Douglas v. Governing Bd. of Window Rock

• Decision Date: 28 May 2009
• Docket Number: No. 1 CA-CV 08-0481.,1 CA-CV 08-0481.
• Citation: 210 P.3d 1275,221 Ariz. 104
• Parties: Randall DOUGLAS and Elizabeth Douglas, husband and wife, Plaintiffs/Appellants, v. GOVERNING BOARD OF WINDOW ROCK CONSOLIDATED SCHOOL DISTRICT NO. 8; Window Rock Consolidated School District No. 8, Defendants/Appellees.
• Court: Arizona Court of Appeals

210 P.3d 1275

221 Ariz. 104

Randall DOUGLAS and Elizabeth Douglas, husband and wife, Plaintiffs/Appellants, v. GOVERNING BOARD OF WINDOW ROCK CONSOLIDATED SCHOOL DISTRICT NO. 8; Window Rock Consolidated School District No. 8, Defendants/Appellees.

No. 1 CA-CV 08-0481.

Court of Appeals of Arizona, Division 1, Department A.

May 28, 2009.

Law Offices of William R. Hobson, P.C. By William R. Hobson, Law Offices of Kevin Koelbel, P.C. By Kevin Koelbel, Chandler, Gil Shaw, Attorney and Counselor at Law By Gil Shaw, Yarnell, The Counters Firm By Lisa J. Counters, Maricopa, Attorneys for Plaintiffs/Appellants.

Hufford, Horstman, Mongini, Parnell & Tucker, P.C. By Patrice M. Horstman, Flagstaff, Attorneys for Defendants/Appellees.

OPINION

BARKER, Judge.

¶ 1 This case requires us to decide whether the persons representing a putative class may appeal a denial of class certification after accepting an unapportioned offer of judgment under Arizona Rule of Civil Procedure 68. Plaintiffs/Appellants Randall Douglas and Elizabeth Douglas (hereinafter "the Douglases") appeal the trial court's denial of their motion for class certification, claiming that the trial court erred in its analysis of commonality and typicality and that their claims are representative of the class. Defendants/Appellees Window Rock Unified School District and its governing board (hereinafter "the District") argue that this court does not have jurisdiction over this appeal because the Douglases waived any objections to error when they accepted the District's offer of judgment. For the reasons that follow, we dismiss this matter for lack of appellate jurisdiction.

Facts and Procedural History

¶ 2 The Douglases worked as teachers in the Window Rock Unified School District from 1993 to 1998. After they left their employment with the District, the Douglases filed this class action, alleging that the District failed to pay teachers the additional compensation to which they were entitled pursuant to Arizona Revised Statutes ("A.R.S.") section 15-952.¹ The District moved to dismiss the complaint, arguing that A.R.S. § 15-952 does not give rise to a private right of action. The trial court granted the motion, and the Douglases appealed to this court.

¶ 3 In an opinion filed November 6, 2003, we held that a private cause of action exists under the statute and remanded the case for further proceedings. Douglas v. Governing Bd. of Window Rock Consol. Sch. Dist. No. 8, 206 Ariz. 344, 345, ¶ 1, 78 P.3d 1065, 1066 (App.2003). On September 30, 2004, the Douglases filed a motion for class certification under Arizona Rule of Civil Procedure ("Rule") 23. The trial court denied the Douglases' motion for class certification, finding that the requirements under Rule 23(a) were not met. The Douglases then filed a motion to set and certificate of readiness, after which the District served a Rule 68 offer of judgment upon the Douglases. The Douglases timely accepted the offer of judgment. Before the trial court entered judgment under Rule 68, the Douglases filed a pleading entitled "Plaintiffs' Motion to Substitute Class Representatives and Motion to Reconsider Motion to Certify as Class Action." On May 29, 2008, the trial court entered judgment under Rule 68 and at the same time denied the Douglases' motions as "moot" because there were "no remaining Plaintiffs" in the action. The Douglases appealed.

Discussion

¶ 4 Although the Douglases never cite us to any statutory authority for our jurisdiction in this case, they claim to be appealing "the final judgment" entered by the trial court and "all underlying orders" issued by that court. The District claims that this court is without jurisdiction to hear this appeal because the Douglases waived their rights to appeal the denial of class certification by accepting the District's Rule 68 offer of judgment. We agree with the District.

¶ 5 Appellate jurisdiction is limited by statute. See Hall Family Props., Ltd. v. Gosnell Dev. Corp., 185 Ariz. 382, 386, 916 P.2d 1098, 1102 (App.1995). "If no statute makes an order appealable, there is no jurisdiction to consider the merits of an appeal from that order." Id. Our statutes list the instances when "[a]n appeal may be taken to the court of appeals from the superior court." A.R.S. § 12-2101 (2003). Normally, an aggrieved party may only appeal from an order of the superior court upon the entry of a "final judgment." A.R.S. § 12-2101(B); see also Harris v. Cochise Health Sys., 215 Ariz. 344, 347, ¶ 8, 160 P.3d 223, 226 (App.2007). An appeal, however, may also be taken from "any order affecting a substantial right made in any action when the order in effect determines the action and prevents judgment from which an appeal might be taken." A.R.S. § 12-2101(D).

