Allison v. Engel

• Decision Date: 06 April 2017
• Docket Number: Court of Appeals No. 15CA1886
• Citation: 395 P.3d 1217
• Parties: Stephen L. ALLISON and Barry R. Allison, Plaintiffs-Appellants and Cross-Appellees, v. Frank ENGEL and Mary Engel, Defendants-Appellees and Cross-Appellants.
• Court: Colorado Court of Appeals

395 P.3d 1217

Stephen L. ALLISON and Barry R. Allison, Plaintiffs-Appellants and Cross-Appellees,

v.Frank ENGEL and Mary Engel, Defendants-Appellees and Cross-Appellants.

Court of Appeals No. 15CA1886

Colorado Court of Appeals, Div. II.

Announced April 6, 2017

Haynes and Boone, LLP, John D. Fognani, Robert P. Thibault, Denver, Colorado, for Plaintiffs-Appellants and Cross-Appellees.

The Halliburton Law Firm, L.L.C., Samantha L. Halliburton, Denver, Colorado, for Defendants-Appellees and Cross-Appellants.

Opinion by JUDGE J. JONES

¶ 1 C.R.C.P. 54(b) allows a district court to enter a final judgment on one claim in a multiple claim case, thereby allowing an immediate appeal of that judgment, but only if certain requirements are met. One of those requirements is that there is "no just reason for delay." To give due force to the strong policy against piecemeal appeals, a district court must apply this requirement (as well as the others) with caution, and only where doing so is justified by reasons that clearly outweigh the concerns animating that policy. We therefore hold that to satisfy the requirement of no just reason for delay, a district court must give reasons for certification showing that unless the judgment on the claim is certified as final, a party would experience some hardship or injustice through delay that could be alleviated only by an immediate appeal.

¶ 2 In this case, which pits neighboring landowners against each other, the district court certified a default judgment on one of several counterclaims—one for unjust enrichment—as final, purportedly to "avoid duplicative efforts" (presumably, multiple trials) and to get "a clear sense of direction" from the appellate court as to "the propriety of [the] ... default judgment and related issues." These reasons, considered individually or together, do not show a danger of hardship or injustice to any party that could be alleviated only by allowing an immediate appeal. It follows that the district court abused its discretion in determining that there was no just reason for delay. It further follows that the district court improperly certified its default judgment on the unjust enrichment counterclaim as final, and therefore we lack jurisdiction over the appeal.

I. Background

¶ 3 The history of this case is rather complicated, but bear with us.

¶ 4 The Allisons own parcels of property on either side of a parcel owned by the Engels. But the Allisons and Engels differ as to the precise boundaries of their neighboring parcels, and for a number of years they have had disagreements and run-ins primarily over a pair of water wells (one drilled in 1976 and the other drilled in 1995) located on one of the Allisons' parcels.

¶ 5 The Allisons filed a complaint against the Engels asserting two claims for trespass and one for a declaration of "the parties' respective rights, obligations, ownership, use and charges related to" the 1995 well. The trespass claims allege that the Engels built a fence on the Allisons' land without their permission, and that the Engels have trespassed on the Allisons' other parcel, resulting in "destruction" of a portion of that parcel.

¶ 6 On July 25, 2013, the Engels filed both their answer to the complaint and counterclaims. They deny trespassing on either of the Allisons' parcels because, they allege, they've obtained both disputed tracts by adverse possession. In response to the Allisons' declaratory judgment claim, the Engels allege that (1) the previous owner of the Allisons' property granted them an easement to drill a water well, to install pipes delivering well water to their property, and for access to the well; (2) they drilled the well in 1976 and used it continually thereafter; (3) a replacement water well was drilled in 1995; (4) they installed water lines from the replacement well to the first well to enable them to get water from the replacement well; (5) the Allisons allowed others to attach water lines to the Engels' water lines; and (6) since 1976, they've paid all electric bills associated with use of the wells. They too ask for a declaration of the parties' rights and obligations relating to the water and the wells.

¶ 7 The Engels also assert several counterclaims. The first seeks a declaration quieting title of both disputed tracts. The second alleges that the Allisons have been unjustly enriched by the Engels' payment of all electric bills associated with operation of the wells and of all costs to repair the wells. The third alleges intentional infliction of emotional distress resulting from confrontations between the parties. And the fourth asserts that Mr. Allison has created a "private nuisance" by interfering with the Engels' use of and access to the wells and by trespassing on their property.

