Rafert v. Meyer ( 2017 )


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  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    03/02/2018 08:13 AM CST
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    Nebraska Supreme Court A dvance Sheets
    298 Nebraska R eports
    RAFERT v. MEYER
    Cite as 
    298 Neb. 461
    Jlee R afert et al., appellants and cross-appellees,
    v. Robert J. M eyer, defendant and third -party
    plaintiff, appellee and cross-appellant, and
    Gerald C. Bryce et al., third -party
    defendants, appellees.
    ___ N.W.2d ___
    Filed December 22, 2017.   No. S-16-1116.
    1.	 Jurisdiction: Appeal and Error. A jurisdictional question which does
    not involve a factual dispute is determined by an appellate court as a
    matter of law.
    2.	 Final Orders: Appeal and Error. A trial court’s decision to certify a
    final judgment pursuant to Neb. Rev. Stat. § 25-1315(1) (Reissue 2016)
    is reviewed for an abuse of discretion.
    3.	 Jurisdiction: Appeal and Error. Before reaching the legal issues
    presented for review, it is the duty of an appellate court to determine
    whether it has jurisdiction over the matter before it.
    4.	 Final Orders: Appeal and Error. To be appealable, an order must sat-
    isfy the final order requirements of Neb. Rev. Stat. § 25-1902 (Reissue
    2016) and, additionally, where implicated, Neb. Rev. Stat. § 25-1315(1)
    (Reissue 2016).
    5.	 Actions: Parties: Final Orders: Appeal and Error. Neb. Rev. Stat.
    25-1315(1) (Reissue 2016) is implicated where there are multiple causes
    of action or multiple parties and the court enters a final order as to one
    or more but fewer than all of the causes of action or parties.
    6.	____: ____: ____: ____. With the enactment of Neb. Rev. Stat.
    § 25-1315(1) (Reissue 2016), one may bring an appeal pursuant to such
    section only when (1) multiple causes of action or multiple parties are
    present, (2) the court enters a final order within the meaning of Neb.
    Rev. Stat. § 25-1902 (Reissue 2016) as to one or more but fewer than all
    of the causes of action or parties, and (3) the trial court expressly directs
    the entry of such final order and expressly determines that there is no
    just reason for delay of an immediate appeal.
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    RAFERT v. MEYER
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    7.	 Statutes: Final Orders: Intent. The intent behind Neb. Rev. Stat.
    § 25-1315(1) (Reissue 2016) was to prevent interlocutory appeals, not
    to make them easier.
    8.	 Judgments: Parties: Appeal and Error. Certification of a final judg-
    ment must be reserved for the unusual case in which the costs and risks
    of multiplying the number of proceedings and of overcrowding the
    appellate docket are outbalanced by pressing needs of the litigants for
    an early and separate judgment as to some claims or parties.
    9.	 Courts: Judgments. When a trial court concludes that entry of judg-
    ment under Neb. Rev. Stat. § 25-1315(1) (Reissue 2016) is appropriate,
    it should ordinarily make specific findings setting forth the reasons for
    its order.
    10.	 ____: ____. In determining whether certification is warranted, a trial
    court must take into account judicial administrative interests as well as
    the equities involved.
    11.	 ____: ____. A trial court considering certification of a final judgment
    should weigh factors such as (1) the relationship between the adjudi-
    cated 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 setoff against the judgment
    sought to be made final; and (5) miscellaneous factors such as delay,
    economic and solvency considerations, shortening the time of trial, fri-
    volity of competing claims, expense, and the like.
    12.	 Actions: Parties. The basic function of third-party practice is the
    original defendant’s seeking to transfer to the third-party defendant the
    liability asserted by the original plaintiff.
    13.	 ____: ____. The policy underlying third-party practice is to avoid circu-
    ity of actions and multiplicity of suits, as well as to expedite the resolu-
    tion of secondary actions arising out of or as a consequence of the same
    facts involved in the action originally instituted.
    Appeal from the District Court for Richardson County:
    Daniel E. Bryan, Jr., Judge. Order vacated, and appeal
    dismissed.
    Gary J. Nedved, of Keating, O’Gara, Nedved & Peter, P.C.,
    L.L.O., for appellants.
    Mark C. Laughlin and Jacqueline M. DeLuca, of Fraser
    Stryker, P.C., L.L.O., for appellee Robert J. Meyer.
