Opinion
Supreme Court Case No. 22SC682
05-20-2024
Daniel WOLF, Petitioner, v. Michael J. BRENNEMAN and Jeffrey B. Selby, Respondents.
Attorneys for Petitioner: Haddon, Morgan and Foreman, P.C., Adam Mueller, Ty Gee, Denver, Colorado Attorneys for Respondents: Davis Graham & Stubbs LLP, Sarah M. Kellner, Brandee L. Caswell, Denver, Colorado
Certiorari to the Colorado Court of Appeals, Court of Appeals Case No. 21CA111
Attorneys for Petitioner: Haddon, Morgan and Foreman, P.C., Adam Mueller, Ty Gee, Denver, Colorado
Attorneys for Respondents: Davis Graham & Stubbs LLP, Sarah M. Kellner, Brandee L. Caswell, Denver, Colorado
En Banc
JUSTICE HART delivered the Opinion of the Court, in which CHIEF JUSTICE BOATRIGHT, JUSTICE MARQUEZ, JUSTICE HOOD, JUSTICE GABRIEL, JUSTICE SAMOUR, and JUSTICE BERKENKOTTER joined.
JUSTICE HART delivered the Opinion of the Court.
¶1 In a case involving multiple claims, Colorado Rule of Civil Procedure 54(b) grants a trial court discretion to certify a ruling on any subset of claims as "final" when there is "no just reason for delay[ing]" an appeal of that subset of claims. This designation allows parties to appeal certified claims while others remain pending in the trial court.
¶2 In a 2017 opinion, the court of appeals significantly narrowed the applicability of Rule 54(b) by asserting that a trial court should only certify an issue for appeal under that rule if it could "give reasons for certification showing that unless the judgment on the claim is certified as final, a party would experience some hardship or injustice through delay that could be alleviated only by an immediate appeal." Allison v. Engel, 2017 COA 43, ¶ 1, 395 P.3d 1217, 1219. Relying on Allison in this case, a division of the court of appeals concluded that, although the trial court had offered reasons for certifying the particular claims for appeal, those reasons did not show a hardship that could only be alleviated by an immediate appeal. Wolf v. Brenneman, No. 21CA111, ¶ 17 (July 28, 2022).
¶3 Because Allison created a standard that is inconsistent with our precedent recognizing the trial court’s considerable discretion in determining whether to certify claims under Rule 54(b), we overturn Allison, vacate the division’s judgment in this case, and remand it to the court of appeals for a determination of whether it has jurisdiction to hear the certified claims in light of our decision.
I. Facts and Procedural History
¶4 In 2002, Michael J. Brenneman and Jeffrey B. Selby (collectively "Respondents") hired Daniel Wolf to aid in the development of Denver’s Four Seasons Hotel. Fifteen years later, Respondents accused Wolf of stealing millions and passed on information concerning their business dealings to the Denver District Attorney ("DA"). Shortly thereafter, the DA charged Wolf with theft and conspiracy to commit theft. After a grand jury indicted Wolf on these charges, a newspaper quoted Selby as saying Wolf had committed "fraudulent theft" and "sold his soul."
¶5 A jury found that Wolf was not guilty, and Wolf then sued Respondents for (1) malicious prosecution, (2) abuse of process, (3) civil conspiracy, (4) false imprisonment, and (5) defamation. Respondents moved to dismiss the first four claims on the ground that their statements to the DA were protected by the common law doctrine of complaining witnesses and by this court’s precedent concerning immunity from civil liability for individuals who are "an integral part of the judicial process." Hoffler v. Colo. Dep’t of Corr., 27 P.3d 371, 373 (Colo. 2001). The trial court agreed that the first four claims were based on "statements made by [Respondents] as part of the judicial process" and accordingly ruled that Respondents "had absolute immunity" from all the charges except defamation (as the statements undergirding the defamation charge were not made as a part of the judicial process).
¶6 Wolf then asked the court to certify the dismissal order as a final and appealable judgment under Rule 54(b). The trial court granted the motion, reasoning that timely appellate review of the dismissed claims would (1) prevent the parties from being "forced to have the expense of two trials" and (2) aid the trial court in conducting an eventual trial because resolution of the dismissed claims was "likely to control the remaining claim and resolution of this case." The court further noted that the facts were largely undisputed, so the appellate record would be limited. Therefore, the court concluded, as required by Rule 54(b), that there was "no just reason for delay" and certified the four claims for appeal.
