First Nat'l Bank of Layton v. Palmer , 427 P.3d 1169 ( 2018 )

This opinion is subject to revision before final
publication in the Pacific Reporter
2018 UT 43
IN THE
SUPREME COURT OF THE STATE OF UTAH
FIRST NATIONAL BANK OF LAYTON,
Appellee,
v.
RAY WILLIAM. PALMER,
Appellant.
No. 20160280
Filed August 16, 2018
On Direct Appeal
Seventh District, Monticello
The Honorable Lyle R. Anderson
No. 090700136
Attorneys:
Matthew C. Barneck, Brian D. Bolinder, Wayne Z. Bennett, Salt Lake
City, for appellee
Craig C. Halls, Blanding, for appellant
JUSTICE HIMONAS authored the opinion of the Court, in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE LEE,
JUSTICE PEARCE, and JUSTICE PETERSEN joined.
JUSTICE HIMONAS, opinion of the Court:
INTRODUCTION
¶1 In this case we are asked to decide whether the district court
abused its discretion in denying Ray Palmer’s motion to amend his
counterclaim and to join a party. Although the parties present this
case as an appeal from a final order pursuant to Utah Rule of Civil
Procedure 54(b), the district court’s rule 54(b) certification does not
make the necessary express determination that there is no just reason
for delay. Additionally, the district court fails to offer the rationale
necessary under Utah Rule of Civil Procedure 52(a). Although “not a
technical bar to our jurisdiction, it functions as a practical bar to our
FIRST NATIONAL BANK v. PALMER
Opinion of the Court
appellate jurisdiction. We cannot review an order that does not offer
the court enough findings and conclusions to understand the
[district] court’s reason[ing].” Copper Hills Custom Homes v.
Countrywide Bank, FSB, 2018 UT 42, ¶ 27, ---P.3d--- (alterations in
original) (citation omitted) (internal quotation marks omitted). And
the district court did not “enter findings supporting the conclusion
that [the certified] order[] [is] final.” Bennion v. Pennzoil Co., 826 P.2d
137, 139 (Utah 1992) (per curiam). Therefore, we hold that we lack
appellate jurisdiction and dismiss the appeal.
BACKGROUND
¶2 This case comes before us with a complex procedural
history, before both the district court and the court of appeals.
However, the majority of the underlying facts and procedural
history are irrelevant for the purposes of our disposition of this
appeal. We therefore provide only the relevant factual and
procedural information.
¶3 First National Bank of Layton (FNB) filed a suit against
Mr. Palmer and several other parties. In response, Mr. Palmer filed
counterclaims against FNB and cross-claims against several of the
other defendants. After extensive litigation before the district court
and multiple appeals to the court of appeals, Mr. Palmer filed a
motion to amend his counterclaim against FNB and to join a party.
The trial court denied that motion on the grounds that it was
untimely because it was filed after the deadline set in the scheduling
order and that granting it would cause unfair prejudice to FNB.
¶4 After further summary judgment proceedings on the
remaining claims, FNB and Mr. Palmer “reached a settlement and
compromise that [was] documented in a private agreement” and
stipulated to a voluntary dismissal of all of the claims and
counterclaims between FNB and Mr. Palmer without prejudice. The
court entered a stipulated dismissal, which preserved “[a]ny right
that [Mr.] Palmer may have to appeal” the order denying his motion
to amend and to join a party. Additionally, the dismissal did not
affect Mr. Palmer’s cross-claims against the other defendants, which
are still ongoing. The district court entered an order certifying the
stipulated dismissal without prejudice as final pursuant to rule 54(b)
of the Utah Rules of Civil Procedure. Mr. Palmer appealed the
district court’s denial of his motion to amend and to join a party.
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Opinion of the Court
STANDARD OF REVIEW
¶5 “Whether appellate jurisdiction exists is a question of law,
which we review for correctness.” Butler v. Corp. of The President of
The Church of Jesus Christ of Latter-day Saints, 2014 UT 41, ¶ 15, 337
P.3d 280. Additionally, “[w]hether a district court’s judgment is final
is a question of law,” which we can consider for the first time on
appeal. DFI Props. LLC v. GR 2 Enters. LLC, 2010 UT 61, ¶ 15, 242 P.3d
781 (citation omitted).
ANALYSIS
¶6 The parties present this case as an appeal of a final order
over which we have jurisdiction pursuant to Utah Code section
78A-3-102(3)(j). But “acquiescence of the parties is insufficient to
confer jurisdiction on the court.” A.J. Mackay Co. v. Okland Constr.
