State ex rel. Iowa Dept. of Transp. v. General Elec. Credit Corp. of Delaware, 88-1366

• Decision Date: 22 November 1989
• Docket Number: No. 88-1366,88-1366
• Citation: 448 N.W.2d 335
• Parties: STATE of Iowa, ex rel. IOWA DEPARTMENT OF TRANSPORTATION, Appellee, v. GENERAL ELECTRIC CREDIT CORP. OF DELAWARE, Appellant, and General Electric Credit Corp., n/k/a General Electric Capital Corp., Cross-Appellee, and Heritage Communications, Inc., Appellant.
• Court: Iowa Supreme Court

Page 335

448 N.W.2d 335

STATE of Iowa, ex rel. IOWA DEPARTMENT OF TRANSPORTATION, Appellee, v. GENERAL ELECTRIC CREDIT CORP. OF DELAWARE, Appellant and General Electric Credit Corp., n/k/a General Electric Capital Corp., Cross-Appellee, and Heritage Communications, Inc., Appellant.

No. 88-1366.

Supreme Court of Iowa.

Nov. 22, 1989.

Thomas J. Miller, Atty. Gen., Charles J. Krogmeier, Sp. Asst. Atty. Gen., and John W. Baty, Asst. Atty. Gen., for appellee.

James C. Fifield and Thomas G. Fisher, Jr., of Duncan, Jones, Riley & Finley, P.C., Des Moines, for appellants and cross-appellee.

Considered by McGIVERIN, C.J., and HARRIS, LARSON, CARTER and NEUMAN, JJ.

McGIVERIN, Chief Justice.

This matter arises from the Iowa Department of Transportation's (DOT) petition in equity to collect back registration fees and penalties under Iowa Code chapter 328 (1985) for the allegedly delinquent registration of an aircraft. The petition sought back registration fees and penalties from General Electric Credit Corp. of Delaware (G.E. Delaware), titleholder and lessor of the aircraft; General Electric Credit Corp. (now known as General Electric Capital Corp. or G.E. Capital), parent corporation of G.E. Delaware; and Heritage Communications, Inc. (Heritage), lessee of the aircraft. The trial court decided the case on the parties' motions for summary judgment, ruling in favor of the DOT against G.E. Delaware and Heritage but in favor of G.E. Capital against the DOT. Only G.E. Delaware and Heritage appealed, and the DOT cross-appealed, joining G.E. Capital in the appeal as cross-appellee.

We affirm the judgment of the district court on the cross-appeal and reverse on the appeal.

I. Background facts and proceedings. The record in this summary judgment case consists of the pleadings, motions for summary judgment, answers to interrogatories, affidavits, exhibits and admissions on file in the district court.

Since 1980, Heritage has leased a Piper Cheyenne aircraft from G.E. Delaware. Heritage is an Iowa corporation with its principal place of business in Des Moines. The aircraft has always been hangared in Des Moines and used to transport Heritage personnel on intrastate business flights. Heritage does not receive compensation for transporting these persons. Heritage is obligated to make lease payments to G.E. Delaware regardless of the use of the aircraft.

G.E. Delaware is a foreign corporation not registered to do business in Iowa, and is a wholly-owned subsidiary of G.E. Capital. G.E. Delaware holds title to the aircraft. Since 1980 it has leased complete control over the aircraft to Heritage. G.E. Delaware has neither possession of nor the right to use the aircraft.

G.E. Capital, a New York corporation registered to do business in Iowa, is the parent corporation of G.E. Delaware. G.E. Capital has no other connection to the aircraft or to this litigation.

In June 1986, the DOT filed a petition in equity in the district court. The petition alleged that Heritage is subject to registration fees on the aircraft by reason of Iowa Code sections 328.20 and 328.37 (1985), and that G.E. Delaware and G.E. Capital are subject to registration fees on the aircraft by reason of Iowa Code sections 328.37 and 328.42. The petition sought determination of the date on which the aircraft became subject to registration under chapter 328 and judgment against the defendants for the statutory fees, as well as for penalties under Iowa Code sections 328.50 and 328.51, and related relief. Defendants uniformly denied liability on the ground that the aircraft is not subject to registration in Iowa by any of them.

The matter came before the district court for hearing on the parties' motions for summary judgment. In its order disposing of the case, the court ruled that Heritage was not required to register the aircraft under section 328.20. The court ruled, however, that both Heritage and G.E. Delaware had "operated" the aircraft in violation of section 328.37 and, therefore, were required to register the aircraft under that section. In addition, the court ruled that G.E. Delaware was required to register the aircraft under section 328.42.

The court further ruled that neither section 328.37 nor section 328.42 directly requires G.E. Capital to register the aircraft. The court also refused to pierce the corporate veil between G.E. Delaware and its parent, G.E. Capital.

