Court Opinion

ID: 9931067
Source: CourtListenerOpinion
Date Created: 2024-02-08 15:06:46.947107+00
Date Added: 2024-06-11T12:16:16.964475
License: Public Domain

FILED
                                                                       IN THE OFFICE OF THE
                                                                    CLERK OF SUPREME COURT
                                                                         FEBRUARY 8, 2024
                                                                     STATE OF NORTH DAKOTA

                  IN THE SUPREME COURT
                  STATE OF NORTH DAKOTA

                                 2024 ND 15

Kenneth L. Pinks and Carol A. Pinks,
husband and wife,                                     Plaintiffs and Appellees
      v.
Alexander S. Kelsch, Attorney at Law, and his
professional corporation, Alexander S. Kelsch,
P.C., and the partners of the fictitious name
partnership entity doing business as Kelsch Ruff
Kranda Nagle & Ludwig: Arlen M. Ruff, P.C.;
Todd D. Kranda, P.C.; Daniel J. Nagle, P.C.;
and Garrett D. Ludwig, P.C.,                     Defendants and Appellants

                                No. 20230161

Appeal from the District Court of Burleigh County, South Central Judicial
District, the Honorable Jay A. Schmitz, Judge.

APPEAL DISMISSED.

Opinion of the Court by McEvers, Justice.

Larry M. Baer, West Des Moines, IA, for plaintiffs and appellees.

Robert B. Stock (argued) and Jack M. Buck (appeared), Fargo, ND, for
defendants and appellants.
                         Pinks, et al. v. Kelsch, et al.
                                No. 20230161

McEvers, Justice.

[¶1] Defendants appeal from orders denying their motion for summary
judgment and concluding Kenneth Pinks and Carol Pinks (together, “the
Pinks”) prevailed on the causation element of their legal malpractice action
against Defendants. The Pinks move to dismiss this appeal for lack of a final
judgment or order and failure to comply with N.D.R.Civ.P. 54(b). We grant the
motion and dismiss the appeal.

                                        I

[¶2] The Pinks commenced this legal malpractice action against Alexander
Kelsch, his professional corporation, and the partners of the fictitious name
partnership entity doing business as Kelsch Ruff Kranda Nagle & Ludwig. The
Pinks alleged Defendants were negligent in representing them in a quiet title
action against the State of North Dakota. The district court bifurcated the legal
malpractice action to first determine the element of causation. Specifically,
whether the Pinks would have achieved a more favorable result in the quiet
title action but for the alleged negligence of Defendants. The parties filed cross-
motions for summary judgment on the causation element. The court denied the
motions, concluding there were genuine issues of material fact.

[¶3] After a bench trial on the causation element, the district court entered
its “Findings of Fact and Opinion RE: Quiet Title Action.” The court concluded
that had the evidence of the Pinks’ ownership of the disputed land been
presented in the quiet title action, the Pinks would have obtained judgment
declaring their ownership claim was prior and superior to the State’s claim of
title. The court concluded that by greater weight of the evidence the Pinks
proved the element of causation and ordered a jury trial be set on the
remaining issues of the legal malpractice claim. Defendants appealed.

                                        1
                                        II

[¶4] The Pinks move to dismiss this appeal, arguing Defendants appealed
from interlocutory orders and did not seek N.D.R.Civ.P. 54(b) certification.

[¶5] “The right to appeal is governed by statute and, absent a statutory basis
for the appeal, we must dismiss the appeal.” Ted J. Boutrous, L.L.C. v.
Transform Operating Stores, LLC, 2021 ND 100, ¶ 4, 960 N.W.2d 801. “Only
judgments and decrees which constitute a final judgment of the rights of the
parties and certain orders enumerated by statute are appealable.” Id.; see also
N.D.C.C. § 28-27-01. We apply a two-pronged test when determining whether
an interlocutory order is appealable. “First, the order appealed from must meet
one of the statutory criteria of appealability set forth in N.D.C.C. § 28-27-02. If
it does not, our inquiry need go no further and the appeal must be dismissed.
If it does, then Rule 54(b), N.D.R.Civ.P., must be complied with.” Energy
Transfer LP v. N.D. Priv. Investigative & Sec. Bd., 2022 ND 84, ¶ 7, 973 N.W.2d
404 (cleaned up).

