Heartwood Home Health & Hospice LLC v. Huber ( 2016 )

2016 UT App 183THE UTAH COURT OF APPEALS
HEARTWOOD HOME HEALTH & HOSPICE LLC,
Appellant,
v.
RITA HUBER AND GLENNA MOLYNEUX,
Appellees.
Opinion
No. 20140883-CA
Filed September 1, 2016
Third District Court, Salt Lake Department
The Honorable John Paul Kennedy
No. 120907379
Gary R. Guelker and Janet I. Jenson, Attorneys
for Appellant
Robert H. Wilde and Michael S. Wilde, Attorneys
for Appellees
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGE
KATE A. TOOMEY and SENIOR JUDGE JUDITH M. BILLINGS
concurred.1
ORME, Judge:
¶1 Heartwood Home Health & Hospice LLC appeals from
the district court’s order imposing sanctions against it under rule
11 of the Utah Rules of Civil Procedure.2 Although other claims
1. Senior Judge Judith M. Billings sat by special assignment as
authorized by law. See generally Utah R. Jud. Admin. 11-201(6).
2. Heartwood challenges the rule 11 sanctions, which the district
court ordered on June 20, 2014. But as the appellees point out,
the notice of appeal cited an August 21, 2014 order that awarded
(continued…)
Heartwood Home Health & Hospice v. Huber
remained pending, Heartwood promptly appealed the rule 11
sanctions, claiming that Clark v. Booth, 821 P.2d 1146 (Utah 1991),
required the early appeal. See id. at 1148. After Heartwood filed
its notice of appeal, but before briefing, the Utah Supreme Court
issued its opinion in Migliore v. Livingston Financial, LLC, 2015 UT
9, 347 P.3d 394. Migliore repudiated Clark. Id. ¶ 21. Because
Migliore governs this case, we dismiss the appeal for lack of
jurisdiction.
BACKGROUND
¶2 The appellees in this case, Rita Huber and Glenna
Molyneux (collectively, Appellees), were both employees of
Heartwood until sometime in 2012, when they left their jobs to
join one of Heartwood’s competitors. On October 24, 2012,
Heartwood sued Appellees, their new employer, and a third
former Heartwood employee. Heartwood alleged breach of
contract, breach of the duty of loyalty, breach of the duty of
confidentiality, intentional interference with contract, and
entitlement to injunctive relief. Appellees and the other
defendants brought counterclaims and a third-party complaint,
alleging interference with economic relations, defamation, and
violations of the Fair Labor Standards Act.
(…continued)
the appellees attorney fees. The appellees argue that the August
21, 2014 order only concerned the award of attorney fees and
therefore that we should not review the earlier order in which
the court determined whether rule 11 sanctions were warranted.
In light of our conclusion that neither order constitutes an
appealable order, we need not resolve this issue. See Utah R.
App. P. 3(a); Utah R. Civ. P. 54(a).
20140883-CA 2 2016 UT App 183Heartwood Home Health & Hospice v. Huber
¶3 For nearly a year after Heartwood filed the initial
complaint, the parties conducted discovery. During discovery,
Heartwood’s president’s deposition was taken.
¶4 In light of that deposition, Appellees’ counsel drafted and
served Heartwood’s counsel with a ‚Rule 11 Motion and
Memorandum‛ and cover letter. The cover letter described the
rule 11 ‚safe harbor provisions,‛ which require rule 11 claimants
to notify the opposing party of an intended rule 11 motion
twenty-one days before filing it to allow the opposing party an
opportunity to rectify the alleged improprieties. See Utah R. Civ.
P. 11(c)(1)(A). The proffered motion would seek sanctions if
Appellees were not dismissed from the lawsuit, Appellees
insisting that Heartwood lacked a ‚factual or legal basis‛ for its
claims against them. After the safe-harbor period expired and
Heartwood did not dismiss Appellees, they filed the rule 11
motion along with a motion for summary judgment, seeking
dismissal of all claims against them. The parties agreed that the
rule 11 motion should be decided after the summary judgment
motion. The district court later granted summary judgment to
Appellees, and shortly thereafter, it granted Appellees’ rule 11
motion in a June 20, 2014 order. In its order the court also
requested that Appellees submit a fee affidavit, and it granted
Appellees an award of attorney fees in an August 21, 2014 order.
Heartwood appealed the August 21, 2014 order on September
19, 2014. See supra note 2. Heartwood’s claims against the other
defendants are still pending in the district court, as are
Appellees’ counterclaims and third-party complaint.
¶5 On January 27, 2015, the Utah Supreme Court issued
Migliore v. Livingston Financial, LLC, 2015 UT 9, 347 P.3d 394.
