Valdez v. Erickson

                                                       Office of the
                                                           Director    New Mexico
                                                                       Compilation
                                                        2023.11.20     Commission
                                                   '00'07- 16:25:50
          IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 

Filing Date: September 18, 2023

No. A-1-CA-40161

CARLA VALDEZ,

      Plaintiff-Appellant,

v.

BARBARA ERICKSON and RENTAL
MANAGEMENT SERVICES, INC.,
a domestic corporation,

      Defendants-Appellees,

and

STATE FARM FIRE AND CASUALTY
INSURANCE COMPANY,

      Proposed Intervenor.

APPEAL FROM THE DISTRICT COURT OF SANDOVAL COUNTY
James A. Noel, District Court Judge

Weems Hazen Law
Bridget J. Hazen
Dathan L. Weems
Albuquerque, NM

for Appellant

O’Brien & Padilla, P.C.
Daniel J. O’Brien
Albuquerque, NM

for Appellees

Guebert Gentile & Piazza, P.C.
Elizabeth M. Piazza
Lawrence A. Junker
Albuquerque, NM

for Intervenor

                                         OPINION

BOGARDUS, Judge.

{1}      This appeal requires us to consider a threshold jurisdictional question arising
from an order granting an insurance company (Intervenor) leave to file a complaint in
intervention. Although the district court granted the leave request, Intervenor never filed
the complaint for declaratory relief that was attached to its intervention motion, and the
district court eventually rendered summary judgment in favor of Defendants, which
Plaintiff now seeks to appeal. Noting the presence of a party not addressed in the
district court’s judgment, this Court ordered Plaintiff to brief the question of how the
presence of an intervenor who has not filed its complaint in intervention affects the
finality of the judgment on appeal. See Smith v. City of Santa Fe, 

, 

, 

 (noting that “it is incumbent upon the appellate court
to raise jurisdiction questions sua sponte when the Court notices them”); see also State
v. Lohberger, 

, 

, 

 (explaining “[t]he
requirement of an unambiguous filed final order is important to the orderly
administration of the law”). Plaintiff has filed a brief addressing that question, which we
have duly considered.

{2}     As more fully explained herein, recent changes to our rules governing finality,
along with a due consideration of the importance of certainty in the finality of orders and
judgments, requires us to conclude that the summary judgment in this case adjudicated
“the rights and liabilities of fewer than all the parties,” Rule 1-054(B) NMRA, rendering it
nonfinal for purposes of appeal. See Lohberger, 

 (noting that both
“[t]he rights of litigants and the integrity of our system of justice” require certainty with
regard to finality).

BACKGROUND

{3}      Plaintiff filed this suit against two named Defendants, alleging personal injuries
arising from the condition of a leased residential property. Defendants are the owner of
that property and the rental management company responsible for maintenance of the
leased premises. Following Defendants’ answers to Plaintiff’s complaint, Intervenor filed
a motion to intervene, asserting it had issued an insurance policy to one of the
defendants, that the other parties are potential third-party beneficiaries of that policy,
and seeking leave to file a complaint for declaratory relief regarding its potential
obligations to defend or indemnify Defendants. That motion was unopposed, and the
district court granted leave for Intervenor to file its declaratory judgment complaint, a
copy of which was attached to the motion. Although Intervenor did not file the complaint,
the litigation proceeded. Defendants successfully filed a motion for summary judgment
on grounds involving statutes of limitation.
{4}    In response to our order directing Plaintiff to brief the question of whether
judgment is final for purposes of appeal, Plaintiff informs us both that Intervenor has
since filed its complaint as a separate declaratory judgment action and that Intervenor
has no objection to this appeal moving forward. Plaintiff also asserts all issues that
needed to be decided with regard to her complaint were, in fact, decided, and any
questions involving Intervenor’s obligations under its insurance policy were mooted by
the district court’s summary judgment in favor of Defendants.

DISCUSSION

{5}     Whether a judgment is final “is a jurisdictional question that an appellate court is
required to raise on its own motion.” Khalsa v. Levinson, 

, 

, 

. In the absence of jurisdiction, this Court “must dismiss.”
Thornton v. Gamble, 

, ¶ 15, 

, 

. The rule
that appeals will lie only from final judgments “serves a multitude of purposes, including
the prevention of piecemeal appeals and the promotion of judicial economy.”
Handmaker v. Henney, 

, 

, 

. Further,
because this Court’s jurisdiction is limited to timely appeals from final judgments or
orders, uncertainty with regard to finality risks the unintended forfeiture of appellate
rights. See Lohberger, 

. Accordingly, we have long emphasized
“the importance of requiring a clearly recognizable final order that will serve its intended
function as an avenue for appellate review.” Id. ¶ 30. To the extent that Plaintiff asserts
Intervenor has no objection to this Court’s exercise of jurisdiction over this appeal, we
note that subject matter jurisdiction “cannot be waived or cured by the consent of the
parties.” El Castillo Ret. Residences v. Martinez, 

, 

.

