Reyher v. State Farm Insurance, 2012COA58 (April 12, 2012)

Everyone looks for a loophole to the American Rule that parties bear their own costs and fees. One is CRCP 54(b), allowing cost awards to the “prevailing party.” Here, defendant successfully opposed class certification. The plaintiffs’ own claims are still pending. The trial court awarded defendant fees and costs, related to class certification, under CRCP 54(b). This appeal, the third so far, addressed that award. Though the case is still ongoing, the appeals court held it had jurisdiction to decide the costs issue, because the class certification issues were finally decided, and the cost award being appealed related only to the class certification claims. The court then reversed the award of costs because defendant’s procedural victory, which did not dispose of either the plaintiffs’ substantive claims, or even those of the putative class, did not make it a prevailing party.


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One response to “Reyher v. State Farm Insurance, 2012COA58 (April 12, 2012)

  1. This opinion seems to have two contrary holdings. First, it holds that the class certification issues, and the collateral issue of the cost award, was final. But then, because the underlying claims have not been finally resolved, reversed the award of costs. The lesson is, I suppose, do not bother to appeal cost awards when substantive claims are still pending, even though the court will hear your appeal. Incidentally, the appeals court also affirmed that cost awards under CRCP 54(b) are discretionary, not mandatory. The other take-away is that the American Rule is still alive and well — and fees and cost awards rare.


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