A case study on court of appeals finality.

Author:Nolan, Michael
Position:New York

The jurisdictional requirements and limitations of the New York State Court of Appeals can make taking an appeal there an arduous experience. Just ask Laszlo Tauber. Over a period of four years, Mr. Tauber attempted to bring his case--Tauber v. Bankers Trust Co. (1)--to the Court on five occasions. On each of the first four, the appeal, or motion for leave to appeal, was dismissed with the ubiquitous entry that "the order sought to be appealed from does not finally determine the action within the meaning of the Constitution." (2) Those dismissals, of course, meant that the Court did not even consider the merits of the case; it could not, because the jurisdictional prerequisite of finality was not met. (3)

The Tauber case illustrates the pitfalls (not to mention expense) that any litigant can face in attempting to appeal to the Court of Appeals. It also shows that the Court's jurisdictional limitations can confound even the best lawyers. Tauber involved a multi-million dollar currency swap deal, and both parties had retained highly respected counsel. (4) This article will follow the Tauber case as it wove its way through the appellate courts, illustrating the concept of finality by putting it into a practical perspective.


    Before taking up the Tauber case, a brief overview of the Court of Appeals' jurisdiction is in order. At the outset, it is well known by this point that the Court of Appeals is largely a certiorari court, controlling its own docket by choosing which cases it wishes to hear. (5) There are three general exceptions: (1) two justice dissents; (2) constitutional questions; and (3) stipulations upon judgment absolute. (6) An appeal as of right lies from a decision where there is a two justice dissent at the Appellate Division on a question of law, (7) and also where a substantial constitutional question is directly involved. (8) Even these limited categories of cases are further limited by the Court's fairly restrictive view of what constitutes a dissent on "a matter of law," when a constitutional question is "directly involved," and whether a constitutional question is "substantial." (9) Where it appears to the Court that the disagreement at the Appellate Division depended on a differing view of the facts, (10) or an exercise of discretion, (11) there is no question of law. If a case involving a constitutional issue was decided on a procedural, statutory, or common law point, rather than directly on the constitutional question (or indeed, even if it might have been so decided), it is not directly involved. (12) The relatively obscure stipulation upon judgment absolute is also appealable as of right, but is little used. (13)

    All other appeals must be sought through a motion for leave, which essentially is an attempt to convince the Court that a case is so important that New York jurisprudence would be forever diminished were the Court not to decide it. (14) Whether by leave or as of right, however, all appeals must satisfy basic jurisdictional thresholds, found in article six, section three of the New York State Constitution, and articles five and fifty-six of the CPLR. These "appealability" rules include: (1) the party taking the appeal must be aggrieved by the decision below (15) (a party is not considered "aggrieved" if he was given complete relief in the court below, but simply does not like the court's reasoning); (2) the appeal must be taken, or motion for leave filed or served, in a timely fashion (i.e., within thirty days of the date of receiving the order or judgment with notice of entry (16)--thirty-five if the notice of entry is served by mail (17) ); (3) the appeal must be from a decision originating in an appropriate court; (18) and finally, the requirement with which this article will be primarily concerned: (4) the appeal must be from a final order or judgment. (19)

    The purpose of the finality requirement is to conserve the Court's resources by insuring that any given case is heard by the Court only once. (20) So stated, the concept may sound simple, but the exceptions that apply, as well as the application of the doctrine to certain situations, can prove confusing. The basic theory is that there is only one appealable paper; anything that comes before or after that paper is, in general, non-final and not appealable. (21) While this, too, may sound fairly straightforward, the sheer number of dismissals of appeals for lack of finality attests to how difficult it can be to determine just what that one appealable paper is. Specifically, in 2014, the Court decided 934 applications for leave to appeal in civil cases, of which 20.7% were dismissed for jurisdictional defects. (22) Almost 200 dismissals were, at least in part, for lack of finality. (23)

    With the basic proposition that there can be only one appealable paper in a case in mind, it would follow that the appealable paper would be the one that disposes of the case on the merits, in its entirety. If the order sought to be appealed comes too early (24) (or too late) (25) to finally determine the merits, it clearly will not be final. Even if the merits are addressed, and appear to be finally dealt with, if further judicial action is necessary to effectuate that order, it is not final. (26) A classic example, which applied in the Tauber case, is an order of the Appellate Division that awards attorney's fees, but leaves the calculation of those fees to the trial court. (27)

    Two principal exceptions to the concept of finality are first, party finality, and second, severance. (28) Party finality applies when all claims against a particular party are fully resolved, but other claims against other parties remain pending. (29) The most common scenario is a motion to dismiss or motion for summary judgment that results in one defendant being granted a judgment or dismissal order that removes that defendant from the case entirely. (30) While the action remains pending against other parties, since all claims by or against that particular defendant have been resolved, the order or judgment dismissing that defendant from the case is deemed final as to that particular party. (31) The rationale would appear to be that once all claims against a particular defendant have been resolved, it would be unduly prejudicial to both parties, but particularly parties whose claims have been completely resolved, to make them await the ultimate outcome of a case in which they are no longer involved before allowing an appeal. (32) This doctrine is generally fairly straightforward, although the issue of whether all claims against a particular defendant have been dismissed in their entirety sometimes produces confusion. (33)

    The other principal exception to the finality requirement is the doctrine of severance. When part of an action is resolved, it may, under certain circumstances, be deemed "severed," and the judgment disposing of those particular claims is deemed final, even though additional claims remain pending. (34) There are two types of severance--express and implied. (35) An order expressly severing (or affirming the express severance of) a complete cause of action is generally given effect to create a final order, even though other claims remain pending. (36)

    Generally, a severance, to be express, must be exactly that--expressed. The order must state that the claims that remain pending are severed from the determined claims. (37) To be effective, however, an express severance must finally dispose of the severed cause of action in its entirety; an express severance that, in essence, splits a cause of action, will not be given effect. (38) This generally applies where a court grants a portion of the plaintiff's requested relief, but leaves other requests for relief under the same cause of action pending. (39) It also appears that the manner of pleading can be determinative. For example, if a claim for attorney's fees is made by way of a request for relief within a given cause of action, then a judgment granting partial relief on that cause of action (i.e., on the underlying claim), cannot be severed from the claim for attorney's fees. (40) Claims for relief within a single cause of action cannot be expressly severed either. (41) On the other hand, as the Appellate Division held in its second memorandum decision in the Tauber case, it appears that where a claim for attorney's fees is stated as a separate cause of action, express severance can be applied. (42) The wisdom (and perhaps even the existence) of this rule may be questionable, however. The Court of Appeals has never stated that the effectiveness of an express severance of a claim for attorney's fees may depend upon the manner in which the claim was pled. This apparent rule can only be inferred from decisions which make oblique references to the procedural posture of the case. (43) It would appear to be somewhat inconsistent with the Court's modern disinclination to sever (or not) based upon pleading formalities. (44)

    Implied severance is both at the same time broader and narrower than express severance. It is broader in the sense that it does not depend upon an expression by the lower court that the cause of action is severed. (45) It is, on the other hand, narrower in that it applies in a much smaller class of cases. As clarified in Burke v. Crosson, causes of action cannot be impliedly severed unless they arise out of different legal relationships and different sets of operative facts. (46) A typical scenario, again, is where the defendant is granted summary judgment dismissing some causes of action, but others are left pending. Prior to Burke, some lower court opinions appeared to be holding, based upon the Court's earlier decision in Sirlin Plumbing Company v. Maple Hill Homes, (47) that virtually any time a motion for summary judgment was granted in part, dismissing some claims, the judgment was final as to those claims...

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