Blumenthal v. Brewer: Supreme Court Rule 304(a) Finding Not Enough for Appellate Jurisdiction

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1 Appellate Practice Corner Scott L. Howie Pretzel & Stouffer, Chartered, Chicago Blumenthal v. Brewer: Supreme Court Rule 304(a) Finding Not Enough for Appellate Jurisdiction An entire volume could be written or at least a whole column on the myths and misconceptions that surround appellate practice and procedure. This edition of the Appellate Practice Corner reviews a recent decision in which the Illinois Supreme Court disposed of one such mistaken impression: the notion that a finding under Supreme Court Rule 304(a) makes an otherwise nonfinal order appealable. Blumenthal v. Brewer, 2016 IL In Blumenthal, the supreme court held that Illinois public policy continues to preclude unmarried cohabitants from bringing claims against one another to enforce mutual property rights where the rights asserted are rooted in a marriage-like relationship between the parties. Blumenthal, 2016 IL , While that principle deserves a volume of its own, this column is concerned with a procedural issue that arose from the defendant s appeal of the dismissal of her counterclaim. Although the circuit court dismissed five distinct counts of the counterclaim and made a written finding pursuant to Illinois Supreme Court Rule 304(a), the supreme court held that the finding did not give the appellate court jurisdiction over four of the five counts of the counterclaim, and that the appellate court had erred in considering that portion of the appeal. This column examines the reasons for that holding and its implications for attorneys who are considering pursuing appeals under Rule 304(a). Facts of Blumenthal Blumenthal was a partition action arising from the dissolution of a domestic partnership. The parties were a samesex couple who had maintained a long-term domestic relationship but had never married. Blumenthal, 2016 IL , 2. After the parties relationship ended, the plaintiff filed a complaint seeking partition of the Chicago home they jointly owned. Id. The defendant counterclaimed for various common-law remedies, including sole title to the home as well as an interest in [the plaintiff s] ownership share in a medical group so that the couple s overall assets would be equalized now that the couple had ended their relationship. Id. 3. All but one of the counterclaim s five counts concerned the disposition of the same home that was the subject of the original partition action. Id. 9. The remaining count sought a constructive trust over the annual net earnings or the sale of the plaintiff s share of her medical practice, or in the alternative, restitution of funds that the plaintiff had appropriated from the couple s joint account to purchase the practice. Id. The plaintiff moved to dismiss the counterclaim pursuant to the supreme court s holding in Hewitt v. Hewitt, 77 Ill. 2d 49 (1979), which held that Illinois public policy, as set forth in the statutory prohibition against common-law marriage, IDC Quarterly Volume 26, Number 4 ( ) Page 1

2 precludes unmarried cohabitants from bringing claims against one another to enforce mutual property rights where the rights asserted are rooted in a marriage-like relationship. Blumenthal, 2016 IL , 3, 10 (citing Hewitt, 77 Ill. 2d 49). The circuit court agreed and dismissed the counterclaim in its entirety. It also made a written finding pursuant to Supreme Court Rule 304(a) that there was no just reason to delay enforcement or appeal of the order. Id. 3, 24; see Ill. S. Ct. R. 304(a) (eff. Mar. 8, 2016). The defendant appealed the dismissal of her counterclaim, arguing that Hewitt should be rejected. Id. 4. The circuit court denied the defendant s motion to stay the underlying partition proceeding while the dismissal of the counterclaim was on appeal, and the defendant did not seek review of that order. Id. 31. Without a stay, the parties continued to litigate the plaintiff s partition action, which eventually led to a trial and resulted in a final judgment as to the parties respective shares in the ownership of the home. Id Neither party appealed that judgment, and the defendant eventually purchased the plaintiff s share. Id. 35. The appellate court later reversed the dismissal of the defendant s counterclaim, agreeing with the defendant s argument that changes in the state s public policy had made Hewitt obsolete. Id. 5. The supreme court granted the plaintiff s petition for leave to appeal. Appellate Jurisdiction Before examining the substantive issue of whether unmarried cohabitants could enforce