[¶6] Defendants contend the order denying their motion for summary
judgment and the “Findings of Fact and Opinion RE: Quiet Title Action” are
appealable under N.D.C.C. § 28-27-02(1) and (5). Section 28-27-02, N.D.C.C.,
provides, in relevant part:

      The following orders when made by the court may be carried to the
      supreme court:

      1. An order affecting a substantial right made in any action, when
      such order in effect determines the action and prevents a judgment
      from which an appeal might be taken;

      ...

      5. An order which involves the merits of an action or some part
      thereof;

      ....

“Under Section 28-27-02 an order denying a motion for summary judgment is
not appealable.” Gillan v. Saffell, 395 N.W.2d 148, 149 (N.D. 1986); see also In

                                        2
re Est. of Vaage, 2016 ND 32, ¶ 20, 875 N.W.2d 527. Therefore, the order
denying Defendants’ motion for summary judgment is not appealable.

[¶7] Assuming without deciding the “Findings of Fact and Opinion RE: Quiet
Title Action” meets one of the criteria of appealability under N.D.C.C. § 28-27-
02, Defendants must comply with N.D.R.Civ.P. 54(b), which provides:

      If an action presents more than one claim for relief, whether as a
      claim, counterclaim, crossclaim, or third-party claim, or if multiple
      parties are involved, the court may direct entry of a final judgment
      as to one or more, but fewer than all, claims or parties only if the
      court expressly determines that there is no just reason for delay.
      Otherwise, any order or other decision, however designated, that
      adjudicates fewer than all the claims or the rights and liabilities of
      fewer than all the parties does not end the action as to any of the
      claims or parties and may be revised at any time before the entry
      of a judgment adjudicating all the claims and all the parties’ rights
      and liabilities.

Rule 54(b), N.D.R.Civ.P., preserves our long-standing policy against piecemeal
appeals. Baker v. Autos Inc., 2017 ND 229, ¶ 7, 902 N.W.2d 508. “[E]ntry of a
final judgment adjudicating fewer than all of the claims of all of the parties is
permitted only in the infrequent harsh case involving unusual circumstances
where failure to allow an immediate appeal would create demonstrated
prejudice or hardship.” N.D.R.Civ.P. 54(b), Explanatory Note. It is undisputed
that Defendants did not request entry of a final judgment as to one or more,
but fewer than all, claims or parties. Instead of seeking certification under Rule
54(b), Defendants appealed to this Court.

[¶8] We “will not consider an appeal in a multi-claim or multi-party case
which disposes of fewer than all claims against all parties unless the [district]
court has first independently assessed the case and determined that a Rule
54(b) certification is appropriate.” Ted J. Boutrous, 2021 ND 100, ¶ 6
(alteration in original). In Ted J. Boutrous, we dismissed an appeal where the
defendants did not seek Rule 54(b) certification and the district court only
ruled on the eviction claim, but did not rule on damages. Id. We concluded the

                                        3
court adjudicated fewer than all of the claims and none of the orders or
judgments appealed from were final. Id.

[¶9] The “Findings of Fact and Opinion RE: Quiet Title Action” addresses
only the causation element of the legal malpractice claim. Still left to be
adjudicated are the elements of existence of an attorney-client relationship, a
duty by the attorney to the client, a breach of that duty by the attorney, and
damages. Davis v. Enget, 2010 ND 34, ¶ 7, 779 N.W.2d 126. Therefore,
N.D.R.Civ.P. 54(b) applies and Defendants failed to comply with the rule.

