IHC Health Srvcs v. D&K Mngmt.

IHC Health Srvcs v. D&K Mngmt.

IN THE UTAH COURT OF APPEALS
 

----ooOoo----

IHC Health Services, Inc., a Utah non-profit corporation,

Plaintiff and Appellee,

v.

D&K Management, Inc., a Utah corporation,

Defendant and Appellant.

MEMORANDUM DECISION
(Not For Official Publication)
 

Case No. 20040505-CA
 

F I L E D
(January 27, 2005)
 

2005 UT App 33

 

-----

Third District, Salt Lake Department

The Honorable Robert K. Hilder

Attorneys: Michael N. Zundel and Glenn R. Bronson, Salt Lake City, for Appellant

Matthew M. Durham and D. Matthew Moscon, Salt Lake City, for Appellee

-----

Before Judges Billings, Greenwood, and Thorne.

PER CURIAM:

    D&K Management, Inc. (D&K) appeals from a partial summary judgment certified as final under rule 54(b) of the Utah Rules of Civil Procedure. This case is before the court on a sua sponte motion for summary dismissal on the basis that the order appealed was not eligible for certification under rule 54(b). Appellee IHC Health Services, Inc. (IHC) opposes dismissal, but D&K agrees that the appeal should be dismissed without prejudice.

    The controlling case on the eligibility of an interlocutory order for certification as final under rule 54(b) is Kennecott Corporation v. Utah State Tax Commission, 814 P.2d 1099 (Utah 1991). Although rule 54(b) "permits the trial court to certify certain interlocutory orders, and by doing so, force the appellate court to entertain the appeal," the "question of whether an order is eligible for certification under rule 54(b), i.e., whether the order is final, is a question of law" reviewed for correctness. Id. at 1100. The Utah Supreme Court adopted the "factual overlap" approach developed in the Seventh Circuit, which concludes "that several legal theories based on one set of facts do not convert the theories into separate claims for purposes of rule 54(b)." Id. at 1103. Therefore, "when this factual overlap is such that separate claims appear to be based on the same operative facts or on the same operative facts with minor variations, they are held not to constitute separate claims for rule 54(b) purposes." Id. The supreme court specifically rejected the alternative approach of the Second Circuit, which focuses on "whether the underlying factual bases for recovery state a number of different claims which could have been separately enforced," that is, "when the facts give rise to more than one legal right or cause of action." Id.

    The district court in this case ruled that:

IHC is entitled to judgment as a matter of law on its claims for forfeiture, declaratory judgment, and to judgment as a matter of law as to liability only on its claims for breach of contract because the undisputed facts show that D&K breached the Lease and defaulted thereunder by failing to pay rent in March 1998.

    Accordingly, the court entered a partial summary judgment providing, in part, that D&K "has forfeited the Lease and breached the contract"; that "IHC is entitled to possession of the property"; and that "[i]ssues relating to ejectment, damages, costs, and attorneys fees are reserved for disposition at a future date." With regard to certification, the district court stated, in part:

IHC's claims for forfeiture and declaratory judgment are separate claims from its breach of contract in that they do not include any facts or issues relating to monetary damages, which are the only remaining issues on IHC's breach of contract claim[.]

    The factual overlap between the certified partial summary judgment on the forfeiture and declaratory judgment causes of action and the remaining breach of contract cause of action is substantial, as underscored by the fact that the district court ruled on D&K's liability for breach of contract based on the same facts underlying the judgment on the other causes of action. IHC concedes that factual overlap exists, but urges this court to consider its need for the immediate enforceability of the partial summary judgment entitling it to possession of the property as an alternative basis on which to sustain the certification. IHC thus urges the court to adopt the separate enforceability approach of the Second Circuit that was rejected by the Utah Supreme Court.

    IHC's argument, which was adopted by the district court, does not support certification under Utah case law following Kennecott. In Furniture Distribution Center v. Miles, 821 P.2d 1165 (Utah 1991), the Utah Supreme Court rejected certification of a partial summary judgment on a quiet title cause of action, which left causes of action for trespass and breach of a real estate contract pending, noting that although the "suit is comprised of three causes of action, it consists of only one 'claim' for purposes of rule 54(b)." Id. at 1166-67. The court reasoned that the remaining issues "all emerge from the sale and occupation of the property, the same facts raised in the quiet title claim." Id. at 1167; see also Weiser v. Union Pac. R.R., 932 P.2d 596, 597-98 (Utah 1997) (concluding that although different facts supported several theories for recovery, the facts all related to a single claim for ownership of the disputed land).

    Under the factual overlap approach, IHC asserts a single claim to terminate D&K's lease and seeks as remedies the recovery of the leased premises and damages for its alleged wrongful retention by D&K. The factual overlap is substantial, indicated by the fact that liability for breach of contract was based on the same operative facts underlying the certified partial summary judgment, leaving the determination of damages as the only unresolved issue. The certification effectively forced D&K to file this appeal or risk losing the right to appeal and to seek a stay pending appeal. Accordingly, D&K agrees that the partial summary judgment was ineligible for certification and does not oppose the dismissal of its appeal.(1)

    We dismiss the appeal on the basis that the partial summary judgment was not eligible for certification under rule 54(b) and we lack jurisdiction. See A.J. Mackay Co. v. Okland Constr. Co., 817 P.2d 323, 325 (Utah 1991) (stating that because order appealed was not final nor eligible for certification as final under rule 54(b), the remedy is dismissal of the appeal). Our
dismissal is without prejudice to a timely appeal filed after entry of a final judgment.

______________________________

Judith M. Billings,

Presiding Judge

______________________________

Pamela T. Greenwood, Judge

______________________________

William A. Thorne Jr., Judge

1. In the district court, IHC stated that if the partial summary judgment was not certified, it would waive its cause of action for monetary damages to allow final judgment to be entered, while reserving a claim for attorney fees. The resulting judgment would not be final. See ProMax Dev. Corp. v. Raile, 2000 UT 4,¶15, 998 P.2d 254 (holding trial court must determine amount of attorneys fees awarded before judgment is final for appeal).