Final Judgments and Harmless Jurisdictional Error in Maryland
By Michael Wein
Appealable final judgments have been described as a legal quagmire that for “the past forty or fifty years … no one issue has been the subject of more opinions than the question of whether a trial court order is appealable …” Brewster v. Woodhaven Bldg. & Dev. Inc., 360 Md. 602, 623 (2000). Going further, the Court of Appeals noted “[n]either the Code nor the Rules define when an order or ruling is sufficiently final to qualify as a judgment…’[W]hether a ruling is final’ … is frequently so close a question that decision of that issue either way can be supported with equally forceful arguments, and that it is impossible to devise a formula to resolve all marginal cases coming within what might well be called the ‘twilight zone’ of finality”) Circuit City Stores, Inc. v. Rockville Pike Joint Venture Ltd. P’ship, 376 Md. 331, 347 (2003), quoting in part, Gillespie v. United States Steel Corp., 379 U.S. 148, 152 (1964)). The solution for the “marginal” and/or inadvertent non-final judgment cases being actually decided on the merits by the Maryland appellate courts, with reasonable continuing predictability for the vast majority of appeals that do not have these concerns, may be found in a Federal Rule and legal interpretation, and recent developments support a similar Rules adoption. Still, a proper discussion on this requires, first, the background and setting on why this problem constantly arises in Maryland law.
For all its admitted complexities, final appealable judgment determinations in Maryland, inherently seem to have harsh and severe “strictness” consequences, as the eventual legal and factual interpretation is afforded “jurisdictional” deference. Thus, if an appealing party, is determined to be jurisdictionally incorrect, the procedural underpinnings preceding that determination, can make or break an appeal. It also permits an untold amount of mischievousness and sandbagging by counsels who keep the “questionable” jurisdictional defect to themselves and “spring” the defect sometimes much later. This includes causing a possibly infirm appeal to be “achieved” as a dismissal by the opposing party, years later. See e.g., Houghton v. County Comm. of Kent County, 305 Md. 407, reconsideration denied, 307 Md. 216 (1986)(upholding dismissal 5-2, when original appeal was timely noted, Court of Special Appeals incorrectly concluded it was not final and untimely, party then went back to Circuit Court, had judgment entered and appealed, only for opposing party to argue that the 2nd appeal was infirm and untimely because 1st appeal was timely final judgment, and no Certiorari was sought with the error dismissing the 1st appeal by the incorrect intermediate appellate court).[1] Further, because of the jurisdictional concerns and deference, appellate courts can and will, even sua sponte, ascertain the jurisdictional infirmity. If so holding, the appellate court will dismiss an untimely appeal or Certiorari outright, regardless of the judicial inefficiencies, even when hundreds of hours of attorney and judicial work are already involved. [2]
Part of the Houghton case was acknowledged as “outdated” in Hiob v. Progressive Am. Ins. Co, 440 Md. App. 466 (2014) written by Judge McDonald and “did not decide” if part of Houghton was overruled by subsequent Rule Amendments. See Hiob, at 502-503 “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.[…] 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.”) As Blog Contributor Brad McCullough addressed here, “[t]hus, 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.”
While practically that appears true, it still should be understood that the Hiob case involved a still viable appeal not being dismissed, based on an improperly “open” non-final judgment Order left unaddressed for 11 years, which the separate document rule is then strictly construed as “open”. That would not appear to be the holding of Hiob, unless considered in tandem with the Court’s recent URS case, that when a final judgment has not been properly entered and followed by the trial court and parties, even unintentionally, the Houghton case does apply without a proper final judgement. Thus, the incentive for both the parties and the trial court, to err on the side of issuing a proper separate judgment, evincing the final appealable judgment.
Less certain and potentially distinguishable, are whether any equitable and waiver concerns may lean towards an appeal not being dismissed, in the face of a proper separate and final judgment document, and there is the possibility that those appeal cases not be strictly construed. A few months ago, the Court’s 2014 decision in Hiob and even more Houghton, was questioned, in another opinion by Judge Robert McDonald in the case of URS Corp. v. Fort Myer Const. Corp. (Dec. Mar. 24, 2017). As Blog Contributor Karen Federman Henry discussed here,
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….
