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June 7, 1982

Bennett LEVIN
Howard N. GARFINKLE, Barbara Garfinkle, Asher Fensterheim, Cyrus West, K. B. Weissman, Edward Breger, Norman Septimus, Jack Deutschmann, Huckleberry Farm, Inc., Country Realty, Inc., Haw Corporation, Tafu Corporation, Czar Realty Corporation. Bennett LEVIN v. RONDI RIVER REALTY CORPORATION, Howard N. Garfinkle, Asher Fensterheim, Cyrus West, K. B. Weissman, Czar Realty Corporation, Edward Breger

The opinion of the court was delivered by: LUONGO

Plaintiff Bennett Levin brought these consolidated actions to recover from the defendants for fraud, misrepresentation, and breach of fiduciary duty in connection with a series of complex real estate transactions in which the parties were involved from 1975 to 1977. After a non-jury trial in January 1980, I issued my findings of fact and conclusions of law on June 11, 1980. Judgment in Civil Action No. 77-3211 was entered in favor of Levin on November 26, 1980 against various defendants for $ 573,405 and for various unliquidated amounts. In Civil Action No. 78-3271, an accounting was ordered to determine the amount to which Levin was entitled from the operation of the Rondi River Realty Corporation. Presently before me is Levin's Consolidated Motion for the Entry of Various Liquidated Judgments. This motion incorporates three prior motions filed by Levin which have been unresolved: (1) Plaintiff's Motion for Entry of Judgment Pursuant to Rule 54(b) against the defendant Alter Ego Corporation (document 412); (2) plaintiff's Motion for the Adoption of the Master's Report (document 436); and (3) plaintiff's Motion for the Entry of Judgment Regarding Certain Indemnities (document 462). I shall deal with each of these motions in turn.

 I. Motion for Entry of Judgment Against the Alter Ego Corporations

 In my order of November 26, 1980, I entered judgment in Levin's favor against Howard Garfinkle and two other individual defendants. I did not, however, enter judgment either for or against defendants HAW Corporation, TAFU Corporation, Czar Realty Corporation, Country Realty, Inc., and Huckleberry Farm, Inc. Nearly four months after I certified the November 25, 1980 judgment as final, Levin filed his motion to enter judgment against these corporations alleging that they are alter egos of Garfinkle. I must deny the motion as untimely filed.

 Recapping the procedural history, the record demonstrates unmistakably that Levin had more than ample opportunity to seek timely relief against the alter ego corporations. At the conclusion of a lengthy non-jury trial, I invited the parties to submit proposed findings of fact and conclusions of law. Levin did submit proposed findings, but did not request specific findings concerning the liability of the alter egos, nor did he ask for relief against them. On June 11, 1980, I filed my findings of fact and conclusions of law, determining that Levin had prevailed on some of his claims but not on others. No findings were made with respect to the liability of the alter ego corporations.

 On June 20, 1980, Levin filed a motion for clarification or reconsideration (Document No. 218), requesting reconsideration of several items. No request, however, was made for specific findings against the alter egos. Indeed, the sum and substance of Levin's discussion of the alter egos was limited to the following: "Similarly we would assume that the Court's judgment will run against the various corporations and persons used by Garfinkle, in the event that any assets are left in any of these corporations." (Document No. 218, at 14). On October 16, 1980, I issued a memorandum opinion ruling on Levin's motion for reconsideration (Document No. 238), and ordered that judgment be entered (Document No. 240). Although the judgment concerned several matters, for purposes of this motion it is sufficient to state that judgment was entered in favor of Levin against Garfinkle for $ 573,405 and for certain other unliquidated amounts. However, judgment was not entered for or against the alter ego corporations.

Now if Your Honor is prepared to say, well, you think those counterclaims are moot, and you will enter a motion or judgment saying the counterclaims are over and done, then we would not need the Rule 54(b) certification.

 (Document No. 316, N.T. at 16). I accepted counsel's assertion that defendants' counterclaim-which obviously involved issues separate and distinct from those already adjudicated-was all that remained to be tried. Accordingly that same day, November 26, 1980, I entered an order granting in part and denying in part Levin's motion to amend the October 16, 1980 judgment, and certified as final the judgment as amended. (See Document No. 265). *fn1"

 Appeals were then taken by both Levin and Garfinkle from the November 26, 1980 judgment. Then, on March 23, 1980, while his appeal was pending, Levin filed this motion for entry of judgment against the alter ego corporations of Garfinkle. (Document No. 412). By this motion, Levin seeks to impose liability on the five corporations for (1) the liquidated judgment against Garfinkle in the amount of $ 573,405, and (2) the unliquidated amounts due Levin from Garfinkle under the November 26, 1980 judgment.

