Romano & Mitchell v. LaPointe

BARBERA, Judge. This case proves, in two respects, an exception to the rules of appellate engagement. It is the rare case in which we accept as a final appealable judgment the resolution of only one claim of a multi-claim lawsuit. And, it is a case in which we are asked to decide no issue other than whether the judgment is final and appealable.

The appeal stems from the Circuit Court for Montgomery County’s certifying as a final judgment its order confirming an arbitration award. The award arose out of a dispute concerning compensation owed Stephen C. LaPointe (“LaPointe”), a certified public accountant and appellee here, by his former employer, the accounting firm of Romano and Mitchell, Chartered (“R & M”), appellant. LaPointe filed suit and the circuit court ordered the parties to arbitration pursuant to a provision of the parties’ employment agreement. The arbitration panel awarded LaPointe monies owed him in back wages and bonuses.

At the request of LaPointe and over the objection of R & M, the court confirmed the award. Still pending was R & M’s counterclaim alleging that LaPointe had violated the non-compete clause of the parties’ agreement after having been terminated by R & M. Notwithstanding the pendency of R & M’s counterclaim, the court certified the arbitration award as final. R & M appealed and presents the following question for our review, which we have rephrased slightly: Whether the circuit court erred or abused its discretion by entering final judgment on LaPointe’s behalf notwithstanding the pendency of the counterclaim and without La-Pointe’s having requested that the judgment be certified as final pursuant to Maryland Rule 2-602(b). Finding no error or abuse of discretion, we affirm the decision of the circuit court. ⁴⁴⁵ FACTUAL BACKGROUND AND LEGAL PROCEEDINGS R & M and LaPointe entered into their original employment agreement in 1989.

Under its terms, LaPointe “agree[d] to devote such time, skill and attention as may be required” in rendering professional accounting services on behalf of R & M. In turn, R & M agreed to pay LaPointe a salary, benefits, and additional compensation in the form of bonuses for new clients LaPointe secured. The parties thereafter executed a Letter of Intent and Agreement, which modified certain compensation provisions of the original agreement and incorporated by reference the non-compete clause of the original agreement. In March 1999, LaPointe filed a five-count complaint alleging that R & M had breached the agreement by failing to pay him certain wages and bonuses. On receipt of the complaint, R & M terminated LaPointe.

LaPointe then filed a ten-count amended complaint, adding, inter alia, a claim of wrongful termination. Meanwhile, the court granted R & M’s motions to stay court proceedings and compel arbitration of the wage and bonus dispute. The court’s order provided that the matter be referred to arbitration “in accordance with the arbitration procedures set forth in the Employment Agreement, or as otherwise agreed by the parties.... ” A full evidentiary hearing commenced before the arbitration panel on May 31, 2000, and continued on June 1, 2000 and July 24, 2000. Eight months later, the arbitration panel issued its written decision and award to LaPointe of $153,016.50 in back wages and bonuses, plus interest.

R & M filed a request for reconsideration of the panel’s decision. Before the arbitration panel ruled on R & M’s reconsideration request, LaPointe filed a petition for confirmation of the award and for entry and enforcement of judgment. R & M opposed the petition, and the court declined to confirm the award during the pendency of the reconsideration request. ⁴⁴⁶ While awaiting the arbitration panel’s decision on reconsideration, R & M filed a counterclaim alleging that LaPointe had violated the non-compete clause of the employment agreement. In particular, R & M averred that LaPointe began rendering accounting services for a former R & M client prior to the expiration of the twelve-month restriction set forth in the non-compete clause.

Unlike LaPointe’s claims, R & M’s counterclaim was not among those that were subject to arbitration under the agreement. 1 LaPointe timely answered, denying all liability and setting forth a number of affirmative defenses. LaPointe also filed a motion to dismiss or for summary judgment, or in the alternative, to strike the counterclaim, and a motion for attorney’s fees. LaPointe asserted as grounds for the latter that R & M’s counterclaim had been filed solely to delay payment of the arbitration award. R & M answered, contending that the factual and legal basis of LaPointe’s motion for attorney’s fees was “erroneous and misleading.” R & M also requested attorney’s fees.

During this time, the arbitration panel denied R & M’s request for reconsideration. This prompted LaPointe to renew his petition for confirmation of the arbitration award and for entry and enforcement of judgment. R & M again opposed the petition, this time on the ground that R & M’s counterclaim was pending in the circuit court. On August 15, 2001, the court held a hearing on LaPointe’s motions to dismiss the counterclaim and to confirm the arbitration award, and the parties’ requests for attorney’s fees.

With regard to confirmation of the award, the court asked LaPointe if there was any reason why the court could not ⁴⁴⁷ enforce the award and let the counterclaim go forward independently. The following discussion occurred: THE COURT: My question to you is, why can’t the arbitration award be enforced and you still go to trial on the counterclaim? [COUNSEL FOR LAPOINTE]: No reason whatsoever, and I would respectfully ask the Court to do that, confirm the award, put it in place, we’ll deal with the counterclaim as appropriate, which we didn’t have to but we will. They [R & M] don’t want you to confirm the award. THE COURT: I understand that, but it seems to me procedurally, there’s nothing to prohibit the Court from doing it other than, there’s no rule that says you can’t — the law is now, it didn’t used to be, but the Court of Special Appeals made it very clear that these cases can clearly be dealt with in parts when there are counterclaims, that the counterclaim is a live, viable entity out there.