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    Nebraska Supreme Court A dvance Sheets
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    RAFERT v. MEYER
    Cite as 
    298 Neb. 461
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, K elch, and
    Funke, JJ.
    Cassel, J.
    INTRODUCTION
    After an insured had obtained life insurance policies and
    named her trust as the owner, her insurance agent stole the
    renewal premiums and the policies lapsed. The insured and the
    trust’s beneficiaries sued the trustee, and the trustee brought a
    third-party claim against the agent. The district court bifurcated
    the trial. Pursuant to a jury verdict on the first stage, the court
    entered an order against the trustee. But before trial on the
    third-party claim, the court certified its order as final.1 Because
    we conclude the certification was an abuse of discretion, we
    dismiss the appeal for lack of jurisdiction.
    BACKGROUND
    Jlee Rafert spoke with an insurance agent, Gerald C. Bryce,
    about purchasing life insurance policies to be put in a trust
    for the benefit of her children. Bryce arranged for his cousin,
    Robert J. Meyer, to prepare a trust instrument and to serve as
    trustee of the trust. In March 2009, Rafert executed the irrevo-
    cable trust.
    As trustee, Meyer thereafter signed three applications for
    life insurance that named Rafert as the insured and the trust
    as the owner of the policies. On each application for insur-
    ance, Meyer provided an address in South Dakota for himself
    as trustee. But Meyer was a resident of Nebraska, and he
    had no intent to pick up any mail sent to the South Dakota
    address. After signing the applications, Meyer never traveled
    to South Dakota to retrieve mail nor did he have mail from
    the South Dakota address forwarded to him. After signing
    the applications for insurance, Meyer considered his duties
    to Bryce and Rafert to be completed. Meyer testified that
    1
    See Neb. Rev. Stat. § 25-1315(1) (Reissue 2016).
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    Bryce, who Meyer understood was operating as Rafert’s
    agent, told Meyer that he would take care of having a succes-
    sor trustee appointed.
    In 2009, Rafert paid initial premiums on the policies total-
    ing $262,006. In 2010, the insurers sent notices to Meyer at
    the South Dakota address that premiums were due and that the
    policies were in danger of lapsing. Once the policies lapsed,
    the insurers sent notices to the South Dakota address advising
    that the policies could be reinstated. Because the notices were
    sent to the South Dakota address and Meyer did not obtain
    mail from that address, Meyer and Rafert were unaware that
    the policies had lapsed.
    Between August 2010 and July 2012, Rafert gave Bryce
    checks totaling $242,391.03 for renewal premiums, made pay-
    able to Bryce’s insurance company, Ag/Insurance Services,
    Inc. (Ag). Rafert believed that Bryce was forwarding the
    checks to the insurers; however, she learned that Bryce stole
    the payments and that her insurance policies had lapsed.
    Rafert and her children (collectively appellants) sued
    Meyer for breach of his duties as the trustee. The complaint
    alleged that Meyer breached his fiduciary duties in a num-
    ber of ways, and it sought to recover all premiums paid by
    Rafert in the total amount of $514,847.03. As an affirmative
    defense, Meyer alleged that appellants’ damages were caused
    by Bryce, Paradigm Financial Services, L.L.C. (Paradigm),
    and Ag.
    Meyer filed a third-party complaint against Bryce, Paradigm,
    and Ag. He alleged that the lapse of the policies was due to
    their negligence and that they were responsible for the dam-
    ages for which appellants alleged Meyer was liable. In Bryce’s
    responsive pleading, he asserted several affirmative defenses.
    He claimed that the causes of action against him were barred
    under Neb. Rev. Stat. § 25-21,185.11 (Reissue 2016), because
    appellants had released Bryce from all liability that he may
    have in this matter. Paradigm and Ag filed similar respon-
    sive pleadings.
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    RAFERT v. MEYER
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    The district court ordered that Meyer’s third-party claim be
    separately set for trial after the trial on the merits of appellants’
    suit against Meyer. Following a jury trial of appellants’ lawsuit
    against Meyer, the court accepted the jury’s verdict in favor
    of appellants and its determination of damages in the amount
    of $60,000.
    On November 9, 2016, the district court entered a “Judgement
    Order.” The order entered judgment on behalf of appellants and
    against Meyer in the amount of $59,086.85, which represented
    the jury’s verdict of $60,000, less a credit of $913.15. It fur-
    ther entered judgment of $15,149.37 in appellants’ favor and
    against Meyer for attorney fees.
