Solomon v. Aetna Life Ins. Co.

• Decision Date: 24 January 1986
• Docket Number: No. 84-1860,84-1860
• Citation: 782 F.2d 58
• Parties: William SOLOMON; Richard Vincent; Jesse Vivian; Kirill Bochnewich; Berj Nercessian; and Julius Smith, Individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. AETNA LIFE INSURANCE CO., a Connecticut corporation; Cunningham Drug Stores, Inc., a Michigan corporation, Defendants, National Bank of Detroit, a national banking institution, jointly and severally, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 58

782 F.2d 58

4 Fed.R.Serv.3d 37

William SOLOMON; Richard Vincent; Jesse Vivian; Kirill Bochnewich; Berj Nercessian; and Julius Smith Individually and on behalf of all others similarly situated Plaintiffs-Appellants, v. AETNA LIFE INSURANCE CO., a Connecticut corporation Cunningham Drug Stores, Inc., a Michigan corporation, Defendants National Bank of Detroit, a national banking institution, jointly and severally, Defendant-Appellee.

No. 84-1860.

United States Court of Appeals, Sixth Circuit.

Argued Oct. 8, 1985.

Decided Jan. 24, 1986.

Kenneth A. Slusser (argued), Cumming, McClorey, Davis & Acho, P.C., Livonia, Mich., for plaintiffs-appellants.

Thomas P. Hustoles, Miller, Canfield, Paddock & Stone, Jack O. Kalmink, Cross, Wrock, Miller & Vieson, Detroit, Mich., William F. Conlon, Chicago, Ill., Francis R. Ortiz (argued), Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit, Mich., for National Bank of Detroit.

Before MARTIN and WELLFORD, Circuit Judges, and PECK, Senior Circuit Judge.

BOYCE F. MARTIN, Jr., Circuit Judge.

We have before us an ERISA case involving multiple claims and multiple parties, where summary judgment was granted to National Bank of Detroit, and a certification under 54(b) of the Federal Rules of Civil Procedure was made. However, because we can find in this record no reasons for the certification given by the district court, we vacate the certification and dismiss the appeal.

William Solomon and five other former employees of Cunningham Drug Stores in Detroit have sued claiming that each of their vested balances in the Cunningham Retirement Plan were improperly reduced by 11.7%. The plan provides for two distinct retirement investment funds: (1) an equity fund managed by the National Bank of Detroit and invested in common stock options or their equivalent; and (2) a segregated investment fund called the guaranteed principal fund which is to be invested solely in insurance contracts selected by the employer Cunningham or in cash equivalents as directed by Cunningham. Cunningham elected to fund this portion of the plan through a multivestor contract with the Aetna Life Insurance Company. The alleged improper reduction occurred as a result of a market value adjustment made by Aetna in connection with the plaintiffs' election of a lump sum distribution of their benefits from the guaranteed principal fund portion of the plan.

In the complaint, the plaintiffs claimed damages against the National Bank of Detroit, which was the plan trustee pursuant to a trust agreement dated October 6, 1976, Cunningham Drug Stores and Aetna Life Insurance Company. Following the filing of answers, the National Bank of Detroit sought summary judgment in the district court. The bank claimed that Solomon and his fellow former employees were owed no statutory or common law duties with regard to the investments which they claimed were improper. The bank argued the trust agreement was clear that it was neither the plan administrator nor did it have any discretionary authority over the multivestor insurance contract in the guaranteed principal fund. The bank also argued that the plaintiffs' common law claims were preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001 et seq. ("ERISA"). The bank's motion for summary judgment was granted to November 5, 1984, and the district court's judgment was certified as final pursuant to Rule 54(b) of the Federal Rules of Civil Procedure. The plaintiffs appeal that decision.

Although the plaintiffs and the National Bank of Detroit have focused on the summary judgment disposition as the central issue on this appeal, the posture we assume in this case depends on the propriety of the district court's 54(b) certification. If that certification was improper, then the district court abused its discretion, and we are without jurisdiction to consider the merits of the summary judgment motion. See B.B. Adams General Contractors, Inc. v. Department of Housing and Urban Development, 501 F.2d 176 (5th Cir. 1974).