Citing Migliore, Appellees then submitted a motion for summary
disposition, asserting that we lack jurisdiction because rule 11
‚does not relieve Heartwood from the final judgment rule.‛ We
denied that motion but asked the parties, who had not yet
20140883-CA 3 2016 UT App 183Heartwood Home Health & Hospice v. Huber
submitted their appellate briefs, to address in their briefing
whether Migliore governed this appeal.
ANALYSIS
¶6 Heartwood claims that the district court’s imposition of
rule 11 sanctions against it, ‚based on *the court’s+ determination
that Heartwood had failed to produce sufficient facts to
withstand the defendants’ summary judgment motion,‛ was
erroneous when ‚Heartwood had a good faith belief that there
was significant circumstantial evidence to support its claims.‛
Because we lack jurisdiction to hear Heartwood’s appeal, we do
not reach this issue.
¶7 With limited exceptions, a party who is entitled to an
appeal may take that appeal only from ‚final orders and
judgments.‛ Utah R. App. P. 3(a). And we generally lack
‚jurisdiction over an appeal unless it is taken from a final
judgment.‛ Loffredo v. Holt, 2001 UT 97, ¶ 10, 37 P.3d 1070. This
principle promotes judicial economy by preventing piecemeal
appellate litigation. See id. ¶ 14; ProMax Dev. Corp. v. Raile, 2000
UT 4, ¶ 15, 998 P.2d 254. ‚To be final, the trial court’s order . . .
must dispose of all . . . claims [in] an action.‛ Bradbury v. Valencia,
2000 UT 50, ¶ 10, 5 P.3d 649. Here, there has been no final
judgment, as none of the three orders—the order granting
summary judgment to Appellees, the order finding a rule 11
violation, or the order awarding attorney fees as a sanction—
were final by their terms nor were they certified as final, see Utah
R. Civ. P. 54(b), and claims are still pending below. Heartwood
does not contend otherwise, but it insists that we have
jurisdiction under an exception to the final judgment rule that
allows rule 11 matters to be treated independently from the rest
of the case.
¶8 Until the Supreme Court’s decision in Migliore, the timing
for appeals of rule 11 sanctions was governed by Clark v. Booth,
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821 P.2d 1146 (Utah 1991). According to Clark, a rule 11 motion
‚ha*d+ no relationship to the disposition of the case on its
merits.‛ Id. at 1148. Thus, rule 11 sanctions were collateral and
could be appealed independently from the merits of the case. See
id. To that end, Heartwood cited Clark in support of its claim that
‚orders imposing Rule 11 sanctions must be appealed separately
via a separate appellate action.‛
¶9 But in Migliore, the Utah Supreme Court expressly
repudiated Clark, and determined that, because motions for rule
11 sanctions are ‚requests for attorney fees,‛ we should apply
the rule from ProMax. See Migliore, 2015 UT 9, ¶ 21. According to
ProMax, judicial economy requires ‚an appellant to appeal all
issues, including an award of attorney fees, in a single notice of
appeal.‛ 2000 UT 4, ¶ 15 (citation and internal quotation marks
omitted). And Migliore ‚extend*ed+ ProMax to apply to requests
for rule 11 sanctions raised before or contemporaneously with
the entry of a final appealable judgment.‛ 2015 UT 9, ¶ 20. But
because Migliore issued after Heartwood had filed its appeal, we
must consider whether Migliore applies to this case. We conclude
that it does.
¶10 As a general rule, an overruling decision—i.e., a decision
by a court rejecting or repudiating a rule previously announced
by that same court—applies retroactively unless the decision
expressly limits the application of the new rule to ‚future cases
arising from fact situations occurring after the announcement of
the new rule.‛ S.R. Shapiro, Annotation, Prospective or Retroactive
Operation of Overruling Decision, 10 A.L.R.3d 1371, § 1[a] (1966).
In Utah, when our Supreme Court issues an overruling decision,
‚[t]he general rule of retroactivity is that the ruling of a court is
deemed to state the true nature of the law both retrospectively
and prospectively.‛ Monarrez v. Utah Dep’t of Transp., 2016 UT 10,
¶ 28, 368 P.3d 846 (citation and internal quotation marks
omitted). Perhaps obviously, such an alteration (or new
characterization) of the common law ‚applies retroactively to the
20140883-CA 5 2016 UT App 183Heartwood Home Health & Hospice v. Huber
parties who seek it.‛ SIRQ, Inc. v. The Layton Cos., 2016 UT 30,
¶ 6. But less obviously, when ‚other cases pending on appeal‛
address the same issue, the parties in those cases ‚are also
entitled to the benefit of such a change in the law,‛ even where
the new standard ‚was not handed down until after trial,‛ so
long as there is no effective challenge to the application of the
new law.3 Id.¶11 Under ‚the modern view,‛ however, Utah courts often
consider ‚relevant judicial policies‛ in deciding the retroactive
operation of a change in the common law. See Van Dyke v.
