Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


December 1, 1992


The opinion of the court was delivered by: MARVIN E. ASPEN


 MARVIN E. ASPEN, District Judge:

 Plaintiffs Fitigues, Inc., FNP Store Corporation, LRV Corporation, Andrea Levinson and Steven Rosenstein (collectively "Fitigues") instituted this action on August 5, 1991, to compel arbitration and to enjoin defendants Joshua E. Varat and Varat Enterprises, Inc. (collectively "Varat") from manufacturing, selling or in any way promoting Fitigues merchandise without Fitigues' written consent. In response, on August 8, 1991, Varat filed a demand for arbitration in the Atlanta division of the American Arbitration Association ("AAA"). On March 24, 1992, arbitrator Harriet E. King rendered her award, which contained seventeen separate findings and resulted in a net transfer in monetary damages of $ 356,944.94 from Fitigues to Varat. On May 4, 1992, Fitigues filed its second-amended complaint, charging Varat with breach of an October 30, 1990, amended settlement agreement as well as the conversion of certain checks and credit memos. Additionally, Fitigues filed an application for an order partially vacating the arbitration award. In turn, Varat moved for entry of judgment to confirm the arbitration award in its entirety and for summary judgment on all claims of Fitigues' second-amended complaint. In an opinion dated September 17, 1992, this court took the following action: (1) denied Fitigues' application for an order partially vacating the arbitration award; (2) granted Varat's motion for entry of judgment; and (3) granted in part and denied in part Varat's motion for summary judgment. Varat now moves (1) pursuant to Fed. R. Civ. P. 54(b) for entry of final judgment on the confirmed arbitration award, and (2) for an award of prejudgment interest at the statutory rate from December 21, 1991, the date arbitration commenced. For the reasons that follow, we grant Varat's motion for entry of final judgment and award Varat prejudgment interest at a rate of 8.75% from March 24, 1992 to the date of judgment.

 I. Final Judgment under Rule 54(b)

 Rule 54(b) provides in part that:

 When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or when multiple parties are involved, 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.

 Fed. R. Civ. P. 54(b). There are three prerequisites to the entry of judgment under Rule 54(b). First, the claim upon which certification is sought must constitute a single "claim for relief." See, e.g., Indiana Harbor Belt R.R. Co. v. American Cyanamid Co., 860 F.2d 1441, 1444-45 (7th Cir. 1988) (finding that plaintiff's strict liability and negligence counts together constitute one claim for relief and accordingly denying appellate review of summary judgment as to only one of the counts). In this regard, separate counts may constitute a single claim for relief. For instance, a plaintiff's claim coupled with a defendant's counterclaim may together constitute a single claim within the meaning of Rule 54(b). See, e.g., ODC Communications Corp. v. Wenruth Inv., 826 F.2d 509, 511-13 (7th Cir. 1987) (deeming a claim for prejudgment possession together with a counterclaim for conversion a single claim for relief). Second, the judgment entered on the claim must be final within the meaning of 28 U.S.C. § 1291. American Hosp. Supply Corp. v. Fisher Scientific Co., 713 F. Supp. 1108, 1109 (N.D. Ill. 1989). Finally, we must find that there is no just reason for delay, taking into consideration judicial efficiency and equity. Curtiss-Wright Corp. v. General Elec. Co., 446 U.S. 1, 8, 100 S. Ct. 1460, 1465, 64 L. Ed. 2d 1 (1980).

 Fitigues does not dispute that the confirmation of the arbitration award is "final" within the meaning of 28 U.S.C. § 1291 and, as such, we turn to the first and third requirements detailed above. Respecting the first requirement, Fitigues, relying on Perera v. Siegel Trading Co., 951 F.2d 780, 786 (7th Cir. 1992), argues that entry of final judgment is inappropriate in this case because "the arbitration question [is] embedded in a larger dispute." Contrary to Fitigues suggestion, however, the court in Perera did not hold that Rule 54(b) may never be used to separate an arbitration award for final judgment. Rather, in Perera, the court confronted an order compelling arbitration which, unlike a final and fully confirmed arbitration award, is an interlocutory order expressly rendered nonappealable by Section 16 of the Federal Arbitration Act, 9 U.S.C. § 16.