 The defendant corporations oppose Levin's motion, contesting the jurisdiction of this court to enter judgment against them at this late date. Several arguments are made by the defendants, but only two merit discussion. First, defendants point out that Levin's motion to enter judgment against the corporations is, in reality, a motion to amend the court's judgment of November 26, 1980. Therefore, defendants contend that the motion is untimely since it was filed well after the running of the ten-day period prescribed in Fed.R.Civ.P. 59(e). Defendants' second and more persuasive argument is that the entry of judgment at this time presents the spectre of a second appeal raising issues identical to those decided by the court of appeals on the appeal from the November 26, 1980 judgment. See Levin v. Garfinkle, 667 F.2d 381 (3d Cir. 1980) (per curiam) (affirming the judgment of the district court). Specifically, defendants argue that when I directed the entry of final judgment against Garfinkle, all matters central to the issue of the liability of Garfinkle, including the liability vel non of the alleged alter ego corporations, were concluded. Therefore, defendants contend that the entry of judgment against them would be improper under Fed.R.Civ.P. 54(b) because the liability issues, in effect, have already been adjudicated and are not subject to revision under the rule.

 Apart from the issue of whether there is a sufficient factual basis for concluding that the corporations are indeed alter egos of Garfinkle, Levin argues that it is procedurally proper to enter judgment against them under Rule 54(b), which reads:

(b) Judgment Upon Multiple Claims or Involving Multiple Parties. 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. In the absence of such determination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

 Levin maintains that since the November 26, 1980 judgment did not contain an adjudication either for or against the defendant corporations, the judgment was not final as to them.

 I do not accept Levin's argument that Rule 54(b) permits entry of judgment at this stage, but if it did grant me the discretion to do so, I would not exercise it under the circumstances here existing. It is apparent from my memorandum opinion of December 31, 1980, as well as from the other circumstances surrounding the direction of the entry of final judgment, that the only matter left to be adjudicated was the abuse of process counterclaims. More importantly, the historic federal policy of avoiding piecemeal appeals militates strongly against entering judgment against the corporations. There can be no dispute that the liability of the defendant corporations is inextricably intertwined with the liability of Garfinkle. Thus, while no express adjudication has been entered with respect to the corporations, it cannot persuasively be argued that the November 26, 1980 judgment did not conclude matters involving the corporations. To hold otherwise, would involve a patent disregard for the policies embodied in Rule 54(b). See Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 8, 100 S. Ct. 1460, 1465, 64 L. Ed. 2d 1 (1980). Indeed, had the court been apprised at the time that Levin intended to seek judgment against the corporations, judgment could not have been certified as final under the rule because the claims certified as final were surely not separate and distinct from the liability of the corporations.

 Accordingly, for reasons discussed above, Levin's motion will be denied. The principle of finality is indeed a substantial one. The court of appeals has ruled on the great majority of the issues in this case. It would be unwise to reopen those issues by granting Levin's motion at a time when this case, after nearly five years, is finally approaching its completion.

 II. Motion for Adoption of the Master's Report

 A. Background

 As part of the unliquidated judgment entered in this case, I ordered defendants Garfinkle and Fensterheim to render an accounting pertaining to the operation of Rondi River Realty Corporation to determine Levin's share of that venture. In addition, I appointed a special master pursuant to Fed.R.Civ.P. 53 to perform the accounting.

 Rondi River's principal asset was an apartment complex in New York City which it operated for a period of almost ten months and then sold for a gain. Levin was a 25% shareholder of the corporation. The principal issue to be determined by the accounting is the amount of money Levin is entitled to receive as his share of the operations of Rondi River and the sale of its principal asset. An additional duty of the master was to determine the extent to which the defendants' practices of siphoning funds away from the corporation and encumbering the corporation's assets with liens to secure personal debts affected Levin's share in the investment.

 The master, Elmer I. Rosen, Certified Public Accountant, met with counsel on several occasions and examined all of the records available for the corporation. He also had available to him the transcript and exhibits from the trial before me, as well as my findings of fact with respect to Rondi River. After submitting an initial report, the master met with counsel pursuant to Rule 53(e)(5) to solicit their comments. Thereafter he submitted a supplemental report which discussed the questions raised at his meeting with counsel. Levin now moves for the adoption of the report, subject to certain modifications which he seeks by way of objection to the report under Rule 53(e) (2). Defendants move to reject the report in its entirety or, in the alternative, to modify it in several respects. In addition, defendant Asher ...

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