Hiob: Nothing Is Over Until the Court Decides It Is
In the comedy film classic Animal House, Delta Tau Chi pledge-master, and future U.S. Senator, John Blutarsky1 asks and then answers a crucial question: “Did you say ‘over’? Nothing is over until we decide it is.” Judge Robert McDonald recently gave similar advice to the Maryland bar. In Hiob v. Progressive Am. Ins. Co., Case No. 4, Sept. Term 2014 (Md. Nov. 20, 2014), Judge McDonald explained that there is no appealable judgment until there is both (1) a final judgment that is (2) also set forth in a separate document signed by a judge or the clerk and entered on the court docket. Thus, even if there is a final adjudication on all claims involving all parties, that final judgment is not appealable until the court enters and dockets a separate document, signed by a judge or the clerk, evidencing that final judgment. In short, nothing is over (and appealable) until the trial court says it is.
By following Bluto’s simple yet sage advice, the Court also steered the bar away from the murky and dangerous waters created by Houghton v. Cnty. Comm’rs of Kent Cnty., 305 Md. 407 (1986), reconsideration denied, 307 Md. 216 (1986), and toward what are hopefully clearer and calmer seas. Houghton was decided before crucial amendments to Rule 2-601 and required counsel to parse through various rulings and decisions to decide whether those rulings and decisions collectively constituted what has been referred to as a “piecemeal judgment.” If the overall effect of those piecemeal rulings was to adjudicate all claims involving all parties, a final appealable judgment was the result, even if no docket entry purported to enter a final judgment. Hiob takes a different approach, applying Rule 2-601 in a way that creates a “path to appellate review” that is “clear and well-marked” with “the time for filing an appeal” being “finite and well-defined.” Hiob, Slip Op. at 1. As will be seen, Hiob’s objective is clarity and predictability, not confusion and uncertainty.
1997 amendments to Rule 2-601
The Hiob Court relied heavily on the 1997 amendments to Md. Rule 2-601, explaining that prior to those amendments, “there was some uncertainty concerning the timing of entry of a final judgment,” and that the “uncertainty could occasionally result in an unwary appellant losing the right to appeal.” Hiob, Slip Op. 6, 7. The amendments were intended “to alleviate much of this uncertainty” by establishing three new requirements. Id. at 7, 10-11. First, each judgment must be “set forth on a separate document” that “must be separate from an oral ruling of the judge, a docket entry, or a memorandum.” Id. at 10 (quoting Md. Rule 2-601 (a)) (footnote omitted). Second, that document must “be signed by either the judge or the clerk.” Id. Finally, “a judgment is effective – meaning that it triggers the time for filing an appeal – only if it is set forth in accordance with the requirements of Rule 2-601(a) and properly entered under Rule 2-601(b).” Id. at 11 (footnote omitted). These three requirements often are collectively referred to as the “separate document” rule.
As the amendments were patterned after Fed. R. Civ. P. 58, the Court of Appeals recognized that they should be interpreted consistently with two guiding principles that are followed in construing Rule 58. First, the separate-document rule should be “mechanically applied” when determining whether an appeal was timely filed. Second, the rule is not “‘a trap for the inexperienced’” and should “be interpreted to preserve the right to an appeal.” Slip Op. at 4, 5 (quoting Bankers Trust Co. v. Mallis, 435 U.S. 381, 386-87 (1978)); Slip Op. at 11-12 (citing Byrum v. Horning, 360 Md. 23, 32 (2000), and Allstate Ins. Co. v. State Farm Mut. Auto. Ins. Co., 363 Md. 106, 117 n. 1 (2001)). As a result, “the mechanical application of the requirement is relaxed only when it will prevent the loss of a right to appeal.” Id. at 5 (citing Bankers Trust Co., 435 U.S. at 386-87). In essence, the separate-document rule is designed to provide a clear and predictable path to appellate review, not to erect obstacles to obtaining that review.
