Olson v. Salt Lake City School Dist.

• Decision Date: 12 August 1986
• Docket Number: No. 19055,19055
• Citation: 724 P.2d 960
• Parties: Jack Allen OLSON, et al., Plaintiffs and Respondents, v. SALT LAKE CITY SCHOOL DISTRICT, et al., Defendants and Appellants.
• Court: Utah Supreme Court

Page 960

724 P.2d 960

Jack Allen OLSON, et al., Plaintiffs and Respondents, v. SALT LAKE CITY SCHOOL DISTRICT, et al., Defendants and Appellants.

No. 19055.

Supreme Court of Utah.

Aug. 12, 1986.

James B. Lee, James M. Elegante and Byron W. Milstead, Salt Lake City, for defendants and appellants.

Dan S. Bushnell and David M. McConkie, Salt Lake City, for plaintiffs and respondents.

ZIMMERMAN, Justice:

This appeal arises from an order of the Tax Division of the Third Judicial District Court permanently enjoining appellants, Salt Lake City School District, its clerk and superintendent, and the Salt Lake City Board of Education as a body and as individuals (collectively referred to as the "District"), from utilizing monies held in a Salt Lake City School District line item reserve fund established to cover unexpected contingencies. The trial court held that the District exceeded its statutory authority by including the line item reserve fund in the budget for 1981-82, and the five preceding fiscal years when the District already had access to an undistributed reserve fund to cover unexpected contingencies, which was specifically authorized by section 53-20-2 of the Utah Code. U.C.A., 1953, § 53-20-2 (Repl.Vol. 5B, 1981, Supp.1985). We agree and affirm.

This suit was filed in July of 1981 by a number of individual plaintiffs and business entities who alleged that they were property owners and taxpayers in Salt Lake City. In addition, one of the plaintiffs is the Utah Taxpayers Association ("the Association"), a non-profit entity primarily composed of business persons and business entities interested in taxation issues. The lead plaintiff in this action, Jack Olson, is the chief executive of the Association; many of the named plaintiffs are members of the Association. ¹ The complaint alleged that the District had improperly included within its annual budget two reserves to cover unexpected contingencies, the first specifically authorized by section 53-20-2 of the Code and the second created by the District of its own accord. Plaintiffs contended that the District had no authority to create the second reserve fund. They contended that the second reserve increased the total budget of the District each fiscal year, resulting in an unnecessarily high property tax mill levy. Plaintiffs sought an injunction to prevent the District from certifying the amount shown in its 1981-82 budget to the Board of County Commissioners for inclusion in the property tax levy. Initially, the district court issued a temporary restraining order; however, after a July 29, 1981, hearing on the matter, the order was dissolved and the matter was set for trial on the merits. Certain plaintiffs paid their 1981 property taxes under protest, and the complaint was later amended to include a request for a refund by these taxpayers.

The matter was submitted upon a stipulated record, and on January 20, 1983, the district court ruled for the plaintiffs. The court found that for each fiscal year from 1976-77 through 1981-82, the District had adopted a budget containing two reserves. The first was a funded "undistributed reserve" authorized by section 53-20-2 to meet unexpected contingencies not otherwise provided for by specific accounts in the budget. ² None of the funds in the undistributed reserve had ever been used. A second funded line item reserve was also included in each of these budgets, and its funds were used to meet unexpected contingencies not related to the line item for which it was budgeted. ³ The court concluded that as a matter of law, the District was entitled to maintain only the statutorily authorized undistributed reserve for unexpected contingencies. Accordingly, the court permanently enjoined the District from adopting a budget that included "any reserve, however designated, which serves to meet unexpected contingency expenditures not otherwise provided for by specific accounts in the budget, and which reserve is in addition to that reserve authorized by section 53-20-2, Utah Code Ann." The court also ordered the District to use the statutorily authorized reserve to meet unexpected contingencies. Finally, in an attempt to qualify its order for immediate appeal under Utah Rule of Civil Procedure 54(b), the court ordered that a final judgment be entered on the plaintiffs' claim for permanent injunctive relief and certified that there was no just reason to delay an appeal. However, the court expressly reserved ruling on the claim of some of the plaintiffs for a tax refund pending the outcome of this appeal.

