Mezey v. Fioramonti, 1 CA-CV 02-0040.

Citation204 Ariz. 599,65 P.3d 980
Decision Date03 April 2003
Docket NumberNo. 1 CA-CV 02-0040.,1 CA-CV 02-0040.
PartiesDeanna Laurel MEZEY, Plaintiff-Appellee, v. Lee Val FIORAMONTI, Defendant-Appellant.
CourtCourt of Appeals of Arizona

Law Offices of Robert C. Houser, P.C. by Robert C. Houser and Franks Bodinet & Park, P.C. by Todd Franks and Kevin A. Park and Frederic G. Lemberg, Phoenix, Attorneys for Plaintiff-Appellee.

Turley, Swan & Childers by Christopher J. Bork and Michael J. Childers, Phoenix, Attorneys for Defendant-Appellant.

OPINION

LANKFORD, Judge.

¶ 1 An old proverb warns: "Beware of still waters." In this case, traversing the still waters of settled law, we have come upon a hazard particular to judicial navigation: a venerable but wrongly decided case.

¶ 2 The case, Cook v. Cook, 26 Ariz.App. 163, 547 P.2d 15 (1976), tells us that we have jurisdiction in any appeal from a determination of liability. It says that a defendant may appeal from such a determination before any determination of damages. According to Cook, if the superior court certifies a partial judgment on liability as final under Arizona Rule of Civil Procedure 54(b), then the judgment is appealable. It is appealable under our jurisdictional statute as a judgment that "determines the rights of the parties and directs an accounting or other proceeding to determine the amount of the recovery." Ariz.Rev.Stat. ("A.R.S.") § 12-2101(G) (1994).

¶ 3 We are reluctant to disturb settled law. But after Cook spoke to this matter, it has been followed on only a single occasion. See Salerno v. Atlantic Mut. Ins. Co., 198 Ariz. 54, 57-58, ¶ 12, 6 P.3d 758, 761-62 (App.2000). Moreover, our supreme court has never expressly approved of Cook's holding. See Musa v. Adrian, 130 Ariz. 311, 314, 636 P.2d 89, 92 (1981)

(citing but distinguishing Cook).

¶ 4 Weighing heavily against our desire for stability in the law is our need to avoid deciding cases that we are not authorized to decide. We must respect the limits on our jurisdiction placed upon us by the Arizona Legislature. See Musa, 130 Ariz. at 312,

636 P.2d at 90 (appellate court jurisdiction is confined to that provided by statute). Historically, we have been vigilant in doing so. "Our supreme court and this court have traditionally guarded jurisdiction closely." Pulaski v. Perkins, 127 Ariz. 216, 219, 619 P.2d 488, 491 (App.1980). An appellate court has the duty to examine its jurisdiction in every appeal when a question exists. Rueda v. Galvez, 94 Ariz. 131, 132, 382 P.2d 239, 239 (1963); Davis v. Cessna Aircraft Corp., 168 Ariz. 301, 304, 812 P.2d 1119, 1122 (App.1991). In examining our jurisdiction, we have determined that the reasoning of Cook is incorrect.

¶ 5 The jurisdictional issue arises in this appeal by virtue of a judgment that adjudicates liability as to some of plaintiff's claims, and determines some but not all of the damages. The plaintiff brought an action for conversion, fraudulent conveyance, intentional and negligent infliction of emotional distress, and constructive trust. Plaintiff obtained summary judgment on the conversion and fraudulent conveyance claims. The court decided liability in favor of the plaintiff on these claims only, and granted a partial, incomplete remedy. It imposed a constructive trust on certain personal property and awarded partial damages of $120,300 plus prejudgment interest. It reserved for later disposition claims for damages for additional property, for diminished value of the property subject to the constructive trust, for loss of use of the property, and for additional prejudgment interest. The superior court nevertheless certified its judgment as final and appealable pursuant to Rule 54(b). Plaintiff then filed a motion for new trial, which the court denied.

¶ 6 On appeal, the defendant moved to dismiss for lack of jurisdiction. Another department of this Court ruled on that motion, dismissing the appeal as to the judgment but permitting the appeal from the order denying the new trial motion.1

¶ 7 We decide that we have jurisdiction of the appeal based on the order imposing a constructive trust. Absent that order, and contrary to Cook, we would lack jurisdiction over an appeal from a partial judgment on liability. Contrary to the earlier order dismissing part of this appeal, we have no independent jurisdiction over the appeal from the new trial order, which is no more appealable than the underlying judgment to which it relates.

