Schiffman v. Hanson Excavating Co., Inc.

• Decision Date: 02 August 1973
• Docket Number: No. 42640,42640
• Parties: F. C. SCHIFFMAN et al., Respondents, v. HANSON EXCAVATING COMPANY, INC., and United Pacific Insurance Company, Petitioners, The City of Seattle, Respondent.
• Court: Washington Supreme Court

Page 681

82 Wn.2d 681

513 P.2d 29

F. C. SCHIFFMAN et al., Respondents, v. HANSON EXCAVATING COMPANY, INC., and United Pacific

Insurance Company, Petitioners,

The City of Seattle, Respondent.

No. 42640.

Supreme Court of Washington, En Banc.

Aug. 2, 1973.

Rehearing Denied Oct. 2, 1973.

Comfort, Dolack, Hansler & Billett, Robert A. Comfort, Tacoma, for appellants.

Le Sourd, Patten, Fleming & Hartung, George M. Hartung, Jr., J. Stephen Werts, Seattle, for respondent.

ROSELLINI, Associate Justice.

This court issued a writ of certiorari to review an order of the Court of Appeals, Division I, Panel 2, dismissing an appeal from judgments first entered November 12 and December 6, 1971, and 'finalized' ¹ August 29, 1972. While the court of appeals did not state its reasons for the dismissal, the parties are agreed that it proceeded upon the premise that the judgments were appealable when first entered, that the time for taking an appeal from them expired 30 days later, and that while a notice of appeal had in fact been given, the appeal had been dismissed for want of prosecution.

In this action subcontractors sued a contractor and the contractor sued the owner, the City of Seattle. The contractor's bondsman was also a defendant. The parties stipulated to a division of the litigation into two 'phases,' the first involving the dispute between the contractor and the subcontractors and the second involving the dispute between the contractor and the owner.

When the trial of the first phase was completed, the judge who heard the case entered two judgments, one against the contractor and its bondsman in favor of the subcontractors, and the other on the contractor's claims over and for certain extras against the city. The judgments did not recite that there was no just reason for delay, nor was there an order entered certifying that there was no just reason for delay.

The contractor filed a notice of appeal but did not perfect the appeal. After the time for filing the statement of facts had passed, the subcontractor moved the court of appeals to dismiss the action for want of prosecution. The contractor at that time called the court's attention to Civil Rule for Superior Court 54(b), which provides:

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination in the judgment, that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order or other form of decision, however, designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties.

The contractor took the position that, since the judgments were not accompanied by the certification required by the rule, they were not appealable, and that the court of appeals had not acquired jurisdiction of the first phase of the litigation. The court of appeals issued an order that, unless the appellant's opening brief should be filed on or before July 31, 1972, the appeal would be dismissed.

On July 27, 1972, the contractor wrote to the court, stating that it was abandoning the appeal because it was premature under CR 54(b). On July 31 the appeal was dismissed.

In the meantime, the second phase of the litigation was concluded, and on August 29, 1972, judgment was entered disposing of the remaining issues between the contractor and the owner. This judgment recited that the judgments of November 12 and December 6, 1971, were 'ratified, confirmed and finalized.' The contractor filed notice of appeal from this judgment and from the earlier judgments. Upon motion of the respondents, the appeal, insofar as it related to the first two judgments, was dismissed. We granted the contractor's application for a writ of certiorari.

The respondents contend at the outset that the court of appeals' first order of dismissal is res judicata and shows that the court had assumed jurisdiction. The order does not reflect the court's reasoning. For aught that it reveals on its face, the appeal was dismissed for want of jurisdiction. Had the contractor taken the procedural step which the respondents declare that it should have taken--that is, sought certiorari in this court to review the order--it would have been in the extraordinary position of asking this court to affirm an order dismissing its appeal. It would be anomalous to hold that by failing to seek review of that order, it relinquished its right to take an appeal from the final judgment entered in the action, even though the prior judgments were not appealable.

