This case involved three actions. In the first, a company sued its former employee, and the former employee filed a counterclaim. In the second, the former employee sued the company on a related matter. In the third, the former employee sued the company’s legal counsel on a related matter.
The trial court consolidated the actions without objection. Then the trial court dismissed the third action, entering judgment in favor of the company’s legal counsel and against the former employee.
Normally, a judgment dismissing an action is “final” and therefore appealable. See A.R.S. § 12-2101(A)(1). After a typical dismissal, the trial court determines that “no further matters remain pending” and enters final judgment under Rule 54(c), confirming appealability. See Ariz. R. Civ. P. 54(c). Even when a dismissal resolves fewer than all claims, the trial court may determine that “there is no just reason for delay” and enter final judgment as to the dismissed claims under Rule 54(b), confirming appealability. See Ariz. R. Civ. P. 54(b).
Here, the trial court declined to treat the judgment dismissing the third action as final under Rule 54(c) or 54(b), because the first and second actions were still being litigated. As a result, the former employee could not immediately appeal the dismissal.
The former employee sought special action review, arguing that the trial court should have treated the judgment dismissing the third action as final under Rule 54(c) or 54(b), allowing an immediate appeal. But the Court of Appeals held that the trial court was within its discretion, reasoning as follows.
As for Rule 54(c): Because the third action was consolidated with two related actions, the dismissal did not necessarily mean that “no further matters remain pending.” Given trial courts’ inherent case management power and the policy of avoiding piecemeal appeals, the trial court had discretion to decide that the dismissed action was so intertwined with the remaining two actions that final judgment was inappropriate at that time.
As for Rule 54(b): Likewise, because the third action was consolidated with two related actions, the trial court had discretion to determine that there was a “just reason for delay” of final judgment in the third action. The third action arose from the same facts as at least one claim in the other two actions, so delaying final judgment would promote efficiency and avoid piecemeal appeals. The former employee did not show that justice required otherwise.
Judge McMurdie delivered the opinion. Judge Campbell and Vice Chief Judge Cattani joined.
Posted by: Josh Whitaker