Articles Posted in Appellate Jurisdiction

Two important rulings arise from this landlord-tenant dispute.

After remand from the appellate court — which did not include instructions for how to proceed — the tenant asked the trial court for leave to amend its complaint to add a new item of damages. The trial court denied the tenant’s request because, it said, it did not have jurisdiction to do so.

Must the appellate court give specific directions to the trial court in an order of remand? The First District Illinois Appellate Court said “No.” Then what is the trial court’s authority and obligation after the appellate court sends the case back to the trial court? Here’s how the appellate court answered the question, complete with the standard of review:

The Cook County (Illinois) Republican Party filed eight complaints against various Democratic Party organizations and individuals asserting violations of the Illinois Election Code. The complaints were filed with the Illinois Board of Elections, which has eight members. The Board tied on each of the complaints, four to four, meaning there was not a majority vote on the question of whether the complaints were filed on justifiable grounds. Each complaint therefore was dismissed.

The Republicans filed a direct appeal to the Illinois Appellate Court, which is allowed by the Illinois Election Code. Because the Board did not state factual findings, the appellate court ruled that it did not have authority to review the question of whether the Republicans’ complaints had justifiable grounds to proceed.

Instead, the appellate court stated that its jurisdiction was limited to the question of whether the Board acted “contrary to law.” In this case, that meant assuring the actual vote count was accurate. The appellate court thus affirmed the Board’s dismissals.

WW Westwood Center sued Canel & Associates for legal malpractice. Canel tendered the defense of the lawsuit to it malpractice insurer, TIG Insurance Company. The tender inspired cross-claims by TIG and Canel for a declaratory judgment – TIG asked for a ruling that it did not have to defend or indemnify Canel; Canel asserted just the opposite.

TIG brought Westwood into the lawsuit, and proceeded to serve discovery on Westwood. Westwood responded by asking the trial court to stay the declaratory judgment lawsuits pending a determination of its malpractice case against Canel.

Canel opposed Westwood’s request for a stay. Because TIG was not paying Canel’s defense costs in the malpractice case, Canel wanted the trial court to rule quickly (and in Canel’s favor) in the declaratory judgment case.

In response to a complaint by the Securities and Exchange Commission, the federal district court froze the assets of Enterprise Trust. The SEC claimed that Enterprise deliberately mishandled and lost millions of dollars that it held for investors. The district court appointed a receiver for Enterprise, who devised a plan to distribute the remaining assets to the account holders. The plan called for custodial account holders to receive a bigger percentage of their accounts than managed account holders.

Although they were not named parties in the lawsuit, and had not intervened, three of the managed account holders appealed to the Seventh Circuit Court of Appeals. They wanted a ruling that distributions to all Enterprise account holders should be treated equally. The appeal raised the propriety of appellate jurisdiction because, in a previous case, the court ruled that “investors affected by a receiver’s plan of distribution can’t appeal without intervening and becoming formal parties to the litigation …”

But this time the court ruled that appellate jurisdiction existed. The appellate court overruled its earlier decision, and concluded that a party whose rights were foreclosed by the receiver’s actions may appeal, even if the party has not officially intervened in the lawsuit. Here’s what the Seventh Circuit said:

LaSalle Bank, the principal creditor in the Goldblatt’s Bargain Stores bankruptcy, claimed Great American Group committed fraud when it purchased inventory from Goldblatt’s stores that were closing. LaSalle had a security interest in the inventory, and was obliged to reimburse Great American for overpayment of the estimated inventory value. The bankruptcy judge agreed that Great American committed fraud, but ruled that LaSalle had not been damaged by the fraud. The bankruptcy court ruled that LaSalle had to reimburse Great American more than $1 million for the inventory.

LaSalle appealed to the district court. The district court reversed the bankruptcy court because “fraud vitiated the contract and thus excused LaSalle Bank from any obligation to perform.” The district court also remanded the case back to the bankruptcy court “for further proceedings consistent with” its order.

Great American then appealed to the Seventh Circuit Court of Appeals. The first issue was whether the appellate court had jurisdiction to hear the appeal. The sticking point was the district court’s remand to the bankruptcy court, which usually would render the district court’s ruling non-appealable. But the Seventh Circuit Appellate Court took Great American’s appeal because the remand was perfunctory and there was nothing left for the bankruptcy court to do.

In this multi-count business dispute, Fidelity National Title Insurance sued a number of parties. The trial court granted summary judgment to defendants on all but one count of the complaint. A breach of contract claim still remained against Old Intercounty.

