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Lee v. ING Investment Mgt. (CA1 6/16/16)

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This opinion is published to make a point about Rule 68; expanding the holding a bit, we’ll also use it to make a point about the practice. The parties in this contract case, though, mostly argued about attorneys’ fees – that each was really the winner and the other was the loser and, anyway, didn’t play fair, and etc., etc.; you’ve heard it all before and so has the court, which didn’t try to add anything new to the law, so we’ll ignore that part.

ING fired Lee and refused to pay money due him under a severance agreement. Lee sued for breach of that agreement. He included a claim for treble damages under 23-355; the trial court gave ING partial summary judgment on it. ING then made an OJ on all claims except attorney fees; Lee accepted it. He then appealed the treble-damages ruling.

The Court of Appeals affirms, holding that the issue was no longer appealable. A judgment entered on an OJ is on the merits; its “a final resolution of all claims at issue.”  Lee argued that the trial court had somehow (the details aren’t given) promised to “’preserve all parties’ rights of appeal.” But the court can’t change those rights; as the trial judge later explained, “I can’t confer something I don’t have.”

And that’s our moral; it may seem – and it is – simplistic but lawyers demonstrate every day that they either don’t know it or hope others don’t: you can’t preserve a right you don’t have. How often do they purport to “reserve the right” to do something? There are times – rarely – when that’s appropriate. But its normally a useless announcement of ignorance – ignorance of whether the right exists and, if it does, of whether and how to preserve it.  

(Opinion: Lee v. IMG)

Southwest Barricades v. Traffic Management (CA1 6/9/16)

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The court holds that “Rule 60(c) cannot be used to set aside a compulsory arbitration award.”

Traffic lost a compulsory-arbitration case brought by Southwest and then blew the appeal date. It tried moving to set aside the award under Rule 60(c), arguing that figuring the appeal time wrongly constituted excusable neglect and also that Southwest withheld evidence. The trial court granted the motion. Southwest appealed – but from an unsigned minute entry, which it didn’t get reduced to judgment, so the appeal was dismissed. It also hadn’t reduced the award to judgment and so, back in the trial court, it moved to do so (an interesting decision, given that its position – more on which below – rested on the fact that the award had never been made a judgment); the trial judge, having already set the award aside, denied the motion. There followed a second arbitration, an appeal from that, and a jury trial, which Traffic won. (This, by the way, over a $10,000 claim. It all makes you proud to be a lawyer, yes?) Southwest appealed.

It argued, as it had wanted to in its practice-run appeal, that using Rule 60 to set aside an arbitration award was wrong. The Court of Appeals agrees. Rule 60 applies to “final judgments, orders, or proceedings,” not to “interlocutory judgments.” “[T]he arbitration award was not final  because it did not dispose of any claims between the parties.” That doesn’t happen until judgment is entered on the award. “An arbitrator does not have the power to dispose of the case.” Southwest argued that the passage of time makes an award final, citing cases under which an award itself could be appealed in cases of excusable neglect. But that applied only to a version of rule 76 that hasn’t existed since 2007.

The court reverses the Rule 60(c) ruling and vacates everything that happened after that.

The parties apparently raised with the court a number of procedural issues that could arise on remand. The court lists them but appropriately, or at least prudently, declines to rule. Arise they will, though. This is a contract case; its now all about who will have liability for the attorneys’ fees when the music stops, so both sides have every incentive to double down.

(Opinion: Southwest Barricades v. Traffic Management)

Ader v. Estate of Felger (CA2 5/27/16)

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This case principally presents an issue of probate limitations. We will skip other, less important or case-specific, issues. We also skip an issue that the court, after addressing it in a lengthy footnote, announces that “we will not address.”

Felger flipped commercial properties; Plaintiff financed his operations. Felger eventually died but his son-in-law took over the business. When Plaintiff stopped getting certain payments owed her she looked into the matter and discovered documents allegedly showing that Felger had not acted properly. She sued his estate, four years after his death, for breach of contract and a number of torts. The estate moved for summary judgment on the statute of limitations; the trial court granted it. Plaintiff appealed; the Court of Appeals affirms.

14-3803A says that claims “that arose before death” must be presented in two years plus the time for notice to creditors. 14-3803C sets a four-month limit for claims arising after death. “As argued by the parties and addressed by the trial court, the issue here is: Which subsection of §14-3803 applies.” Plaintiff argued for the discovery rule,  contending that C applies because she found the smoking-gun documents, and thereby discovered her claim, after the death and less than four months before suit. But the court explains that a time limit for creditors’ claims is a “nonclaim statute” rather than a statute of limitations; the discovery rule can’t apply because a nonclaim statute can’t be tolled or waived. We’re frankly not sure we were aware that the discovery rule is based on tolling or waiver.

The court also says that the discovery rule can apply to statutes of limitations because they say “accrue” but not to nonclaim statutes because they say “arise.” “Accrue” means “when one party is able to sue another”; “arise . . . refers to the decedent’s act or conduct upon which a claim is based.” Well, umm, okay, if you say so.

Plaintiff argued that “a claim is not actionable until all the elements of the claim exist.” That may seem part and parcel of a discovery-rule argument but it didn’t to the court. Plaintiff’s counsel apparently said it at oral argument, in the context of explaining that the element of damages couldn’t be determined until Plaintiff saw the documents. Because it wasn’t in the briefs the court declines to consider what it calls the “’elements’ argument.” Based on what’s in the opinion the argument may be wrong – it’s the knowledge that damages exist that’s the trigger, not the ability to calculate them, and Plaintiff had known for a few years that she hadn’t received some payments. But there may be more to it than that, otherwise we don’t know why the court would seize on such a restrictive interpretation of a rule its normally pretty lenient about.

Plaintiff argued that she had in part specifically alleged torts by the estate after Felger’s death, therefore 3803C applies at least to those claims. The court says that Plaintiff “misapprehends the concept of a decedent’s estate.” An estate is a “collection of . . . assets” that “cannot ‘act.’” So for post-death acts you have to sue the PR or the persons who committed the acts (which Plaintiff had apparently also done) and the estate isn’t liable for them.

(Put aside whether that’s right or wrong. We don’t know why courts must, every once in a while, indulge in the practice of gratuitously insulting the lawyers before them. To rule on the accuracy of an argument is one thing; that’s the court’s job. But to tell the world, and the lawyer’s client, that the lawyer doesn’t understand the law is quite another. Judges at the trial-court level who can’t do their jobs without announcing their own superiority and demeaning others aren’t respected; why should appellate opinions be held to a different standard? Experience, if nothing else, should have solved this problem: judges who pronounce the other guy the dummy turn out to be right about half the time. We hope it wasn’t a judge who wrote that line; we know it was a judge who should have edited it out.)

So, 14-3803A applies. But no PR was appointed, so no notice to creditors was sent or published. Since the 3803A period includes the time for notice to creditors, how do you figure it when there wasn’t one? The court agrees with the trial court that the answer is 14-3108, which says that probate can’t occur after two years (with inapplicable exceptions); that’s the “ultimate time limit” (the statute’s heading says that). Plaintiff cited Estate of Winn, in which the Supreme Court allowed a late-appointed PR to pursue a tort claim because the law is “intended to protect the decedent’s successors and creditors. The court distinguishes that case because it was the defendant there – not a successor or creditor – who wanted to invoke the time limitation. Although Plaintiff was a creditor the court explains that creditors are entitled only to timely claims, which is why Plaintiff’s is untimely. And if it seems to you that that doesn’t necessarily follow logically, you’re an idiot and your parents should be embarrassed.

(Opinion: Ader v. Estate of Felger)