¶7 A split division of the court of appeals found the certification invalid. The majority observed that a desire to avoid duplication of trial efforts and obtain guidance from an appellate court were essentially the reasons given for Rule 54(b) certification that Allison had determined were insufficient. Wolf, ¶¶ 15-16. The division therefore concluded that, following Allison, the trial judge had abused his discretionary authority under Rule 54(b). Id. at ¶ 17. Judge Berger—a member of the original Allison majority—dissented, contending that the Allison court’s "adoption of a black letter rule of law was unwise and legally unjustified" as it gave no deference to the judgment of the trial court on matters of certification or the proper allocation of judicial resources. Id. at ¶¶ 19, 22 (Berger, J., dissenting).
¶8 Following the ruling, Wolf filed a petition for certiorari, which this court granted. Both parties now join Judge Berger in asking us to overrule Allison.
We granted certiorari to decide the following issue:
[REFRAMED] Whether the holding in Allison v. Engel, 2017 COA 43, 395 P.3d 1217, regarding what constitutes a sufficient justification for certification of final orders under C.R.C.P. 54(b) should be overturned.
II. Analysis
A. Standard of Review
[1, 2] ¶9 We review interpretations of the Colorado Rules of Civil Procedure de novo. Brown v. Walker Com., Inc., 2022 CO 57, ¶ 14, 521 P.3d 1014, 1018. But we review a trial court’s determination in a Rule 54(b) certification order that there is "no just reason for delay" for an abuse of discretion. Lytle v. Kite., 728 P.2d 305, 308 (Colo. 1986). A court abuses its discretion only when its ruling is "manifestly arbitrary, unreasonable, or unfair." In re Storey, 2022 CO 48, ¶ 35, 517 P.3d 1243, 1252.
B. Allison Impermissibly Restricts Trial Court Discretion under Rule 54(b)
¶10 Colorado appellate courts can generally only hear disputes arising from a final judgment of a lower court. See C.A.R. 1(a). A judgment is typically not "final" until the court has ruled on all outstanding claims. However, C.R.C.P. 54(b) provides that "[w]hen more than one claim for relief is presented 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 … upon an express determination that there is no just reason for delay." This certification allows parties, with a judge’s approval, to appeal a trial court’s final ruling on some matters without needing to wait for a final judgment on other pending claims.
¶11 In this case, Wolf requested, and the district court granted, certification under Rule 54(b) of the order dismissing four of his five claims. Wolf appealed. The division—applying the court of appeals’ earlier decision in Allison—concluded that the district court’s justification for certification failed to show a "hardship or injustice" that could only be alleviated by an immediate appeal and, further, that the reasons proffered by the court for certifying the final order were the same as those rejected in Allison and were not themselves sufficient to support certification. Wolf, ¶¶ 15, 17.
¶12 In Allison, two neighbors engaged in a protracted property dispute.¶ 4, 395 P.3d at 1220. Following litigation over a series of claims and counterclaims, the district court entered default judgment on an unjust enrichment claim. Id. at ¶¶ 6-10, 395 P.3d at 1220-21. The court certified that order as final under Rule 54(b), finding that there was no just reason for delay because certification would (1) "avoid duplicative efforts" and (2) grant the parties and the district court a "clear sense of direction in terms of issues to be considered" following the merits trial. Id. at ¶ 18, 395 P.3d at 1222. On appeal, the division determined that these justifications were insufficient under Rule 54(b) and that it lacked jurisdiction to hear the claim on the merits. Id. at ¶ 45, 395 P.3d at 1226.
¶13 The Allison court asserted that "[d]istrict courts should … be reluctant to enter Rule 54(b) orders since the purpose of the rule is limited to avoiding undue hardship resulting from a delay in allowing an appeal." Id. at ¶ 32, 395 P.3d at 1224. Then, citing to federal appellate decisions interpreting the functionally similar Fed. R. Civ. P. 54(b), the court concluded that Rule 54(b) certification should be granted only when a party "will suffer some hardship or injustice that can be alleviated only by an immediate appeal." Id. at ¶ 33, 395 P.3d at 1224.