About three weeks later, the trial court ruled that Old Intercounty was in default on that contract claim. But the court did not enter a default judgment at that time. Nor did the court issue language under Illinois Supreme Court Rule 304(a) that would have permitted an appeal before a final judgment as to all issues against all parties. At Fidelity’s request, the trial court issued Rule 304(a) language as to the summary judgments a week and a half later.

Fidelity National appealed the summary judgments within 30 days of the time the trial court issued Rule 304(a) language. But Fidelity’s Notice of Appeal was filed more than 30 days after the trial court granted the summary judgments.

This mortgage foreclosure action reminds us that just because a trial court says its order is final and appealable, it’s not necessarily so.

GMB Financial Group held a mortgage on property owned by Michele Marzano. GMB sued to foreclose on the mortgage. Michele did not timely enter an appearance in the trial court, so a default judgment of foreclosure was entered against her. She asked the court to vacate the default and to quash service of the lawsuit. In turn, GMB asked the court to strike Michele’s motion. The trial court granted GMB’s motion to strike, and stated that its order was “final and appealable.” Later, the trial court confirmed GMB’s sale of the property.

Michele appealed both trial court rulings. Her Notice of Appeal was filed within 30 days of the court’s order that approved the sale of the property, but more than 30 days after the trial court made its “final and appealable” order granting GMB’s request to strike the motion to quash service.

Secura Insurance Company had a coverage dispute with Farmers Insurance Company. Both companies made summary judgment motions. Farmers’ was granted; Secura’s was denied.

Secura appealed. The company mailed its notice of appeal to the court on the deadline day to appeal, so of course the court did not receive it until after the deadline passed. Normally that’s okay. Illinois Supreme Court Rule 373 in effect says that mailing is filing. But the rule also states that the mailing has to be supported by an affidavit or certificate as required by Illinois Supreme Court Rule 12(b). Secura’s notice of appeal was not accompanied by either.

Farmers asked the appellate court to dismiss the appeal. Farmers argued that the lack of an affidavit or certificate stating when the notice of appeal was mailed made it impossible to tell whether Secura really complied with the 30-day deadline. The appellate court denied Farmers’ motion, ruling that “the failure to comply with the rules was ‘harmless error’ and there was no showing of prejudice to Farmers.” The appellate court then ruled in favor of Secura on the insurance coverage dispute.

Gerald Swinkle was denied a job with the Illinois Liquor Control Commission. He filed a claim against the liquor commission in the Illinois Civil Service Commission. He charged that the liquor commission’s hiring practice violated a veteran’s preference provision in the Illinois Administrative Code. The Civil Service Commission ruled that Swinkle did not prove his case, and that Swinkle was not entitled to an evidentiary hearing. The trial court affirmed the Civil Service Commission.

Swinkle still wanted an evidentiary hearing, so he appealed to the Fourth District Illinois Appellate Court. He filed a notice of appeal within the required 30 days. But he filed the notice in the appellate court, not the trial court as required by the Illinois Supreme Court rules. By the time Swinkle’s notice of appeal was filed with the trial court, it was 44 days late.

The appellate ruled that filing in the wrong court doomed Swinkle’s appeal. The court did not have jurisdiction to hear the appeal because Swinkle did not file a notice of appeal in the trial court, a requirement to establish appellate jurisdiction.

Michael Marrs, representing a class of similarly aggrieved employees, sued Motorola for violation of the Employee Retirement Income Security Act. After Motorola got a summary judgment, Marrs appealed. Marrs’s notice of appeal was filed timely, but it stated only that he was appealing. It did not state that he was appealing on behalf of the class he represented.

Under Federal Rule 3(c), as interpreted by the Seventh Circuit Court of Appeals, “the notice of appeal must indicate that the class representative is appealing in his representative capacity.” Marrs had to fix his notice of appeal, or else the appellate court would not have jurisdiction to consider an appeal by the class. But the time for filing the notice of appeal had passed. So to fix the notice, Marrs asked the appellate court to allow him to file a corrected version that specifically said the appeal was for the entire class.

The Seventh Circuit Court of Appeals denied Marrs’s motion. The opinion does not state why, but presumably the court adopted the rationale argued by Motorola – i.e., that Marrs’s motion really was asking for extra time to file a notice of appeal for the class, and that he did not meet the conditions for allowing extra time.

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