First Nat. Bank of Belfield v. Candee

• Decision Date: 25 June 1992
• Docket Number: No. 910154,No. 910159,910154,910159
• Citation: 488 N.W.2d 391
• Parties: FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North Dakota, Plaintiff and Appellee, v. Douglas CANDEE, Defendant and Appellee, and David Schmidt and Kathleen Schmidt, Defendants and Appellants. FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North Dakota, Plaintiff and Appellee, v. David SCHMIDT and Kathleen Schmidt, Defendants and Appellants. FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North Dakota, Plaintiff and Appellee, v. Frank SCHMIDT and David Schmidt, Defendants and Appellants, and Douglas Candee, d/b/a Schmidt, Schmidt and Candee, Defendant and Appellee. FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North Dakota, Plaintiff and Appellee, v. Frank SCHMIDT and David Schmidt, Defendants and Appellants, and Douglas Candee, d/b/a Schmidt, Schmidt and Candee, Defendant and Appellee. Douglas G. CANDEE, Plaintiff and Appellee, v. David SCHMIDT and Frank A. Schmidt, Defendants and Appellants. Douglas G. CANDEE, Plaintiff and Appellee, v. David SCHMIDT, Defendant and Appellant. Civ.to Civ.
• Court: North Dakota Supreme Court

Page 391

488 N.W.2d 391

FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North

Dakota, Plaintiff and Appellee, v. Douglas CANDEE, Defendant and Appellee, and David Schmidt and Kathleen Schmidt, Defendants and Appellants.

FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North

Dakota, Plaintiff and Appellee, v. David SCHMIDT and Kathleen Schmidt, Defendants and Appellants.

FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North

Dakota, Plaintiff and Appellee, v. Frank SCHMIDT and David Schmidt, Defendants and Appellants, and Douglas Candee, d/b/a Schmidt, Schmidt and Candee, Defendant

and Appellee.

FIRST NATIONAL BANK OF BELFIELD, located in Belfield, North

Dakota, Plaintiff and Appellee, v. Frank SCHMIDT and David Schmidt, Defendants and Appellants, and Douglas Candee, d/b/a Schmidt, Schmidt and Candee, Defendant

and Appellee.

Douglas G. CANDEE, Plaintiff and Appellee, v. David SCHMIDT and Frank A. Schmidt, Defendants and Appellants.

Douglas G. CANDEE, Plaintiff and Appellee, v. David SCHMIDT, Defendant and Appellant.

Civ. No. 910154 to Civ. No. 910159

Supreme Court of North Dakota.

June 25, 1992.

William G. Heth (argued), of William Heth Law Firm, Dickinson, for plaintiff and appellee First Nat. Bank of Belfield. Appearance by George Wald of First Nat. Bank of Belfield.

William A. Herauf (argued), of Freed, Dynes, Reichert, Buresh & Herauf, PC, Dickinson, for plaintiff, defendant and appellee Douglas Candee. Appearance by Larry Gardner of Candee Const.

Thomas M. Disselhorst (argued), of Disselhorst Law Office, Bismarck, for defendants and appellants David Schmidt, Kathleen Schmidt, and Frank Schmidt. Appearance by David Schmidt and Kathleen Schmidt.

MESCHKE, Justice.

Frank and David Schmidt appeal from a "Final Order Of Distribution Of Partnership Assets" entered in six separate actions and from a denial of their motion to vacate an order requiring the sale of partnership property in South Dakota. We affirm.

In 1974 Douglas Candee orally agreed with Frank and David to form Schmidt, Schmidt, and Candee (SS & C), a farming partnership. SS & C purchased land in Perkins County, South Dakota, and farmed it from 1975 through 1983. Then, Frank experienced health problems, and in 1984, Douglas and David orally agreed to form a second farming partnership, Rabbit Creek, to rent equipment and the South Dakota land from SS & C. From 1984 through 1987, Rabbit Creek farmed that land.

Meanwhile, various partners and David's wife, Kathleen, executed four promissory notes payable to First National Bank of Belfield. Douglas executed one promissory note that he, David, and Kathleen personally guaranteed. A second promissory note was executed by David and Kathleen, and the other two promissory notes were executed by all three partners.

When timely payments were not made, the Bank sued the respective partners and Kathleen in four separate actions to collect on the four notes. Thereafter, Douglas sued David and Frank, seeking dissolution of SS & C and an accounting and distribution of its assets. Douglas also separately sued David, seeking dissolution of Rabbit Creek and an accounting and distribution of its assets.

The trial court consolidated all six actions for a trial without a jury. The court found in favor of the Bank in the four actions to collect on the promissory notes. In the dissolution actions on August 22, 1989, the court ordered dissolution of both partnerships and distribution of the partnerships' assets. The court also appointed a receiver to assist in the sale of the South Dakota land.

Separate judgments were entered on August 22, 1989, in the Bank's four actions on the promissory notes. Separate second amended judgments were entered in three of those cases on June 28, 1990. A second amended judgment in the fourth action on a promissory note was entered on March 7, 1991. An amended judgment in the action to dissolve Rabbit Creek was entered on September 26, 1990, and notice of entry of judgment was served on that day. An amended judgment in the action to dissolve SS & C was entered on December 10, 1990, and notice of entry of that judgment was served on January 3, 1991.

