Free Response in Opposition to Motion - District Court of Arizona - Arizona

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Dan W. Goldfine (#018788) Adam Lang (#022545) SNELL & WILMER L.L.P. One Arizona Center 400 East Van Buren Street Phoenix, AZ 85004-2202 Telephone: (602) 382-6000 Facsimile: (602) 382-6070 [email protected] [email protected] Attorneys for Plaintiffs and Counterdefendants and Third Party Defendants Steve Hilton and John Landon and Grant Woods, Esq. (#006106) GRANT WOODS, P.C. 1726 North Seventh Street Phoenix, Arizona 85006 Telephone: (602) 258-2599 Facsimile: (602) 258-5070 [email protected] Attorneys for Plaintiffs and Counterdefendants and Third Party Defendants Steve Hilton and John Landon

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Snell & Wilmer L.L.P.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Meritage Homes Corporation, a Maryland Corporation, formerly d/b/a Meritage Corporation, Case No. CV-04-0384-PHX-ROS Hancock-MTH Builders, Inc., an Arizona corporation, Hancock-MTH Communities, Inc., an MERITAGE'S OPPOSITION TO Arizona corporation, and currently d/b/a Meritage GREG HANCOCK'S (1) MOTION Homes Construction, Inc., an Arizona corporation, FOR LEAVE TO FILE A REQUEST FOR A RULE 54(B) PARTIAL and Meritage Homes of Arizona, Inc., an Arizona JUDGMENT AND (2) HIS corporation, REQUEST FOR A RULE 54(B) PARTIAL JUDGMENT Plaintiffs, v. Ricky Lee Hancock and Brenda Hancock, husband and wife; Gregory S. Hancock and Linda Hancock, husband and wife, Rick Hancock Homes L.L.C., an Arizona limited liability company; RLH Development, L.L.C., an Arizona limited liability company; and J2H2, L.L.C., an Arizona limited liability company, Defendants. (Assigned to the Honorable Roslyn O. Silver)

Case 2:04-cv-00384-ROS

Document 356

Filed 09/21/2006

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Rick and Brenda Hancock, Defendants, Counter-Claimants, and Third Party Plaintiffs, v. Meritage Homes Corporation, a Maryland Corporation, formerly d/b/a Meritage Corporation, Hancock-MTH Builders, Inc., an Arizona Corporation, Hancock-MTH Communities, Inc., an Arizona Corporation, an Arizona Corporation; and currently d/b/a Meritage Homes Construction, Inc., an Arizona Corporation, and Meritage Homes of Arizona, Inc., an Arizona Corporation; Steven J. Hilton and Suzanne Hilton, husband and wife; John R. Landon and Debi Landon, husband and wife; Scott Keeffe and Vicky Keeffe, husband and wife; Roger Zetah and Jane Doe Zetah, husband and wife; and James Arneson and Zane Arneson, husband and wife, Third Party Defendants. Seeking leave,1 Defendant Greg Hancock ("Hancock") has moved for a partial final judgment with respect to this Court's March 31, 2006 Order dismissing Defendant Greg Hancock's counterclaims against Meritage and third-party claims against third-party defendants Hilton, Seay, and Landon (collectively, "Meritage"). Largely relying on

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inapposite state case law, Hancock misstates the standard under Rule 54(b), Federal Rules of Civil Procedure ("Rule"), for entry of a partial judgment. Hancock switches the burden of proof from himself to Meritage by erroneously stating that the Court must inquire "whether there is any just reason for delay in entering the order as a judgment." See Hancock's Motion for Rule 54(b) Judgment on Less than All Claims ("Motion") at 3:17-18 (emphasis added). Instead, Rule 54(b) expressly

provides that the Court should not enter a partial judgment unless the moving party establishes and the Court rules that "there is no just reason for delay." Rule 54(b) (emphasis added); Wood v. GCC Bend, LLC, 422 F.3d 873, 877-78 (9th Cir. 2005); see Braswell Shipyards, Inc. v. Beazer East, Inc., 2 F.3d 1331, 1335 (4th Cir. 1993) (the Meritage's Opposition To Hancock's Request For Leave flows from its opposition to the underlying motion and will not be addressed separately.
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