{6}     The question of whether a judgment or order is final for appellate purposes is
governed by Rule 1-054, which underwent significant substantive revisions taking effect
on December 31, 2016. Before that revision, that rule contemplated entry of separate
final judgments with regard to different parties:

       When multiple parties are involved, judgment may be entered adjudicating
       all issues as to one or more, but fewer than all parties. Such judgment
       shall be a final one unless the court, in its discretion, expressly provides
       otherwise and a provision to that effect is contained in the judgment.

Rule 1-054(B)(2) NMRA (2016); see Rivera v. King, 

, ¶ 4, 

,

 (holding, under prior rule, that the dismissal of all claims against one of
multiple defendants constituted a final judgment as to that defendant); see also
Seaboard Fire & Marine Ins. Co. v. Kurth, 

, ¶ 5, 

, 

 (dismissing an appeal as untimely under the prior rule because “a judgment
dismissing all claims of one plaintiff [was] final at that time, and such party [could not]
wait until the remaining claims [were] concluded before appealing”).

{7}  As amended, however, the rule now contemplates the entry of a single final
judgment, even where multiple parties are involved, unless the district court expressly
certifies that a judgment resolving the rights and liabilities of a single party should be
treated by the appellate court as a final judgment.

       If an action presents more than one claim for relief, whether as a claim,
       counterclaim, cross[-]claim, or third-party claim, or if multiple parties are
       involved, the court may direct entry of a final judgment about one or more,
       but fewer than all, claims or parties, only if the court expressly finds no just
       reason for delay. Otherwise, any order or other decision, however
       designated, that adjudicates fewer than all the claims, or the rights and
       liabilities of fewer than all the parties, does not end the action for any of
       the claims or parties, and may be revised at any time before the entry of a
       judgment adjudicating all the claims and all the parties’ rights and
       liabilities.

Rule 1-054(B). Following this amendment, the New Mexico rule now mirrors its federal
counterpart by requiring that final judgments address the claims of all parties to the
litigation. See Fed. R. Civ. P. 54(b) (declaring nonfinal a decision “that adjudicates fewer
than all the claims or the rights and liabilities of fewer than all the parties”); Camarena
ex rel. Camarena v. Superior Contracting Corp., 

, ¶ 15, 

(acknowledging the substantive similarity of the state and federal finality rules), cert.
denied, 

 (S-1-SC-39836); Cordova v. Cline, 

, ¶ 12
n.1, 

 (explaining that the amendment to Rule 1-054(B) avoids “the
piecemeal litigation” that occurred prior to the amendment).

{8}     The summary judgment at issue in this appeal contains no certification that it
constitutes the final judgment in this case. During the case, Intervenor sought and was
granted leave to have its rights and liabilities arising from an insurance policy
determined by the district court. As a result, Intervenor became a party to this case. See
Ruybalid v. Segura, 

, ¶ 13, 

, 

 (explaining
that intervention is the process by which “a person is permitted to become a party in an
action between other persons, after which the litigation proceeds with the original and
intervening parties”); 7C Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane,
Federal Practice and Procedure § 1920 (database updated April 2023) (noting that an
“intervenor is entitled to litigate fully on the merits once intervention has been granted”).

{9}     Our conclusion that Intervenor is a party to this suit and thus its claims must be
adjudicated to establish finality is consistent with decisions from other jurisdictions. See
White v. Tex. Am. Bank/Galleria, N.A., 

, 83 (5th Cir. 1992) (noting that upon
being permitted to intervene, intervenors “became parties to the action, equal in status
to the original parties”); Narragansett Elec. Co. v. Constellation Energy Commodities
Grp., Inc., 

 (D.R.I. 2007) (holding that an intervenor became a
party to an action upon the grant of a motion to intervene); Petrosian v. Frizell, 

 (Mich. Ct. App. 1970) (noting that “[u]pon the compensation insurance
carrier being permitted to intervene it became a party to the litigation”); Deutschmann v.
Sears, Roebuck, & Co., 

 (Ct. App. 1982) (“An intervener
becomes an actual party to the suit by virtue of the order authorizing him to intervene.”
(alteration, internal quotation marks, and citation omitted)); In re J.D., 

 (Tex. App. 2009) (concluding that an appeal was “premature due to the presence of
the intervention”). Similarly, there is persuasive authority for the proposition that the
pendency of an unresolved motion to intervene prevents the entry of a final judgment.
See Ligon v. City of N.Y., 

 (2d Cir. 2014) (remanding in order that,
inter alia, pending intervention motions could be adjudicated by the trial court);
Applebaum v. State Farm Mut. Auto. Ins. Co., 

 (M.D. Pa. 1986)
(treating a judgment as nonfinal because pending motions to intervene amounted to
“unfinished business” that must be addressed by the trial court).