    Appellants filed a motion for certification. They requested
    that the district court certify the November 2016 order as a
    final order as to their cause of action against Meyer. They
    asserted that “[t]he adjudication of the third-party action will
    not affect the issues on appeal and the Appellate Court will not
    review the same issue twice.”
    During the hearing on the motion, the district court first gave
    Meyer 10 days to amend his third-party complaint in order
    to add other individuals who worked for Ag. In discussing
    Meyer’s request and immediately before the court addressed
    the certification motion, counsel for Bryce, Paradigm, and
    Ag stated that “the basis of the third-party complaint all has
    to do with the first-party complaint. . . . [I]f there is no judg-
    ment against [Meyer], then there is no claim against [Bryce,
    Paradigm, and Ag] or anybody else . . . .” With respect to the
    motion for certification, the court stated:
    I know the Court generally doesn’t like to do that. They
    want me to try the whole thing and get it over with, but
    as I’m listening to this, I realize it’s just going to be a
    long time before they even get — it’d probably be three
    or four months before they can even get ready to try
    their case.
    The court further stated, “I don’t know how — I assume that
    the Court will grant — will grant your request, but I never
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    know because they could find it — not a final order, but I
    assume that they will based on my certification.”
    The district court entered an order granting the motion for
    certification. The order stated:
    The Court finds and certifies the Judgement Order entered
    on November 9, 2016 is a Final Order within the mean-
    ing of Neb. Rev. Stat. §25-1902 [(Reissue 2016)] as to
    the cause of action for breach of fiduciary duty brought
    by [appellants] against . . . Meyer and all issues associ-
    ated with [appellants’] claims against [Meyer]. The Court
    further finds that pursuant to Neb. Rev. Stat. §25-1315(1),
    there is no just reason for the delay of an appeal.
    On that same day, appellants filed a notice of appeal. We
    ordered supplemental briefing, which we have now considered,
    regarding the propriety of the certification.
    ASSIGNMENTS OF ERROR
    Although appellants assign error to the proceedings and
    Meyer assigns error on cross-appeal, we do not reach the
    assignments.
    STANDARD OF REVIEW
    [1,2] A jurisdictional question which does not involve a fac-
    tual dispute is determined by an appellate court as a matter of
    law.2 A trial court’s decision to certify a final judgment pursu-
    ant to § 25-1315(1) is reviewed for an abuse of discretion.3
    ANALYSIS
    [3,4] Before reaching the legal issues presented for review,
    it is the duty of an appellate court to determine whether it
    has jurisdiction over the matter before it.4 In order to vest
    2
    Guardian Tax Partners v. Skrupa Invest. Co., 
    295 Neb. 639
    , 
    889 N.W.2d 825
    (2017).
    3
    Id.
    4
    
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    an appellate court with jurisdiction, a notice of appeal must
    be filed within 30 days of the entry of the final order.5 To be
    appealable, an order must satisfy the final order requirements
    of Neb. Rev. Stat. § 25-1902 (Reissue 2016) and, additionally,
    where implicated, § 25-1315(1).6
    [5,6] Section 25-1315(1) is implicated where there are
    multiple causes of action or multiple parties and the court
    enters a final order as to one or more but fewer than all
    of the causes of action or parties.7 With the enactment of
    § 25-1315(1), one may bring an appeal pursuant to such
    section only when (1) multiple causes of action or multiple
    parties are present, (2) the court enters a final order within
    the meaning of § 25-1902 as to one or more but fewer than
    all of the causes of action or parties, and (3) the trial court
    expressly directs the entry of such final order and expressly
    determines that there is no just reason for delay of an imme-
    diate appeal.8 All three components are met here, but we are
    concerned with the propriety of the court’s determination that
    there is no just reason for delay.
    [7,8] The intent behind § 25-1315(1) was to prevent inter-
    locutory appeals, not to make them easier.9 Ten years ago, we
    instructed that
    certification of a final judgment must be reserved for the
    “unusual case” in which the costs and risks of multiply-
    ing the number of proceedings and of overcrowding the
    appellate docket are outbalanced by pressing needs of the
    litigants for an early and separate judgment as to some
    claims or parties. The power § 25-1315(1) confers upon
    5
    Id.