Co., 817 P.2d 323, 325 (Utah 1991) (citation omitted). Instead, it is
essential that we are satisfied that we have jurisdiction before
reaching the merits of the case. See Bradbury v. Valencia, 2000 UT 50,
¶ 8, 5 P.3d 649 (“[A] lack of jurisdiction can be raised by the court or
either party at any time.” (citation omitted)). And when we conclude
that we lack jurisdiction, as is the case here, it is “incumbent upon us
. . . to dismiss the appeal.” Copper Hills Custom Homes v. Countrywide
Bank, FSB, 2018 UT 42, ¶ 2, ---P.3d--- (citation omitted) (internal
quotation marks omitted).
¶7 Two sets of principles govern our jurisdictional concerns
today: the final judgment rule and mootness. Under the final
judgment rule, we generally have jurisdiction over an appeal only if
it “is taken from a final order or judgment that end[s] the
controversy between the litigants.” Id. ¶ 10 (alteration in original)
(citation omitted) (internal quotation marks omitted); see also
Bradbury, 2000 UT 50, ¶ 9 (“For an order or judgment to be final, it
must dispose of the case as to all the parties, and finally dispose of the
subject-matter of the litigation on the merits of the case.” (citation
omitted) (internal quotation marks omitted)). There are three
exceptions to this rule: (1) appeals taken under “statutory avenue[s]
for appealing nonfinal orders,” Copper Hills, 2018 UT 42, ¶ 13
(citation omitted), (2) interlocutory appeals under Utah Rule of
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FIRST NATIONAL BANK v. PALMER
Opinion of the Court
Appellate Procedure 5, id. ¶ 14, and (3) certification under Utah Rule
of Civil Procedure 54(b), 1 id. ¶ 15.
¶8 Because Mr. Palmer still has ongoing claims against other
parties, he obtained rule 54(b) certification of his voluntary dismissal
without prejudice from the district court in an attempt to satisfy the
third exception to the final judgment rule. Thus, it is only this
exception that is potentially before us today.
¶9 For certification to be proper under rule 54(b), three
requirements must be met: (1) “there must be multiple claims for
relief or multiple parties in the action;” (2) “the judgment appealed
from must have been entered on an order that would be appealable
but for the fact that other claims or parties remain in the action;” and
(3) “the [district] court, in its discretion, must make a[n express]
determination that there is no just reason for delay.” Id. ¶ 16
(alterations in original) (citation omitted) (internal quotation marks
omitted).
¶10 Even if the final judgment rule has been satisfied, we lack
jurisdiction over issues that have become moot. See Phx. Indem. Ins.
Co. v. Smith, 2002 UT 49, ¶ 6, 48 P.3d 976; Barton v. Utah Transit Auth.,
872 P.2d 1036, 1039–40 (Utah 1994). When “the parties settle[] their
dispute and voluntarily stipulate[] to dismiss the underlying”
claims, a party “does not have the right to appeal the [district]
court’s prior” ruling on issues related to those claims because “the
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1 Utah Rule of Civil Procedure 54(b) provides:
When an action presents more than one claim for
relief—whether as a claim, counterclaim, cross claim,
or third party claim—and/or when multiple parties are
involved, the court may enter judgment as to one or
more but fewer than all of the claims or parties only if
the court expressly determines that there is no just
reason for delay. Otherwise, any order or other
decision, however designated, that adjudicates fewer
than all the claims or the rights and liabilities of fewer
than all the parties does not end the action as to any of
the claims or parties, and may be changed at any time
before entry of judgment adjudicating all the claims
and the rights and liabilities of all the parties.
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Opinion of the Court
issue[s are] moot.” Phx. Indem., 2002 UT 49, ¶ 6. And the parties
cannot stipulate to reserve a right to appeal a previous decision
related to those claims because “the parties to the action cannot, by
agreement, confer jurisdiction upon the court where it would
otherwise have none.” Id. ¶ 5 (citation omitted) (internal quotation
marks omitted).
¶11 This case raises several issues of potential jurisdictional
concern. The first potential jurisdictional concern rises from the
district court’s grant of rule 54(b) certification to a voluntary
dismissal without prejudice. The plain language of rule 54(b) allows
a district court to “enter judgment as to one or more but fewer than all
of the claims or parties.” UTAH R. CIV. P. 54(b) (emphasis added).
And the second requirement for proper rule 54(b) certification
mandates that “the judgment appealed from must have been entered
on an order that would be appealable but for the fact that other
claims or parties remain in the action.” Copper Hills, 2018 UT 42, ¶ 16
(citation omitted). We have some doubt that a voluntary dismissal
without prejudice can satisfy these prerequisites to proper rule 54(b)
certification. Instead of functioning as a judgment against a party,
“[a] voluntary dismissal without prejudice render[s] the proceedings
a nullity and leave[s] the parties as if the action had never been
brought.” Phx. Indem., 2002 UT 49, ¶ 3 (second and third alterations
in original) (citation omitted) (internal quotation marks omitted).