On the issue of statutory penalties, the court ruled that the "power [to assess or to waive penalties] is discretionary with the department [of transportation] and the Court finds no reason to interfere with the fees and penalties assessed in this case."

In accordance with its rulings, the court granted the motion for summary judgment by the DOT against defendants Heritage and G.E. Delaware, and judgment was entered against those defendants for back registration fees and statutory penalties, accrued since 1980, in the amount of $142,306.60. G.E. Capital's motion for summary judgment against the DOT also was granted.

Heritage and G.E. Delaware appealed. G.E. Capital did not join in the appeal. The DOT subsequently filed a notice of cross-appeal purporting to appeal from that portion of the district court's ruling which held that G.E. Capital was not liable for the fees or penalties either directly or on a "pierce the corporate veil" theory. Heritage, G.E Delaware, and G.E. Capital moved to dismiss the DOT's cross-appeal as untimely filed. The motions were ordered submitted to this court with the appeal.

II. The cross-appeal against G.E. Capital. The threshhold issue here is whether this court must dismiss G.E. Capital from the case for lack of appellate jurisdiction. The issue has been raised by defendants' motions to dismiss the cross-appeal against G.E. Capital. As previously noted, the DOT has attempted to cross-appeal against G.E. Capital, but G.E. Capital did not appeal from the district court's ruling.

The rule in Iowa is that an appeal to the supreme court "must be taken within, and not after, 30 days from the entry of the order, judgment or decree," with certain exceptions not relevant to this case. Iowa R.App.P. 5(a). Furthermore, "[a] cross-appeal may be taken within the 30 days for taking an appeal or in any event within five days after the appeal is taken." Id. In considering the requirements of rule 5(a), we have said:

A timely appeal is jurisdictional, and cannot be conferred by consent.... It is our duty to refuse, on our own motion, to entertain an appeal not authorized by rule.

Robco Transp., Inc. v. Ritter, 356 N.W.2d 497, 498 (Iowa 1984).

In this case, the trial court entered its order on the various motions for summary judgment on August 23, 1988. Heritage and G.E. Delaware filed their notice of appeal twenty-nine days later, on September 21, and the final day for filing notice of appeal came and went on September 22. On September 26, five days after the initial notice of appeal was filed, the DOT filed its notice of cross-appeal from that portion of the district court order in favor of G.E. Capital. Thus, the DOT, as appellee, purported to cross-appeal against G.E. Capital, a non-appellant.

Heritage, G.E. Delaware, and G.E. Capital moved to dismiss the DOT's cross-appeal against G.E. Capital, asserting that a cross-appeal can be taken only against an appellant. Because G.E. Capital is not an appellant, they argue that the DOT's "cross-appeal" is really an appeal and, as an appeal, it is untimely. Therefore, the argument goes, the court has no jurisdiction over that portion of the appeal involving G.E. Capital. In response, the DOT contends that rule 5(a) allows a cross-appeal against any party to the judgment appealed from, whether appellant or non-appellant.

The term "cross-appeal" is not defined in the Iowa Rules of Appellate Procedure. The term is used in rule 5(a), which specifies the time within which a cross-appeal may be taken, and again in Iowa Rule of Appellate Procedure 13(b), which lays down the briefing schedule to be followed in cases involving cross-appeals.

We find no Iowa case on point; but the question presented by this fact pattern has been addressed in other jurisdictions. See Annotation, Right To Perfect Appeal, Against Party Who Has Not Appealed, By Cross Appeal Filed After Time For Direct Appeal Has Passed, 32 A.L.R.3d 1290 (1970 & Supp.1989). As the commentator notes, the resolution of the question has "depend[ed] entirely upon the wording and construction of pertinent rules or statutes, if any, concerning the availability of review by the method of cross appeal." Id. at 1291. The annotation classifies the decided cases into groups depending on the general language of the rule or statute involved, namely, those "designating party against whom cross appeal may be filed," and those "restricting right of cross appeal to certain litigants." Compare Maxwell v. Aetna Life Ins. Co., 128 Ariz. 350, 625 P.2d 939 (App.1981) (rule providing that cross-appeal was available to an "opposing party" for twenty days after appeal allowed cross-appeal against appellants only, because after a final judgment at the trial level, only an appellant would be an "opposing party" as to an appellee) with Brown v. Maryland Casualty Co., 245 Ark. 70, 431 S.W.2d 258 (1968) (where statute provided that "[a]ny other party to the action" could cross appeal within ten days after an appeal, the time for any second or subsequent appeal, whether direct or cross was extended for ten days after the first notice of appeal of the judgment) and Fed.R.App.P. 4(a)(3) (providing that after timely initial appeal by one party, "any other party" may file notice of appeal within next fourteen days).

Unlike the rules considered above, however, rule 5(a) does not designate the parties against whom a cross-appeal may be filed, nor does it extend or restrict the right of cross-appeal to any particular litigants; it merely directs that a cross-appeal--an undefined term--must...