{10} Because Intervenor did not proceed to file its complaint in this case, however, the
district court never had any occasion to declare its rights and liabilities. As a result, we
have a judgment before us that resolves all of the claims for relief asserted below, but
without adjudicating the rights and liabilities of all the parties. Summary judgment in this
case would have undoubtedly been a final judgment, pursuant to the version of Rule 1-
054 in effect prior to December 31, 2016. The current rule, however, requires that
Intervenor’s rights and liabilities be addressed in any final order. See Rule 1-054(B).

{11} Plaintiff asserts that the district court’s summary judgment is final because it
resolves the issues of law and fact raised in her complaint. See Cole v. McNeill, 1984-
NMCA-126, ¶ 3, 

, 

 (explaining that judgments are final when
“all issues of law and fact necessary to be determined are in fact determined, and the
case is completely disposed of so far as the court has the power to dispose of it”).
Although we agree that the issues raised by Plaintiff’s complaint have, in fact, been
determined, the case has not been “completely disposed of so far as the court has the
power to dispose of it,” see 

 given the presence of a party who has yet to assert
claims it has been granted leave to assert. Stated in terms of Rule 1-054, although the
summary judgment adjudicates “all the claims” asserted, it nonetheless adjudicates “the
rights and liabilities of fewer than all the parties” because it fails to address the status of
a party—Intervenor—whose rights and liabilities have yet to be adjudicated. See Rule 1-
054(B). We note that there does not appear to be any impediment to the entry of an
order or judgment unambiguously resolving the uncertain status of that party or
certifying, if the district court deems it proper, that there is “no just reason for delay.” 

{12} Plaintiff further asserts that shortly after the district court granted its motion to
intervene, Intervenor chose to file its complaint for a declaratory judgment as a separate
action. As a result, Plaintiff suggests, Intervenor has a full and fair opportunity to litigate
its declaratory judgment claim independent of this lawsuit. The inquiry is not, however,
whether Intervenor’s claims could be addressed in another proceeding. The inquiry is
whether the claims Intervenor was permitted to bring in this proceeding have been
addressed. It does not appear—either from the record before us or otherwise—that
anything prevents Intervenor from pursuing declaratory relief in the present case,
notwithstanding its apparent decision to seek that relief elsewhere. These
circumstances, which represent potential unfinished business in the case tried below,
may be easily resolved by the entry of an order or judgment addressing Intervenor.
{13} Finally, Plaintiff asserts that if Intervenor were to pursue its declaratory relief in
this suit, the ruling contained in the summary judgment likely mooted any question
involving its duty to defend or indemnify Defendants. Whether the summary judgment
resolved the question Intervenor was granted leave to raise, however, has not been
addressed by the district court, and we decline to address that question in the first
instance.

{14} Accordingly, Rule 1-054(B) requires the entry of a judgment or order addressing
Intervenor’s claims, or making the appropriate certification, before the summary
judgment Plaintiff seeks to appeal will be final for appellate purposes. Requiring
certainty with regard to finality serves the beneficial purpose of removing any doubt
regarding the status of the claims and parties below. See Lohberger, 

 (noting that uncertainty “may unintentionally forfeit a party’s right to appellate
review”). In the present case, certainty requires that the leave granted to Intervenor to
file its complaint in intervention be addressed by the district court. Because finality
determinations demand certainty, and cannot be the subject of case-by-case
adjudication, see id. ¶ 22, it is incumbent upon the parties and the district court to create
an appellate record that demonstrates the finality of the judgment or order on appeal.
See id. ¶ 25 (“The requirement of an unambiguous filed final order is important to the
orderly administration of the law.”).

CONCLUSION

{15} Because the summary judgment at issue in this appeal adjudicates the rights and
liabilities of fewer than all of the parties below, we conclude that no final judgment has
yet been entered. Accordingly, this appeal is premature and must be dismissed for lack
of jurisdiction.

{16}   IT IS SO ORDERED.

KRISTINA BOGARDUS, Judge

WE CONCUR:

JENNIFER L. ATTREP, Chief Judge

KATHERINE A. WRAY, Judge