¶ 6 Arizona courts have previously addressed the statutory basis for an appeal of an order denying permission to proceed with a class action under Rule 23. See Reader v. Magma-Superior Copper Co., 108 Ariz. 186, 494 P.2d 708 (1972); Markiewicz v. Salt River Valley Water Users' Ass'n, 118 Ariz. 329, 576 P.2d 517 (App.1978). As a general rule, an order denying class certification is "merely interlocutory, and is not final until all issues and parties involved in the lawsuit are finally disposed of." Markiewicz, 118 Ariz, at 340, 576 P.2d at 528.² The rationale for this general rule derives from the fact that Rule 23 "do[es] not contemplate that an order allowing or disallowing a class action will be final" because the order "may be altered or amended before the decision on the merits." Ariz. R. Civ. P. 23(c)(1); Markiewicz, 118 Ariz, at 341 n. 10, 576 P.2d at 529 n. 10. Because "[a] prior order denying leave to proceed as a class becomes merged into the final judgment," a plaintiff may challenge an adverse certification ruling during an appeal from a final judgment under A.R.S. § 12-2101(B). Markiewicz, 118 Ariz, at 341, 576 P.2d at 529.

¶ 7 However, Arizona law imposes a second hurdle to litigants seeking appellate review: the litigant must be an "aggrieved party" with standing to appeal. ARCAP 1 ("An appeal may be taken by any party aggrieved by the judgment.") (emphasis added); Chambers v. United Farm Workers Org. Comm., 25 Ariz.App. 104, 106, 541 P.2d 567, 569 (1975) ("'Standing' focuses on the parties and requires that each party possess an interest in the outcome of the litigation."); Farmers Ins. Group v. Worth Ins. Co., 8 Ariz.App. 69, 71, 443 P.2d 431, 433 (1968) ("It is a prerequisite to our appellate jurisdiction that the appellant be a `party aggrieved' by the judgment or order from which the appeal is taken."). A party is aggrieved if (1) its interest is direct, substantial, and immediate, (2) its interest would be prejudiced by the judgment or benefitted by reversal of the judgment, and (3) a legal right or its pecuniary interest has been directly affected. Abril v. Harris, 157 Ariz. 78, 80-81, 754 P.2d 1353, 1355-56 (App.1987).

¶ 8 In the context of class action certification rulings, we have previously held that an individual plaintiff has standing to challenge the adverse certification ruling when the trial court entered a directed verdict in favor of the defendants in the action. Markiewicz, 118 Ariz, at 333, 341, 576 P.2d at 521, 529. In Markiewicz, we focused on the fact that the disposition of the case was unfavorable to the individual plaintiff when finding that the plaintiff had suffered a sufficient harm to appeal. Id. at 341, 576 P.2d at 529 (citing Wright v. Stone Container Corp., 524 F.2d 1058, 1060 (8th Cir.1975), for permitting an appeal from a class action denial after a trial on the merits that was unfavorable to the individual plaintiff, and Paton v. LaPrade, 524 F.2d 862 (3d Cir.1975), for "permitting appeal from class action denial after a disposition unfavorable to the individual plaintiff"). The facts of this case are materially different from the situation in Markiewicz because the Douglases accepted an offer of judgment in their favor. Generally, when a court enters judgment in favor of a party, that party is not "aggrieved" and thus has no standing to appeal. See Trus Joist Corp. v. Safeco Ins. Co. of Am., 153 Ariz. 95, 101, 735 P.2d 125, 131 (App.1986) ("It is the general rule that a party has no right to appeal from a judgment in its favor since it cannot be an aggrieved party."); Kalil Bottling Co. v. Burroughs Corp., 127 Ariz. 278, 282, 619 P.2d 1055, 1059 (App.1980) ("[Plaintiff] is not entitled to cross-appeal from a judgment wholly in its favor on any ground since it is not an aggrieved party.").

¶ 9 Also critical to the determination of the Douglases' standing before this court is the fact that the Douglases consented to the judgment. It is a well-established rule that a party cannot appeal from a judgment to which it consents. Cofield v. Sanders, 9 Ariz.App. 240, 242, 451 P.2d 320, 322 (1969) ("It is well settled that ordinarily a consent judgment is not subject to appellate review."); see Duwyenie v. Moran, 220 Ariz. 501, ___, 207 P.3d 754, 759 (2009) ("A party cannot generally appeal from an order that it consented to have entered against it."); Guard v. County of Maricopa, 14 Ariz.App. 187, 189, 481 P.2d 873, 875 (1971) ("Appellant is therefore foreclosed from challenging on appeal a judgment to which she consented."); see also Gatto v. Comm'r of Internal Revenue, 1 F.3d 826, 828 (9th Cir.1993) ("[A] party implicitly surrenders its right to appeal a civil judgment ... by consenting to be bound by that judgment."); Seidman v. City of Beverly Hills, 785 F.2d 1447, 1448 (9th Cir.1986) (dismissing an appeal of an adverse certification ruling and holding that "an appealable final judgment must still be adverse to the plaintiff" and that "[i]t cannot be the product of a voluntary stipulation"). There are exceptions to this general rule, "such as where there is lack of consent to the judgment or lack of jurisdiction over the subject matter, or where the judgment was obtained...