To Appeal or Not Appeal:
Recent Maryland Court of Appeals Decisions on When You Can Appeal
Alfred L. Scanlan, Jr., Robert N. Kelly and James N. Markels
This is the first of what the authors intend to be a series of Articles on the interfaces of Appellate and Trial Litigation tactics and practice. We begin with a recap and analysis of two rulings from the Maryland Court of Appeals that we believe will be of particular interest to the trial lawyer practicing in the areas of insurance and direct defense. Herein we will review those two cases and the light they shed on the seemingly simple question of when a party can appeal an unfavorable decision of the trial court.
It is commonly known that appeals must be taken from a final judgment—that is, from an order that has the effect of fully terminating litigation at the trial court level, and, in the words of the Court of Appeals, “putting a party out of court.” Sometimes it can be difficult to determine when that has occurred. For example, when a trial court reviews an agency action and, upon a finding of error, remands the case back to the agency for further proceedings that is considered a “final judgment” for the purpose of an appeal. But what if the agency and the aggrieved party ask the trial court to remand the case without conducting a review, and the trial court does so? Is that order appealable? In an opinion released on March 30, 2015 in Metro Maintenance Systems South, Inc. v. Milburn, 2015 WL 1412639 (Md. 2015), the Court held it was not.
In that case, Milburn applied for unemployment benefits to the Department of Labor, Licensing, and Regulation (the “Department”) after he quit his job. A Department examiner denied his application based on a finding that he did not quit his job “for good cause” under Labor & Employment Article § 8-1001(a)(1). He appealed to the Department’s Lower Appeals Division, which affirmed the same finding, and then to the Department’s Board of Appeals, which refused to hear his appeal. Milburn then appealed to the trial court.
As required under Maryland Rule 7-207, Milburn filed a brief with the trial court arguing for reversal of the Department’s determination, and his former employer filed an opposition, arguing that it should be upheld. The Department, after reviewing the briefs, moved that the matter be remanded to the Department for further review of the examiner’s findings. Milburn consented, but his former employer opposed the Department’s motion. The trial court, after a hearing in which the merits of the case were not discussed, granted the Department’s motion. The former employer appealed. The Court of Special Appeals determined that the trial court’s order was not appealable and dismissed the appeal. The case then appeared on the Court of Appeals’ radar.
The Court of Appeals began by reminding us that a ruling must contain three elements to be an appealable final judgment: (1) it must be intended by the court as an unqualified, final disposition of the matter in controversy; (2) unless the court acts pursuant to Maryland Rule 2-602(b) to direct the entry of a final judgment as to less than all the claims or all the parties, it must adjudicate or complete the adjudication of all claims against all parties; and (3) it must be set forth a recorded in accordance with Rule 2-601. Milburn (citing, Rohrbeck v Rohrbeck, 318 Md. 28, 41, 566 A.2d 767 (1989)).
Only the first element was in question in Milburn. Under that prong, the Court made it clear that an order that “terminates the proceedings in that court and denies a party the ability to further prosecute or defend the party’s rights concerning the subject matter of the proceeding” is a final judgment even if the order did not resolve the merits of the case itself. A typical example of such an order is one that transfers venue of a case from one trial court to another. The Court noted that in agency appeals, a typical result is for the case to be remanded to the agency for further proceedings. While the rights of the parties may yet be fully determined upon remand, those remand orders are final judgments because they terminate the proceeding before the trial court.
Given that background, the Court concluded that the trial court’s work was not yet “done” as a result of the remand prior to a review of the merits, because it had merely deferred its review for the time being. The Court distinguished this case from the cases involving a transfer of venue since the trial court was still in place to receive the case again from the Department if necessary. As a result, the former employer had not been “put out of court” as needed for there to be a final appealable judgment.
Aside from final judgments, certain categories of interlocutory orders of the trial court are immediately appealable pursuant to MD Code, Courts and Judicial Proceedings, § 12-303. In addition, at common law certain interlocutory orders can be appealed under what is called the collateral order doctrine. This doctrine is a very narrow exception to the final judgment rule, and is applicable only under extraordinary circumstances. The criteria that must be met to fit within this doctrine are that the order must: (1) conclusively determine a disputed question; (2) resolve an important issue; (3) be completely separate from the merits of the action; and (4) be effectively unreviewable on appeal from a final judgment. A classic example is a party’s challenge to a trial court jurisdiction based on an arbitration agreement—the party’s appeal rights are effectively lost if a trial court’s denial of a motion to compel arbitration cannot be appealed until after the conclusion of the jury trial itself.
In Spivery-Jones v. Receivership Estate of Trans Healthcare, Inc., 438 Md. 330, 91 A.3d 1172 (2014), the Court considered whether an order denying a motion to vacate a receivership was appealable under the collateral order doctrine. In that case, approximately two years after a trial court appointed a receiver for an insolvent company, a creditor of that company moved to vacate that receivership on the basis that the trial court lacked subject matter jurisdiction. The plaintiff-appellant argued that the assets of the receivership would be looted through distributions to other creditors, as well as the expenditure of administrative and legal fees, before any meaningful review of her contention could occur.
After losing before the trial court and the Court of Special Appeals, the appellant pressed her case on to the Court of Appeals, but to no avail. The Court took little time in distinguishing her appeal from the receivership appointment orders permitted under Section 12-303(3)(iv), since the order appealed from denied a request to vacate an appointment, as opposed to grant an appointment. The appellant was two years late in filing her appeal on that issue. As to the collateral order doctrine, the Court held that the appellant did not meet the extremely high standard required. The Court noted that she could still challenge any distribution plan offered by the receiver before the trial court, and those decisions could be appealed. That this process may entail further litigation costs was of no moment. Since the issue raised by the appellant was still reviewable, she had no ability to appeal.
These cases highlight the careful attention that a litigator must use in determining when to appeal an unfavorable ruling. While in these cases the litigants were found to have appealed prematurely, counsel must be equally careful to note a timely appeal when a final judgment has been entered, or else lose that right permanently. For example, when a motion for sanctions comes into play at the conclusion of litigation, the time for appealing a final judgment on the merits is decidedly not co-terminus with the time to appeal the grant or denial of attorneys fees and or other sanctions under Rule 1-341. The former is a final order, the latter collateral. Vigilance, and awareness of the standards for determining the appealability of orders, are mandatory for the prudent litigator.
Alfred L. Scanlan, Jr., Robert N. Kelly and James N. Markels anchor the Appellate and Trial Strategy Group within Jackson & Campbell, P.C., and concentrate on assisting clients and their existing legal counsel develop effective trial and dispute resolution strategies at the trial court level, and assuming direct responsibility for appeals to state and federal appellate courts.