Allstate Insurance v. Angeletti

WENNER, Judge. Allstate Insurance Company (Allstate) has appealed from an order entered by the Circuit Court for Cecil County in a declaratory judgment action brought by Allstate to determine coverage under a homeowner’s insurance policy. Because we conclude that the certification under Rule 2-602 of the order appealed from as a “final judgment” was improper, we shall not reach the merits of the controversy. The case began when a long standing feud between two neighboring families, the Ewings and the Angelettis, erupted into violence.

One particularly bitter and heated backyard shouting match deteriorated into a shooting match when Louis Angeletti, Jr. shot and injured Daniel Ewing and his wife, Debora. 1 As a result, the Ewings filed a suit ²¹³ for damages against Mr. Angeletti (“the underlying suit”). Mr. Angeletti claimed coverage under his Allstate homeowner’s insurance policy. Allstate, however, denied coverage and initiated the lawsuit which is the subject of this appeal. The record begins with Allstate’s “Complaint for Declaratory Judgment,” which named Louis Angeletti, Jr., Daniel Ewing and Debora Ewing as defendants.

In this complaint Allstate alleged that on the date of the incident it had in force a homeowner’s insurance policy insuring Louis Angeletti, Jr., under “general liability conditions”; that on the day in question “Louis Angeletti, Jr. is alleged to have shot and wounded Daniel J. Ewing and Debora Jean Ewing who have filed suit in the Circuit Court for Cecil County, Law 13697, seeking damages for injuries arising out of said shooting”; that “Louis Angeletti, Jr. and Daniel L. Ewing and Debora Jean Ewing have sought to have [Allstate] defend the case and Louis Angeletti, Jr. has sought [Allstate] to cover any liability which might be found against him pursuant to said policy”; and that “Allstate Insurance Company believes that its rights, duties and obligations under said policy do not require it either to defend or cover Louis Angeletti, Jr. in the Cecil County case herein referenced.” The complaint closed with a prayer for a judgment declaring the rights and duties of Allstate under the policy, as they related to the underlying suit, but no copy of the Ewings’ complaint accompanied this pleading. Indeed, no copy of the Ewings’ complaint has ever been entered into this record by any of the parties, 2 nor is there any reference ²¹⁴ in this record as to what specific allegations are contained in the underlying suit. Nevertheless, while the Ewings’ theory or theories of liability remained a mystery, it soon became clear that AÍlstate’s denial of coverage was based on an exclusion in the policy which states: “We [Allstate] do not cover bodily injury intentionally caused by an insured person.” Allstate took the position that Mr. Angeletti intentionally injured the Ewings. The issue of whether Mr. Angeletti intentionally shot the Ewings was tried before a jury.

The jury was unable to reach a verdict as to whether Mr. Angeletti intentionally shot Daniel Ewing but returned a verdict that he had not intentionally shot Debora Ewing. The trial judge denied Allstate’s motion for judgment notwithstanding the verdict and ordered that: The Plaintiff, Allstate Insurance Company, shall be required to defend Louis Angeletti, Jr., in the case filed by Debora Jean Ewing, in the Circuit Court for Cecil County, Law No. 13697; and The Plaintiff, Allstate Insurance Company, shall be required to pay on behalf of the Defendant, Louis Angeletti, Jr., within the applicable limits of its policy, any judgment entered against him and in favor of Debora Jean Ewing in Case No. 13697; and That the case of Allstate Insurance Company vs. Louis Angeletti, Jr. and Daniel L. Ewing is and has been declared a mistrial; and That final judgment as directed above shall be entered with respect to the claim of Allstate Insurance Company, Plaintiff vs. Defendants Louis Angeletti, Jr. and Debora Jean Ewing, there being no just reason for delay: as provided by Md.Rule 2-602____ ²¹⁵ Allstate appealed from the judgment entered pursuant to that order. As we have noted, we shall dismiss the appeal nostra sponte. While none of the parties have challenged our jurisdiction to hear this case, we must recognize upon our own motion our lack of appellate jurisdiction because of an improper application of Rule 2-602.

Potter v. Bethesda Fire Department Inc., 302 Md. 281, 285 , 487 A.2d 288 (1985); Biro v. Schombert, 285 Md. 290, 293 , 402 A.2d 71 (1979); Diener Enterprises, Inc. v. Miller, 266 Md. 551, 555 , 295 A.2d 470 (1972); Russell v. American Security Bank, 65 Md.App. 199, 206 , 499 A.2d 1320 (1985). Rule 2-602 provides as follows: (a) Generally. — Except as provided in section (b) of this Rule, an order or other form of decision, however designated, that adjudicates fewer than all of the claims in an action (whether raised by original claim, counterclaim, cross-claim, or third-party claim), or that adjudicates less than an entire claim, or that adjudicates the rights and liabilities of fewer than all the parties to the action: (1) is not a final judgment; (2) does not terminate the action as to any of the claims or any of the parties; and (3) is subject to revision at any time before the entry of a judgment that adjudicates all of the claims by and against all of the parties. (b) When Allowed. — If the court expressly determines in a written order that there is no just reason for delay, it may direct in the order the entry of a final judgment: (1) as to one or more but fewer than all of the claims or parties; or (2) pursuant to Rule 2-501(e)(3), for some but less than all of the amount requested in a claim seeking money relief only. Since Rule 2-602 is modeled after Rule 54(b) of the Federal Rules of Civil Procedure, interpretations of its federal counterpart have been deemed especially persuasive as to the meaning of the Maryland rule.

