, inducement by fraud.
In Corrosioneering, Inc. v. Thyssen Environmental Systems, Inc., 807 F.2d 1279, 1283 (6th Cir. 1986) (citations omitted), the Sixth Circuit enumerated a "nonexhaustive list of factors which a district court should consider when making a Rule 54(b) determination. . . ." Those factors, the court stated, include:
(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 district 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 set-off 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. Depending upon the facts of the particular case, all or some of the above factors may bear upon the propriety of the trial court's discretion in certifying a judgment as final under Rule 54(b).
In Corrosioneering the court also pointed out that:
As even a cursory examination of these factors shows, an issue being considered for Rule 54(b) certification may be "separate and distinct" from other issues in the case and yet be an unsuitable candidate for immediate appeal. For example, a "separate and distinct" issue of contribution or indemnification would likely be unsuitable for Rule 54(b) certification if the related issue of liability, on which the contribution or indemnity would depend, was yet to be resolved in the district court, because a finding on the liability issue in the district court could moot the need for review of the question of contribution or indemnification.
Id. (citation omitted).
Were fraud found, and UPS elected, as presumably it would, to rescind the contract, along with seeking whatever remedies would remain to it following such recission, see, e.g., Bennice v. Bennice, 82 Ohio App.3d 594, 598 (1992), SLA could not enforce the contract against UPS. Waterford Products Co. v. Victor, 1999 WL 1313664, *5 (Ohio App. 11 Dist., Dec 17, 1999) ("the existence of fraud generally renders a contract unenforceable because there was no meeting of the minds at the moment of the formation of the agreement."). Even though in this case, as in Corrosioneering, the issues raised by SLA's claims and UPS' counterclaim are separate and distinct, a ruling in UPS' favor as to its fraud counterclaim would moot the need for review of the ruling in its favor on SLA's contract claims.
I conclude, accordingly, that Rule 54(b) certification is not appropriate because the outcome with regard to the remaining claims might well make consideration of the issues SLA wants to raise on appeal unnecessary.
It is, therefore,
ORDERED THAT plaintiff's motion for certification pursuant to Fed.R.Civ.P. 54(b) be, and the same hereby is overruled.
So ordered.