claimed mutual property rights rooted in a marriage-like relationship, the court addressed the plaintiff s argument that it did not have jurisdiction over certain aspects of the appeal. The plaintiff maintained that because four counts of the counterclaim concerned the disposition of the home a matter that remained in dispute and was not resolved by the dismissal of those counts those counts should not have been addressed in the appellate court and were not properly before the supreme court. Id. 21. The supreme court agreed, finding that the appellate court s reversal of the dismissal of those counts was fatally flawed for procedural reasons unrelated to the substantive legal issues. Id. The principal flaw, the supreme court found, was that the appellate court lacked the jurisdiction to consider the appeal. Id. 22. As set forth in the Illinois Constitution, the appellate court has jurisdiction to hear appeals of final judgments entered by the circuit courts. Id. (citing ILL. CONST. 1970, art. VI, 6). Because the circuit court s dismissal of the defendant s counterclaim in Blumenthal left the plaintiff s complaint for partition still to be litigated, the dismissal was not a final judgment within the meaning of the Illinois Constitution. The state constitution also authorizes the supreme court to enact rules allowing for appeals of circuit court rulings and orders other than final judgments. Blumenthal, 2016 IL , 22 (citing ILL. CONST. 1970, art. VI, 6). Pursuant to that constitutional authority, the supreme court enacted Rule 304(a), which permits an appeal of a final judgment that does not dispose of an entire proceeding if the trial court has made an express written finding that there is no just reason for delaying either enforcement or appeal or both. Ill. S. Ct. R. 304(a). The language of Rule 304(a) is significant in that it recognizes that the finality of a circuit court s order does not depend on or require the disposal of the entire proceeding; an order may be final even as the parties continue to litigate other aspects of the same case. An order or judgment is considered to be final and appealable for purposes of this rule if it terminates the litigation between the parties on the merits or disposes of the rights of the parties, either on the entire controversy or a separate part thereof. Id. (emphasis added) (citing In re Marriage of Gutman, 232 Ill. 2d 145, 151 (2008)). IDC Quarterly Volume 26, Number 4 ( ) Page 2

3 The circuit court in Blumenthal had made the written finding required by Rule 304(a), which the defendant cited as the basis for appellate jurisdiction. Id. 24. But the supreme court recognized that a Rule 304(a) finding alone did not make for appellate jurisdiction; the ruling being appealed still had to qualify as a final judgment or order. Id. The finding will make a final order appealable, but it will not confer appellate jurisdiction if the order is not final. Id. (citing Kellerman v. Crowe, 119 Ill. 2d 111, 115 (1987), and EMC Mortgage Corp. v. Kemp, 2012 IL , 14). The dismissal of the counts that set forth the defendant s theories for how the home should be partitioned did not meet the requirement of finality for purposes of Rule 304(a). While the order need not dispose of all the issues presented by the pleadings, it must be final in the sense that it disposes of the rights of the parties, either upon the entire controversy or upon some definite and separate part thereof. Blumenthal, 2016 IL , 25 (emphasis added) (citing Kellerman, 119 Ill. 2d at 115). The dismissal of the counts containing the defendant s partition theories related to the home did not meet this definition because the partition of the home remained a matter in dispute; it was the subject of the plaintiff s complaint, which was still pending after the dismissal of the counterclaim. Those counts arose from the same set of operative facts and sought precisely the same thing as the underlying cause of action asserted by [the plaintiff]: division of the value of the parties Chicago home. Id. 26. The dismissal of the defendant s theories did not resolve any distinct and separate part of the controversy: Rather than being distinct and separate from [the plaintiff s] action, these counts merely advanced different analytical approaches for determining how the home or its proceeds should be allocated between the parties. They were, in effect, different iterations of the very same claim. When they were dismissed, the ultimate question how the value of the residence should be split remained unresolved. The dismissal served only to narrow the criteria applicable to that decision. Id. (emphasis