Mere Inclusion of Rule 304(a) Language Does Not Necessarily Confer Jurisdiction in the Appellate Court

By Katherine A. Grosh
Partner, Beermann Pritikin Mirabelli Swerdlove LLP

In AT&T v. Lyons & Pinner Electric Company, Inc., 2014 IL App (2d) 130577, the Illinois Appellate Court, Second District, tackled a question rarely analyzed by an appellate court: in a case involving a concededly final order that disposed of fewer than all claims, whether the trial court abused its discretion in entering a Rule 304(a) finding without determining that there existed “no just reason for delay of the appeal.” As every appellate practitioner is aware, Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010) provides that, if multiple claims for relief are involved in an action, an appeal may be taken from a final judgment as to one or more, but fewer than all, of the claims if the trial court makes an explicit written finding that no just reason exists for delaying either enforcement or appeal. However, appellate practitioners are equally aware that “Rule 304(a) does not allow for a trial court to confer appellate jurisdiction merely by using the Rule 304(a) language that ‘there is no just reason for delaying enforcement or appeal.’ ” AT&T, 2014 IL App (2d) 130577, ¶ 19 (quoting In re Estate of Stark, 374 Ill. App. 3d 516, 522 (2007)).

A trial court’s decision to grant Rule 304(a) relief is reviewed under an abuse-of-discretion standard. AT&T, 2014 IL App (2d) 130577, ¶ 24 (citing Lozman v. Putnam, 328 Ill. App. 3d 761, 771 (2002)). In AT&T, the reviewing court found that the trial court abused its discretion when it found the dismissal of the defendant/third-party plaintiff Lyons and Pinner Electric Company's (Lyons) contribution claim both final and appealable under Rule 304(a). AT&T’s original claim against Lyons alleged that Lyons was negligent in performing its excavation work when they struck and damaged underground telephone utility facilities owned and operated by AT&T. Lyons filed a two-count third-party complaint against USIC Locating Services, Inc. (USIC), which AT&T had hired to locate and mark the underground facilities before Lyons’s excavation work began. Essentially, Lyons alleged that USIC was negligent in performing its locating services for AT&T, which proximately caused AT&T’s damages. Count I of the third-party complaint against USIC was for contribution for the damages claimed by AT&T, and Count II sought damages for Lyons’s own losses resulting from USIC’s negligence, including for downtime.

The trial court granted USIC’s section 2-615 motion to dismiss Count I of the third-party complaint (contribution) with prejudice, but not Count II (negligence). The trial court entered a Rule 304(a) finding over the objection of Lyons. In urging the court to make the Rule 304(a) finding, USIC argued in its motion that the contribution claim and the negligence claim were separate bases for recovery that would turn on different evidence. In response, Lyons argued that a Rule 304(a) finding was inappropriate under the factors set forth in Geier v. Hamer Enterprises, Inc., 226 Ill. App. 3d 372 (1992).

In Geier, the Illinois Appellate Court, First District, held that in determining whether any just reason for delaying an appeal existed, a court must consider the following factors: “ (1) the relationship between the adjudicated and unadjudicated claims; (2) the possibility that the need for review might or might not be mooted by future developments in the [trial] court; (3) the possibility that the reviewing court might be obliged to consider the same issue a second time; (4) the presence or absence of a claim or counterclaim which could result in set-off against the judgment sought to be made [appealable]; [and] (5) miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense, and the like.” Id. at 383. The Geier court noted the United States Supreme Court’s decisions, which emphasized a “pragmatic approach focusing on severability and efficient judicial administration”: “Where the dismissed claims ‘can be decided independently of each other,’ that is, they are not ‘so inherently inseparable from, or closely related to’ the remaining claims, then the trial court does not abuse its discretion in certifying that there exists no just reason for delay of the appeal.” Id. at 385 (quoting Sears, Roebuck & Co. v. Mackey, 351 U.S. 427, 436 (1956)).