Before this Court, the District seeks a reversal of the trial court's ruling and a dissolution of the permanent injunction. First, however, a jurisdictional issue must be addressed--whether the case was properly certified for appeal under Utah Rules of Civil Procedure 54(b). ⁴ The parties have not raised the issue and when the issue was broached by the Court at oral argument, neither side appeared eager to address it. Cf. Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737, 740, 96 S.Ct. 1202, 1204, 47 L.Ed.2d 435 (1976). However, to ignore Rule 54(b) problems simply because the parties are anxious to have their case considered on the merits will only exacerbate the apparently widespread confusion surrounding Rule 54(b) practice. Although we have recently attempted to clarify the parameters of Rule 54(b), see Pate v. Marathon Steel Co., 692 P.2d 765 (Utah 1984); Lane v. Messer, 689 P.2d 1333 (Utah 1984); Williams v. State, 716 P.2d 806 (Utah 1986), further comment seems necessary.

At the outset, we note that acquiescence of the parties is insufficient to confer jurisdiction and that a lack of jurisdiction can be raised at any time by either party or by the court. See, e.g., Heath Tecna Corp. v. Sound Systems International, Inc., 588 P.2d 169, 170 (Utah 1978); Utah Restaurant Association v. Davis County, 709 P.2d 1159, 1160 (Utah 1985); Kennedy v. New Era Industries, Inc., 600 P.2d 534, 534-35 (Utah 1979). In Pate v. Marathon Steel, we noted that a ruling is not appealable under Rule 54(b) unless three requirements are met: (i) there must be multiple claims or parties; (ii) the trial court must determine that there is "no just reason" to delay the appeal; and (iii) the judgment or order appealed from must be final, i.e., it must wholly dispose of the claim or the party. Id., 692 P.2d at 767-68; accord Williams v. State, 716 P.2d at 807.

As we noted in Pate, not every order is "final" and thus appealable under Rule 54(b). 692 P.2d at 767-68. The only orders that are "final" within the meaning of the rule are those that (i) are entered in cases where there are multiple parties or multiple claims for relief, and (ii) "wholly" dispose of one or more, "but fewer than all," of the claims or parties. 692 P.2d at 768. If an order meets both requirements of finality, the district court can then choose to certify it for immediate appeal on the ground that there is no just reason for delay. A district court cannot, however, make a non-final order appealable. An order is either final or it is not. The terminology used in describing it cannot change its fundamental character. Id., n. 2; see, e.g., Little v. Mitchell, 604 P.2d 918 (Utah 1979); cf. Wheeler Machinery v. Mountain States Mineral Enterprises, Inc., 696 F.2d 787, 789 (10th Cir.1983) (decided under Fed.R.Civ.P. 54(b)).

The order appealed from here is not final within the meaning of Rule 54(b), except as to the Utah Taxpayers Association. Although plaintiffs prayed for several different kinds of relief, they asserted but one legal claim: that the District's use of the line item reserve to cover the costs of unexpected contingencies not otherwise provided for in the budget was unlawful. Based on this single claim, plaintiffs sought declaratory, injunctive, and monetary relief. The final disposition of a claim for relief necessarily includes a determination of the remedy to which the claimant is entitled. As the United States Court of Appeals for the Second Circuit has said in

"Finality," for purposes of the application of Rule 54(b), is generally understood as that degree of finality required to meet the appealability requirements of 28 U.S.C. § 1291. [Citations omitted.] This, in turn, is usually defined as a judgment "which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233 [65 S.Ct. 631, 633, 89 L.Ed. 911] ... (1945). 9 Moore's Federal Practice p 110.08.

Acha v. Beame, 570 F.2d 57, 62 (2nd Cir.1978). ⁵ Thus, "where liability has been decided but the extent of damage remains undetermined, there is no final order" for purposes of appellate review. Sun Shipbuilding & Dry Dock Co. v. Benefits Review Board, United States Department of Labor, 535 F.2d 758, 760 (3rd Cir.1976). This is also the case where the trial court's order disposes of a request for declaratory relief but leaves unresolved other equitable and legal claims for relief. Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737, 742, 96 S.Ct. 1202, 1205, 47 L.Ed.2d 435 (1976); accord In re Martin-Trigona, 763 F.2d 135, 138-39 (2nd Cir.1985).

In the present case, the court granted the declaratory and injunctive relief requested by all plaintiffs, but specifically reserved the questions of entitlement to a tax refund for later determination. The reservation of that issue means that the underlying claim for relief has not been wholly disposed of as to any of the parties who have sought a refund under the amended complaint. See n. 1, supra. Therefore, we dismiss the appeal as to all of the individual plaintiffs who seek tax refunds as part of their requested relief. As to the Utah Taxpayers Association, which cannot recover monetary damages on behalf of its members, id., the order is final because it wholly disposes of the Association's claim. That portion of the appeal is properly before us. ⁶

We turn to the merits....