Patrick S. Miller v. Transamerica Commercial Finance Corporation

ARKANSAS COURT OF APPEALS

NOT DESIGNATED FOR PUBLICATION

JUDGE JOHN E. JENNINGS

DIVISION I

CA00-140

September 13, 2000

PATRICK S. MILLER

APPELLANT AN APPEAL FROM GARLAND COUNTY

CIRCUIT COURT

V. NO. CIV 99-428-II

TRANSAMERICA COMMERCIAL HONORABLE TOM SMITHERMAN,

FINANCE CORPORATION CIRCUIT JUDGE

APPELLEE

DISMISSED

This is an appeal from a denial of appellant Patrick Miller's motion to set aside a default judgment entered against him in the Garland County Circuit Court. We dismiss this appeal because the order from which it has been taken does not adjudicate all of the claims or the rights and liabilities of all of the parties and is, therefore, not a final appealable order.

In June 1999, appellee Transamerica Commercial Finance Corporation sued Diamond Lakes Marine, Inc. (hereinafter "DLM"), dba Miller Marine, for a debt of $2,809,907.33 that was secured by DLM's inventory, of which appellee sought possession. Appellee sued appellant and his wife, Terri Miller, for judgment on their guaranty of the debt and for possession of the collateral. Appellee also sued North Malvern Marine, Inc. (hereinafter "NMM"), alleging that NMM was believed to have possession of some of the collateral.

NMM and the Millers did not answer the complaint or appear at a hearing on June 29, 1999, after which the trial judge ordered that a temporary restraining order be in effect against all defendants until all of the collateral was picked up by appellee.

On July 26, 1999, the circuit judge entered a separate default judgment against appellant and Mrs. Miller in the amount of $2,701,708.72. In this judgment, the circuit judge noted that, because DLM had filed for relief under Chapter 11 of the Bankruptcy Code, an automatic stay was in effect as to any proceedings against it. He stated: "[Appellant] and Terri H. Miller are not in bankruptcy and were served with a copy of the summons and complaint in this matter on June 22, 1999, and have filed no response and are in default."

On September 16, 1999, DLM filed an answer, asserting that, because it had filed a petition in bankruptcy, this action was stayed as against all defendants. Appellant also filed a motion to set aside the default judgment, alleging that he had no recollection of having been served with the complaint and arguing that DLM's petition for bankruptcy also stayed the claims against him. He contended that the attorney who had represented him and DLM had been found by the bankruptcy judge to have had a conflict of interest and to have been negligent in his representation of appellant. Appellant further alleged that DLM's answer also inured to his benefit and asked that the default judgment be set aside on the grounds of mistake, inadvertence, surprise, and excusable neglect under Arkansas Rule of Civil Procedure 55. In support of his motion, appellant filed two affidavits, a copy of DLM's bankruptcy petition, and an order of the bankruptcy court. Appellee entered a partialsatisfaction of judgment on November 1, 1999, stating that the remaining balance was $1,458,985.93.

A hearing was held on appellant's motion to set aside the default judgment on November 1, 1999. Appellant did not attend but was represented by his counsel. A Garland County deputy sheriff testified that he remembered serving appellant with the complaint. At the conclusion of the hearing, the circuit judge found that appellant had been served with the complaint and the temporary restraining order; that the untimely answer of DLM did not inure to appellant's benefit; that DLM's bankruptcy stay did not prohibit this proceeding against appellant; that appellant had failed to establish a meritorious defense as required by Rule 55; and that appellant had failed to show any mistake or excusable neglect sufficient to set aside the default judgment. Appellant takes his appeal from the order denying his motion to set aside that judgment.

Although the parties did not raise this issue, it is well settled that it is our duty to determine whether this court has jurisdiction. Haase v. Starnes, 337 Ark. 193, 987 S.W.2d 704 (1999). For an order to be final, it must dismiss the parties from the court, discharge them from the action, or conclude their rights to the subject matter in controversy. Id. See Ark. R. App. P. -- Civ. 2(a)(11). Arkansas Rule of Civil Procedure 54(b) provides that, when multiple parties and claims are involved in a lawsuit, an order that adjudicates fewer than all of the claims or the rights and liabilities of all of the parties is not a final appealable order. See Hambay v. Williams, 335 Ark. 352, 980 S.W.2d 263 (1998). Although Rule 54(b) permits a trial judge to direct entry of final judgment as to fewer than all of the claimsin a lawsuit upon an express determination, supported by specific factual findings, that there is no just reason for delay, no such determination was made by the circuit judge in this case.

The supreme court recently addressed the issue of the finality of an order in which all of the parties' rights were not adjudicated and upheld the long-standing rule that the failure to obtain a final order as to all of the parties and all of the claims renders the order not final for purposes of appeal. In Shackleford v. Arkansas Power & Light Co., 334 Ark. 634, 976 S.W.2d 950 (1998), the court held that a claim against a defendant remains until the trial court enters an order of dismissal. See also Blaylock v. Shearson Lehman Bros., Inc., 330 Ark. 620, 954 S.W.2d 939 (1997). In the case before us, the abstract does not reveal any order dismissing or finally adjudicating the claims against NMM or DLM. Additionally, the order from which this appeal has been taken does not contain an express determination, supported by factual findings, that there is no just reason for delay in taking an appeal as required by Rule 54(b). Therefore, we do lack jurisdiction to hear this appeal and must dismiss it.

Appeal dismissed.

Hart and Griffen, JJ., agree.