In reviewing Geier, the AT&T court also noted that, where significant factual overlap existed between the decided and the retained claims, an appeal must be deferred until the retained claims are resolved because that they were not separate claims. AT&T, 2014 IL App (2d) 130577, ¶ 23 (citing Lozman, 328 Ill. App. 3d at 771).  Calling it a “darn close question,” the trial court in AT&T disagreed with Lyons, reasoning that the dismissal of Lyons’s contribution claim turned on “a purely legal question” involving the application of the Moorman doctrine.

On appeal, Lyons argued, in the alternative to various merits-based arguments, that the trial court abused its discretion in finding the dismissal of the contribution claim final and appealable under Rule 304(a). Declining to reach the merits of the appeal, the reviewing court dismissed the appeal for lack of jurisdiction on the grounds that the trial court entered the Rule 304(a) finding “without regard for whether there was any just reason for delay of the appeal” and solely to “advance the substantive issues” to the appellate court, thereby improperly circumventing the procedure for certifying questions for interlocutory appeal under Rule 308. Id. ¶ 16. The court initially outlined the two-part test used by courts in determining appellate jurisdiction under Rule 304(a) or its “substantially similar” federal counterpart, Rule 54(b): (1) whether the order is “final” and (2) whether there is any just reason for delaying the appeal. Id. ¶ 20 (citing Stark, 374 Ill. App. 3d at 522-23).

The parties did not dispute the finality of the trial court’s dismissal of the contribution claim with prejudice. AT&T, 2014 IL App (2d) 130577, ¶ 21. With regard to the second part of the two-part test, whether there was any just reason for delaying the appeal, the court in AT&T noted that there was no indication that the trial court considered the Geier factors (although it concededly need not expressly articulate its consideration of those factors), and that the trial court’s comments that the dismissal of Lyons’s contribution claim turned on “a purely legal question” indicated that it intended to invoke Rule 308, not 304(a). Id. at ¶¶ 25, 27-28. However, none of the procedures for certifying a question for appellate review under Rule 308 were followed.

A party seeking appellate review under Rule 308 must first file an application for leave to appeal within 14 days after the latter of (i) the entry of the order in the trial court, or (ii) the making of the prescribed statement by the trial court. That application must be accompanied by an original supporting record containing the order appealed from and other parts of the trial court record necessary for the determination of the application; and must also “contain a statement of the facts necessary to an understanding of the question of law determined by the order of the trial court; a statement of the question itself; and a statement of the reasons why a substantial basis exists for a difference of opinion on the question and why an immediate appeal may materially advance the termination of the litigation.” Id. (citing Ill. S. Ct. R. 308(c)). The court in AT&T cautioned, however, that “Rule 308 is not intended to be a mechanism for expedited review of an order that merely applies the law to the facts of a particular case,” and does not permit an appellate court to review the propriety of the order entered by the trial court. AT&T, 2014 IL App (2d) 130577, ¶ 31. Rather, the appellate court is “limited to answering the specific question certified by the trial court.” Id. After reciting these and other requirements for a Rule 308 appeal, the court expressed no opinion as to whether a properly presented certified question under Rule 308 would be appropriate in that case.

In addition to being a good refresher on Rule 308, the AT&T opinion is instructive because it suggests that a trial court’s Rule 304(a) finding is itself appealable. Although the court in AT&T “express[ed] no opinion as to whether the Geier factors weigh in favor of an immediate appeal under Rule 304(a),” (id. ¶ 32) the case stands for the proposition that dismissal for lack of jurisdiction is appropriate where a Rule 304(a) finding was improperly entered.

Recommended Citation: Katherine A. Grosh, Mere Inclusion of Rule 304(a) Language Does Not Necessarily Confer Jurisdiction in the Appellate Court, The Brief, (April 29, 2014), http://applawyers-thebrief.blogspot.com/2014/04/mere-inclusion-of-rule-304a-language.html.

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