moving party bears the burden to establish that a partial judgment should be entered under Rule 54(b)). Under the express terms of Rule 54(b), Hancock has not met his burden for a piecemeal appeal. I. RULE 54(B) The FEDERAL CIVIL RULES HANDBOOK summarizes Rule 54(b) as follows: A judgment entered as to less than all claims in a lawsuit, or as to less than all parties in a lawsuit, is not immediately appealable. Instead, the appeal must generally await the entry of judgment as to all remaining claims and parties. However, the district court can make a judgment as to less than all claims or parties "final," and thus immediately appealable, by expressly determining that just cause exists to delay the appeal and by directing the entry of judgment. Separate, piecemeal appeals during a single litigation are often inefficient and uneconomical, and thus are contrary to the historic federal policy favoring one appeal on all issues at the conclusion of the lawsuit. Rule 54(b) determinations allowing immediate appeal permit exceptions from this general policy for those infrequent instances where awaiting a final judgment would be unduly harsh or unjust. FEDERAL CIVIL RULES HANDBOOK at 868 (2005) (emphasis added and footnotes omitted).

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There must be a "sufficient important reason" for granting Rule 54(b) certification. 16 See, e.g., Curtiss-Wright Corp. v. GE, 446 U.S. 1, 8 n.2 (1980); Wood, 422 F.3d at 87717 78. In applying Rule 54(b) to determine whether there is a sufficiently important reason 18 for granting certification, there are a number of factors that the Court should consider: 19 20 21 22 23 24 25 26 27 28 · · · · · · Whether certification under Rule 54(b) increases the likelihood of unnecessary appellate review? Whether the claims finally adjudicated were separate, distinct, and independent of any other claims? Whether review of the adjudicated claims would be mooted by any future developments in the case? Whether an appellate court would have to decide the same issues more than once even if there were subsequent appeals? Whether delay would inflict severe financial harm? Whether the adjudicated claims are separable from the other claims
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

remaining in the case? See, e.g., Curtiss-Wright, 446 U.S. at 8 n.2 (1980); Wood, 422 F.3d at 877-78. II. HANCOCK'S ARGUMENTS ARE INSUFFICIENT In sum, Hancock argues that his dismissed counterclaims are factually distinct from Meritage's claims against him and that an appeal will save this Court resources. In taking such a narrow tact, Hancock apparently concedes that the other Rule 54(b) factors weigh against certification: a Rule 54(b) certification in this instance increases the likelihood of unnecessary appellate review, that immediate appeal does not reduce the risk of multiple appeals on the same issue, that settlement may moot his appeal, and that there is no risk that delay would inflict severe financial harm. Indeed, that is the case, and Hancock is only acknowledging what is common sense. Even as to the two factors Hancock identifies as supposedly supporting a partial judgment, Hancock is mistaken. In acknowledging that his counterclaims are intertwined with the remaining claims in the case, see Motion at 4:14-15, his subsequent claims that the facts are different appears pretextual at best. The reality is that Hancock's fraudulent conduct and breaches of fiduciary duties and the license agreement are central to Meritage's claims against him and central to Meritage's defenses to his counterclaims that Meritage, after beginning to uncover Hancock's wrongful and tortious conduct, allegedly did not perform contractual duties it owed Hancock. Hancock also asserts the proposition that if he is successful on appeal, this Court will preserve its limited resources. Hancock does not meet his burden to establish that his proposition is true in light of how intertwined the matters are. There is simply no basis to conclude that more of the Court's resources may be exhausted if there is a successful appeal. The reality is that the standard practice of a single appeal is more likely to lead to settlement before trial, thereby reducing the Court's burden substantially. Even if Hancock's unsupported proposition were to be true, it is not grounds for granting Rule 54(b) relief. After all, an immediate appeal of a partial judgment would