Hiob litigation in the Circuit Court and Court of Special Appeals
Multiple members of the Hiob family, including the personal representatives of Virginia Hiob and Laura Dusome, sued Progressive American Insurance Company and Erie Issuance Exchange, seeking declaratory relief. All the plaintiffs brought claims against Progressive, but only Virginia Hiob’s personal representative brought a claim against Erie. In September 2009, the Circuit Court entered summary judgment for Progressive, “thereby resolving all of the claims against Progressive.” Slip Op. at 13. The Court issued a written order declaring the rights of the parties that “was entered on the docket on October 7, 2009.” Id.
The litigation remained dormant for 14 months. Then, on January 10, 2011, Erie and Virginia Hiob’s personal representative dismissed with prejudice the estate’s action against Erie with a “Line of Dismissal” that was entered on the docket as “Voluntary Dismissal (Partial).” Thus, as of that day, all claims involving all parties were finally resolved.
Also that day, all plaintiffs “filed a ‘Motion to Reduce Order of October 7, 2009 to Final Judgment,’ citing Rule 2-601 and noting that, with the dismissal of Erie, the interlocutory order as to Progressive could be made final.” Id. at 13. The Circuit Court granted that motion, signing an Order on February 8, 2011, “stating that ‘final judgment is entered.’” Id. On February 15, 2011 – 36 days after the Line of Dismissal had been docketed but before the “final judgment” Order had been docketed – the plaintiffs noted an appeal from the judgment entered in Progressive’s favor. Ten days later, the “final judgment” Order was docketed when “the clerk made a docket entry indicating that a final judgment had been issued.” Id. at 14.
The Court of Special Appeals dismissed the plaintiffs’ appeal, finding that it was untimely. Hiob v. Progressive Am. Ins. Co., 212 Md. App. 734 (2013). Relying on the Court of Appeals’ decision in Houghton – which approved the concept of “piecemeal judgments” – the Court of Special Appeals “concluded that, although Houghton predated the 1997 amendment of Rule 2-601, its holding on piecemeal finality remained good law.” Slip Op. at 14. The intermediate appellate court then held that the Line of Dismissal was a judgment for purposes of Rule 2-601; “that the docketing of the Line of Dismissal on January 10, 2011, was the date final judgment was entered”; and that the plaintiffs’ “failure to file their notice of appeal within 30 days of that date doomed their appeal.” Id. The Court of Appeals “granted certiorari to consider the application of Rule 2-601 in this context” and to decide whether the Line of Dismissal had constituted a final and appealable judgment from which the plaintiffs had failed to note a timely appeal. Id.
A judgment cannot be appealed until a separate document is docketed evidencing its finality
The Court of Appeals explained that the case’s outcome hinged on “what qualifies as a ‘separate document’ that, upon its docketing, starts the 30-day clock for filing a notice of appeal.” Id. at 2. In answering that question, the Court addressed three components of the “separate document” rule: 1) the separate document must be in the form of a judgment; 2) the separate document must be signed by the clerk or a judge; and 3) the separate document must be docketed.
The Court concluded that the Line of Dismissal was not in the form of a judgment. Progressive argued “that the entry of the voluntary dismissal started the time for filing a notice of appeal because, at that point in the action, all of the pending claims had been finally adjudicated,” but the Court rejected that argument. Id. at 21-22 (footnote omitted). While a judgment must be final before it can be appealed, a final judgment is nonetheless not “an ‘effective’ judgment,” capable of being appealed, until Rule 2-601’s separate requirements are also met. Id. at 22. “In other words, the existence of final adjudication on all claims against all parties is necessary but not sufficient to begin the time for filing an appeal.” Id. at 23 (footnote omitted).
Furthermore, the Line of Dismissal did “not clearly indicate to the parties or the public” that the court had fully adjudicated all issues and had “reached a final, unqualified decision.” Id. at 29. The concept of clarity is a crucial component of the Court’s opinion.2 The litigants, as well as non-parties, must be able to look at the document and determine from that document that all claims have been finally resolved and that the trial court intends to enter a final judgment. Id. at 31. Someone should not have to search the docket, review the claims asserted, analyze the docket entries, and make an independent determination that no further claims remain pending. Instead, someone who wants to know if a final appealable judgment has been entered must be able to rely on a separate document setting forth that judgment – which could not be accomplished by merely reviewing the Line of Dismissal. Id. at 32.
