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Damned If You Do, Damned If You Don’t: “Necessary” Documents, Filed Stamps, Premature Notices Of Appeal, And “Bare Bones” Rule 59 Motions.

Keeping up with the latest interpretations of substantive law in published opinions is hard enough.  But when procedural dismissal of your appeal is at stake, you are well-advised to scour the unpublished opinions as well to learn where the trickiest traps lie.  This morning’s North Carolina Court of Appeals opinion in Diversified Financial Servs. v. F&F Excavating & Paving, Inc. provides a fascinating case study.

The Defendants in Diversified Financial sought review of a 20 October 2010 summary judgment order for Plaintiff and 26 January 2011 order denying Defendants’ motion for rehearing and to vacate summary judgment.  Sound simple?  Of course not!  Four different appellate procedural issues reared their ugly heads—each seeking to prevent the Defendants’ appeal from being heard on the merits.

“Unnecessary” Record on Appeal Documents.    Apparently, the pro se Defendants had allowed a silly little thing called a default judgment to be entered against them before they decided to defend themselves from the Plaintiff’s lawsuit.  The trial court ultimately set aside the default judgment and instead decided the case on Plaintiff’s motion for summary judgment.  However, the Court of Appeals seemed somewhat miffed that several motions filed by Plaintiff—specifically, Plaintiff’s motion for default judgment and motion for summary judgment—were not included in the record.  On the one hand, the Court of Appeals concluded that the motions were “not necessary for our determination of the questions presented by Defendant” because “the bases of the orders of the trial court in this case were clear.” (Whew!)   At the same time, the Court “emphasize[d] that it is the appellant’s duty and responsibility to see that the record is in proper form and complete.

Sure, the basic point makes sense: the Court of Appeals is warning counsel to include all substantive motions in the record next time he files a record on appeal.  The conundrum, however, is that the Court of Appeals called these very motions “not necessary for [its] determination of the questions presented.”  Appellate Rule 9(b)(2), however, cautions  that “it shall be the duty of counsel for all parties to an appeal to avoid including in the record on appeal matters not necessary for an understanding of the issues presented.” Are you damned if you do, and damned if you don’t? 

One possible resolution to this dilemma lies in the language of Appellate Rule 9(b)(2).  The Rule targets materials not “necessary for an understanding” of the issues presented, while Diversified Financial states that the materials were “not necessary for a determination” of the issues presented.  Admittedly I am splitting hairs here, but it appears to me that what the Court of Appeals wants to see from the record is how this case developed.  Are motions for extensions of time and calendar call notices usually “necessary to understand” the case’s procedural history?  No. What about thirteen identical copies of some affidavit attached to various pleadings in the record on appeal?  Again, no.  Are motions for default judgment and motions for summary judgment necessary to help the court “understand” the case?  Probably so.  One question I ask when determining whether to include potentially “marginal” documents in the record on appeal is this: 

Is this document likely to be referenced in a statement of the case or in the statement of the facts?  If so, I usually include the document in the record on appeal.

“Non-Existent” Filed Stamps.  The Court of Appeals also noted, again with a bit of annoyance, that Plaintiff’s request for admissions was not “time stamped, which means there is no evidence of record showing the date upon which the request was filed.”  Appellate Rule 9(b)(3) requires that all papers in the record on appeal show the date on which they were filed.  Our good friend, John Bowers, pointed out that many attorneys do not file discovery documents unless it becomes a necessary exhibit to some later motion that is filed (e.g., a motion to compel).  See N.C. R. Civ. P. 5(d) (suggesting that discovery should not be filed with the court).  Indeed, many trial court clerks refuse to put such items in the court file. Moreover, an appellant has no control over whether his opponent files discovery documents. 

We have previously discussed the importance of securing legible “filed” stamps on your record documents. If a record document was filed in the trial court, you should include the filed-stamped document in the record.  However, what do you do when a document was not filed in the trial court, but is nonetheless properly included in the record on appeal because it was “served, submitted for consideration, admitted or made the subject of an offer of proof” under Appellate Rule 11(c)?  Unfortunately, the appellate rules do not answer this question.  However, I generally do two things. 

First, I note in the record on appeal’s index that the document was served on a particular date (e.g., “Plaintiffs’ Responses to Defendants’ First Set of Requests for Admission [served 31 October 2011]”).  Second, I include a notation at the top of the document itself identifying when it was served, submitted for consideration, admitted, or made the subject of an offer of proof (e.g., “Served 31 October 2011”).  I am hopeful that this approach will continue to appease our appellate overlords. 

