The Final Judgment Rule: It ain’t over ’til it’s over

By Karen Federman Henry

Just when you think you know all of the rules for determining when a final judgment exists, they shift a bit.[*] The March 24 decision of the Court of Appeals in URS Corp. v. Fort Myer Construction Corporation interpreted the separate document requirement in Md. Rule 2-601 to allow a waiver of the requirement when doing so does not prejudice a party and preserves a party’s right to appeal. In some respects, the Court has returned us to some of the uncertainty that accompanied its decision in Houghton v. County Commissioners of Kent County, 305 Md. 407 (1986).

The elements of a final judgment sound simple—when all of the issues have been decided and the parties are effectively “out of court,” the time to appeal starts to run. The difficulty arises when multiple orders are entered regarding different stages of litigation. Some may allow an immediate or interlocutory appeal, while others must await the outcome of the case. Thus, in Houghton, the non-final order dismissing a portion of the case did not start the appeal period, but when combined with a later order, it created the final judgment in the case. The additional dilemma at the time was that the confirmation of the final judgment did not always occur through a written order or opinion of the court—it could be a simple docket entry.

After Houghton, the Rules were amended to require a separate written document that identified the entry of judgment. Rule 2-601 made the practitioner’s life much easier—the appeal clock did not start ticking until the written document appeared in the court file. Simple, right? It seemed to be as recently as 2014, when the Court of Appeals confirmed that a final judgment did not exist until two events occurred: a final judgment resolving all issues in the case plus a separate document signed by a judge or clerk and entered on the court docket. See Hiob Progressive American Ins. Co., 440 Md. 466 (2014). The principle seemed clear and unambiguous—until last month.

In its most recent discussion of the final judgment rule, the Court of Appeals announced that the appellate court may waive the written order requirement otherwise mandated by the Rule. This is intriguing for a couple of reasons. At a minimum, it undoes the comfort of knowing when a final appealable order exists—we are back to evaluating whether all issues have been resolved and the parties are out of court. For decades, practitioners have relied on the separate written order provision, rather than guessing at which decision of a trial court ends the litigation. In doing so, the Court’s decision in URS returns practitioners to the unknown world of whether a particular decision is final and appealable without a written document evidencing its finality.

The Court may have reined in the new waiver option, by limiting its application to those situations that do not prejudice a party and serve only to preserve a party’s right to appeal. In this case, the waiver allowed an appeal to proceed instead of being dismissed as premature, i.e., filed before the written document identifying the entry of judgment was entered in the court file. Time will tell whether the Court’s decision to allow a waiver will become more commonplace.

[*] The phrase from the title is attributed to Yogi Berra, the famous baseball player who expressed a number of “Yogi-isms.”