In addition, the Line of Dismissal was neither signed by the clerk or a judge, id. at 32-35, nor docketed under Rule 2-601(b). In concluding that the docketing requirement had not been satisfied, the Court reiterated its concern that the litigants and general public be given simple and clear notice that a final and appealable judgment has been entered. The docket entry for the Line of Dismissal said “Voluntary Dismissal (Partial) as to Erie Insurance Exchange.” Id. at 36. That entry was “ambiguous as to whether a judgment has been entered because it does not specify whether the dismissal is with or without prejudice, leaving open the possibility that the claim against Erie was not resolved definitively.” Id. Again, simplicity and clarity are paramount, and setting complicated traps is to be avoided:
The ambiguity as to finality is especially apparent in this case because neither the docket entry, nor the Line of Dismissal as to Erie, indicates that the prior summary judgment order in favor of Progressive is now a final order. Instead, under the peculiar interpretation urged by Progressive, the notice of dismissal, signed by only two of the multiple plaintiffs and defendants, would constitute both the final judgment in the entire action and the separate document on which that final judgment is set forth. Such a rule creates a trap for the unwary and the inexperienced and does not promote the ability of the public to readily determine the disposition of every claim brought in the circuit courts. Id. at 36-37.
As the Line of Dismissal failed to meet the separate-document requirement, “a separate document was not rendered or entered until the clerk docketed the Circuit Court’s February 8, 2011 order on February 25, 2011—the earliest date on which the 30-day clock for filing a notice of appeal would have been triggered.” Id.at 16 (footnote omitted). And while the plaintiffs “filed their notice of appeal before the order was docketed on February 25, 2011, it was timely under the savings provision of Rule 8-602(d),” which states that if a notice of appeal is filed after a trial court announces its ruling, but before the ruling is docketed, the notice is “treated as filed on the same day as, but after, the entry on the docket.” Id. at 16-17 (emphasis in original) (footnote omitted). Thus, the appeal was timely, the Court of Special Appeals should not have dismissed it, and the case was remanded to the intermediate court for a decision on the merits.
Houghton and piecemeal judgments or finality
The Court ended its opinion “with a word on what it is sometimes called ‘piecemeal finality,’” and its 1986 decision in Houghton – a decision relied on heavily by the Court of Special Appeals in dismissing the Hiobs’ appeal. Id. at 37 (footnote omitted). In that case, the Houghtons sued the County Commissioners of Kent County in a three-count complaint. On January 21, 1985, the Circuit Court dismissed Counts I and III, and “the court’s order granting the motion to dismiss was entered on the docket, although the word ‘judgment’ was not used in the docket entry.” Houghton, 305 Md. at 410. Two days later, the Houghtons voluntarily dismissed Count II. “This notice of dismissal was entered on the docket the same day, although again the word ‘judgment’ was not used in the docket entry. As of January 23, 1985, therefore, there was a final disposition of all counts in the complaint.” Id. (citations omitted).
On February 19, the Houghtons noted an appeal, but “the Court of Special Appeals sua sponte dismissed the appeal on the ground that there was no final circuit court judgment.” Id. at 410-11. The Houghtons did not seek a writ of certiorari from the Court of Appeals. Instead, when the case was remanded, the Circuit Court on May 1 entered an Order entering final judgment, and the next day the Houghtons noted another appeal to the Court of Special Appeals. Before the case was argued in the Court of Special Appeals, the Houghtons obtained a writ of certiorari from the Court of Appeals.
The County Commissioners then moved to dismiss the appeal, arguing “that, upon the dismissal of count two on January 23, 1985, there was a final appealable judgment.” Id. at 411. According to the County Commissioners, “the Court of Special Appeals erred in dismissing the first appeal,” “the order of appeal filed on May 2, 1985, more than thirty days from the final judgment on January 23rd, was late and conferred no appellate jurisdiction,” and therefore the “appeal must be dismissed.” Id.