This appears to be the present evolution of the Court of Appeals. Perhaps it was the difference between permitting an appeal to go forward for the first and only time without a proper appealable final judgment ever being issued, as in Hiob, versus forever dismissing an appeal as in URS, due to a confusion on a “marginal” and/or inadvertently improper final judgment. Regardless, the Court of Appeals now notes “[b]ecause the separate document requirement is intended to clarify the deadline for filing an appeal—not to create delay for its own sake—the separate document requirement may be waived when waiver does not prejudice appeal rights. Such is the case in this appeal.” URS Corp. v. Fort Myer Constr. Corp., 452 Md. 48, 53 (2017). Thus, though the word “equities” does not appear in the URS opinion, it appears that the Court has seen at least “waiver” and prejudice as a concern, that should permit an appellate court to decide the merits of the appellate case, even if “jurisdictionally” it does not quite fit, particularly under the harsh tone of Houghton and its brethren.[3]
This “break” for the first time in 30 years in the jurisdictional dam of final judgments, appears to be reminiscent of the 2-judge dissenting opinion in the Houghton case written by Judge McAuliffe and joined by Chief Judge Robert Murphy. If so, it is a welcome sign of the Court at least subtly, acknowledging the dilemma, that at least those acting in good faith under the laws and facts, in an appeal filing, should not have cases dismissed, particularly if such dismissals is Draconian and harsh, so that there is not even the legal fiction of reapplying to the Circuit Court for a proper final judgment, and a delay of a few months.
The majority suggests that application of the law of the case doctrine may not be of benefit to appellant in this case because the failure to file a timely appeal deprives an appellate court of jurisdiction, and we cannot confer jurisdiction where none exists. That argument overlooks the effect of applying the law of the case to these facts. […] I am aware that hard cases sometimes make bad law, and that we must avoid distortion of a rule simply to avoid a harsh result in a single case. In this instance, however, I believe the rule may be applied rationally and without distortion to achieve a logical and just result. I would consider the appeal on its merits.
Houghton v. County Comm’rs of Kent County, 305 Md. 407, 417-418 (1986) (J. McAuliffe, dissenting).
So where do we go from here? The federal courts may have a solution. The solution may on its face appear simply, but is the result of the federal court’s experience with a similar conundrum, and fits in with the Maryland Court of Appeals’ recent URS decision, to have “waiver” and “prejudice” doctrines considered, and not for the separate document requirement to be an absolute. CRS, instead, could be harmonized with an underutilized part of the Final Judgment Rule in the Federal Courts, being adopted by the Maryland Rules committee. A review of FRCP 58, finds that sub-section (c) that the “marginal” and/or accidentally improper final appealable judgments, can be considered by the appellate court, if there’s a separate document or if “150 days have run from the entry in the civil docket.” Thus, perhaps creatively, the jurisdictional absolutes vexing Maryland Courts are mitigated significantly, when the FRCP Rules, permit a type of “waiver” when it is without “prejudice” such as is defined therein as not being challenged for a period of time…like the 150 days permitted in Federal Court in FRCP 58(c). (Which would also fit in well with the time frame that appeals and their infirmities could be discovered through an information report at the Court of Special Appeals, and any pre-Briefing mediation process)
(c) Time of Entry. For purposes of these rules, judgment is entered at the following times:
(1) if a separate document is not required, when the judgment is entered in the civil docket under Rule 79(a); or
(2) if a separate document is required, when the judgment is entered in the civil docket under Rule 79(a) and the earlier of these events occurs:
(A) it is set out in a separate document; or
(B) 150 days have run from the entry in the civil docket.
Fed R. Civ. P. 58(c)
The Fourth Circuit Court of Appeals in Quinn v. Haynes, has already adopted this approach. The first part includes the axiomatic determination on timely appeals being “mandatory and jurisdictional.” Id. at 843, quoting United States v. Robinson, 361 U.S. 220, 229 (1980).
“Nevertheless, we have jurisdiction to hear this appeal because the district court failed to comply with the “separate document” requirement of Rule 58 of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 58 (“Every judgment shall be set forth on a separate document.”). Instead of entering judgment on a separate document, the district court issued only a document styled as a Memorandum Opinion and Order Accepting and Adopting Proposed Findings of Fact and Recommendation for Disposition of Magistrate Judge. See Fed. R. Civ. P. 58 notes to 1963 amendment (“The amended rule eliminates these uncertainties by requiring that there be a judgment set out on a separate document–distinct from any opinion or memorandum–which provides the basis for the entry of judgment.”).
The consequences of the district court’s failure to comply with Rule 58 are well-established: When a district court does not enter its final judgment on a separate document, the time to appeal does not begin to run. See Caperton v. Beatrice Pocahontas Coal Co., 585 F.2d 683, 689 (4th Cir. 1978).
