Chapter 16 FINAL JUDGMENTS AND APPEALABLE INTERLOCUTORY ORDERS

• Jurisdiction: Maryland

Chapter 16 FINAL JUDGMENTS AND APPEALABLE INTERLOCUTORY ORDERS

Honorable Kevin F. Arthur and Sean R. Luhks¹

I. INTRODUCTION

In Maryland, appeals are permitted from a final judgment or from an order that falls within one of a few narrow categories of appealable interlocutory orders.²

With notable understatement, the appellate courts have said that questions of whether an order is a final judgment or otherwise appealable are "not always easy,"³ and "not always readily capable of delineation."⁴ According to the State's highest court, no other issue has "been the subject of more opinions" in recent decades, and perhaps no issue has presented "more difficulty" to the bar, than the issue of appealability.⁵

The purpose of this chapter is to synthesize the statutory provisions, rules, and decisions concerning the appealability of orders in civil cases in the circuit courts.⁶ The first half of this chapter will discuss the characteristics of an appealable final judgment. The second half of this chapter will discuss the three limited exceptions, under which parties may appeal from certain interlocutory orders.

II. THE APPEALABLE FINAL JUDGMENT

Appellate jurisdiction in Maryland is determined by statute and, therefore, the right to appeal exists only to the extent that it has been legislatively granted.⁷ The statutes governing the right of appeal, most of which are codified at Subtitle 3 of Title 12 of the Courts and Judicial Proceedings Article, "are meant to represent the entire subject matter of the law of appeals."⁸

Under the governing statutes, appeals ordinarily must await the entry of a final judgment by the circuit court.⁹ The purposes of this "final judgment rule" are to prevent piecemeal appeals, to avert the interruption of ongoing judicial proceedings, and to thereby promote judicial efficiency and economy.¹⁰

Maryland Code Annotated, Courts and Judicial Proceedings II § 12-301 (2020 & Supp. 2022) (hereinafter Cts. & Jud. Proc. I or II § ___) provides, in pertinent part:

Except as provided in § 12-302 of this subtitle,¹¹ a party may appeal from a final judgment entered in a civil or criminal case by a circuit court. The right of appeal exists from a final judgment entered by a court in the exercise of original, special, limited, statutory jurisdiction, unless in a particular case the right of appeal is expressly denied by law.

Section § 12-101(f) of the Courts and Judicial Proceedings Article states that the term "final judgment" means "a judgment, decree, sentence, order, determination, decision, or other action by a court, including an orphans' court, from which an appeal, application for leave to appeal, or petition for certiorari may be taken." These statutes do not define the term "final."¹² Instead, the General Assembly implicitly has left it to the Supreme Court of Maryland to determine the concept of finality for purposes of appeal.¹³ The Court has done so in part through its rule-making authority but primarily through case law.

To constitute a "final judgment" within the meaning of the Courts Article, an order must have three attributes: (1) it must be intended by the court as an unqualified, final disposition of the matter in controversy; (2) unless the court acts properly in accordance with Md. Rule 2-602(b), it must adjudicate or complete the adjudication of all claims against all parties; and (3) the clerk must make a proper record of the judgment in the docket in accordance with Md. Rule 2-601.¹⁴ In addition, Md. Rule 2-601 requires that each judgment be "set forth on a separate document" signed by the judge or, in some instances, by the clerk.¹⁵ Each of these attributes will be considered in turn.

A. An Unqualified, Final Disposition

More than a century ago, the State's highest court described a final judgment as an order that decides the "very matter in controversy between the parties" and determines "the question of right in issue in the cause."¹⁶ To have the attribute of finality, the order "must be so far final as to determine and conclude the rights in the action, or to deny to the party seeking redress by the appeal the means of further prosecuting or defending his rights and interests in the subject matter of the proceeding."¹⁷ It is not strictly necessary that the order resolve the underl ying dispute between the parties; an order is considered final if its effect is to put the party out of court.¹⁸