added). The supreme court compared the jurisdictional posture of Blumenthal to similar circumstances in which Rule 304(a) findings are ineffective to confer appellate jurisdiction over subjects that are still in dispute. The dismissal of fewer than all counts in a complaint, for instance, is not appealable even with a Rule 304(a) finding if the claim set forth in those counts is stated differently and continues to proceed in counts that remain pending. Id. 27 (citing Davis v. Loftus, 334 Ill. App. 3d 761, 766 (1st Dist. 2002)). Likewise, a finding under Rule 304(a) will not confer appellate jurisdiction over an order that disposes only of certain issues relating to the same basic claim[.] Blumenthal, 2016 IL , 27 (citing In re Marriage of Leopando, 96 Ill. 2d 114, (1983)). In the context of counterclaims, such as the one at issue in Blumenthal, most tort cases are unlikely to involve the sort of mirror-image counts in which opposing parties allege opposite or adverse versions of essentially the same claims. But such counterclaims are common in other settings. Contract disputes, for instance, including insurance-coverage matters, frequently involve competing interpretations of contracts or agreements. A defendant in such a case might respond to the plaintiff s complaint with a counterclaim, containing a different analytical approach and offering the defendant s own answer to the ultimate question posed by the complaint. See Blumenthal, 2016 IL , 26. Blumenthal stands for the proposition that the dismissal of those claims, even accompanied by a Rule 304(a) finding, will not be appealable as long as the plaintiff s original claims on the same subjects remain pending. It also bolsters the principle, set forth in Davis and Leopando, that the dismissal of part of a plaintiff s complaint may not be appealable under Rule 304(a) if the remaining parts concern the same issues or claims. IDC Quarterly Volume 26, Number 4 ( ) Page 3

4 Blumenthal is the latest decision to set forth the principle that a written finding under Rule 304(a) is not dispositive of jurisdiction and does not necessarily make an order appealable. See Blumenthal, 2016 IL , Id. 24. The supreme court s disposition of the jurisdictional issue evokes AT&T v. Lyons & Pinner Electric Co., 2014 IL App (2d) , in which the appellate court dismissed an appeal that had been filed pursuant to Rule 304(a), concluding that the circuit court had abused its discretion in making the written finding. The appellate court in AT&T set forth the factors that a circuit court must consider when determining if there is any just reason for delaying the appeal: (1) the relationship between the adjudicated 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 set-off against the judgment sought to be made [appealable]; [and] (5) miscellaneous factors such as delay, economic and solvency considerations, shortening the time of trial, frivolity of competing claims, expense, and the like. AT&T, 2014 IL App (2d) , 22 (quoting Geier v. Hamer Enters., Inc., 226 Ill. App. 3d 372, 379 (1st Dist. 1992) (quoting Allis-Chalmers Corp. v. Philadelphia Elec. Co., 521 F.2d 360, 364 (3d Cir. 1975))) (editorial brackets added in AT&T). But the judge who made the finding in AT&T had considered none of these factors; rather, he had made the Rule 304(a) finding because he felt that a disputed legal issue deserved appellate review. AT&T, 2014 IL App (2d) , The appellate court acknowledged that he was not required to give any reasons for making the finding but since he had done so, the court observed, his reasons were relevant to assessing its validity. Id. 27. The appellate court further suggested that the issue being appealed might have been suitable for an interlocutory appeal under Supreme Court Rule 308, which has considerably different procedural requirements. Id. 28 (citing Ill. S. Ct. R. 308 (eff. Jan. 1, 2016)). In Blumenthal, the jurisdictional problem with the Rule 304(a) finding was the first prong of the rule: the circuit court s dismissal of the counterclaim was not actually final. In AT&T, the problem was the second prong: the circuit court had not actually determined there to be no just reason to delay enforcement or appeal, even though its order said that it had. Both cases, however, speak to the broader principle that a reviewing court should not reflexively accept a Rule 304(a) finding as determinative of appellate jurisdiction, but should consider the finality of the order at issue, the lower court s stated reasons for making the finding, and whether the claim being appealed can be severed from those claims still in dispute. Apart