Opinion ID: 2739703
Heading Depth: 2
Heading Rank: 1

Heading: all orders, including interlocutory orders,

Text: MUST SATISFY RULE 7(f)(2) OF THE UTAH RULES OF CIVIL PROCEDURE ¶16 An appeal as of right may only be taken from a final order or judgment. UTAH R. APP. P. 3(a). Rule 7(f)(2) of the Utah Rules of Civil Procedure prescribes the procedure for obtaining an order from which an appeal may be taken. It states that “[u]nless the court approves the proposed order submitted with an initial memorandum, or unless otherwise directed by the court, the prevailing party shall, within fifteen days after the court’s decision, serve upon the other parties a proposed order in conformity with the court’s 6 Cite as: 2014 UT 41 Opinion of the Court decision.” UTAH R. CIV . P. 7(f)(2) (2013).2 ¶17 In Central Utah Water Conservancy District v. King, we clarified the requirements of rule 7(f)(2) and held that compliance with rule 7(f)(2) dictates the timing for filing a notice of appeal. 2013 UT 13, ¶ 15, 297 P.3d 619. We explained that under rule 7(f)(2), one of three events must occur before the time to appeal begins to run: “(1) the court approves an order submitted with an initial memorandum; (2) the court enters an order prepared by counsel and served on opposing counsel pursuant to rule 7(f)(2); or (3) the court explicitly directs that no additional order is necessary.” Id. The second of these three options is the default mechanism for satisfying rule 7(f)(2) and will apply “unless the district court approves the proposed order submitted with a party’s initial memorandum or when the district court explicitly directs that no additional order is required.” Id. ¶ 10 (internal quotation marks omitted). Therefore, “if neither of the two exceptions to the default is present, the prevailing party has fifteen days in which to submit a proposed order.” Id. ¶ 26. “If the prevailing party fails to submit” a proposed order in this time frame, “any party interested in finality—generally, the nonprevailing party—may submit an order.” Code v. Utah Dep’t of Health, 2007 UT 43, ¶ 7, 162 P.3d 1097.3 ¶18 Satisfaction of one of these events is necessary not only for establishing finality of a judgment that resolves an entire case, but also “for ascribing finality to an interlocutory decision.” Houghton 2 As of May 2014, rule 7(f)(2) gives the prevailing party twentyone days from the court’s decision to serve a proposed order on the other parties. UTAH R. CIV . P. 7(f)(2) (2014). But we apply the rule that was in effect as of the relevant events in this case, which prescribed a fifteen-day time frame for the prevailing party to serve a proposed order. UTAH R. CIV . P. 7(f)(2) (2013). 3 As we explained in Code v. Utah Department of Health, 2007 UT 43, ¶ 6 n.1, 162 P.3d 1097, and reiterated in Central Utah Water Conservancy District v. King, “when the prevailing party neglects its obligations under the rule, the appeal rights of the nonprevailing party will extend indefinitely.” 2013 UT 13, ¶ 26, 297 P.3d 619 (internal quotation marks omitted). Because we recognize that “[s]uch an indefinite extension is contrary to notions of judicial efficiency and finality,” we have asked “that our advisory committee review rule 7(f)(2) and address the possibility of endlessly hanging appeals.” Id. ¶¶ 26–27. 7 BUTLER v. CORP. OF THE PRES. Opinion of the Court v. Dep’t of Health, 2008 UT 86, ¶ 11, 206 P.3d 287. Thus, an appeal from an interlocutory decision is ripe “only after strict compliance with rule 7(f)(2).” Cent. Utah Water Conservancy, 2013 UT 13, ¶ 17. Requiring rule 7(f)(2) compliance in the interlocutory context comports with our judicial policy that when parties intend to appeal interlocutory rulings, there is “no benefit to a system in which parties must guess, on a case-by-case basis, whether a judge’s language in a memorandum decision implies, invites, or contemplates further action by the parties.” Code, 2007 UT 43, ¶ 6 (alterations omitted) (internal quotation marks omitted). ¶19 Compliance with rule 7(f)(2), though necessary, is not sufficient to trigger the time to appeal an interlocutory ruling. Interlocutory rulings must also satisfy one of two additional conditions to be eligible for immediate appeal: (1) the district court, in its discretion, certifies the order as final under rule 54(b) of the Utah Rules of Civil Procedure, or (2) an appellate court grants permission to appeal an interlocutory order under rule 5 of the Utah Rules of Appellate Procedure.4 Therefore, the time period for appealing an interlocutory ruling begins to run only after (1) compliance with rule 7(f)(2) and (2) satisfaction of either civil procedure rule 54(b) or appellate procedure rule 5. ¶20 In this case, the district court’s Summary Judgment