The question whether a court in a prior proceeding had jurisdiction of the subject matter is one which can be raised collaterally. In re Wesley v. Schneckloth, 55 Wash.2d 90, 346 P.2d 658 (1959); Brown v. Brown, 46 Wash.2d 370, 281 P.2d 850 (1955).

There can be no doubt that, when the respondents moved to dismiss the second appeal from the 1971 judgments, the question whether the court had acquired jurisdiction on the first appeal was put in issue.

Implicit in the dismissal of the second appeal is a holding that the court had acquired jurisdiction on the first notice of appeal. It is that holding which we are asked to review and we find that the question is properly before us.

Whether the court acquired jurisdiction upon the first attempted appeal depends upon the effect to be given to CR 54(b). This rule was copied from the Federal Rules of Civil Procedure. Insofar as it pertains to multiple claims, it was adopted by the federal courts in 1948. It was broadened to cover actions involving multiple parties in 1961. The reasons for its adoption, the interpretation which the federal courts have placed upon it, and the problems encountered in its application are discussed at some length in 10 C. Wright & A. Miller, Federal Practice and Procedure: Civil §§ 2653--2661 (1973). The authors discuss, in section 2653, the confusion which existed under the prior rule, which had permitted but did not require the district court to make a final determination of one or more of the claims in an action involving multiple claims when all the claims had not been fully adjudicated. One of the problems under the old rule was that it provided no guidance on what constituted a 'final order' so that parties lacked any reliable means of determining whether a particular order of the court relating to less than all of the claims was appealable. The authors say, at pages 23--24:

The 1948 amendment of Rule 54(b) did much to obviate the difficulties experienced under the original rule. As a result of that revision, when more than one claim is presented, the court may direct the entry of a final judgment upon one or more but fewer than all the claims only 'upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.' Any order that does not contain both the required determination and direction, even though it adjudicates one or more of the claims, is subject to revision anytime before a judgment is entered adjudicating the remaining claims.

As stated by the Supreme Court, the obvious purpose of the amendment was to reduce as far as possible the uncertainty and the hazard assumed by a litigant who either does or does not appeal from a judgment of the character we have here. It provides an opportunity for litigants to obtain from the District Court a clear statement of what that court is intending with reference to finality, and if such a direction is denied, the litigant can at least protect himself accordingly. (Dickinson v. Petroleum Conversion Corp., 338 U.S. 507, 512, 94 L.Ed. 299, 70 S.Ct. 322 (1950).)

This also is reflected in the Advisory Committee Note which points out that the amendment re-establishes the ancient policy against piecemeal appeals with clarity and precision, with the addition of 'a discretionary power to afford a remedy in the infrequent harsh case.' As a result of the 1948 amendment there should be no difficulty in determining whether an order is appealable. Unless the court makes the express determination and direction required by the rule, a partial disposition of the action is not ripe for review.

(Footnotes omitted.)

In section 2654, the authors state that rule 54(b) is designed to facilitate the entry of judgments upon one or more but fewer than all the claims or as to one or more but fewer than all the parties in an action involving more than one claim or party. It is meant to strike a balance between the undesirability of more than one appeal in an action and the need for making review available in a multiple-claim or multiple-party action at a time that best serves the needs of all the litigants. If the claims are closely related and there is a risk of repetitive appeals, the lower court may decide that this is a reason to delay review and refuse to make the determination required by rule 54(b). The court is given discretion to enter a final judgment, and if it does decide to do so, the court must do so in a definite, unmistakable manner. Absent a certification under rule 54(b), any order in a multiple-party or multiple-claim action, even if it appears to adjudicate a separable portion of the controversy, is interlocutory, according to the decisions of the federal courts.

The authors state further, at page 34:

The requirement in Rule 54(b) that the court make an express determination that there is no just reason for delaying the review of a judgment on fewer...