Chappell, 818 P.2d 1023, 1025 (Utah 1991). In such circumstances,
it is the parties’ burden to demonstrate the need for prospective
application only. See Monarrez, 2016 UT 10, ¶ 28. To this end, the
3. Generally, parties are protected from the retroactive
application of newly enacted legislation unless the Legislature
expressly states otherwise or if an exception applies. Waddoups v.
Noorda, 2013 UT 64, ¶ 6, 321 P.3d 1108. One such well-
established exception is that laws that only affect procedure
apply retroactively. See id. ¶ 8. While this is not the preferred
approach to determining retroactive application of changes to
the common law, see S.R. Shapiro, Annotation, Prospective or
Retroactive Operation of Overruling Decision, 10 A.L.R.3d 1371,
§ 5[a] (1966), by analogy, the principles informing this approach
also suggest that retroactive application would be appropriate
here. The rule under consideration is purely procedural as it
impacts only the timing of Heartwood’s appeal and does not
affect Heartwood’s ability to appeal or its likelihood of success in
future appeals. See Waddoups, 2013 UT 64, ¶ 8 (‚However, laws
which merely pertain to and prescribe the practice and
procedure or the legal machinery by which the substantive law
is determined or made effective are procedural and may be
given retrospective effect.‛) (brackets, citation, and internal
quotation marks omitted).
20140883-CA 6 2016 UT App 183Heartwood Home Health & Hospice v. Huber
party seeking to avoid retroactive application of the new law
‚must *make+ a showing of ‘justifiable reliance on the prior state
of the law’ or that ‘the retroactive operation of the new law may
otherwise create an undue burden.’‛ Id. (quoting Van Dyke, 818
P.2d at 1025). See also SIRQ, 2016 UT 30, ¶ 6 (applying an
overruling decision to a pending appeal because the parties did
not challenge its applicability); Loyal Order of Moose, # 259 v.
County Board of Equalization, 657 P.2d 257, 265 (Utah 1982)
(‚Where overruled law has been justifiably relied upon or where
retroactive operation creates a burden, the court, in its discretion,
may prohibit retroactive operation of the overruling decision.‛).
¶12 Here, Heartwood challenges the applicability of Migliore,
but it points us to no law contradicting the general rule favoring
retroactivity. And Heartwood has made no ‚showing‛ of its
justifiable reliance on Clark, nor has it shown that our application
of Migliore would cause an undue hardship. See Monarrez, 2016
UT 10, ¶ 28. Instead, the entirety of its argument on this point
consists of a brief footnote stating that ‚the Migliore decision was
published approximately five months after the district court
entered its Rule 11 Judgment in this matter. Therefore, [Clark]
still applied at the time Heartwood filed its Notice of Appeal and
the Rule 11 Judgment should be treated separately from the
underlying lawsuit.‛ This ‚bare assertion‛ provides us with no
basis upon which to depart from the general rule. See Monarrez,
2016 UT 10, ¶ 28 (citation and internal quotation marks omitted).
In other words, Heartwood simply has not meaningfully
challenged the retroactive application of Migliore, see SIRQ, 2016
UT 30, ¶ 6, and we therefore conclude that the Migliore rule
applies to this case.
CONCLUSION
¶13 Migliore governs the timing of Heartwood’s appeal. And
because it requires that attorney fee awards, including those
awards imposed as rule 11 sanctions, must be raised in a single
20140883-CA 7 2016 UT App 183Heartwood Home Health & Hospice v. Huber
appeal after entry of a final judgment, see Migliore v. Livingston
Financial, LLC, 2015 UT 9, ¶ 21, 347 P.3d 394, Heartwood’s
appeal is premature, and we are jurisdictionally barred from
reaching its merits.4 Accordingly, we dismiss the appeal without
prejudice to the filing of a timely appeal after the entry of a final,
appealable judgment.
4. Paradoxically, application of the Migliore rule, which advances
the cause of judicial efficiency across the board, actually impedes
it here. The narrow issue on appeal has been briefed and argued.
We could decide the issue now and spare the parties the burden
of rebriefing and, perhaps, rearguing the issue. And we would
spare the Utah Supreme Court, or, more likely, another panel of
this court, from having to come up to speed on the issue raised
in the instant appeal. Unfortunately, because the final judgment
rule is jurisdictional and not discretionary, we are powerless to
decide the merits of the appeal for the sake of convenience.
20140883-CA 8 2016 UT App 183