Smith v. Korf, Diehl, Clayton and Cleverley, 64094

• Decision Date: 18 February 1981
• Docket Number: No. 64094,64094
• Parties: Harold Arthur SMITH and Jeanette Rae Smith, Appellants, v. The Partnership of KORF, DIEHL, CLAYTON AND CLEVERLEY; J. N. Diehl; B. C. Clayton; James W. Cleverley; and Charles G. Neighbor, as Individuals, Appellees.
• Court: Iowa Supreme Court

Page 137

302 N.W.2d 137

Harold Arthur SMITH and Jeanette Rae Smith, Appellants, v. The Partnership of KORF, DIEHL, CLAYTON AND CLEVERLEY; J. N. Diehl; B. C. Clayton; James W. Cleverley; and Charles G. Neighbor, as Individuals, Appellees.

No. 64094.

Supreme Court of Iowa.

Feb. 18, 1981.

Rehearing Denied March 13, 1981.

Robert H. Laden of Hyland, Laden & Pearson, P. C., Des Moines, for appellants.

Steven J. Dickinson of Belin, Harris, Helmick & Lovrien, Des Moines, for appellees.

Considered by LeGRAND, P. J., and UHLENHOPP, McCORMICK, LARSON and SCHULTZ, JJ.

LARSON, Justice.

Harold Arthur Smith, who was formerly a deputy in Jasper County, was fired by the sheriff. The Jasper County Civil Service Commission, acting pursuant to section 341A.12, The Code 1975, found the firing was proper, and the district court affirmed on judicial review. During these proceedings Smith was represented by Charles G. Neighbor, a member of the appellee law partnership. Following his loss in the civil service proceeding and subsequent district court review, Smith sued Neighbor and his partners, alleging negligence in the handling of his case. His wife also sued, alleging loss of consortium. A summary judgment motion filed by the partnership was sustained by the district court on the basis that the district court decision in the earlier appeal from the civil service commission conclusively established that the Smiths could not recover on a legal-malpractice case, and they were prevented from relitigating it under the principle of issue preclusion. Prior to submission of this case, this court raised a jurisdictional issue based upon the apparent lack of finality in the district court judgment. We conclude we have jurisdiction to hear the appeal, and reverse the district court.

I. Jurisdiction. The jurisdictional problem arose because of a counterclaim by the partnership against Smiths, for attorney fees, which was not disposed of by the summary judgment. Because of the remaining counterclaim, the judgment was not final for purposes of appeal. Shoemaker v. City of Muscatine, 275 N.W.2d 206, 208 (Iowa 1979), and prior to the 1980 amendment of Iowa Rule of Appellate Procedure 1, dismissal of the appeal would have been mandatory. See Decatur-Moline v. Blink, 283 N.W.2d 347, 349 (Iowa 1979). However, appellate rule 1, was amended by adding a new subdivision "c" which provides as follows:

If an appeal to the supreme court is improvidently taken because the order from which appeal is taken is interlocutory, this alone shall not be ground for dismissal. The papers upon which the appeal was taken shall be regarded and acted upon as an application for interlocutory appeal under rule 2, rules of appellate procedure, as if duly presented to the supreme court at the time the appeal was taken.

The amendment became effective July 1, 1980. See § 684.19, The Code, and 1980 Session of the 68th General Assembly, Chapter 1209. The appellants argue that, because it is a procedural rule, it is to be given retrospective effect. The appellees counter that the amendment was not "procedural" for purposes of applying the general rule of retrospective application and that, because all of the district court proceedings including the notice of appeal of September 4, 1979 preceded the effective date of rule 1(c), it was inapplicable.

The general rule is that if a statute or amendment is "substantive," it will not be applied retrospectively, unless it is clearly made applicable by its terms. Benton County, Iowa v. Wubbena, 300 N.W.2d 168, 170 (Iowa 1981); In re Estate of Parsons, 272 N.W.2d 16, 17 (Iowa 1978). However, if it relates to "procedure," it is not limited to prospective application, even in the absence of clear legislative intent. Walker State Bank v. Chipokas, 228 N.W.2d 49, 51 (Iowa 1975) (retrospective application of Iowa R.Civ.P. 55, respecting dismissals when petition not filed according to statements under original notice). The retrospective application proscribed by the general rule is one which "takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability in respect to transactions or considerations already past." Id. (quoting Black's Law Dictionary 1480 (4th Rev. ed. 1968)); accord, 73 Am.Jur.2d Statutes § 348, at 486-87 (1974).

Notwithstanding the fact appellate rule 1(c) is facially a procedural rule, the Smiths contend it is substantive for purposes of this case because it "determine(s) the parameters of the jurisdiction of the court." We do not agree. The amendment to appellate rule 1 does not define the jurisdiction of this court; it merely establishes a method of implementing our jurisdiction, already existing, to allow interlocutory appeals.

The partnership contends that the traditional substantive-procedural distinction has been virtually abrogated by section 4.5, The Code 1979, which states "(a) statute is presumed to be prospective in its operation unless expressly made retrospective." We note, first, that the language of section 4.5 relates to statutes, not rules of procedure. Groesbeck v. Napier, 275 N.W.2d 388 at 390 (Iowa 1979), which, appellees say, held section 4.5 to apply to procedural statutes as well as substantive ones, merely referred to a Minnesota case so holding, without deciding the issue. Further, section 4.5 is an enactment of section 14 of the Uniform Statutory Construction Act, as to which the drafters have said, "(i)f a procedural statute is amended, the rule is that the amendment applies to pending proceedings as well as those instituted after the amendment." 14 U.L.A. Statutory Construction Act § 14, Commissioners' Comment at 524 (1975). For purposes of resolving the issue of retrospective application of this amendment to rule 1, we conclude it is procedural.

Moreover, because the provision in question is not a statute, but a rule with its origin in our court, we will exercise greater latitude in interpreting and applying it in the light of policy considerations. See 3 Sutherland, Statutes and Statutory Construction § 67.10, at 237 (1974). One of the policy considerations underlying the amendment to rule 1 and a simultaneous amendment to rule 5 is to avoid the problem of appeals being aborted as premature or denied as too late, due to misapprehension as to their finality. That policy would be well served by applying the amendment in this case.

The amendment to appellate rule 1 should be applied to all appeals pending as of its effective date, as well as those...