And “[a] party who voluntarily dismisses its complaint without
prejudice generally has no right to appeal.” Id. (alteration in original)
(citation omitted). 2
¶12 The second potential jurisdictional concern stems from the
order Mr. Palmer is appealing—the denial of his motion to amend
his counterclaims and to join a party. The district court only certified
the parties’ voluntary dismissal without prejudice as final; it did not
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2 There is an exception to this general prohibition if a party is able
to meet two requirements: “(1) the plaintiff is legally prejudiced by
certain conditions placed by the court on the voluntary dismissal,
and (2) the plaintiff evidences no acquiescence in those conditions.”
Barton, 872 P.2d at 1039 (citations omitted). We do not pass on
whether Mr. Palmer would be able to meet these requirements here
because we dismiss for lack of appellate jurisdiction on other
grounds.
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FIRST NATIONAL BANK v. PALMER
Opinion of the Court
certify the denial of Mr. Palmer’s motion to amend and to join a
party as final. To the extent that Mr. Palmer’s motion to amend
relates to the counterclaims he dismissed in the stipulated dismissal
without prejudice, we are concerned that the denial of the motion to
amend is moot and Mr. Palmer lacks the right to appeal that issue.
See id. ¶ 6 (concluding that where “the parties settled their dispute
and voluntarily stipulated to dismiss the underlying action, [the
plaintiff] does not have the right to appeal the [district] court’s prior
denial of its motion for partial summary judgment and the issue is
moot”); Barton, 872 P.2d at 1039 (“A party who voluntarily dismisses
its complaint without prejudice generally has no right to appeal. . . .
[because] a plaintiff who moves for voluntary dismissal receives just
that which is sought—the dismissal of his action and the right to
bring a later suit on the same cause of action, without adjudication of
the merits.” (citations omitted) (internal quotation marks omitted)).
And to the extent that Mr. Palmer’s attempt to amend his
counterclaims and to join a party is unrelated to the voluntary
dismissal, the district court did not certify that denial as final, and
therefore that denial would not meet the rule 54(b) exception to the
final judgment rule. 3
¶13 The final potential jurisdictional concern results from the
content of the district court’s rule 54(b) certification. The district
court never “make[s] a[n express] determination that there is no just
reason for delay.” See Copper Hills, 2018 UT 42, ¶ 16 (second
alteration in original) (citation omitted). Additionally, the district
court fails to comply with the requirement, generally provided by
Utah Rule of Civil Procedure 52(a), to “advance[] a rationale as to
why” there is no just reason for delay and enter findings that “detail
the lack of factual overlap between the certified and remaining
claims.” Id. ¶ 21 (alteration in original) (citation omitted) (internal
quotation marks omitted); see also id. ¶ 27.
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3 This is, of course, not to say that the district court could have
certified its denial of Mr. Palmer’s motion to amend and to join a
party as final under rule 54(b). It is not clear to us that the district
court’s denial “would be appealable but for the fact that other claims
or parties remain in the action.” Copper Hills, 2018 UT 42, ¶ 16
(citation omitted); see also supra ¶ 11.
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Opinion of the Court
¶14 The first two potential jurisdictional concerns we raise
present interesting, but more complicated and nuanced, issues for
our consideration. We need not, however, reach them here, because
the third jurisdictional concern presents us with an unavoidable
conclusion—we lack jurisdiction over this appeal and must dismiss.
While we have previously never had to confront this issue because
“certifications seen in this court” at least meet this minimum
threshold requirement by “universally includ[ing] an incantation”
that there is “no just reason for delay,” Bennion v. Pennzoil Co., 826
P.2d 137, 139 (Utah 1992) (per curiam), we hold in another case today
that a district court’s failure to include that express language
prevents jurisdiction from being vested in this court. Copper Hills,
2018 UT 42, ¶ 26. The district court’s failure to make that
determination here is fatal to our exercise of jurisdiction, and we
therefore dismiss for lack of appellate jurisdiction. 4
CONCLUSION
¶15 The rule 54(b) certification did not contain the necessary
express determination that there is no just reason for delay. Nor has
the district court entered rule 52(a) factual findings that support this
determination. Therefore, the district court has not entered any final
order in this case, and because no exception to the final judgment
rule exists, we dismiss this appeal for lack of appellate jurisdiction.
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4 While we have discretion under Utah Rule of Appellate
Procedure 5(a) to treat certain improper 54(b) certifications as
interlocutory appeals, we decline to exercise this discretion here
based on the other jurisdictional concerns we raise.
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