¶ 8 We consider first whether appellate jurisdiction exists over the partial summary judgment. A judgment that adjudicates liability for the plaintiff but does not determine her remedy is not a final, appealable judgment. Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 744, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976). In this respect, Arizona's rule is the same as the federal one. Our Rule 56(c) clearly describes this type of judgment as not final. "A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages." (Emphasis added).

¶ 9 Nor can a partial judgment on liability be made final and appealable by adding a Rule 54(b) certification of finality. Liberty Mut. Ins. Co., 424 U.S. at 744, 96 S.Ct. 1202. As our supreme court stated in Musa v. Adrian, "[Rule 54(b) certification] does not confer jurisdiction if the judgment did not in fact dispose of `one or more' of the claims." 130 Ariz. at 313, 636 P.2d at 91; see Davis, 168 Ariz. at 304,

812 P.2d at 1122 ("Before a trial court may certify a judgment under Rule 54(b), it must find that the judgment is final, that is, `an ultimate disposition of an individual claim.'") (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436, 76 S.Ct. 895, 100 L.Ed. 1297 (1956)).

¶ 10 Such a judgment is not final because it cannot meet the requirement that it resolve "one or more but fewer than all of the claims...." Ariz. R. Civ. P. 54(b). No entire claim is resolved when only its liability portion is decided.2

"The order ... constitutes a grant of partial summary judgment limited to the issue of ... liability. Such judgments are by their terms interlocutory, see Fed.R.Civ.P. 56(c), and where assessment of damages or awarding of other relief remains to be resolved have never been considered to be `final' within the meaning of [the federal jurisdictional statute]."

Liberty Mut. Ins. Co., 424 U.S. at 744, 96 S.Ct. 1202. The appeal in this case was taken from just such a non-final judgment.

¶ 11 Cook v. Cook, however, reached a different conclusion. It relied not only on Rule 54(b) but also on a specialized provision of our jurisdictional statute. Section 12-2101(G) allows an appeal "from an interlocutory judgment which determines the rights of the parties and directs an accounting or other proceeding to determine the amount of the recovery." Cook likened a trial of damages to an accounting and held that a partial judgment on liability could be final even though it left damages unadjudicated. 26 Ariz.App. at 167, 547 P.2d at 19. If the superior court certified such a judgment under Rule 54(b), the court of appeals would entertain the appeal from the judgment. Id. at 168, 547 P.2d at 20.

¶ 12 Cook expands appellate jurisdiction beyond the apparent intent of the statute upon which our jurisdiction depends.3 As discussed above, a partial judgment on liability does not qualify as a "final" judgment appealable under A.R.S. § 12-2101(B). To say that the same judgment can be appealed under paragraph G transforms a narrow exception into permission to appeal in a broad range of cases. It allows the limited jurisdiction for the rare appeal in a specialized accounting proceeding to support wholesale appeals of non-final judgments in ordinary civil cases.

¶ 13 The section 12-2101(G) exception for an accounting is indeed quite narrow.4 An accounting is a particular equitable proceeding that is employed only in specific situations. See 1 Am.Jur.2d Accounts and Accounting § 52, at 609, and § 57, at 615 (1994). Among other conditions for an equitable accounting, the accounts to be resolved "are of such a `complicated nature' that only a court of equity can satisfactorily unravel them." Dairy Queen v. Wood, 369 U.S. 469, 478, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962). Moreover, an accounting is ordinarily performed in two stages: in the first, the court determines liability (the right to the accounting); in the second, the actual accounting is conducted. 1 Am.Jur.2d Accounts and Accounting § 66, at 624.

¶ 14 The accounting proceeding that the statute contemplates as eligible for appeal is thus very different from the usual case of civil liability and damages. An accounting involves a very complex determination of accounts, while in the ordinary civil case the assessment of damages is usually subordinate to the trial of liability. An accounting, too, is inherently a two-stage proceeding, unlike the typical civil case in which a trial ordinarily includes both liability and damages. Finally, an accounting is a relatively rare proceeding, while innumerable cases involving claims for money damages are filed every year. In short, section 12-2101(G) contemplates appeals only in the rare case prior to the unusual, complex and inherently separate accounting phase. We lack any indication that the Legislature intended to sweep within appellate jurisdiction vast numbers of ordinary civil cases involving damages in which liability is decided before damages are awarded.

¶ 15 Cook nevertheless gave the statute expansive effect, citing several reasons. First, the court was unable to identify any other similar equitable proceeding to give effect to the statutory reference to "other proceeding to determine the amount of recovery." 26 Ariz.App. at 167, 547 P.2d at 19. Yet there is at least one such proceeding: a tracing to enforce a constructive trust.5 In such a case, the court imposes a constructive trust on property, and then traces that property or its...

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