¶14 After announcing this stringent standard, the Allison court considered the trial judge’s proffered reasons for certification—a desire to (1) avoid duplicative trials and (2) obtain clarification of the legal issues. Id. at ¶¶ 37-38, 395 P.3d at 1225. The court found that both justifications were "plainly insufficient to justify certification." Id. at ¶¶ 40, 42, 395 P.3d at 1225.
¶15 As to the desire to avoid duplicative trials, the division noted that any case with multiple claims could benefit from early appellate intervention on a dismissed claim to avoid multiple trials if the claim is later resurrected. Id. at ¶ 40, 395 P.3d at 1225, This harm, concluded the court, is therefore Insufficiently specific to justify certification. Id. Further, because appellate courts do not act as an "advisory board" with whom trial courts can consult mid-case, the Allison court explained that the justification that early appellate intervention would offer legal clarity is "simply not a proper function of Rule 54(b) certification." Id. at ¶ 42, 395 P.3d at 1225-26.
¶16 Allison's rigidity is inconsistent with our prior precedent interpreting Rule 54(b). See. Harding Glass Co. v. Jones, 640 P.2d 1123, 1125 (Colo. 1982). In Harding Glass, we adopted a three-step test for determining the validity of a certification order. 640 P.2d at 1125. First, the trial court "must determine that the decision to be certified is a ruling upon an entire ‘claim for relief.’ " Id. (quoting Curtiss-Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, 7, 100 S.Ct. 1460, 64 L.Ed.2d 1 (1980)). Second, "it must conclude that the decision is final ‘in the sense of an ultimate disposition of an individual claim.’ " Id. (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436, 76 S.Ct. 895, 100 L.Ed. 1297 (1956)). Third, the court "must determine whether there is just reason for delay in entry of a final judgment on the claim." Id. Appellate review of the first two questions is de novo, but the third "is committed to the trial court’s sound judicial discretion." Id. at 1125-26.
¶17 Although Allison purported to follow federal cases interpreting Fed. R. Civ. P. 54(b), see Allison at ¶¶ 31-33, 395 P.3d at 1224, the per se rules adopted by the Allison court are inconsistent with federal law as well. Most notably, in Curtiss-Wright, the U.S. Supreme Court expressed its strong "reluctan[ce] … to fix or sanction narrow guidelines for the district courts to follow" in Fed. R. Civ. P. 54(b) certification orders. 446 U.S. at 11, 100 S.Ct. 1460. Further, the Court noted that "the proper role of the court of appeals is not to reweigh the equities or reassess the facts but to make sure that the conclusions derived from those weighings and assessments are juridically sound and supported by the record" in part because trial courts are "the one[s] most likely to be familiar with the case and with any justifiable reason for delay." Id. at 10, 100 S.Ct. 1460 (quoting Sears, 361 U.S. at 437, 76 S.Ct. 895).
[3] ¶18 We therefore emphasize what we explained many years ago in Harding Glass, 640 P.2d at 1125: Appellate courts reviewing a district court's finding that there is "no just reason for delay" in a Rule 54(b) certification order do so only to determine whether the court abused its discretion and may overturn those decisions only if they are "manifestly arbitrary, unreasonable, or unfair." Storey, ¶ 35, 517 P.3d at 1252. Because there are situations in which a trial court would not abuse its discretion by considering the factors rejected in Allison, we overrule Allison and express our general skepticism of the creation of per se rules that cabin trial court discretion under Rule 54(b).
Respondents assert that a trial court’s certification of claims dismissed on the ground of absolute immunity ought to receive special deference. However, we granted this case only to consider whether Allison should be overruled. Having so decided, we decline to reach beyond the issue presented. The fact that the underlying substantive issue is immunity from suit is one factor of many that a court may consider in deciding to certify under C.R.C.P. 54(b).
¶19 We take no position on whether the court of appeals has jurisdiction in this case. On remand, the division should consider whether the district court abused its discretion in certifying the claims pursuant to Rule 54(b) under the circumstances presented by this case.
III. Conclusion
¶20 We accordingly overrule Allison to the extent that it conflicts with this opinion, vacate the division’s judgment, and remand the case to the court of appeals for reconsideration of the jurisdictional question.