¶ 8 Rather than replying to the Engels' counterclaims, the Allisons filed a motion for partial summary judgment on September 30, 2013, the last day of an extension the court had previously granted the Allisons to answer or otherwise respond to the counterclaims. The motion sought summary judgment on only two of the Engels' allegations—that they have a "senior water right" in the 1995 replacement well and that they have an easement for access to that well. The Allisons did not answer or otherwise respond to any other aspect of the Engels' counterclaims.

¶ 9 One week later, the Engels filed a motion for default judgment on their counterclaims based on the Allisons' failure to answer or otherwise respond except as in the motion for partial summary judgment. By rule, the Allisons had until October 28, 2013, to respond to that motion. They didn't meet that deadline.

¶ 10 Consequently, the district court, noting the Allisons' failure to respond, granted the Engels' motion for default judgment in part. The court entered default judgment in the Engels' favor on all four of their counterclaims and awarded them damages of $32,114.05.¹ The court certified the default judgment as final under Rule 54(b), though no party had asked for such a certification.²

¶ 11 Later that same day, the Allisons filed their response to the motion for default judgment and a motion under C.R.C.P. 60 to set aside the default judgment. They asserted, incorrectly, that their response wasn't due until October 29, and so the court shouldn't have entered default judgment. Much procedural wrangling ensued.

¶ 12 As now relevant, the Engels responded to the Allisons' Rule 60 motion, arguing that the Allisons' counsel had simply miscalculated the response date and that the Allisons had been obligated to answer the counterclaims because they had addressed only two "very narrow issues" relating to one of the counterclaims in their motion for partial summary judgment. Before filing a reply in support of their Rule 60 motion, the Allisons filed an answer to the counterclaims on November 7, 2013, which the Engels subsequently moved to strike. In their Rule 60 reply, the Allisons belatedly acknowledged that their counsel had miscalculated the due date for their response to the Engels' motion for default judgment. Nonetheless, they argued that they weren't required to answer or otherwise respond to the counterclaims because they had filed a dispositive motion—the aforementioned motion for partial summary judgment. The Engels moved to strike this new argument. In the midst of all this, the parties completed briefing on the Allisons' motion for partial summary judgment.

¶ 13 On December 30, 2013, the court entered an order setting aside the default judgment in part. The court ruled that the Allisons hadn't shown any excusable neglect for failing to timely answer the counterclaims. But because the motion for partial summary judgment could "fairly be read as contesting at least some of the underlying factual allegations concerning the water wells," the court said it had erred in awarding damages on the Engels' intentional infliction of emotional distress and nuisance counterclaims. The court left intact the remainder of the default judgment.

¶ 14 After the Allisons filed additional motions under Rules 59 and 60 further attacking the default judgment, the court held a hearing on the Engels' quiet title counterclaim. (Before the hearing, the court granted the Allisons' motion for partial summary judgment only on the issue whether the Engels had a "senior water right.") Because the court concluded that there was a factual dispute as to whether the Engels had adversely possessed the two tracts at issue, it set aside the default judgment on the quiet title counterclaim.

¶ 15 The Allisons appealed. The Engels cross-appealed. This court ordered the parties to show cause why the appeal should not be dismissed for lack of a final, appealable order. The Allisons responded that there had been a proper Rule 54(b) certification; the Engels asserted (as they had in their notice of cross-appeal) that there wasn't a final, appealable order. A motions division of this court dismissed the appeal and cross-appeal.

¶ 16 Undeterred, the Allisons asked the district court for a new Rule 54(b) certification, arguing that the court's rulings on the post-default judgment motions had "clarifi[ed]" the "scope" of the default judgment. They also argued that allowing an immediate appeal would

• provide the court and the parties, "in the shortest time, a binding decision that would provide a definite appellate answer as to the surviving applicability of the default judgment, in whole or part," thereby enabling the parties to focus on the claims and counterclaims to be tried and avoid the "distraction" of "unresolved appellate outcomes on key claims and issues";

• be "judicially efficient because it would simply displace a later appeal of the default judgment as part of an appeal of an entire case";

• somehow eliminate the prospect of a second trial that otherwise would have to occur in the event the default judgment were reversed in a later appeal; and

• increase the possibility of settlement by clearing up the "uncertainty

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