Ruling constituted an interlocutory ruling because, although it ended the litigation between Butler and COP, Ford remained a defendant in the case. To be appealable, therefore, the Summary Judgment Ruling must have (1) complied with rule 7(f)(2) and (2) been certified as final under rule 54(b) or been granted interlocutory review under appellate procedure rule 5. ¶21 Looking first to whether the Summary Judgment Ruling was rule 7(f)(2) compliant, it is clear that none of the three events described in Central Utah Water occurred. COP did not submit and serve a proposed order with its initial summary judgment memorandum, the court did not enter an order prepared by COP and served on Butler within fifteen days after the court’s decision, and the court’s written ruling did not explicitly direct that no additional 4 We have also recognized that in some instances, “orders and judgments that are not final can be appealed if such appeals are statutorily permissible.” Bradbury v. Valencia, 2000 UT 50, ¶ 12, 5 P.3d 649. But in this case, no statute exists that would have made the Summary Judgment Ruling immediately appealable. 8 Cite as: 2014 UT 41 Opinion of the Court order was necessary. Although Butler later lodged a proposed rule 7(f)(2) order with the district court as permitted by Code, the district court declined to sign and enter it. ¶22 The district court did, however, subsequently enter a Certification Order pursuant to rule 54(b). The determinative issue in this case is therefore whether the district court’s Certification Order satisfied the requirements of both rule 7(f)(2) and rule 54(b) for the Summary Judgment Ruling. If so, the time for appealing the Summary Judgment Ruling began to run when the Certification Order was entered, and Butler’s appeal of the Summary Judgment Ruling is untimely. We hold that although a district court may enter a single order that satisfies both rule 7(f)(2) and rule 54(b), it must do so by strictly and expressly complying with the requirements of both rules. II. ENTRY OF AN ORDER THAT IS RULE 7(f)(2) COMPLIANT IS A PREREQUISITE TO RULE 54(b) CERTIFICATION ¶23 Having addressed the requirements of rule 7(f)(2), we turn to the requirements of rule 54(b). Prior to the adoption of Rule 54(b), courts followed the “single-judicial-unit theory” to determine which orders were final and thus appealable. 10 CHARLES ALAN WRIGHT , ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 2653 (3d ed. 1998); see also Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 431–32 (1956) (discussing the judicial unit theory). Under this theory, any action—regardless of the number of parties or claims—was treated as a single unit and “only one appeal was permitted from any one action.” WRIGHT, MILLER & KANE, supra § 2653. After promulgation of the Federal Rules of Civil Procedure, which allow for liberal joinder of parties and claims, “a need for relaxing the restrictions upon what should be treated as a judicial unit for purposes of appellate jurisdiction” became apparent. Sears, Roebuck, 351 U.S. at 432. Rule 54(b) of the Federal Rules of Civil Procedure was adopted “[l]argely to meet this need.” Id. at 432–33. Rule 54(b) of the Utah Rules of Civil Procedure is “modeled after and is identical in all material respects” to its federal counterpart. Pate v. Marathon Steel Co., 692 P.2d 765, 767 (Utah 1984). ¶24 Rule 54(b) (of both the Federal and Utah Rules of Civil Procedure) “facilitate[s] the entry of judgments upon one or more but fewer than all the claims or as to one or more but fewer than all the parties in an action involving more than one claim or party.” WRIGHT, MILLER & KANE, supra § 2654. The rule does this by granting district courts the discretion to “direct the entry of a final 9 BUTLER v. CORP. OF THE PRES. Opinion of the Court judgment[5] as to one or more but fewer than all of the claims or parties . . . upon an express determination by the court that there is no just reason for delay and upon an express direction for the entry of judgment.” UTAH R. CIV . P. 54(b); see FED . R. CIV . P. 54(b) (same).6 ¶25 Not all interlocutory rulings qualify for rule 54(b) certification. As we first explained in Pate v. Marathon Steel Co., 692 P.2d 765, 767 (Utah 1984), and more recently in Powell v. Cannon, there are 5 Rule 54(a) clarifies that a judgment “includes a decree and any order from which an appeal lies.” (Emphasis added.) Because an appeal lies only from a rule 7(f)(2) compliant order, see supra ¶¶ 17–18, satisfaction of rule 7(f)(2) is required in order to obtain a judgment. 