Premature Notices of Appeal.  In Diversified Financial, the trial court orally granted Plaintiff’s motion for summary judgment on 11 October 2010, but did not enter a written order to that effect until 20 October 2010.  Defendants filed a “Rule 59” motion and motion for rehearing on 14 October 2010—6 days before the written summary judgment order was formally entered.  A similar timing issue arose two months later.  The trial court denied the post-judgment motions in open court on 8 December 2010, but did not enter a written order to that effect until 26 January 2011.  Again, the Defendants filed notice of appeal early—on 6 January 2011—20 days before the court entered the written order denying the post-judgment motions. 

First point: Deadlines for filing Rule 59 motions and notices of appeal do not begin to run until a written judgment is both signed and filed.  

N.C. R. Civ. P. 58 states that a judgment is not entered until it is reduced to writing, signed by the judge, and filed with the clerk of court. Therefore, Defendants’ notice of appeal and Rule 59 motion were both prematurely filed.  For better or for worse, this is the routine practice of many accomplished trial lawyer—many of whom may be afraid that they will miss their appellate deadlines.

The Diversified Financial Defendants got a small break on this issue (at least as to his premature notice of appeal).  Under the little-known case of Abels v. Renfro. Corp., the oral “rendering of an order in open court commences the time when notice of appeal may be taken by filing and serving written notice. . . while entry [filing] of an [written] order initiates the thirty-day time limitation for within which notice of appeal must be filed and served.”  As long as the subsequently entered written judgment is in “substantial compliance” with judgment rendered in open court, the premature notice of appeal will be considered a timely appeal of the written judgment.

Second point:  Although the Court in Diversified Financial appears to accept that the premature Rule 59 motion was timely filed, be forewarned that there is at least one Court of Appeals’ opinion holding that a premature Rule 59 motion will be considered untimely and will not toll your notice of appeal deadline.

See Stevens v. Guzman, 140 N.C.  App. 780, 538 S.E.2d 590 (2000).  But see Kor Xiong v. Marks, 193 N.C.App. 644, 668 S.E.2d 594 (2008).  While we see no logical reason why different rules should apply to premature Rule 59 motions and premature notices of appeal, we don’t make the rules.  Bottom line: Don’t play with fire by filing a premature Rule 59 motion. 

“Bare bones” Rule 59 Motions.

Even if your Rule 59 is timely filed, that does not mean that any old Rule 59 motion will toll your notice of appeal deadline.  Unfortunately for the Diversified Financial defendants, they won the initial battles but lost the war.  Because their Rule 59 motion was a “bare bones” motion that did not satisfy the requirements of Rule 59, their notice of appeal deadline was never tolled, and they missed their 30-day window for filing an appeal of the summary judgment order.

Diversified Financial follows a prior opinion which holds that a proper Rule 59 motion must (1) identify the basis of the motion, including the relevant subsection of Rule 59(a); and (2) show that argument either was made or could not have been made prior to the judgment. 

As to the first point, Diversified Financial reminds us that

“the mere recitation of the rule number relied upon by the movant is not a statement of the grounds within the meaning of Rule 7(b)(1).  The motion, to satisfy the requirements of Rule 7(b)(1), must supply information revealing the basis of the motion.” 

Not only should a proper Rule 59 motion provide the relevant legal rule, but it probably is required to provide the relevant facts supporting the Rule 59 grounds.  See Smith v. Johnson, 125 N.C. App. 603, 481 S.E.2d (1997).  

Unfortunately for the Defendants in Diversified Financial, their Rule 59 motion did not state which grounds they were relying on, but instead “argued for a change in existing law, asking the trial court to apply federal law and the law of the other states to interpret N.C. Gen. Stat. § 1A-1, Rule 36.”  Concluding that a “petition for a change in existing law is not a ground listed in Rule 59(a),” the Court of Appeals concluded that the Rule 59 motion was deficient, and therefore,  did not toll the time for filing the Defendant’s notice of appeal. 

As to the second point, Diversified Financial notes that proper Rule 59 motions cannot be based on new arguments that could have been made prior to the entry of the judgment.  A Rule 59 motion that is based solely on new and previously available arguments “cannot be treated as a Rule 59(e) motion,” and therefore will not toll the notice of appeal deadline.  Take away point: 

Be careful when you use your Rule 59 motion to make new or “refined” arguments to the trial court—especially if your Rule 59 motion is not based on other rock-solid grounds that clearly toll your notice of appeal deadline.

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