Monday, March 5, 2018

Seventh Circuit Emphasizes Requirements of Final Judgments

By Richard Harris
Law Clerk to Hon. Susan F. Hutchinson, Illinois Appellate Court, Second District

With its tongue in its cheek, the Seventh Circuit Court of Appeals recently found a case so wanting of jurisdiction that it expressed a desire to make both sides pay a penalty into the “law clerks’ holiday-party fund.”

In Cooke v. Jackson Nat’l Life Ins. Co., No. 17-2080 (7th Cir. Feb. 9, 2018), the District Court ordered two kinds of relief. First, the defendant insurance company was ordered to pay the death benefit on the plaintiff’s husband’s policy. Second, the insurance company was ordered to pay the plaintiff’s legal expenses. The parties treated this order as the final judgment for purposes of appeal. However, the order made no mention of any specific relief—it simply stated that one motion was granted, another was denied, and an award was made. “We have held many times,” wrote Judge Frank Easterbrook, “that judgments must provide relief and must not stop with reciting that motions were granted or denied—indeed that it is inappropriate for a judgment to refer to motions at all.”

The Court of Appeals noted that there was another order entered by the District Court, not treated as a final judgment by the parties, which also purported to grant relief. This was a standard form order used for judgments. It stated that judgment was entered in favor of the plaintiff and against the insurance company, and that the plaintiff was awarded “reasonable attorney fees.” Unfortunately, the order was not signed by the district judge (see Fed. R. Civ. P. 58(b)(2)(B)), and it made no mention of exactly how much the insurance company was ordered to pay—whether for attorney fees or on the plaintiff’s husband’s policy. Recognizing these shortcomings, the plaintiff sought clarification by way of a motion to reconsider under Federal Rule of Civil Procedure 59(e). In turn, the District Court entered an order that directed the insurance company to pay a specific amount on the policy, but left open the amount of attorney fees. The plaintiff filed a petition asking for specification on the amount of attorney fees, but this was denied with leave to renew after resolution of the pending appeal from the first order.

The debacle continued when the insurance company filed a second notice of appeal, this time on the order containing the ruling on the plaintiff’s Rule 59 motion. The insurance company conceded the issue on the merits and paid the plaintiff on her husband’s policy, but argued that the plaintiff was not entitled to attorney fees. This prompted Judge Easterbrook to query, “Yet how can [the insurance company] appeal from an award of attorneys’ fees that has yet to be quantified? A declaration of liability lacking an amount due is not final and cannot be appealed.” The obvious problem was that this could lead to multiple appeals from a single award: one contesting the declaration of liability on the issue of attorney fees and another contesting the amount of attorney fees awarded. The insurance company cited Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988), correctly observing that decisions on the merits and awards of attorney fees are separately appealable. But while Budinich would have applied to make the award on the plaintiff’s husband’s policy final and appealable, that case did not provide for an appeal from an unquantified award for legal expenses.

Throwing one final wrench into the proceedings, the plaintiff filed a motion under Federal Rule of Appellate Procedure 38, arguing that she was entitled to a separate award of attorney fees because she was forced to litigate the insurance company’s “frivolous” appeal from the order on her Rule 59 motion. The motion was denied, as the plaintiff was scolded for briefing the issue on the merits rather than filing a motion to dismiss the premature appeal. Judge Easterbrook concluded, “If it were permissible for a court to order both sides to pay a penalty—say, into the law clerks’ holiday-party fund—we would be inclined to do so. But there’s no such appellate power and no good reason for us to order [the insurance company] to pay something to [the plaintiff] as a result of a problem that both sides missed.”

Alas, we law clerks are left to finance our own holiday debauchery.

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