6 According to the final judgment rule, a judgment or order is final and thus appealable if it “dispose[s] of the case as to all the parties, and finally dispose[s] of the subject-matter of the litigation on the merits of the case.” Powell v. Cannon, 2008 UT 19, ¶ 11, 179 P.3d 799 (internal quotation marks omitted). Interlocutory rulings that do not end the controversy between the litigants are generally not appealable until a final judgment has been entered. Moreover, when a case consists of multiple claims or multiple parties, a decision that disposes of less than all of the claims or all of the parties is generally not appealable until “the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.” UTAH R. CIV . P. 54(b). Once final judgment is entered, all preceding interlocutory rulings that were “steps towards final judgment” merge into the final judgment and become appealable at that time. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949); see also 10 JAMES WM . MOORE , MOORE ’S FEDERAL PRACTICE § 54.25[5] (3d ed. 2014) (explaining that under the merger rule, an interlocutory order “merges into the final judgment that disposes of all the claims and parties and becomes appealable at that time”). But where an interlocutory order is certified as final under rule 54(b), that order does not merge into the final judgment that resolves the entire case. Instead, it stands alone as a final appealable order, and all prior interlocutory rulings that were steps toward the rule 54(b) certified interlocutory order merge into that final order. Under the Utah Rules of Civil Procedure, therefore, when a rule 7(f)(2) compliant interlocutory order is certified as final under rule 54(b), all prior rulings that were steps toward the final interlocutory order merge into that order and become appealable at the time the rule 54(b) certification is entered. 10 Cite as: 2014 UT 41 Opinion of the Court three prerequisites to rule 54(b) certification: (1) “there must be multiple claims for relief or multiple parties to the action,” (2) “the judgment appealed from must have been entered on an order that would be appealable but for the fact that other claims or parties remain in the action,” and (3) “the trial court, in its discretion, must make a determination that there is no just reason for delay of the appeal.” 2008 UT 19, ¶ 26, 179 P.3d 799 (emphasis added) (internal quotation marks omitted). This interpretation of Utah’s rule 54(b) is consistent with interpretations of the parallel federal rule. Pate, 692 P.2d at 767; see also WRIGHT, MILLER & KANE, supra § 2656 (explaining that federal rule 54(b) sets forth the same three “basic conditions on its applicability”). ¶26 The second rule 54(b) prerequisite—that the judgment be entered on an otherwise appealable order—is most relevant to our resolution of this case. This prerequisite requires a district court to finally decide “at least one claim or the rights and liabilities of at least one party” prior to granting rule 54(b) certification. Id. § 2656. In the federal system, a claim is not finally decided unless and until (1) it “ends the litigation on the merits and leaves nothing for the court to do but execute the judgment,” and (2) “it is set out separately and entered as required by Rule 58.” Id. (emphasis added) (internal quotation mark omitted). ¶27 The federal rule 58, which serves a similar purpose to Utah’s rule 7(f),7 requires that “[e]very judgment and amended judgment must be set out in a separate document.” FED . R. CIV . P. 58(a); cf. UTAH R. CIV . P. 7(f)(3) (“Unless otherwise directed by the court, all orders shall be prepared as separate documents . . . .”). Therefore, in the federal system, unless an interlocutory ruling satisfies rule 58’s separate document requirement, that ruling does not qualify for rule 54(b) certification. Similarly, in Utah, unless an interlocutory decision satisfies rule 7(f)’s order requirements (both the procedural requirements of rule 7(f)(2) and the form requirements of rule 7(f)(3)), it does not qualify for certification under rule 54(b). ¶28 In sum, to qualify for rule 54(b) certification, a judgment must meet three requirements. First, it must be entered in an action 7 Cent. Utah Water Conservancy Dist. v. King, 2013 UT 13, ¶ 27, 297 P.3d 619 (asking the Utah Committee on the Rules of Civil Procedure to look to federal rule 58(c) as an example for how Utah rule 7(f)(2) might address its finality conundrum). 