Jurisdiction of Circuit Court

Author: LegalEase Solutions 

Introduction

Client’s client is the plaintiff in a civil case (in Federal Court) against Defendant, City of Dearborn.  Plaintiff filed a motion for summary judgment, which was granted holding the City liable. The trial court left the issue of damages unresolved. The City has appealed the order of judgment.

Questions Presented

Does the circuit court have jurisdiction over an appeal from a summary judgment if it has decided only the question of liability leaving the issue of damages unresolved?

Short Answers

Possibly no.  Generally, only final orders are appealable, and an order that decides the issue of liability alone leaving the issue of damages unresolved is only an interlocutory order which may only be appealable in limited circumstances

Discussion

  1. A JUDGMENT CANNOT BE CONSIDERED FINAL AS LONG AS IT LEAVES OPEN THE QUESTION OF DAMAGES.

 The City’s appeal challenging the trial court’s finding of liability is essentially premature.  Generally, only final orders are appealable, and an order that decides the issue of liability alone leaving the issue of damages unresolved is only an interlocutory order.  The district court’s order on the client’s motion for summary judgment is only an interlocutory order as it is limited to the issue of liability and assessment of damages or awarding of other relief remains to be resolved.  Such judgments cannot be considered “final” within the meaning of 28 U.S.C. §  1291.  See Shakman v. Democratic Organization of Cook County, 508 F. Supp. 1059 (D. Ill. 1981).  28 U.S.C. §  1291 stipulates that the court of appeals has “jurisdiction of appeals from all final decisions of the district courts….”

The judgment of the district court in the instant case cannot be considered final as it does not end the litigation because the question of damages is still in dispute.  A judgment can be considered final only if it “ends the litigation on merits” and “leaves nothing for the court to do except execute the judgment.”  International Controls Corp. v. Vesco, 535 F.2d 742, 747 (2d Cir. 1976).  If a judgment leaves open the question of additional damages, it cannot be considered final.  Id. at 748.  International Controls Corp. stemmed from the efforts of the appellee to recover damages from Vesco, the financier who owned and controlled a personal holding company Vesco & Co., Inc.  The question before the court was whether earlier default judgments against Vesco were final and therefore subject to execution.  In deciding the issue of finality of the default judgments, the court found that as far as Vesco was concerned, the judgments do not end the litigation because the appellee was left with the option of appearing and asserting additional damages.  Id. at 747.  According to the court, only if all damages stemming from one claim are fixed, can a final judgment be entered on that claim. Id. at 748. When there are multiple claims, the court may enter final judgments for some claims while retaining jurisdiction over the other claims.  Fed. R. Civ. P. 54(b).  Id.

The district court’s order is not an appealable order as it fixes liability but not damages.  For example, in Kaszuk v. Bakery & Confectionery Union & Industry International Pension Fund, 791 F.2d 548 (7th Cir. 1986), the appellant challenged the district court’s granting of summary judgment to appellee on her claim that appellant breached its fiduciary duty to inform appellee’s deceased husband of the steps that he had to take to elect a pre-retirement husband-and-wife pension plan.  Even though many questions remained between the parties, the district court granted partial summary judgment to the appellee on the issue of liability holding that the Fund breached its fiduciary duty to notify her of the election requirement.  Although the parties did not bring up the issue of jurisdiction, the court took it up suo moto and held that even though the district court held that the appellee was entitled to benefits, it “did not dispose of her request for pre-judgment interest” and “therefore did not finally adjudicate her entitlement to damages.”  Id. at 552.  The court refused to hold the order a final disposition of a claim.

The aspect of damages is intertwined with the issue of liability. A summary judgment will not be considered final if it “resolves one aspect of the question of liability but leaves the issue of damages in dispute.” Rudd Constr. Equipment Co. v. Home Ins. Co., 711 F.2d 54, 56 (6th Cir. 1983).  Only if all claims stemming from one claim are decided, will that claim be considered to have been finally decided.  International Controls Corp., 535 F.2d 742, 748 (2d Cir. 1976)When there are multiple claims, in order to be certified as final and appealable under Rule 54(b), a judgment must dispose of at least one claim with the degree of finality required to satisfy the appealability standards of 28 U.S.C. §  1291. Id.

Thus, the general rule is that an issue of liability cannot be considered as finally decided if the issue of damages is left unresolved.

  1. APPEALS FROM INTERLOCUTORY ORDERS ARE PERMISSIBLE IN CERTAIN CIRCUMSTANCES.

 The City can file an appeal against the summary judgment holding if it meets the standards prescribed by statute and common law.  As per 28 U.S.C. §  1292(b), an appeal from an interlocutory order shall be permitted if “such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.” See Shakman, 508 F. Supp. 1059, 1062 (D. Ill. 1981).

City’s appeal against the summary judgment may also be upheld if the determination of damages can be characterized as “ministerial.”  For example, in Winston Network, Inc. v. Indiana H. B. R. Co., 944 F.2d 1351 (7th Cir. 1991), before the court was a dispute between Indiana Harbor Belt Railroad (IHB), Transportation Displays, Inc. (TDI) and TDI’s insurer Aetna Insurance Company (“Aetna”) regarding the ultimate liability for $2.4 million assessed as damages in an earlier negligence action. The district court ordered Aetna to pay IHB’s costs, attorneys’ fees, and share of the judgment in the Carter litigation, but failed to state the damages, if any.  The order was appealed against.   The appellate court, on deciding its jurisdiction over the appeal had to consider if the district court’s order was final.  According to the court, though an order deciding the issue of liability alone and leaving the issue of damages to future proceedings is only a preliminary ruling, an immediate appeal from a liability judgment can be allowed if the determination of damages can be characterized as “ministerial.”  Id. at 1357.  The court held:

The computation of damages in this case required nothing more than adding IHB’s predetermined portion of the state court judgment, with statutory interest, to IHB’s defense costs in the state court litigation. That determination is viewed as “mechanical.”

Id. (internal citations omitted)

Further, an interlocutory order may be appealed if there is a statute so authorizing it. See Wynn v. Reconstruction Finance Corp., 212 F.2d 953, 955 (9th Cir. 1954).  In Wynn, the appellant challenged a partial summary judgment order of the district court.  The court held that “[t]he appellate jurisdiction of this court is limited to appeals from final judgments and from such interlocutory orders as are specifically made appealable by statute”, id., and that a partial summary judgment would be “non-appealable prior to the entry of a final judgment in the case, in the absence of a specific statute authorizing an appeal”, id. at 956.

In granting appeals from interlocutory orders, courts also see if the case qualifies as an “infrequent harsh case which justifies a Rule 54(b) certification.”  Rudd, 711 F.2d 54, 56 (6th Cir. 1983 (holding that “nothing in the record before us remotely suggests that any party would suffer hardship if the right to appeal were deferred pending resolution of the entire controversy on the merits.”)

Conclusion

The general rule is that only final orders are appealable, and an order that decides the issue of liability alone leaving the issue of damages unresolved is only an interlocutory order.  However, an interlocutory order may be appealed against if: (i) such order involves a controlling question of law, the determination of which may materially advance the ultimate termination of the litigation; (ii) the issue of damages that has been left unresolved can be characterized as “ministerial.”; (iii) if the interlocutory order is specifically made appealable by a statute.

Therefore, the circuit court will have jurisdiction over City’s appeal only if it is proved that the issue involves a controlling question of law, or if the issue of damages can be showed as ministerial or if the interlocutory appeal in the instant case is made appealable by some statute.