Marks v. Moreno

309 P.3d 974

Bradley M. MARKS, Appellee/Cross–Appellant,

v. Manuel M. MORENO, Appellee,andState Farm Mutual Automobile Insurance Company, Appellant/Cross–Appellee.

No. 108,650.

Court of Appeals of Kansas.

Sept. 27, 2013.

Appeal from Johnson District Court; Kevin P. Moriarty, Judge.

James L. Sanders, Richard T. Merker, Schalie A. Johnson, and Brian G. Boos, of Wallace, Saunders, Austin, Brown & Enochs, Chtd., of Overland Park, for appellant.

Lynn R. Johnson and David R, Morantz, of Shamberg, Johnson, Bergman, Chtd., of Kansas City, Missouri, for appellee.

Before BRUNS, P.J., PIERRON and LEBEN, JJ.

MEMORANDUM OPINION

LEBEN, J.

After Bradley Marks obtained a nearly $5.4 million default judgment against Manuel Moreno for injuries sustained in an auto accident, State Farm Insurance—which insured the car Moreno had been driving—sought to intervene to ask for the judgment to be set aside. The district court denied State Farm's request that it be allowed to intervene for purposes of asking to set aside the default judgment itself, but the court gave State Farm the opportunity to intervene for the limited purpose of challenging the amount of the judgment—an offer State Farm accepted.

State Farm appealed the district court's decision, however, contending that the company should have been allowed full intervention rights. Marks cross-appealed, contending that State Farm shouldn't have been allowed to intervene for any purpose.

But ordinarily, appeals come only after the district court has concluded all proceedings in a case. While there's a limited exception to that rule allowing a party to appeal if that party has been totally denied the right to intervene, State Farm is not such a party. There's another limited exception under which an appeal can be taken while the case is still pending before the district court (called an interlocutory appeal), but our court denied the parties' request that we hear the appeal on that basis. After that denial, State Farm filed a traditional appeal, contending that because State Farm's motion for full intervention had been denied, it had a right to appeal. But since State Farm succeeded in obtaining intervention rights for a limited purpose, we conclude that we have no jurisdiction to consider the appeal, and the appeal is therefore dismissed.

Factual and Procedural Background

The underlying lawsuit between Marks and Moreno arose out of a 2007 auto accident. Marks obtained a default judgment against Moreno, and the district court determined that Marks had suffered nearly $5.4 million in damages. The court entered a default judgment against Moreno for that amount.

Several other things of note occurred. Some attorneys hired by State Farm filed a motion on Moreno's behalf arguing that he had never been properly served with the lawsuit, a requirement for it to proceed. The district court concluded that there had indeed been proper service on Moreno. After the default judgment was entered, Moreno filed his own motion to set aside the judgment, supported by Moreno's affidavit about facts related to service of the suit. But soon after that, Moreno entered into an agreement with Marks under which Moreno agreed to withdraw his motion to set aside the default judgment and to assign to Marks any rights Moreno might have to sue State Farm for failing to carry out its duties under the insurance contract that covered Moreno. State Farm then filed its own motion to intervene directly in the suit. State Farm continued to assert that service of process had never been obtained on Moreno, in which case the default judgment would have to be set aside.

In the meantime, Marks obtained a garnishment order against State Farm for the full amount of the default judgment. State Farm removed the garnishment action to federal court, and the proceedings there have been stayed pending final resolution of State Farm's efforts in state court to set aside the underlying default judgment.

The proceedings that led directly to this appeal involved State Farm's motion to intervene. State Farm sought to intervene to challenge service of process; if the service was improper, the judgment against Moreno should be set aside, which would also take away the garnishment order against State Farm seeking to collect that judgment.

At a hearing before the district court, the court denied State Farm's motion to intervene for the purpose of challenging service of process. But the court then said it would allow State Farm to intervene for a more limited purpose—having a new hearing on what the amount of the judgment should have been. These rulings were set out in a single paragraph in the district court's written order of that hearing:

“The Court denies State Farm permission to intervene to challenge the procedural validity of the November 8, 2011 default judgment. However, the Court, on its own motion, grants State Farm the option of intervening in this matter for the sole and limited purpose of challenging the amount of the default judgment entered on November 8, 2011[.]”

An interlocutory appeal can be sought if the district court certifies that its decision involves a controlling question of law worthy of immediate appeal from an order not otherwise appealable. The district court made those findings here.

Having been granted permission, State Farm formally joined the suit as an intervenor in order to challenge the judgment amount. Marks then applied to the Court of Appeals for interlocutory appeal, and State Farm filed a cross-application for interlocutory appeal. Our court has discretion in deciding whether to accept an interlocutory appeal, and this court denied both applications for interlocutory appeal. Two days later, State Farm filed a notice of appeal, essentially claiming that it had a right to appeal the district court's default judgment. Marks filed a cross-appeal.

Analysis

This Court Lacks Appellate Jurisdiction Because There Has Been No Final Decision.

We recognize that this lawsuit is important to the parties, and each of them has issues on which they seek an appellate ruling. But long-established rules provide that we have a duty to question—on our own initiative—whether our court has jurisdiction to hear an appeal, even if the parties don't raise the issue of jurisdiction. Miller v. FW Commercial Properties LLC, 293 Kan. 1099, 1102, 272 P.3d 596 (2012). Parties may not mutually consent to give appellate jurisdiction to this court that the court can't legally acquire. Western Light & Telephone Co. v. Toland, 177 Kan. 194, 196, 277 P.2d 584 (1954). Thus, we have a duty to dismiss an appeal when the record discloses a lack of jurisdiction. Kansas Medical Mut. Ins. Co. v. Svaty, 291 Kan. 597, 609, 244 P.3d 642 (2010).

Appellate courts may exercise jurisdiction only under circumstances allowed by statute, meaning that this court doesn't have discretionary power to entertain appeals from all district court orders. 291 Kan. at 609–10. To prevent piecemeal appeals, the legislature has limited civil appeals to certain circumstances: (1) final decisions and certain orders under K.S.A. 60–2102(a) and (b), which are automatically appealable, and (2) interlocutory appeals under K.S.A. 60–2102(c), which require acceptance by the Court of Appeals. Kansas Medical, 291 Kan. at 610. Parties may not appeal from an order in the middle of litigation and hope that this court will decide that the order is appealable. 291 Kan. at 610.

If a party's application for interlocutory appeal is denied, this court only has jurisdiction over a final decision in the case. K.S.A.2012 Supp. 60–2102(a)(4). A final decision generally disposes of the entire merits of a case and leaves no further questions or the possibility of future directions or actions by the court. In re T.S. W., 294 Kan. 423, 433, 276 P.3d 133 (2012). A final decision is an order that definitely terminates a right involved in the action. 294 Kan. at 433. In other words, a judgment or order is considered final “if all the issues in the case are determined, not just part of the issues.” AMCO Ins. Co. v. Beck, 258 Kan. 726, Syl. ¶ 1, 907 P.2d 137 (1995).

As a general rule, an order denying a motion to intervene—rather than granting it on a limited basis, as was done here—is a final appealable order. Montoy v. State, 278 Kan. 765, 765, 102 P.3d 1158 (2005). But whether a ruling on a motion is appealable depends on whether the ruling amounts to a final order. Carrigg v. Anderson, 167 Kan. 238, 241, 205 P.2d 1004 (1949). The court-made rule allowing appeal of a denial of a motion to intervene is based on the theory that the denial is final as to the movant's rights in the action. Ousley v. Osage City, 95 Kan. 254, 259–60, 147P. 1110 (1915). On the other hand, an order that adds a party is not appealable; all parties in the suit would still have...