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Case 2:04-cv-00384-ROS

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

always provide an opportunity to save trial court resources (if we are to accept Hancock's proposition). Rule 54(b), however, is only for the extraordinary and not for the ordinary; it is not intended to be used to avoid trials. See Credit Francais Int'l, S.A. v. Bio-Vita, Ltd., 78 F.3d 698, 706 (1st Cir. 1996) (the possibility of avoiding a trial is "rarely, if ever, a self-sufficient basis for a Rule 54(b) certification"). III. RULE 54(B) FACTORS CUT AGAINST CERTIFICATION A closer review of the Rule 54(b) factors cuts against certification. Hancock offers none, and there is no evidence that Hancock will suffer some form of harm that an immediate appeal will avoid. He does not have to pay a judgment, attorneys' fees or costs. Hancock remains a party to the lawsuit so he is not encountering unnecessary legal fees. See Credit Francais Int'l, 78 F.3d at 707 (certification is particularly suspect when the putative appellant remains a litigant before the trial court). It is undisputed that granting a Rule 54(b) partial judgment in this instance increases the likelihood of multiple, piecemeal appeals. Since more than 90% of all cases settle before trial, the reality is that in most circumstances allowing the matter to go to fruition creates a potential settlement mooting any appeal. In the remaining cases, the vast majority of cases are affirmed on appeal meaning that there is no added burden on this Court or the Court of Appeals. Only in the unlikely scenario that the matter goes to trial and Hancock persuades the Court of Appeals to reverse this Court is there any potential of added burden ­ and that burden is only on this Court and not the Court of Appeals. An appeal at this time is distinctly futile for reasons independent of this Court's rulings ­ at least with respect to Hancock's abuse of process and malicious prosecution claims. Hancock filed the identical claims against Meritage in State court. The State court dismissed these claims with prejudice. See Exhibit 1.2 Irrespective of this Court's Order of Dismissal, res judicata renders appeal of these issues futile. CONCLUSION For the reasons set forth above, Hancock's request for a Rule 54(b) partial
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It is worth noting that Hancock has not sought to appeal this State court judgment.
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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

judgment should be denied.

DATED this 21st day of September, 2006. SNELL & WILMER L.L.P.

By s/ Dan W. Goldfine Dan W. Goldfine Adam Lang One Arizona Center 400 E. Van Buren Street Phoenix, Arizona 85004-2202 Attorneys for Plaintiffs and Counterdefendants and Third Party Defendants Steve Hilton and John Landon and

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 By s/ Grant Woods Grant Woods, Esq. GRANT WOODS, P.C. 1726 North Seventh Street Phoenix, Arizona 85006 Attorneys for Plaintiffs and Counterdefendants and Third Party Defendants Steve Hilton and John Landon CERTIFICATE OF SERVICE I hereby certify that on September 21, 2006, I electronically transmitted the foregoing document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Ivan K. Mathew Mathew & Mathew, P.C. 1850 N. Central Avenue, Suite 1910 Phoenix, Arizona 85004 Attorneys for Defendant Rick Hancock Robert M. Frisbee Frisbee & Bostock, PLC 1747 East Morton Avenue Suite 108 Phoenix AZ 85020 Attorneys for Defendant Greg Hancock

Snell & Wilmer L.L.P.

Case 2:04-cv-00384-ROS

Document 356- 6 - Filed 09/21/2006

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LAW OFFICES One Arizona Center, 400 E. Van Buren Phoenix, Arizona 85004-2202 (602) 382-6000

Mark I. Harrison Sarah Porter Osborn Maledon, P.A. 2929 North Central Avenue Suite 2100 Phoenix, Arizona 85012-2794 Attorneys for Defendant Greg and Linda Hancock and Counsel of Record Robert Frisbee Kenneth J. Sherk Timothy J. Burke Fennemore Craig, P.C. 3003 N. Central Ave. Suite 2600 Phoenix, AZ 85012-2913 Attorneys for Defendant Snell & Wilmer, L.L.P. in State Court Action

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29323.0078\GOLDFID\PHX\1885096

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