11 BUTLER v. CORP. OF THE PRES. Opinion of the Court involving multiple claims or multiple parties. Second, it must have been entered on an order that would otherwise be appealable but for the fact that other claims or parties remain in the action. An interlocutory order will only meet this “otherwise appealable” requirement if it ends the litigation on the merits as to at least one claim or one party and satisfies the requirements of rule 7(f). Third, the trial court, in its discretion, must make a determination that there is no just reason for delay of the appeal. III. A SINGLE ORDER MAY SATISFY BOTH RULES 7(f)(2) AND 54(b), BUT TO DO SO IT MUST STRICTLY COMPLY WITH THE REQUIREMENTS OF BOTH RULES ¶29 We now clarify the overlap between rule 7(f)(2) and rule 54(b). Because interlocutory decisions must comply with rule 7(f)(2), see supra Part I, and because an interlocutory decision does not qualify for rule 54(b) certification unless rule 7(f)(2) has been satisfied, see supra Part II, a district court may not certify as final an interlocutory ruling that has not met the requirements of rule 7(f)(2). Under this construction, the time for appeal begins to run only after both rules 7(f)(2) and 54(b) are satisfied. ¶30 This relationship between rule 7(f)(2) and rule 54(b) is similar to the relationship between rule 7(f)(2) and rule 3 of the Utah Rules of Appellate Procedure, which dictates how an appeal as of right may be taken. Giusti v. Sterling Wentworth Corp., 2009 UT 2, ¶ 34, 201 P.3d 966, holding modified by Cent. Utah Water Conservancy Dist. v. King, 2013 UT 13, 297 P.3d 619. Replacing the references to “rule 3” with “rule 54(b)” in our Giusti decision illustrates this point: “[W]hile [rule 54(b)] provides the substantive requirement for [an interlocutory] decision’s finality . . . [rule 54(b)] does not eviscerate the procedural requirements of rule 7 for triggering the appeal period once a final decision is rendered.” Id. Like rule 3 of the Utah Rule of Appellate Procedure, rule 54(b) works in concert with rule 7(f)(2). ¶31 Although, strictly speaking, rule 7(f)(2) compliance is a prerequisite to rule 54(b) certification, a district court may issue an order that satisfies both rules simultaneously. That is, a district court may issue a rule 7(f)(2) order for an interlocutory ruling and in the same order certify the ruling as final for purposes of appeal. But the combined order must strictly comply with the requirements of both rules. ¶32 For the combined order to comply with rule 7(f)(2), one of the three conditions discussed in Central Utah Water must occur. To 12 Cite as: 2014 UT 41 Opinion of the Court satisfy the first condition, a party must submit and serve a proposed combined order with its initial memorandum in support of or in opposition to the underlying motion and must include as part of the initial memorandum a motion for rule 54(b) certification. The second condition requires that the party who prevails on the underlying motion prepare and serve on the opposing parties a combined order in the manner provided by rule 7(f)(2).8 This will generally require the party preparing and filing the combined order to also file a motion for rule 54(b) certification.9 If the prevailing party fails to serve the proposed combined order within fifteen days after the court’s decision, the nonprevailing party (or any party interested in finality), may then prepare and serve a proposed combined order as provided by rule 7(f)(2). The third rule 7(f)(2) condition is satisfied when the district court, in its ruling on the underlying motion, certifies the ruling as final under rule 54(b) and explicitly directs that no additional order is necessary. Until one of these conditions is satisfied, the appellate clock does not begin to run. ¶33 Looking specifically to the first rule 7(f)(2) option, the dissent would have us read rule 7(f)(2)’s reference to “an initial memorandum” to encompass later memoranda relating to motions other than the underlying motion to which the order applies (in this case, a memorandum in support of a motion for rule 54(b) certification). But this interpretation of “an initial memorandum” contradicts our precedent and is inconsistent with the language of rule 7(f)(2) as a whole. See Aequitas Enters., LLC v. Interstate Inv. Grp., LLC, 2011 UT 82, ¶ 17, 267 P.3d 923 (“[W]e read the plain language of our rules of civil procedure as a whole.” (alterations omitted) 8 Rule 7(f)(2) instructs the prevailing party to “serve upon the other parties a proposed order in conformity with the court’s decision” “within fifteen days after the court’s decision.” UTAH R. CIV . P. 7(f)(2) (2013). Upon receiving service, the other parties have five days to make any objections to the proposed order. Id. After the expiration of the five days or upon being served with an objection, “[t]he party preparing the order shall file the proposed order.” Id. 9 Such a motion would be unnecessary in a situation where the district court rules on the initial motion, either from the bench or in a memorandum decision, simultaneously rules that rule 54(b) certification is appropriate, and then directs the prevailing party to prepare an order in conformity with its ruling. 