One common example of a final disposition in the defendant's favor is a dismissal. Ordinarily, in a case where there are no other claims asserted, an order granting a motion to dismiss the plaintiff's entire complaint is a final judgment.¹⁹ In assessing finality, it is immaterial whether the court dismissed the complaint with prejudice or without prejudice. A dismissal "without prejudice" still signifies the termination of the entire case in the circuit court, despite the absence of an adjudication on the merits.²⁰ A dismissal order that expressly grants the plaintiff the "right to refile" another action is equivalent to a dismissal without prejudice.²¹

A dismissal order is not a final judgment, however, if the order expressly grants the plaintiff leave to amend the complaint.²² The express grant of leave to amend shows that the order is not intended to finally dispose of the case.²³

The mere expiration of the time period for amending the complaint does not transform the prior order into a final judgment.²⁴ Md. Rule 2-322(c) provides that if "the plaintiff fails to file an amended complaint within the time prescribed, the court, on motion, may enter an order dismissing the action[.]" Accordingly, "[w]here leave to amend is expressly granted in an order, the case remains pending in the trial court, whether or not an amended complaint is filed, until another order is entered disposing of the case."²⁵

Broadly speaking, a trial court's ruling is not considered final if the court does not intend for its ruling to end the litigation in that court.²⁶ In deciding whether an order is final, appellate courts examine whether the order is "unqualified," that is, whether the trial court had any contemplation that any further order was to be issued or that anything more was to be done.²⁷ Put differently, an unqualified order "leave[s] nothing more to be done to effectuate the court's disposition."²⁸ An order ordinarily is not "unqualified" if the court expressly indicates that another order will follow.²⁹

Even if the court expressly designates an order as "final," the order is not a final judgment unless the order, in fact, completes the adjudication of all claims.³⁰ The test of finality is whether the court actually has disposed of all claims, not simply whether the court has made a decision that renders the remaining unaddressed claims groundless or impractical.³¹

To qualify as a final judgment, the order must represent a complete adjudication of the case, except as to an issue that would be regarded as "collateral" to the proceedings.³² An example of a collateral matter is a contempt proceeding, which may arise out of another action but is usually regarded as separate from the underlying action. A judgment terminating the underlying action is final and appealable even if a related contempt proceeding is still pending in the trial court.³³ Likewise, an order adjudging a person in contempt is appealable even if the underlying action is still pending in the trial court.³⁴

Claims for attorneys' fees allowable by law under a statute or rule are usually regarded as collateral to the main action.³⁵ But a claim for attorneys' fees pursuant to a contractual right is usually treated as part of the damage claim itself, and therefore it must be adjudicated as part of the judgment on the underlying action.³⁶ The Maryland Rules governing claims for attorneys' fees highlight this distinction. Awards of attorneys' fees allowed by a contract as an element of damages or allowed under a prevailing party provision to a contract should "be included in the judgment on the underlying cause of action."³⁷ The trial court may award attorneys' fees under a statute or rule either as part of the judgment or as a separate judgment.³⁸

In divorce cases, trial courts will sometimes intend to issue a qualified domestic relations order (QDRO), allocating the parties' rights as to retirement savings accounts, as an integral part of a divorce judgment.³⁹ But where the court does not contemplate issuing a QDRO as part of a judgment and simply issues one after the judgment to aid its enforcement, the QDRO "is collateral and not necessary to a final judgment."⁴⁰ When the court subsequently enters a QDRO that is collateral to the divorce judgment, parties may take a separate appeal to seek review of issues decided in the QDRO that were not previously decided in the underlying judgment.⁴¹

When assessing finality, it can be important to distinguish between the action presented to the circuit court and the underlying controversy or dispute between the parties. Generally, if the court's order completely disposes of the entire action before it, the order is final and appealable because it terminates the proceedings in that court. This proposition remains true even if the only action presented to the court is a separate and independent action to decide some discrete issue in a related proceeding.

For example, the Court has concluded that an order denying a petition to stay arbitration, when "brought as a separate, self-standing action[,]" is a final judgment in that action.⁴² An order granting⁴³ or denying⁴⁴ a petition for writ of mandamus may be a final judgment, even where it fails to resolve some related proceeding. Because a mandamus action may be brought a "separate and independent" action, an order terminating that entire action is "final and appealable in its own right."⁴⁵ Similarly, an order enforcing or quashing an administrative subpoena may be a final judgment in an action brought solely for that purpose.⁴⁶ In those...