In a 5-to-2 decision, with Judge John Eldridge writing for the majority, the Court of Appeals agreed. According to the majority, “[t]he order of January 21, 1985, dismissing counts one and three, coupled with the order of January 23, 1985, dismissing the remaining count two, had the effect of putting the plaintiff out of court. Nothing remained to be done.” Id. at 412. Both orders were docketed as required by the Rules, and, as the majority further explained, “Nothing in Rule 2-601, adopted on July 1, 1984, and dealing with the entry of judgment, requires that the word ‘judgment’ always be used as a prerequisite to finality. The orders of January 21 and 23, 1985, together constituted the final judgment of the circuit court.” Id. at 412-13.
Thus, over a vigorous dissent authored by Judge John McAuliffe and joined by Chief Judge Robert Murphy, the Court of Appeals dismissed the appeal.3 Moreover, the Court, in another 5-to-2 decision with Judge Eldridge again writing the opinion, and with the same two dissenters, denied a motion for reconsideration – a request for reconsideration that was supported by the Maryland State Bar Association as amicus curiae. Houghton v. Cnty. Comm’rs of Kent Cnty., 307 Md. 216 (1986). In denying that request, Judge Eldridge reiterated that whether a decision is appealable is determined by whether it is final – i.e., whether it adjudicates all claims and has the effect of putting the plaintiff out of court – and not by whether the word “judgment” is contained in the order or entry that is placed on the docket.
In Hiob, after questioning whether Houghton even remains good law, Judge McDonald acknowledged the significance of the amendments to Rule 2-601:
Because Houghton interpreted a version of Rule 2-601 prior to the adoption of the separate document requirement, its analysis as to whether each judgment has been entered properly under Rule 2-601 is outdated. For instance, at the time Houghton was decided, the requirement that the clerk prepare, sign, and enter the separate document on which judgment is set forth was not yet part of Rule 2-601. Additionally, at the time of the Houghton decision, the time for filing an appeal began at the time that a final, appealable judgment existed and a notation was entered on the docket. As a result, the analysis in Houghton focused on whether the orders issued in that case finally resolved all of the issues and nothing remained pending before the court. See Houghton, 305 Md. at 412 (concluding that an order of dismissal on two claims and a notice of dismissal on a third claim had the effect of putting the plaintiff out of court, nothing remained to be done, and therefore, a final judgment existed). The 1997 amendments to Rule 2-601 changed the analysis from whether finality existed to whether an order, which finally resolved all the issues, had been set forth on a separate document. Houghton’s focus on finality is still relevant, but it is not sufficient, without the separate document, to start the time for filing an appeal.
Slip Op. at 38-39 (footnote omitted).
Thus, after Hiob and its analysis and application of Rule 2-601, counsel are not left to dig through docket entries, parse various rulings, and decide whether a final appealable judgment exists. The separate-document rule should alleviate that need. In both substance and tone, the Hiob Court has tried to make life easier, or at least more predictable, for lawyers filing appeals.
1 The future Senator was better known as “Bluto.”
2 And “with the advent of electronic filing in the courts,” id. at 19, there should be less confusion and more clarity as the court will issue an electronic document, accompanied by a docket entry, complying with Rule 2-601.
3 A particularly controversial aspect of Houghton was that the Houghtons’ counsel had been correct – counsel had filed a notice of appeal from what the Court of Appeals ultimately concluded was a final, appealable judgment. But because the Court of Special Appeals had erroneously held that the decision was interlocutory – and had sua sponte dismissed the appeal – and as the Houghtons’ counsel had acquiesced in and complied with that erroneous decision, the Houghtons lost their day in court.
Brad McCullough is a commercial and business litigator and appellate attorney at Lerch, Early & Brewer in Bethesda, Maryland. Brad represents businesses and individuals in a wide variety of cases in federal and state trial and appellate courts, as well as before arbitration panels and in mediation proceedings.
This article originally appeared on The Maryland Appellate Blog.