13 BUTLER v. CORP. OF THE PRES. Opinion of the Court (internal quotation marks omitted)). As we explained above, supra ¶ 17, among the three options for satisfying rule 7(f)(2), the default is the second: requiring the prevailing party, within fifteen days of the court’s decision, to serve on the other parties an order in conformity with the court’s decision. Cent. Utah Water, 2013 UT 13, ¶ 10. ¶34 The critical point for determining whether a prevailing party must prepare and serve a proposed order on the other parties is the moment when the district court makes its decision in the underlying matter. At that point, if the district court neither indicated in its ruling that no further order was required nor approved a proposed order submitted with the prevailing party’s initial memorandum the only remaining option is for the prevailing party to prepare an order and serve it on the other parties within fifteen days of the district court’s decision. Id. ¶ 26 (“Under rule 7(f)(2), if neither of the two exceptions to the default rule is present, the prevailing party has fifteen days [from the date of the court’s decision] in which to submit a proposed order.”). ¶35 The option of submitting a proposed order with “an initial memorandum” therefore cannot take place after the district court has ruled on the underlying matter. Thus, under rule 7(f)(2), the only “initial memorandum” with which a proposed order may be submitted is either the memorandum in support of or the memorandum in opposition to the underlying motion. See Kilpatrick v. Bullough Abatement, Inc., 2008 UT 82, ¶ 12, 199 P.3d 957 (“[T]he time for appeal begins to run with the entry of the prepared order, unless the court either approves a proposed order submitted with the initial memorandum or explicitly directs that no order is required.”). ¶36 The dissent contends that this interpretation of rule 7(f)(2) creates “traps for unwary litigants.” Infra ¶ 55. But by limiting the meaning of “initial memorandum” to only the memorandum in support of or opposition to the underlying motion, our interpretation promotes certainty in identifying the applicable memoranda. This not only allows the district court and the parties to know whether the default rule 7(f)(2) procedure is necessary, but it also prevents the possibility that a party will fail to realize that a proposed order submitted with a subsequent memorandum triggered the time to appeal a previous ruling (which is precisely what happened in this case under the dissent’s interpretation of rule 7(f)(2)). 14 Cite as: 2014 UT 41 Opinion of the Court ¶37 The dissent also asserts that our construction of interplay between rules 7(f) and 54(b) “undermines the doctrine of merger.” See infra ¶¶ 45–55. We agree with the dissent’s characterization of how merger operates in the context of an interlocutory ruling certified as final under rule 54(b). See supra ¶ 24 n.6. As the dissent explains, “[a]n appeal from a judgment made final under Rule 54(b) opens up the record [and permits review of all rulings that led up to the judgment] as to the parties involved in the appeal in the same way as an appeal from a final judgment that disposes of the entire action.” Infra ¶ 49 (alteration in original) (quoting 15A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3905.1 n.22 (2d ed. Supp. 2014)). ¶38 But we fail to see how our decision disrupts this doctrine. As we have explained, if a district court erroneously certifies as final an interlocutory ruling for which no rule 7(f)(2) order exists, that certification will not be valid. And where an interlocutory ruling is not validly certified under rule 54(b), that ruling and all rulings leading up to it remain nonfinal for purposes of appeal, and merger does not occur. But once a valid rule 7(f)(2) order is entered and that order is properly certified as final under rule 54(b), the doctrine of merger takes full effect such that all rulings that led up to the certified order merge into that order and become reviewable on appeal. ¶39 Contrary to the dissent’s assertion, infra ¶ 53, an appellant need not “secure [independent] compliance with rule 7(f)(2) for each and every interlocutory order encompassed by the rule 54(b) certification,” because the ultimate rule 7(f)(2) order that is properly certified as final under rule 54(b) satisfies rule 7(f)(2) for all prior interlocutory rulings that merge into it (i.e., all interlocutory rulings that led up to the ultimate order). This is so regardless of which of the three rule 7(f)(2) methods the district court employs. So long as one of the methods has been strictly complied with at the time the district court grants rule 54(b) certification, all interlocutory rulings leading up to the ruling made final under rule 54(b) merge and become appealable at that time.