[¶10] Defendants argue they did not need to seek Rule 54(b) certification
because Rule 54(b) does not supersede N.D.C.C. § 28-27-02, citing Sheets v.
Letnes, Marshall & Fiedler, Ltd., 311 N.W.2d 175 (N.D. 1981). In Sheets, the
Court concluded that the district court order granting summary judgment on
the issue of liability for legal malpractice affected the substantial legal rights
of the appealing law firm and involved the merits of an action or some part
thereof, and therefore was appealable. 311 N.W.2d at 179. The Court noted that
“Rule 54(b) deals with finality and does not supersede statutes which control
appellate jurisdiction. . . . Nor does Rule 54(b) affect the appealability of
interlocutory orders which are appealable by statute.” Id. In Sheets, the law
firm moved the district court for Rule 54(b) certification prior to appeal, which
was denied. Id. at 178. The Court “express[ed] no comment whether or not a
statute authorizing an appeal may be superseded by a rule adopted by this
Court.” Id. at 179.

[¶11] Here, Defendants did not move for Rule 54(b) certification and the
district court only ruled on the causation element of the legal malpractice
claim. In Sheets, the law firm moved for Rule 54(b) certification, which was
denied, and the district court ruled on the issue of liability, which “eliminate[d]
any defenses to liability.” 311 N.W.2d at 179. Therefore, Sheets is different from
this case. See also Gauer v. Klemetson, 333 N.W.2d 436, 438 (N.D. 1983)
(distinguishing Sheets and noting that “[i]n Sheets the order for partial
summary judgment and the subsequent denial of a Rule 54(b) motion did have
an effect on the merits because it determined liability, prohibited an appeal on
the issue of liability, and restricted the trial to the issue of damages”).

                                        4
[¶12] Further, in subsequent cases, we have recognized that Sheets is no longer
controlling precedent. Gissel v. Kenmare Twp., 463 N.W.2d 668, 672 (N.D.
1990) (“[O]ur decision in Sheets . . . regarding the applicability of Rule 54(b)
certification to orders that are appealable under § 28-27-02, is no longer
controlling.”); Thompson v. Goetz, 455 N.W.2d 580, 583 (N.D. 1990) (noting
Sheets “predates the ‘shift in our appellate procedure regarding the
applicability of Rule 54(b) certification to orders that are appealable pursuant
to Section 28-27-02, N.D.C.C.’”) (quoting Peterson v. Zerr, 443 N.W.2d 293, 296
(N.D. 1989)). To the extent Sheets held Rule 54(b) did not need to be complied
with prior to appealing an interlocutory order under § 28-27-02, we now clarify
that Sheets is overruled.

[¶13] Defendants failed to comply with N.D.R.Civ.P. 54(b). Accordingly, we
grant the Pinks’ motion to dismiss the appeal.

                                      III

[¶14] In addition to dismissal, the Pinks request costs and attorney’s fees
incurred in resisting this appeal. Under N.D.R.App.P. 38, if we determine that
an appeal is frivolous, we “may award just damages and single or double costs,
including reasonable attorney’s fees.” “An appeal is frivolous if it is flagrantly
groundless, devoid of merit, or demonstrates persistence in the course of
litigation which evidences bad faith.” Buchholz v. Buchholz, 2022 ND 203, ¶ 43,
982 N.W.2d 275. We conclude Defendants’ appeal is not flagrantly groundless
or devoid of merit and does not demonstrate bad faith in pursuing the
litigation. We deny the Pinks’ request for costs and attorney’s fees.

                                       IV

[¶15] The appeal is dismissed.

[¶16] Jon J. Jensen, C.J.
      Lisa Fair McEvers
      Jerod E. Tufte
      Allan L. Schmalenberger, S.J.
      William A. Neumann, S.J.

                                        5
[¶17] The Honorable Allan L. Schmalenberger, S.J., and the Honorable
William A. Neumann, S.J., sitting in place of Crothers, J., and Bahr, J.,
disqualified.

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