Dellinger v. Wolf

Filed 6/2/20 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2020 ND 112
Jesse Dellinger, Plaintiff
v.
Jeremy Young Wolf d/b/a Young Wolf
Trenching, Trevor Grandchamp, and SITE
Energy (USA) Inc., Defendants
and
QEP Energy Company, Defendant and Appellee
v.
Kinsale Insurance Company, Third-Party Defendant and Appellant
and
Legendary Field Services, LLC, Third-Party Defendant
No. 20190301
Appeal from the District Court of McKenzie County, Northwest Judicial
District, the Honorable Daniel S. El-Dweek, Judge.
DISMISSED.
Opinion of the Court by Tufte, Justice.
Jordan B. Weir (argued) and Robert B. Stock (appeared), Fargo, N.D., for
defendant and appellee QEP Energy Company.
Larry L. Boschee (argued) and Jack E. Zuger (appeared), Bismarck, N.D.,
Nicholas C. Grant (on brief), Dickinson, N.D., and Aaron L. Warren (on brief),
Miami, Florida, for third-party defendant and appellant Kinsale Insurance
Company.
Dellinger v. Young Wolf
No. 20190301
Tufte, Justice.
Kinsale Insurance Company (“Kinsale”) appealed from a district court’s
partial summary judgment determining Kinsale has a duty to defend QEP
Energy Company (“QEP”). QEP moved to dismiss the appeal, arguing the
partial summary judgment is not appealable. Kinsale responded, asserting
the Declaratory Judgment Act provides a statutory basis for the appeal. We
conclude the Declaratory Judgment Act does not provide a statutory basis for
the appeal, and we dismiss the appeal for lack of jurisdiction.
I
This is a personal injury lawsuit arising from an explosion at a well site
in McKenzie County. The Plaintiff, Jesse Dellinger, sued multiple defendants,
including his employer, Legendary Field Services, LLC (“Legendary”), and
QEP. QEP was the operator of the well site. Legendary was an oil and gas
service provider. Legendary and QEP had entered into a master services
agreement which required Legendary to maintain a commercial liability
insurance policy that named QEP as an additional insured. Legendary
purchased such a policy from Kinsale. After the explosion, QEP tendered its
defense to Legendary and Kinsale as an additional insured on the policy.
Kinsale denied QEP coverage.
QEP filed a third-party complaint against Kinsale and Legendary
claiming breach of contract and requesting declaratory relief. QEP moved for
partial summary judgment, requesting a declaration that Kinsale has a duty
to defend QEP as an additional insured on the policy. Kinsale opposed the
motion, invoking various coverage exclusions. The district court granted
partial summary judgment declaring Kinsale has a duty to defend QEP.
Kinsale moved to certify the partial summary judgment as final under
N.D.R.Civ.P. 54(b). Before the district court ruled on Kinsale’s Rule 54(b)
motion, Kinsale filed a notice of appeal. This Court temporarily remanded the
case to the district court for the court to decide the Rule 54(b) motion. On
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remand, the district court declined to certify its partial summary judgment
order as a final judgment. QEP now moves to dismiss the appeal, arguing the
district court’s partial summary judgment order is not appealable.
II
The right of appeal is governed by statute in North Dakota. Jordet v.
Jordet, 2015 ND 73, ¶ 13, 861 N.W.2d 154. When there is no statutory basis
for an appeal, this Court lacks jurisdiction and must dismiss the appeal. Id.
Orders that are not final and do not dispose of all the claims in a case are
generally not appealable. Bulman v. Hulstrand Constr. Co., 503 N.W.2d 240,
241 (N.D. 1993); Regstad v. Steffes, 433 N.W.2d 202, 203 (N.D. 1988). If a
district court determines there is “no just reason for delay,” it may certify a
judgment disposing of fewer than all of the claims as final. N.D.R.Civ.P. 54(b).
However, Kinsale asserts the Declaratory Judgment Act provides
statutory authorization for this appeal. The Declaratory Judgment Act is
codified at N.D.C.C. ch. 32-23. Section 32-23-06 provides:
The court may refuse to render or enter a declaratory
judgment or decree if such judgment or decree, if rendered or
entered, would not terminate the uncertainty or controversy giving
rise to the proceeding. However, the court shall render or enter a
declaratory judgment or decree in an action brought by or against
an insurance company to determine liability of the insurance
company to the insured to defend, or duty to defend, although the
insured’s liability for the loss may not have been determined.
(Emphasis added.) The Legislature added the emphasized language in 1983 in
response to our case law to the contrary. Blackburn, Nickels & Smith, Inc. v.
Nat’l Farmers Union Prop. & Cas. Co., 452 N.W.2d 319, 322–23 (N.D. 1990).
See also 1983 N.D. Sess. Laws ch. 377, § 1. Kinsale also relies on Section 32-
23-01, N.D.C.C., which provides:
The [court’s] declaration may be either affirmative or
negative in form and effect, and such declaration shall have the
force and effect of a final judgment or decree.