from the jurisdictional defect created by the insufficient Rule 304(a) finding in Blumenthal, the supreme court found a second procedural flaw unrelated to jurisdiction: In refusing to apply existing supreme court precedent to the issue of whether the partition counts were legally recognizable without a marital relationship, the appellate court had effectively overruled precedent handed down by a higher court something it had no authority to do. Blumenthal, 2016 IL , 28. The supreme court further held that the defendant s appeal of the dismissal of the partition-related counts in the counterclaim could not proceed because it could lead to a decision inconsistent with the final judgment on the partitionrelated issues in the plaintiff s complaint. After the defendant s counterclaim was dismissed, the partition-related issues were ultimately tried and reduced to a final judgment. Id While the defendant had moved to stay the proceedings on the plaintiff s partition action while the appeal was pending, the circuit court had denied that motion, and the defendant had not appealed that order as she could have done, under Supreme Court Rule 307. Id. 39 (citing Ill. S. Ct. R. 307(a)(1) (eff. Feb. 26, 2010)). Nor had she appealed the circuit court s final decision on the plaintiff s complaint for partition. Rather, the defendant had accepted the circuit court s partition ruling and purchased IDC Quarterly Volume 26, Number 4 ( ) Page 4

5 the plaintiff s share of the property according to the court s valuation. Id. 40, 43. This would have foreclosed her from pursuing the partition-related counts of her counterclaim even if they had been properly appealed. Id. 41. Were a reviewing court to reinstate the defendant s residence-partition counts, the supreme court observed, a subsequent decision on those counts might contradict the decision that had already been rendered on the plaintiff s complaint. Id. 42. Skeptical of the notion that the circuit court could undo its final judgment, set aside the partition, and consider anew how the value of the home should be divided, the supreme court noted that such an outcome would be barred by the doctrine of res judicata, which is meant to allow disputes that have been resolved to remain concluded. Id. 38, 42. Such a result, it held, would be tantamount to permitting [the defendant] to proceed with a new and separate action with respect to division of the home s value, which the court rejected as impermissible. Id. 41. Conclusion The supreme court s jurisdictional holding in Blumenthal serves as a stark reminder that a Rule 304(a) finding is not conclusive for purposes of establishing appellate jurisdiction. When a circuit court dismisses some but not all of a party s claims, and the subject matter of the dismissed claims concerns a subject that remains pending in the circuit court, a Rule 304(a) finding does not dispositively confer appellate jurisdiction. It may not always be as obvious as it was in Blumenthal that the dismissed claims concern the same subject matter as those that are still pending, and there may be room for argument as to whether the same subject matter is at issue. Prudence may call for filing a notice of appeal in all but the most obvious cases, so as not to forfeit a legitimate appeal. But an appellee should not hesitate to cite Blumenthal as authority for the dismissal of an appeal when the subject matter of the dismissed claim or claims remains in dispute in the circuit court. Each case will differ, of course, and reasonable people may differ as to whether the still-pending counts concern the same issue as those that were dismissed but when there is a colorable argument that they do, Blumenthal may be authority for dismissing the appeal. About the Author Scott L. Howie is a partner at Pretzel & Stouffer, Chartered, in Chicago, specializing in post trial and appellate practice in the state and federal courts. He received his undergraduate degree from Northwestern University in 1989 and his law degree from Chicago-Kent College of Law in Mr. Howie is a member and past director of the Illinois Appellate Lawyers Association, where he co-chairs the Moot Court Committee. About the IDC The Illinois Association Defense Trial Counsel (IDC) is the premier association of attorneys in Illinois who devote a substantial portion their practice to the representation of business, corporate, insurance, professional and other individual defendants in civil litigation. For more information on the IDC, visit us on the web at or contact us at PO Box 588, Rochester, IL , , , idc@iadtc.org. IDC Quarterly Volume 26, Number 4 ( ) Page 5