    6
    Id.
    7
    See id.
    8
    Castellar Partners v. AMP Limited, 
    291 Neb. 163
    , 
    864 N.W.2d 391
          (2015).
    9
    See 
    id. - 468
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    the trial judge should only be used “‘“in the infrequent
    harsh case”’” as an instrument for the improved admin-
    istration of justice, based on the likelihood of injustice or
    hardship to the parties of a delay in entering a final judg-
    ment as to part of the case.10
    The message that certification must be reserved for the “unusual
    case” has been repeated numerous times.11
    [9] Nebraska courts have also repeatedly stated that when a
    trial court concludes entry of judgment under § 25-1315(1) is
    appropriate, it should ordinarily make specific findings setting
    forth the reasons for its order.12 Here, the court’s order merely
    used the language of the statute and did not explain why cer-
    tification was appropriate. While the absence of detailed find-
    ings by the trial court does not require automatic dismissal,13
    it is difficult to accord deference to a court’s decision when
    there is no reasoning to support it. We once again remind
    trial courts that a decision to certify an order as final under
    § 25-1315(1) should be supported by the court’s reasoning for
    doing so.
    Without specific findings to support the district court’s cer-
    tification, we turn to the record in search of some indication
    10
    Cerny v. Todco Barricade Co., 
    273 Neb. 800
    , 809-10, 
    733 N.W.2d 877
    ,
    886 (2007).
    11
    See, Castellar Partners v. AMP Limited, supra note 8; Poppert v. Dicke,
    
    275 Neb. 562
    , 
    747 N.W.2d 629
    (2008) (Gerrard, J., concurring); Southwest
    Omaha Hospitality v. Werner-Robertson, 
    20 Neb. Ct. App. 930
    , 
    834 N.W.2d 617
    (2013); Halac v. Girton, 
    17 Neb. Ct. App. 505
    , 
    766 N.W.2d 418
    (2009);
    Sand Livestock Sys. v. Svoboda, 
    17 Neb. Ct. App. 28
    , 
    756 N.W.2d 299
    (2008);
    Jones v. Jones, 
    16 Neb. Ct. App. 452
    , 
    747 N.W.2d 447
    (2008); Murphy v.
    Brown, 
    15 Neb. Ct. App. 914
    , 
    738 N.W.2d 466
    (2007).
    12
    See, Castellar Partners v. AMP Limited, supra note 8; Cerny v. Todco
    Barricade Co., supra note 10; Southwest Omaha Hospitality v. Werner-
    Robertson, supra note 11; Halac v. Girton, supra note 11; Sand Livestock
    Sys. v. Svoboda, supra note 11; Jones v. Jones, supra note 11; Murphy v.
    Brown, supra note 11.
    13
    See Sand Livestock Sys. v. Svoboda, supra note 11.
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    of an exceptional need for immediate appellate intervention.14
    Appellants’ motion requested certification for the following
    reasons: (1) No appeal could move forward until the third-
    party claim between Meyer and the third-party defendants
    was resolved, (2) delaying the appeal would be contrary to
    the benefits achieved in the bifurcation of breach of fiduciary
    duty action and the third-party claim, (3) the adjudication of
    the third-party claim would not affect the issues on appeal
    and the appellate court would not review the same issue
    twice, and (4) the breach of fiduciary duty action had been
    in litigation since 2013 and further delay of an appeal would
    unnecessarily lengthen that time. And we can glean from
    the court’s statement during the hearing on the motion for
    certification that it was concerned about the delay in trying
    the case Meyer brought against Bryce and the other third-
    party defendants.
    [10,11] In determining whether certification is warranted,
    a trial court must take into account judicial administrative
    interests as well as the equities involved.15 A trial court con-
    sidering certification of a final judgment should weigh factors
    such as (1) the relationship between the adjudicated and unad-
    judicated 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 setoff against the judgment sought to be made final;
    and (5) miscellaneous factors such as delay, economic and
    solvency considerations, shortening the time of trial, frivol-
    ity of competing claims, expense, and the like.16 As a starting
    point for considering certification of a final judgment, it is
    14
    See Castellar Partners v. AMP Limited, supra note 8.
    15
    
    Id. 16 Cerny
    v. Todco Barricade Co., supra note 10.