It is clear that our jurisdiction stems from the appeal of a final order under 28 U.S.C. Sec. 1291 or from an appealable interlocutory order under Section 1292. In the present case the following order was entered by the district court:

It is hereby ordered that NBD's Motion for Summary Judgment be, and the same hereby is, granted, and plaintiffs' complaint is dismissed in its entirety as to NBD. It is hereby further ordered that because there is no just reason for delay in entering a judgment in favor of National Bank of Detroit, the Court directs that a judgment of dismissal of plaintiffs' claims against NBD shall be entered forthwith.

In Sears Roebuck & Co. v. Mackey, 351 U.S. 427, 437-38, 76 S.Ct. 895, 900-01, 100 L.Ed. 1297 (1956), the Court stated:

The District Court cannot, in the exercise of its discretion, treat as 'final' that which is not 'final' within the meaning of Sec. 1291. But the District Court may, by the exercise of its discretion in the interest of sound judicial administration, release for appeal final decisions upon one or more, but less than all, claims in multiple claims actions....

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Rule 54(b) ... scrupulously recognizes the statutory requirement of a 'final decision' under Sec. 1291 as a basic requirement of an appeal to the Court of Appeals....

Fed.R.Civ.P. 54(b) ¹ is designed to facilitate the entry of judgment on one or more claims, or as to one or more parties, in a multi-claim/multi-party action. The rationale for its adoption was stated in Mackey, 351 U.S. at 432, 76 S.Ct. at 897, as follows:

With the Federal Rules of Civil Procedure, there came an increased opportunity for the liberal joinder of claims in multiple claims actions. This, in turn, demonstrated a need for relaxing the restrictions upon what should be treated as a judicial unit for purposes of appellate jurisdiction. Sound judicial administration did not require relaxation of the standard of finality in the disposition of the individual adjudicated claims for the purpose of their appealability. It did, however, demonstrate that, at least in multiple claims actions, some final decisions, on less than all of the claims, should be appealable without waiting for a final decision on all of the claims ...

The rule attempts to strike a balance between the undesirability of piecemeal appeals and the need for making review available at a time that best serves the needs of the parties. See Wright & Miller, Federal Practice and Procedure: Civil Sec. 2654 (1973). The rule is not to be used without due deliberation. In Panichella v. Pennsylvania Railroad Co., 252 F.2d 452, 455 (3d Cir.1958), the court stated:

[T]he draftsmen of ... Rule [54(b) ] have made explicit their thought that [the rule] would serve only to authorize 'the exercise of a discretionary power to afford a remedy in the infrequent harsh case....' [citation omitted] It follows that 54(b) orders should not be entered routinely or as a courtesy or accommodation to counsel.

We acknowledge that the district court's decision to certify a claim for immediate appeal under Rule 54(b) merits substantial deference. Curtiss-Wright Corp. v. General Electric, 446 U.S. 1, 12, 100 S.Ct. 1460, 1467, 64 L.Ed.2d 1 (1979). That deference, however, rests on the assumption that the district court undertook to weigh and examine the competing factors involved in the certificate decision. Id., 446 U.S. at 10, 100 S.Ct. at 1466. Certainly a proper exercise of discretion under Rule 54(b) requires the district court to do more than just recite the 54(b) formula of "no just reason for delay." The Court in Protective Committee v. Anderson, 390 U.S. 414, 434, 88 S.Ct. 1157, 1168, 20 L.Ed.2d 1 (1968), provided:

[I]t is essential ... that a reviewing court have some basis for distinguishing between well-reasoned conclusions arrived at after a comprehensive consideration of all relevant factors, and mere boiler-plate approval phrased in appropriate language but unsupported by evaluation of the fact or analysis of the law....

The guiding principles of Panichella, supra, and Protective Committee, supra, have been uniformly followed. As the Second Circuit noted in Schwartz v. Compagnie General Transatlantique, 405 F.2d 270, 275 (2d Cir.1968):

[T]he trial court [should] marshall the competing considerations and state the ones considered to be most...