After the receiver submitted a final report and accounting about the partnerships' assets and the sale of the South Dakota land, the court entered a "Final Order Of Distribution Of Partnership Assets" in each of the six actions on March 18, 1991. In May 1991, Frank and David appealed from the Final Order of Distribution entered in each action. Additionally, in the action to dissolve SS & C, Frank and David appealed from an order denying their motion to vacate the sale of the South Dakota land.

At the outset of this appeal, the Bank and Douglas argue that the amended judgments in all six actions were final, and that the Schmidts have not perfected timely appeals from those amended judgments within "60 days of the date of the service of notice of entry of the judgment or order appealed from" under NDRAppP 4(a). The Bank and Douglas assert that the amended judgments are not reviewable in the Schmidts' appeals from the Final Order Of Distribution. The Schmidts respond that the amended judgments were not final and appealable until the court approved the Final Order Of Distribution, so that the amended judgments were interlocutory and are reviewable in their timely appeals from the Final Order of Distribution. Here, the Schmidts appealed from the Final Order of Distribution within sixty days. This appealability question involves identifying the proper point of finality: Does the potential finality of the amended judgments in each of the six actions control over the patent finality of the Final Order Of Distribution later entered in each action?

We have a strong tradition "that no appeal lies from a judgment that is interlocutory and not final. E.g., Anderson v. Bothum, 77 N.D. 678, 45 N.W.2d 488 (N.D.1950)." Regstad v. Steffes, 433 N.W.2d 202, 203 (N.D.1988). Rather, an interlocutory determination is reviewable on appeal from the final judgment. Wells County Water Resource Dist. v. Solberg, 434 N.W.2d 577 (N.D.1989). Our strong tradition against interlocutory appeals requires an appeal to be taken from a final judgment, or the equivalent under NDRCivP 54(b). Barth v. Schmidt, 472 N.W.2d 473 (N.D.1991). When unadjudicated claims remain to be resolved by a trial court, a satisfactory NDRCivP 54(b) certification is necessary for an appeal from a determination on some of the claims. Gissel v. Kenmare Township, 463 N.W.2d 668 (N.D.1990); Gissel v. Kenmare Township, 479 N.W.2d 876 (N.D.1992). These finality principles control here.

In Anderson v. Bothum, 77 N.D. 678, 45 N.W.2d 488 (N.D.1950), we considered a partner's appeal from an "interlocutory judgment" that dissolved a partnership and appointed a referee to hear testimony on the value of the partnership property. We concluded that the "interlocutory judgment" did not finally determine the rights of the parties and contemplated further judicial action regarding the partnership property. We held that the appeal was not authorized by statute and dismissed it.

Bothum is consistent with decisions from other jurisdictions involving finality and appealability in partnership dissolutions. DeGase v. DeGase, 690 S.W.2d 485 (Mo.App.1985); Bass v. Dalton, 218 Neb. 379, 355 N.W.2d 225 (1984); Bakewell v. Bakewell, 21 Cal.2d 224, 130 P.2d 975 (1942); see 59A Am.Jur.2d Partnership Sec. 1096 (1987). These precedents indicate that, for purposes of finality and appealability, there is a difference between a judicial determination about an arithmetic formula for the division of partnership assets and the subsequent distribution of the assets pursuant to that formula.

In Bakewell, the California Supreme Court recognized that a decree was final and appealable where, except for compliance with the decree, there was no question left for future judicial consideration, and that a decree was interlocutory and nonappealable where further judicial action was needed for a final determination of the rights of the parties. In Bakewell the court held that the judgment was not final, in part, because the lower court's judgment did not establish the proportional rights of the partners to partnership assets. See also Price v. Slawter, 169 Cal.App.2d 448, 337 P.2d 914 (1959) [judgment was final because the court ordered profits, earnings, losses, and liabilities to be shared by the partners on a one-quarter basis, and the distribution of any net proceeds from the sale of certain property was an arithmetical determination that did not require additional judicial action]; David v. Goodman, 89 Cal.App.2d 162, 200 P.2d 568 (1948) [judgment was not final because an accounting and determination of profits left more to be done than ministerial compliance with decree]; see 4 Am.Jur.2d Appeal and Error Sec. 122 (1962). Although Bothum and these other precedents did not address a Rule 54(b) certification, they are consistent with our current framework under NDRCivP 54(b) for analyzing appeals when unadjudicated claims remain to be resolved by the trial court.

These appeals have an additional quirk because the trial court consolidated all six actions for trial, and then entered separate judgments and amended judgments in each action, before eventually entering the Final Order of Distribution in all six actions. In Gissel v. Kenmare Township, 463 N.W.2d 668 (N.D.1990), we considered whether a Rule 54(b) certification was necessary for an appeal from a post-consolidation order disposing of one of two cases that had been consolidated for all purposes. We adopted a flexible case-by-case approach which focused on the extent and purpose of the consolidation and the relationship of the consolidated actions. In Gissel the trial court had consolidated two actions involving a township board's alleged lack of compliance with statutory procedures for discontinuing a township road. In holding that a Rule 54(b) certification...