While the absence of a properly-entered judgment disposes of the contention that the appeal was untimely filed, it raises the further question of whether this Court may consider the merits of the appeal without first requiring that the State obtain a judgment that formally complies with Rule 58. In Caperton, we resolved this issue and held that this Court has subject matter jurisdiction to hear an appeal, despite the lack of conformity with Rule 58, when a three-factor test is met: “(1) ‘the District Court clearly evidenced its intent that the opinion and order from which an appeal was taken would represent the final decision in the case’; (2) a judgment of dismissal ‘was recorded in the clerk’s docket’; and (3) the appellees ‘did not object to the taking of the appeal in the absence of a separate judgment.'” Id. at 690-91 (quoting Bankers Trust Co. v. Mallis, 435 U.S. 381, 387-88, 55 L. Ed. 2d 357, 98 S. Ct. 1117 (1978)). In this case, the memorandum opinion and order issued by the district court clearly evidenced the court’s intent that it serve as the final decision in the case, the district court’s memorandum opinion and order was entered on the docket on September 21, 1999, and Haynes has not objected to the taking of this appeal in the absence of the separate document. Therefore, this Court has subject matter jurisdiction to hear the merits of this appeal.” [Emphasis Added]
Quinn v. Haynes, 234 F.3d 837, 843 (4th Cir. 2000).
In other words, while the 4th Circuit accepts that an appeal is not properly jurisdictional when the final judgment and separate document rules are not done, based on the more flexible Rule and concomitant appellate law allowing 3 factors similar to waiver and prejudice, to still permit subject matter jurisdiction on appeal, so long as it’s past 150 days, where the prejudice imbues against the parties and the appellate courts who did not discover it earlier. Appeals that violate the final judgment or separate document rule, may still be considered by the appellate court when its essentially “harmless.” Though a different time period could work as well (such as 180 or even 240 days), the 150 day time period to permit the appeal to go forward, still allows time to correct obviously erroneous errors, without significantly delaying the appeal (possibly with a reversal and remand for correct entry of the final judgement). For those appeals past 150 days with the correct 3-part criteria on those rare cases, but not a technically correct final appealable judgment, the appellate court has subject matter
In Maryland, we could significantly reduce the number of technically infirm final appealable judgments being litigated on jurisdictional issues for years, especially to the Court of Appeals. The present system more often than not, leads to wasted judicial resources, and could even allow unsavory sandbagging by the opposing party, years later, as opposed to actually arguing the merits of the appeal case, when there was no prejudice. Instead of the party opposing the appeal, intentionally or unintentionally, failed to timely apprise the appellate court, as to its concerns on the final appealable judgment being proper in a separate document signed by a clerk or judge, since the jurisdictional aspects trace to a long-standing but “harsh” legal interpretation of the Rules permitting appeals, the solution is remarkably simple–adopt a small amount of flexibility giving jurisdiction, though a Rule amendment, similar to what the Federal Courts already have.
[1] In 2004, I wrote a piece on the Houghton case, discussing the Draconian consequences of the Houghton rule, and advocating the Dissenting opinion. This was published as a “Practice Tip” in the Maryland Bar Journal, “Mandatory Certiorari in the Maryland Court of Appeals.”
[2] The ancient proverb “For want of a nail” involving causality as a result of seemingly small actions and inactions, comes to mind. For lack of a perfectly ripe and appealable final judgment, the notice of appeal is lost. For lack of the notice of appeal, the merits of the briefs are lost…(and so on)… and all for the want of a perfectly secured final appealable judgment.
[3] In a footnote, the Maryland Court of Appeals also tried to harmonize the two opinions, as being a question on the “comprehensiveness” of the separate document, but by adopting the waiver and prejudice doctrine, not deciding the issue.
[T]he Commission appears to argue that a separate document reflecting the judgment in favor of the Commission against URS alone would not suffice to resolve this issue and that the separate document requirement may be satisfied only by a document that comprehensively addresses all claims in a case. Prior to the adoption of the separate document requirement, this Court recognized the concept of “piecemeal finality” or “springing finality” under which separate orders disposing of different claims would together be regarded as a final judgment as of the time of the last of those orders. See Houghton v. County Commissioners of Kent County, 305 Md. 407, 504 A.2d 1145 (1986). With the adoption of the separate document requirement in 1997, there have arisen different views as to the continuing viability of the idea of “piecemeal finality.” Compare P.V. Niemeyer, L.M. Schuett, & J.E. Smithey, Maryland Rules Commentary (4th ed. 2014) at 630-32 (“the rule now requires that one document will embody the entire judgment [and not] numerous separate documents”) with Hiob v. Progressive American Ins. Co., 212 Md. App. 734, 743-46, 71 A.3d 184 (2013), rev’d on other grounds, 440 Md. 466, 103 A.3d 596 (2014) (concluding that Houghton remains “good law”). Given our holding that the separate document requirement was waived in this case, the issue of how comprehensive a separate document need be is an academic question that we need not resolve here. See Hiob, 440 Md. at 501-3.
URS Corp. v. Fort Myer Constr. Corp., 452 Md. 48, 69 n.13 (2017).
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