Diener Enterprises, Inc. v. ²¹⁶ Miller, supra; Canterbury Riding Condominium v. Chesapeake Investors, Inc., 66 Md.App. 635 , 505 A.2d 858 (1986). In most of the cases involving an improper application of this “certification” procedure, dismissal of the appeal has resulted because of an erroneous legal determination as to what constitutes “a claim.” See, e.g., East v. Gilchrist, 293 Md. 453 , 445 A.2d 343 (1982); Biro v. Schombert, supra, Diener Enterprises, Inc. v. Miller, supra; Harford Sands, Inc. v. Levitt & Sons, 27 Md.App. 702 , 343 A.2d 544 , cert. denied, 276 Md. 744 (1975). Thus, where an order adjudicates less than an entire claim in a case involving multiple claims, Rule 2-602 does not apply and the trial judge has no authority to direct the entry of final judgment on the order. 3 In the case sub judice, however, the order of ²¹⁷ the circuit court falls within the ambit of the rule, because it adjudicates the rights and liabilities of some but fewer than all of the parties to the action. Nevertheless, even where the trial judge has the authority to direct the entry of final judgment on such an order, appellate courts have made it clear that the trial judge must exercise considered discretion before doing so and that certification is not to be done routinely or often.

In Diener Enterprises, Inc. v. Miller, supra, the Court of Appeals dismissed an appeal because of an erroneous application of former Rule 605a, the predecessor to Rule 2-602. Although the Court held that the trial judge lacked authority to enter final judgment on an order disposing of less than an entire claim, the Court also suggested in strong dicta the type of considerations to be weighed in a situation where a trial judge possesses discretionary authority under the rule. The Court stressed that appellate review of a discretionary certification would focus on whether there is anything in the record which establishes the existence of any hardship or unfairness which would justify discretionary departure from the usual rule establishing the time for appeal. 266 Md. at 555 , 295 A.2d 470 . As a guide to trial judges, the Court suggested that “they should balance the exigencies of the case before them with the policy against piecemeal appeals and then only allow a separate appeal in the very infrequent and harsh case.” Id., at 556 , 295 A.2d 470 .

The Court in Diener relied heavily on federal decisions interpreting Rule 54(b) of the Federal Rules of Civil Procedure, and was particularly influenced by Panichella v. Pennsylvania Railroad Company, 252 F.2d 452 (3d Cir. 1958), cert. denied, 361 U.S. 932 , 80 S.Ct. 370 , 4 L.Ed.2d 353 (1960). There the language of the Third Circuit is instructive. After discussing the historic policy against piecemeal appeals and the origin of Rule 54(b), the Court noted that: [T]he draftsmen of this Rule have made explicit their thought that it would serve only to authorize “the exercise of a discretionary power to afford a remedy in the ²¹⁸ infrequent harsh case * * *.” 28 U.S.C.A., Federal Rules of Civil Procedure, 118-119 note [and see 5 F.R.D. 472 -73]. It follows that 54(b) orders should not be entered routinely or as a courtesy or accommodation to counsel.

The power which this Rule confers upon the trial judge should be used only “in the infrequent harsh case” as an instrument for the approved administration of justice and the more satisfactory disposition of litigation in the light of the public policy indicated by statute and rule. Id. at 455. The Supreme Court has recently evidenced a disinclination to restrict the operation of Federal Rule 54(b) within an overly narrow framework. In Curtiss-Wright Corporation v. General Electric Company, 446 U.S. 1 , 100 S.Ct. 1460 , 64 L.Ed.2d 1 (1980), the Court cautioned against reading the Notes of the Advisory Committee which drafted Rule 54(b) as a standard of construction.

In Curtiss-Wright the Court reversed a dismissal by the U.S. Court of Appeals for the Third Circuit, thereby approving a discretionary certification under Rule 54(b). The Supreme Court concluded that the Court of Appeals had misinterpreted the standard of review for Rule 54(b) certifications, and stated that: “However accurate it may be as a description of cases qualifying for Rule 54(b) treatment, the phrase ‘infrequent harsh case’ in isolation is neither workable nor entirely reliable as a benchmark for appellate review.” Id. at 10 , 100 S.Ct. at 1466 , 64 L.Ed.2d at 12 . Whatever the inclination of the Supreme Court may be, acting in its supervisory role regulating practice and procedure in the federal courts, we have found no similar inclination by our Court of Appeals to retreat from the suggestion that the certification procedure ought to be reserved for “the very infrequent harsh case[s].” Starfish Condominium Association v. Yorkridge Service Corporation, Inc., 292 Md. 557, 569 , 440 A.2d 373, 380 (1982) (quoting Diener, supra at 556 , 295 A.2d at 473 ). Nor are we persuaded that a retreat from that language is wise.

Thus we caution Maryland judges that, in the exercise of ²¹⁹ their discretion under Rule 2-602, they should keep the concept of the “infrequent harsh case” firmly in mind. As the caselaw discloses, that concept does not exist in a vacuum. While there is no set of specific standards applicable to every situation, certain general considerations have been strongly suggested by both courts and commentators 4 as useful in weighing the decision whether to certify an order as a final judgment. Judge Moylan, writing for this court in Canterbury Riding Condominium v. Chesapeake Investors, Inc., 66 Md.App. 635 , 505 A.2d 868 (1986), recently summarized the developing guidelines in this area.

In his discussion of the proper exercise of discretion under this Rule, he noted that the primary considerations are the strong policy against piece-meal appeals and the interests of judicial economy. Both of these factors weigh heavily against certification, and in assessing them, it is important to consider whether the same issues will have to be considered by the appellate court on successive appeals. Whether the determination of the remaining claims may render moot the need for the review being sought should also be considered, as should the question of whether entertaining the appeal upon the merits would require us to determine questions that are still before the trial court. The trial judge should then weigh the exigencies of the case against those factors and consider the possible harsh effects of delaying an appeal until the