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Kinsale reads these two provisions together as creating immediate
appealability of decisions concerning insurers’ duty to defend.
In Ziegler v. Meadowbrook Insurance Group, Inc., 2009 ND 192, 774
N.W.2d 782, we were presented with the same argument and decided the case
without a majority opinion. Ziegler requested a declaratory judgment
determining the defendant insurers had a duty to defend him in a separate
lawsuit. Id. at ¶ 3. He also brought claims for breach of an insurance contract
and breach of the duty of good faith and fair dealing. Id. The district court
granted partial summary judgment, concluding there was a duty to defend, but
the court did not resolve Ziegler’s other claims against the insurers. Id. at ¶ 6.
The insurers appealed and then moved for Rule 54(b) certification. Id. at ¶ 30.
The district court did not decide the Rule 54(b) motion, concluding it lacked
jurisdiction while the insurers’ appeal was pending. Id.
Two justices concluded the partial summary judgment order was not
appealable because it was not intended to be final and was not appealable
under N.D.C.C. § 28-27-02. Ziegler, 2009 ND 192, ¶¶ 1-18, 774 N.W.2d 782
(opinion of Crothers, J.; Maring, J., concurring). The plurality rejected the
appellants’ argument that this Court should allow immediate appeals of
interlocutory decisions about insurance coverage under N.D.C.C. ch. 32-23
because under N.D.C.C. § 32-23-07, the Court reviews declaratory judgments
according to the same jurisprudence that applies to any other order or
judgment. Id. at ¶ 10. The plurality then articulated the following analysis for
determining whether an order is appealable:
First, the order appealed from must meet one of the
statutory criteria of appealability set forth in NDCC § 28-27-02. If
it does not, our inquiry need go no further and the appeal must be
dismissed. If it does, then Rule 54(b), NDRCivP, must be complied
with. If it is not, we are without jurisdiction.
Id. at ¶ 11 (quoting Mann v. N.D. Tax Comm’r, 2005 ND 36, ¶ 7, 692 N.W.2d
490). The plurality then explained that N.D.C.C. § 28-27-02 sets out seven
categories of orders that may be appealed, all of which are required to be final.
Id. at ¶¶ 12-13 (“to avoid a longstanding policy against piecemeal appeals, we
would not entertain appeals under N.D.C.C. § 28-27-02 from orders that were
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not meant to be final”). The plurality interpreted the partial summary
judgment order as not “intended to be final” because it contemplated further
discovery and additional proceedings on the duty-to-defend issue. Id. at ¶ 14.
They concluded the appeal must be dismissed. Id. at ¶ 18. Another justice
disagreed with the plurality on the statutory interpretation but reached the
same result under N.D.R.Civ.P. 54(b), creating a majority for dismissal. Id. at
¶¶ 20-31 (Kapsner, J., concurring in the result). Two justices dissented,
concluding the Declaratory Judgment Act provided statutory authorization for
the appeal. Id. at ¶¶ 32-37 (VandeWalle, C.J., dissenting, joined by Sandstrom,
J.).
We find the plurality opinion in Ziegler persuasive in deciding this case.
As in Ziegler, the district court here entered a partial summary judgment on
the duty-to-defend issue, but it left other issues unresolved. The partial
summary judgment contemplated the case would proceed with further
discovery and additional proceedings. The district court’s denial of certification
under N.D.R.Civ.P. 54(b) expressly stated its intent to reconsider the duty-to-
defend issue after the necessary factual record was developed at trial. We adopt
the rationale of the Ziegler plurality, concluding that the partial summary
judgment regarding Kinsale’s duty to defend is not immediately appealable
under the Declaratory Judgment Act. Because the partial summary judgment
was not intended to be final and is not appealable under N.D.C.C. § 28-27-02,
we must dismiss for lack of jurisdiction.
III
We hold the order granting partial summary judgment is not appealable.
We dismiss the appeal.
Jerod E. Tufte
Daniel J. Crothers
Jon J. Jensen, C.J.
I concur in the result.
Lisa Fair McEvers
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VandeWalle, Justice, concurring specially.
In Ziegler v. Meadowbrook Insurance Group, Inc., 2009 ND 192, 774
N.W.2d 782, as noted in ¶ 8 of the majority opinion, I dissented believing that
the amendment of the Declaratory Judgment Act provided the basis for appeal
to this Court. However, Ziegler was decided more than ten years ago, and the
Legislature has not acted. When this Court construes a statute and the
Legislature takes no action, it is presumed the Court’s interpretation is in
accord with the Legislature’s intent. City of Bismarck v. Uhden, 513 N.W.2d
373, 376 (1994) (citing Blair v. City of Fargo, 171 N.W.2d 236 (N.D. 1969)).
I therefore concur in the result.
Gerald W. VandeWalle
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