Sheets v. Letnes, Marshall & Fiedler, Ltd.

Decision Date19 October 1981
Docket NumberNo. 10003,10003
Citation311 N.W.2d 175
CourtNorth Dakota Supreme Court
PartiesLeona SHEETS, Plaintiff and Appellee, v. LETNES, MARSHALL & FIEDLER, LTD., a professional corporation, and Daniel S.Letnes and F. John Marshall, individually and as agents for the professionalcorporation, Defendants and Appellants. Civ.

Farhart, Rasmuson, Lian & Maxson, Minot, Roy A. Ilvedson, Minot, and Percy Foreman, Houston, Tex., for plaintiff and appellee; argued by Roy A. Ilvedson, Minot.

Vogel, Brantner, Kelly, Knutson, Weir & Bye, Fargo, for defendants and appellants; argued by Mart R. Vogel, Fargo.

SAND, Justice.

This is an appeal by the defendant, Letnes, Marshall & Fiedler, Ltd., a professional corporation, and Daniel S. Letnes and F. John Marshall, individually and as agents for the professional corporation (hereinafter referred to as Letnes firm), from two orders of the district court of Grand Forks County granted in favor of the plaintiff, Leona Sheets (Leona).

Leona's husband, Harold T. Sheets, died on 14 Sept. 1975 allegedly as the result of a malfunction of a paint sprayer. In addition to Leona, two children survived Harold's death. Leona consulted the Letnes firm some time in October 1975 and entered into a retainer contract with them to institute legal proceedings on behalf of herself and her two children against the Farmers Union Oil Co., St. Joseph's Hospital, and Graco Manufacturing Co. as defendants, to recover damages sustained as a result of Harold's death. The Letnes firm eventually initiated a lawsuit in Leona's name against Graco, Inc., Farmers Union Central Exchange, and Farmers Union Oil Company by a complaint dated 16 July 1979. However, Leona's case was dismissed because the action was not commenced within the two-year statutory period (North Dakota Century Code § 28-01-18(4)) pursuant to this Court's decision in Sheets v. Graco, Inc., 292 N.W.2d 63 (N.D.1980). 1 The Letnes firm also initiated a lawsuit in September 1978 in the minor children's names against the same defendants. That action was ultimately settled for $150,000 by Leona's present counsel.

Following a dismissal of her action, Leona instituted the present action against the Letnes firm and alleged that they "negligently failed to institute the legal action and commence said wrongful death action within two years following the death of Harold T. Sheets, as required by North Dakota law." The Letnes firm's answer denied negligence and asked for a setoff for attorney's fees and costs incurred for their part in the prosecution of the minor children's action.

Several pretrial motions were consolidated for hearing and after that hearing two orders were entered. The first order granted summary judgment against the Letnes firm on the issue of liability for legal malpractice and also refused to allow the Letnes firm a setoff for reasonable attorney's fees and costs incurred for their part in the representation of the two minor children. The second order granted Leona's motion prohibiting testimony at trial concerning any opinion as to the possibility of recovery against the original defendants; any opinion as the difference in value between the claims of Leona and her children; any opinion as to the likelihood of jury verdicts and the amounts thereof; any opinion as to the decedent's contributory negligence; any opinion as to the decedent's assumption of risk; and any opinion as to the total value of the case and the value or amount in settlement of the children's case to be subtracted from the amount of the verdict in the malpractice suit. The Letnes firm then moved the Court for an order expressly determining that there was no just reason for delay and directing entry of judgment pursuant to those two orders. See Rule 54(b), North Dakota Rules of Civil Procedure. The district court denied the Letnes firm's motion. The Letnes firm then appealed from the two orders.

Leona has moved this Court to dismiss the Letnes firm's appeal because she asserts the orders are interlocutory and therefore nonappealable.

The first order which we will consider is the order granting Leona's motion for summary judgment on the issue of liability.

Leona points out that NDRCivP 56(c) provides that "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.) Leona cites us to federal authorities which stand for the proposition that an interlocutory summary judgment on the issue of liability is not appealable until the damage issue is resolved. See 10 Wright & Miller, Federal Practice and Procedure, § 2715, p. 420, and § 2737, p. 675. Further, Leona points out that the district court did not make an express determination that there was no reason for delay and an express direction for entry of summary judgment pursuant to NDRCivP 54(b). Based on this, Leona contends that the order granting partial summary judgment on the issue of liability is interlocutory and not appealable.