Counsel for R & M did not object or otherwise respond to the court’s contemplated action. At the conclusion of the hearing, the court confirmed the arbitration award but denied both LaPointe’s motion to dismiss the counterclaim and the parties’ requests for attorneys’ fees. Thereafter, the court entered a written order that read, in pertinent part: “[I]t appears to the Court that there is no just reason for delay, that the arbitration award should be confirmed, and that final judgment should be entered thereon,” and R & M “may proceed with its Counterclaim independent of this judgment.” From that order, R & M filed this timely appeal. DISCUSSION R & M’s only challenge on áppeal relates not to the merits of the court’s confirmation of the arbitration award but, instead, to the court’s certification of the award as a final judgment under Rule 2-602(b).

R & M specifies that the court erred or abused its discretion by: (1) certifying the award as a final judgment irrespective of the pendency of a ⁴⁴⁸ counterclaim; and (2) entering a final judgment notwithstanding LaPointe’s failure to make a specific request that the judgment be certified as final. Putting aside the question of why R & M has chosen to bring this appeal for the sole purpose of asking whether there should be an appeal, we focus only upon the issue R & M presents for our consideration. That issue calls upon us to determine whether this is one of those rare cases for which Rule 2-602(b) was promulgated. For the reasons that follow, we hold that it is.

I. “The right to seek appellate review ordinarily must await the entry of a final judgment, disposing of all claims against all parties.” Shoemaker v. Smith, 353 Md. 143, 165 , 725 A.2d 549 (1999); Md.Code (1973, 1998 Repl.Vol.), § 12-301 of the Courts & Judicial Proceedings Article. Three exceptions to this rule exist in Maryland: (1) appeals from interlocutory rulings allowed by statute; (2) appeals from interlocutory rulings permitted under the collateral order doctrine; and (3) appeals permitted under Maryland Rule 2-602(b). Shoemaker, 353 Md. at 165 , 725 A.2d 549 . Only the third exception — that which is provided by Rule 2-602(b) — is at issue in this appeal.

Maryland Rule 2-602 states, in pertinent part: (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. ⁴⁴⁹ (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. At the outset, we recognize that Rule 2-602(b) “is not a grant of unlimited discretion to the trial judge.” Canterbury Riding Condominium v. Chesapeake Investors, Inc., 66 Md.App. 635, 642 , 505 A.2d 858 (1986).

Rather, it “provides a limited and tightly circumscribed exception” to the general rule set forth in subsection (a). Tharp v. Disabled American Veterans Dep’t of Maryland, Inc., 121 Md.App. 548, 553 , 710 A.2d 378 (1998). A prerequisite for the entry of a final judgment under Rule 2-602(b) “is an order that, absent the existence of multiple parties or multiple claims, would be final in the traditional sense.” Jenkins v. Jenkins, 112 Md.App. 390, 424 , 685 A.2d 817 (1996), cert. denied, 344 Md. 718 , 690 A.2d 524 (1997). As the Court of Appeals described it in Snowden v. Baltimore Gas & Electric Co., 300 Md. 555, 563 , 479 A.2d 1329 (1984), a trial judge’s authority under Rule 2-602(b) to certify certain orders as final and appealable “is limited to orders which, by their nature, have a characteristic of finality.” Said differently, a claim that is the subject of Rule 2-602(b) certification must be “totally decided.” Canterbury, 66 Md.App. at 644 , 505 A.2d 858 .

Rule 2-602(b) contains the additional requirements that the order certifying a final judgment be in writing and that it explicitly state that there is “no just reason for delay.” Tall v. Bd. of Sch. Comm’rs of Baltimore City, 120 Md.App. 236, 242 , 706 A.2d 659 (1998). Unless both requirements are satisfied, the appellate court is without jurisdiction to hear the appeal and will not reach the question whether the trial court’s certification of finality was a proper exercise of discretion. ⁴⁵⁰ Tharp, 121 Md.App. at 561 , 710 A.2d 378 (stating that, without an express determination of no just reason for delay, “there is naught for us to review because our jurisdiction is wanting” (citations omitted)); accord Waters v. U.S.F. & G. Co., 328 Md. 700, 708-09 , 616 A.2d 884 (1992). Underlying the entirety of Rule 2-602 is the policy that “ ‘piecemeal appeals are disfavored.’ ” NRT Mid-Atlantic v. Innovative Properties, 144 Md.App. 263, 274 , 797 A.2d 824 (2002) (quoting Cant v. Bartlett, 292 Md. 611, 614 , 440 A.2d 388 (1982)).

Thus, the trial court’s exercise of its discretionary authority under Rule 2-602(b) is subjected to “close appellate scrutiny.” Tharp, 121 Md.App. at 562 , 710 A.2d 378 ; accord Diener Enters., Inc. v. Miller, 266 Md. 551, 555 , 295 A.2d 470 (1972); Edwards v. First Nat’l Bank of North East, 122 Md.App. 96 , 101-02 n. 2, 712 A.2d 33 (1998). Indeed, the standard by which we assess the circuit court’s discretionary decision is “far less deferential than is generally the case with respect to discretionary rulings.” Tharp, 121 Md.App. at 563 , 710 A.2d 378 . We will not hesitate to substitute our judgment for that of the trial court, because “[w]hat is implicated is the ability of the appellate court, in questionable or borderline cases, to control its own docket.” Id. With that legal framework in mind, we turn to the case sub judice.

We note preliminarily that R & M does not contend that the arbitration award lacks the characteristic of finality required by the rule and without which a trial court is unauthorized to make a final judgment certification under Rule 2-602(b). In any event, there is no question but that the confirmed arbitration award has the requisite characteristic of finality, having been totally decided below. Nor does R & M suggest that the court failed to satisfy the additional requirements of Rule 2-602(b) that there be a written order that includes a statement of no just reason for delay. The court’s