Viscito v. Christianson

• Decision Date: 28 April 2015
• Docket Number: No. 20140252.,20140252.
• Citation: 862 N.W.2d 777
• Parties: Matthew VISCITO, Mary Lynn Berntson, and Florence Properties, LLC, Plaintiffs and Appellants v. Kevin CHRISTIANSON, Pace's Lodging Corporation, Mednational, LLC, Aurora Medical Park No. 2, LLC, Jeff Sjoquist, Defendants and Appellees.
• Court: North Dakota Supreme Court

862 N.W.2d 777

Matthew VISCITO, Mary Lynn Berntson, and Florence Properties, LLC, Plaintiffs and Appellants

v.Kevin CHRISTIANSON, Pace's Lodging Corporation, Mednational, LLC, Aurora Medical Park No. 2, LLC, Jeff Sjoquist, Defendants and Appellees.

No. 20140252.

Supreme Court of North Dakota.

April 28, 2015.

Jordan T. Schuetzle, Grand Forks, ND, for plaintiffs and appellants.

Michael T. Andrews, Fargo, ND, for defendants and appellees.

Opinion

McEVERS, Justice.

[¶ 1] Matthew Viscito, Mary Lynn Berntson, and Florence Properties, LLC (collectively “Viscito”) appeal from a district court judgment of dismissal without prejudice, which awarded Kevin Christianson, Pace's Lodging Corporation, Mednational, LLC, Aurora Medical Park No. 2, LLC, and Jeff Sjoquist (collectively “Christianson”) attorney's fees and costs. We reverse and remand the district court's judgment awarding attorney's fees and costs.

I

[¶ 2] Viscito sued Christianson alleging a number of claims pertaining to an agreement the parties entered to build, own, and lease a hospital. Christianson moved to compel arbitration, contending the agreement required that Viscito's claims be resolved through arbitration. On August 1, 2013, the district court granted the motion to compel arbitration and ordered the parties complete arbitration within six months from the date of the order.

[¶ 3] On January 30, 2014, Viscito moved for an extension of time to complete arbitration. Christianson moved to dismiss with prejudice and requested an award of attorney's fees and costs under N.D.R.Ct. 11.5. On March 24, 2014, the district court held a hearing on the motions. At the conclusion of the hearing, the district court ruled from the bench that the case be dismissed without prejudice and awarded Christianson reasonable attorney's fees and costs. The district court requested Christianson submit an itemized billing statement of its attorney's fees, so the court could determine the reasonableness of the fees. Christianson submitted an affidavit requesting $33,405.14, the full amount of fees and costs it had incurred defending the entire case, along with itemized billing statements documenting the work performed from July 6, 2012, to April 7, 2014, totaling the amount requested. The district court dismissed the case without prejudice and awarded Christianson $33,405.14 in attorney's fees and costs. Viscito appealed, arguing the district court abused its discretion in awarding Christianson all of its costs and attorney's fees incurred throughout the case because the court misinterpreted the rules authorizing sanctions.

II

[¶ 4] Before we consider the merits of Viscito's appeal, we must first address Christianson's challenges regarding the appealability and timeliness of this case. Christianson argues this case is not appealable because 1) Viscito did not timely file the notice of appeal, 2) Viscito cannot appeal from a dismissal without prejudice or an order solely awarding attorney's fees and costs, 3) Viscito waived its argument on appeal because it did not object to the amount of the attorney's fees and costs below, and 4) Viscito voluntarily satisfied the judgment by paying the attorney's fees and costs.

1.

[¶ 5] Christianson argues Viscito's appeal is untimely because 63 days elapsed between the entry of the order Viscito appealed from and the date Viscito filed a notice of appeal.

[¶ 6] Under N.D.R.App.P. 4(a)(1), an appellant must file the notice of appeal within 60 days from service of notice of entry of the judgment or order being appealed. On May 9, 2014, the district court entered an order for judgment of dismissal. The district court entered judgment on May 13, 2014, and Christianson served notice of entry of order for judgment of dismissal and judgment the same day. On July 11, 2014, Viscito filed a notice of appeal, stating it was appealing from the final order entered on May 9, 2014.

[¶ 7] The time for civil appeals runs from the date of service of notice of entry of the judgment or order, not the date the court entered the judgment or order. See N.D.R.App.P. 4, Explanatory Note (“The time for civil appeals runs from ‘service of notice of entry ’ of the order or judgment.” (Emphasis added)). As such, we conclude Viscito's notice of appeal was timely, under N.D.R.App.P. 4(a)(1), because it was filed within 60 days of the service of notice of entry of the order for judgment and judgment.

2.

[¶ 8] Christianson argues both a dismissal without prejudice and a challenge based solely on an award of attorney's fees and costs are not appealable.