 With some guidance from the Supreme Court, the Seventh Circuit has developed an approach that distinguishes claims for relief in an action by focusing on the degree of factual overlap between the issues arising in the claims to be certified under Rule 54(b) and those arising in the remaining claims in the lawsuit: "Two distinct claims are but one for purposes of Rule 54(b) if they have a 'significant factual overlap.'" Automatic Liquid Packaging, Inc. v. Dominik, 852 F.2d 1036, 1037 (7th Cir. 1988) (quoting National Metalcrafters v. McNeil, 784 F.2d 817, 821 (7th Cir. 1986)); American Hosp. Supply, 713 F. Supp. at 1110. The goal of this approach is the avoidance of the risk of reviewing identical issues in a series of appeals:

 For if there are different facts (and of course different issues) considerations of the appeals piecemeal rather than all at once will not involve a duplication in the efforts required by judges to prepare for argument in, and to decide, each appeal . . . . By the same token, if there is a great deal of factual overlap between the decided and the retained claims, they are not separate, and appeal must be deferred till the latter are resolved.

 Jack Walters & Sons Corp. v. Morton Bldg., Inc., 737 F.2d 698, 701 (7th Cir.), cert. denied, 469 U.S. 1018, 105 S. Ct. 432, 83 L. Ed. 2d 359 (1984). For example, in Indiana Harbor, 860 F.2d at 1446, the court noted the substantial overlap between plaintiff's strict liability and negligence counts that resulted from the common issue of reasonable care: "One of the factors for evaluating if an activity is ultra-hazardous is whether the accident could have been prevented by the exercise of reasonable care." Similarly, in ODC Communications, 826 F.2d at 512-13, the court held that the determination of ownership is sufficiently central to both plaintiff's claim for prejudgment possession and the defendant's conversion counterclaim that the overlap of factual issues warrants denial of Rule 54(b) certification.

 Unlike the circumstances found in Indiana Harbor and ODC Communications, however, the decided claim in this case (confirmation of the arbitration award) bears no significant factual overlap with the remaining claim (the extent of damages due to Varat's failure to return certain materials to Fitigues in a timely manner). As noted in our previous opinion, dated September 17, 1992, the factual issue necessary to determine the extent of damages Fitigues suffered as a result of Varat's protracted failure to return the materials is the cost of developing new patterns and sketches for use by Fitigues' new manufacturer. Review of the arbitration award, however, is limited to those circumstances expressly provided in § 10 of the Federal Arbitration Act, 9 U.S.C. § 10. Flender Corp. v. Techna-Quip Co., 953 F.2d 273, 279 n.5 (7th Cir. 1992); Chameleon Dental Prods., Inc. v. Jackson, 925 F.2d 223, 226 (7th Cir. 1991); Moseley, Hallgarten, Estabrook & Weeden, Inc. v. Ellis, 849 F.2d 264, 267 (7th Cir. 1988). Those circumstances concern the conduct of the arbitrator and the circumstances under which the award were obtained, not the merits of the arbitrator's decision. See 9 U.S.C. § 10(a) (Supp. 1992). Accordingly, we find that the decided issue and the remaining issue cannot be deemed a single claim for relief under Rule 54(b).

 Under the third prong of the Rule 54(b) analysis, we look to "whether the claims under review were separable from the others remaining to be adjudicated and whether the nature of the claims already determined was such that no appellate court would have to decide the same issues more than once even if there were subsequent appeals." Curtiss-Wright Corp., 446 U.S. at 8, 100 S. Ct. at 1465. At first blush, it is difficult to distinguish this consideration from the Seventh Circuit's "significant factual overlap" analysis in the context of identifying claims for relief in a lawsuit. "The 'separateness' of the claims being appealed and those that remain in the district court invariably factor into both steps of the review." Indiana Harbor, 860 F.2d at 1444. As this court noted in American Hosp. Supply, 713 F. Supp. at 1108 n.3, however, there is a distinction. A "significant" factual overlap will preclude certification under Rule 54(b) regardless of the existence of other factors warranting interlocutory appellate review whereas any lesser overlap may or may not militate against certification. "For example, if the district court concluded that there was a possibility that an appellate court would have to face the same issues on a subsequent appeal, this might perhaps be offset by a finding that an appellate resolution of the certified claims would facilitate a settlement of the remainder of the claims." Curtiss-Wright Corp., 446 U.S. at 8 n.2, 100 S. Ct. at 1465 n.2. In the instant case, there being little if any factual overlap, a denial of Varat's Rule 54(b) motion must turn on factors such as judicial efficiency and equity. We, however, cannot discern any factor sufficient to preclude Rule 54(b) certification.

 There being no just reason for delay, pursuant to Fed. R. Civ. P. 54(b), we grant Varat's motion for entry of final judgment as to the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.