The Letnes firm asserts that the order is appealable pursuant to North Dakota Century Code § 28-27-02(5), which provides as follows:

"The following orders when made by the court may be carried to the supreme court:

"5. An order which involves the merits of an action or some part thereof;"

The Letnes firm contends that the district court's order in substance denies them the opportunity to present a defense to the issue of their liability, and, therefore, involves the merits of an action and affects their substantial rights.

The right of appeal in this State is statutory. City of Bismarck v. Walker, 308 N.W.2d 359 (N.D.1981); Skoog v. City of Grand Forks, 301 N.W.2d 404 (N.D.1981). In this respect the North Dakota Legislature has provided that a "judgment or order ... may be removed to the supreme court by appeal as provided in this chapter (NDCC Ch. 28-27)." NDCC § 28-27-01. Section 28-17-02, NDCC, sets out which orders constitute appealable orders and are reviewable by the Supreme Court.

We have said that "only those judgments and decrees which constitute a final determination of the rights of parties and those orders enumerated in NDCC § 28-27-02 are appealable." (Emphasis added.) Mitzel v. Schatz, 167 N.W.2d 519, 524 (N.D.1968), aff'd on merits, 175 N.W.2d 659 (N.D.1970).

Further, our decision in Rogelstad v. Farmers Union Grain Terminal Association, Inc., 224 N.W.2d 544 (N.D.1974), rev'd on merits, 226 N.W.2d 370 (N.D.1975), noted the distinction between that which is appealable pursuant to the federal statutory appeal provisions and our state statutory appeal provisions. See also, Dangerfield v. Markel, 222 N.W.2d 373 (N.D.1974), rev'd on other grounds, 252 N.W.2d 184 (N.D.1977). In Rogelstad, 224 N.W.2d at 546, we said:

"The federal statutory scheme allows appeals from 'all final decisions' of the United States District Courts. 28 U.S.C. 1; 1291 (1970 Ed.). This establishes criteria for appealability that are obviously different from our own, as § 28-27-02, N.D.C.C., expressly allows appeals from interlocutory orders in certain instances. Additionally, the factors to be considered in reaching a decision of this nature, such as the over-all caseload of the court, the number of class actions brought in the jurisdiction, and the available methods of alternative review, may well deserve different weight in North Dakota than they do in a given federal jurisdiction. Any such difference accorded these factors militates against blanket adoption of the federal doctrine." (Emphasis added.) 2

Our analysis of Leona's motion to dismiss the Letnes firm's appeal requires us to consider the consequences, if any, of the trial court's failure to grant the Rule 54(b) motion. Rule 54(b) deals with finality and does not supersede statutes which control appellate jurisdiction. Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 438, 76 S.Ct. 895, 901, 100 L.Ed. 1297 (1956); Mitzel v. Schatz, 167 N.W.2d at 524. Nor does Rule 54(b) affect the appealability of interlocutory orders which are appealable by statute. 6 Moore's Federal Practice P 54.30(2.-1). Furthermore, we express no comment whether or not a statute authorizing an appeal may be superseded by a rule adopted by this Court.

In this instance we have serious reservations as to whether or not a Rule 54(b), NDRCivP, order could have been entered because a determination as to the amount of damages was not made and without such a determination the claim was not final in all respects. See, Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976). Further, we do not believe such an order would be necessary because the Letnes firm is relying upon our statutory provisions which confer the right to appeal.

Although the order is not a final determination as to the malpractice claim, if the order is within those orders enumerated in NDCC § 28-27-02, and specifically subsection 5 relating to orders involving the merits of an action or some part thereof, it is appealable. See, Mitzel v. Schatz, 167 N.W.2d at 524.

In Skoog v. City of Grand Forks, 301 N.W.2d at 407, we quoted with approval the following from Bolton v. Donavan, 9 N.D. 575, 84 N.W. 357 (1900):

"... the phrase 'involves the merits' must be so interpreted as to embrace orders which pass upon substantial legal rights of the suitor, whether such rights do or do not relate directly to the cause of action or subject matter in controversy."

Similarly, in Northwest Airlines, Inc., v. North Dakota, 244 N.W.2d 708, 710 (N.D.1976), we said:

"The words 'merits of the action' cannot be clearly defined in any technical legal sense, however, they can be regarded as referring to significant legal rights as distinguished from technicalities relating to only procedure or form."

In this instance the partial summary judgment on the issue of liability eliminates any defenses to liability which the Letnes firm may interpose. The order effectively denies...

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