[¶ 9] “Ordinarily, an order dismissing a complaint without prejudice is not appealable because either side may commence another action after the dismissal. However, a dismissal without prejudice may be final and appealable if it has the practical effect of terminating the litigation in the plaintiff's chosen forum.” Winer v. Penny Enters., Inc., 2004 ND 21, ¶ 6, 674 N.W.2d 9 (citation omitted). Although this Court has concluded a party cannot generally appeal a dismissal without prejudice, Viscito is not appealing the dismissal. Rather, the appeal is on the amount of the attorney's fees and costs the court imposed as a sanction.

[¶ 10] The question is whether Viscito would be later foreclosed from appealing the award of attorney's fees as a sanction if appeal is not allowed. Review of the record indicates the merits raised in Viscito's initial complaint will likely be addressed in arbitration. After arbitration, the arbitrator's award could be reviewed on motion to the district court under N.D.C.C. ch. 32–29.3. However, there has been no showing the arbitrator or the district court would have the authority to review the attorney's fees and costs awarded as a sanction in conjunction with this judgment of dismissal without prejudice. As a result, Viscito's only opportunity for review of the district court's award of attorney's fees and costs was to appeal from the judgment for dismissal without prejudice.

[¶ 11] Christianson argues the award of attorney's fees and costs as a sanction unrelated to the merits of the case is interlocutory in nature and therefore not appealable relying on State ex rel. Olson v. Nelson, 222 N.W.2d 383 (N.D.1974). Christianson's reliance on this Court's holding in Nelson is misplaced. In Nelson, the district court assessed attorney's fees and costs to a party, after that party failed to answer interrogatories. 222 N.W.2d at 385. The party who was assessed the attorney's fees then appealed the fees, prior to the final adjudication of the case. Id. We have stated “[t]his Court will not consider interlocutory appeals unless it can be affirmatively established the underlying order was ‘meant to be, in all aspects, final.’ ” White v. Altru Health Sys., 2008 ND 48, ¶ 4, 746 N.W.2d 173 (citation omitted). Unlike Nelson, the district court's order and judgment was intended to be final at least as it pertained to the sanctions imposed. See City of Bismarck v. Thom, 261 N.W.2d 640, 646 (N.D.1977) (distinguishing the difference between the award of attorney's fees in a judgment from an award from an interlocutory order). Although the district court did not adjudicate the merits of the case, it entered judgment dismissing the case without prejudice and imposed sanctions. Under the facts of this case, the award of attorney's fees and costs is an appealable issue.

3.

[¶ 12] Christianson argues the issue was not preserved for appeal, because Viscito failed to object to Christianson's April 7, 2014, application for attorney's fees and costs.

[¶ 13] It is well-settled that issues not raised in the district court may not be raised for the first time on appeal:

The purpose of an appeal is to review the actions of the trial court, not to grant the appellant an opportunity to develop and expound upon new strategies or theories. The requirement that a party first present an issue to the trial court, as a precondition to raising it on appeal, gives that court a meaningful opportunity to make a correct decision, contributes valuable input to the process, and develops the record for effective review of the decision. It is fundamentally unfair to fault the trial court for failing to rule correctly on an issue it was never given the opportunity to consider. Accordingly, issues or contentions not raised in the district court cannot be raised for the first time on appeal.

Paulson v. Paulson, 2011 ND 159, ¶ 9, 801 N.W.2d 746 (citations omitted) (quotation marks omitted).

[¶ 14] In Christianson's response in opposition to the motion for extension of time, Christianson requested it be awarded “costs and fees incurred herein, pursuant to N.D. Court Rule 11.5.” Viscito objected to an award of attorney's fees in its supplemental brief in opposition to the motion to dismiss, when it asserted that sanctions were inappropriate under N.D.R.Ct. 11.5, because Christianson could not show it suffered prejudice resulting from Viscito's inability to meet the deadline for arbitration of the case; therefore, the district court could not conduct the necessary analysis for sanctions. On March 24, 2014, a hearing was held on Viscito's motion for extension of time and Christianson's motion to dismiss. At the hearing, Viscito did not specifically object to an award of attorney's fees and costs to Christianson; however, Viscito did argue against the district court imposing sanctions. Because Viscito raised the issue before the district court by arguing sanctions were inappropriate in this case, Viscito preserved this argument on appeal.

4.

[¶ 15] Christianson argues Viscito waived the right to appeal by voluntarily satisfying the judgment. To support its position, Christianson relies on this Court's holdings in Lyon v. Ford Motor Co., 2000 ND 12, 604 N.W.2d 453 and Mr. G's Turtle Mountain Lodge v. Roland Twp., 2002 ND 140, 651 N.W.2d 625.

[¶ 16] “[A] party who voluntarily pays a judgment against him waives the right to appeal from the judgment.” Lyon, 2000 ND 12, ¶ 7, 604...