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    appropriate for the trial court to consider whether the claims
    under review are separable from the others remaining to be
    adjudicated and whether the nature of the claims already
    determined was such that no appellate court would ever have
    to decide the same issues more than once even if there were
    subsequent appeals.17
    [12,13] We begin by examining the interrelationship
    between the adjudicated and unadjudicated claims. Appellants
    claim in their supplemental brief that there is no relationship
    between the claims. But that belies the nature of a third-party
    claim. The basic function of third-party practice is the original
    defendant’s seeking to transfer to the third-party defendant
    the liability asserted by the original plaintiff.18 A third-party
    claim may be asserted only when the third party’s liability is
    in some way dependent on the outcome of the main claim or
    when the third party is secondarily liable to defendant.19 Thus,
    some degree of relatedness is inherent in a suit involving a
    third-party claim. “‘The policy underlying third-party practice
    is to avoid circuity of actions and multiplicity of suits, as well
    as to expedite the resolution of secondary actions arising out
    of or as a consequence of the same facts involved in the action
    originally instituted.’”20
    The facts also demonstrate the interrelationship of the
    claims. “When the dismissed and surviving claims are factu-
    ally and legally overlapping or closely related, fragmentation
    of the case is to be avoided except in ‘“unusual and com-
    pelling circumstances.”’”21 Here, appellants sued Meyer for
    breach of fiduciary duties. His use of a mailing address in
    17
    
    Id. 18 AgriStor
    Credit Corp. v. Radtke, 
    218 Neb. 386
    , 
    356 N.W.2d 856
    (1984).
    19
    
    Id. 20 Id.
    at 
    390, 356 N.W.2d at 859
    .
    21
    Cerny v. Todco Barricade Co., supra note 
    10, 273 Neb. at 813
    , 733
    N.W.2d at 888-89.
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    South Dakota—that he did not check or have mail forwarded
    from—prevented appellants and Meyer from knowing that
    the checks Rafert gave to Bryce were not being used to pay
    the premiums on the insurance policies. Because Bryce stole
    those checks, Meyer claims that Bryce is the proximate cause
    of appellants’ damages. And on cross-appeal, Meyer brings up
    issues related to Bryce’s settlement with Rafert’s husband, in
    connection with which Rafert dismissed her lawsuit against
    Bryce—a lawsuit that alleged the same damages as her law-
    suit against Meyer. Here, there is overlap—both factually
    and legally—between appellants’ lawsuit against Meyer and
    Meyer’s third-party claim against Bryce, Paradigm, and Ag.
    “It is uneconomical for an appellate court to review facts on
    an appeal following a . . . certification that it is likely to be
    required to consider again when another appeal is brought after
    the district court renders its decision on the remaining claims
    or as to the remaining parties.”22
    The parties contend that certification was appropriate
    because a reviewing court would not be obliged to consider
    the same issues a second time. They highlight that appel-
    lants’ claim against Meyer was for breach of fiduciary duties
    and that Meyer’s claim against the third-party defendants
    was for contribution. And they contend that the contribution
    claim would not involve any of the issues currently on appeal.
    Appellants go a step further and argue that the contribution
    claim cannot even be adjudicated until the amount Meyer is
    required to pay appellants is finally determined. But it would
    be most efficient for the reviewing court to have the claims
    presented for review as a unified package.
    The circumstances here do not make this the “unusual
    case.” In urging us to accept jurisdiction over the appeal,
    Meyer argues that our resolution of the issues on appeal could
    22
    10 Charles Alan Wright et al., Federal Practice and Procedure § 2659 at
    110 (2014).
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    eliminate the need for a trial of his third-party claim. While we
    understand Meyer’s desire for an early appeal, § 25-1315 was
    not intended to multiply appeals merely upon the uncertain
    hope that doing so might avoid future proceedings. According
    to the district court, there probably would be a delay of 3 to
    4 months before the third-party complaint would be ready for
    trial. But nothing in the record suggested that such a delay
    would cause an unusual hardship for the parties. We conclude
    that the court abused its discretion in certifying the November
    9, 2016, order as final under § 25-1315(1).
    CONCLUSION
    We conclude that the district court abused its discretion in
    certifying the November 9, 2016, order as final. We there-
    fore vacate the court’s order certifying a final judgment, and
    because there is no final judgment, we dismiss the appeal for
    lack of jurisdiction.
    Order vacated, and appeal dismissed.
    Wright, J., not participating.