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Notice of Appeal Perils: Further Proof that You Should Ignore Appellate Rule 3(c)(2)

Ignore that Rule of Appellate Procedure!  How often do you hear me say that?  I would wager not often, but the Court of Appeals’ recent opinion in Magazian v. Creagh precipitates a friendly warning to take a figurative red pen and strike out a portion of Appellate Rule 3.

Magazian involved a plaintiff’s attempt to “renew” a foreign judgment issued in 2001.  The trial court granted summary judgment to the defendant, and the plaintiff appealed.

The Court of Appeals identified two problems with the Magazian plaintiff’s appeal.  First, the 2001 foreign judgment was not part of the record on appeal.  As we have previously noted [here, here, &  here], an appellant that fails to include a necessary document in the record on appeal risks having its appeal dismissed.  Occasionally, appellate judges will instruct counsel to supplement the appellate record, but they have no duty to do so and, more often than not, will simply dismiss the appeal for the record deficiency.

Second, the Magazian court held that the notice of appeal was not timely filed. The trial court’s judgment was entered (i.e., filed) on Friday, September 20, 2013.  N.C. R. Civ. P. 58 requires the judgment be served within three days of entry of the judgment with a certificate of service.  Here, there was no evidence that the defendant or the court ever served the judgment on the plaintiff as required by the Appellate Rules or the Rules of Civil Procedure.  Instead, the plaintiff first received notice that a judgment had been entered on Wednesday, September 25, 2013, when an unidentified person emailed the plaintiff a copy of the judgment.  Thereafter, the plaintiff filed a notice of appeal on October 25, 2013—30 days after the plaintiff was emailed a copy of the judgment.

As you may know, the Rules of Appellate Procedure do not allow service of a judgment by email.  Email service is allowed only when a document is filed electronically via the appellate courts’ e-filing website.  N.C.R. App. P. 26(c).  As a judgment is filed in the trial court, the email service provision of Appellate Rule 26(c) does not apply.  Moreover, the Magazian court acknowledged that “[e]mail is not a valid method of service” under the Rules of Civil Procedure, either.  Therefore, proper service of the judgment on the plaintiff was never made.

So, when is a notice of appeal due if the judgment to be appealed is never properly served?  You might think such a notice is essentially “timely no matter what.”  But such a rule would allow for an indefinite delay, even if the parties have “actual notice” that the judgment was entered.  The Court of Appeals has repeatedly rejected such a result as being contrary to the purpose of N.C. R. Civ. P. 58, and instead only requires “fair notice” that a judgment has been entered to start the notice of appeal clock.  See, e.g., Huebner v. Triangle Research Collaborative, 193 N.C. App. 420, 667 S.E.2d 309 (2008) (an appellant with actual notice cannot wait three years to file a notice of appeal).

The Court of Appeals took this logic further in last year’s Manone v. Coffee decision, holding that “when a party receives actual notice of the entry and content of a judgment . . . the service requirements of Rule 3(c) . . . are not applicable.”  The result in Manone was particularly pernicious—even though someone in the appellant’s firm picked the judgment up from the courthouse within three days of entry of judgment, appellant’s counsel did not actually receive the judgment until four days after it was entered.  Appellant’s counsel filed notice of appeal more than 30 days after the judgment was entered, apparently believing that it could rely on the alternative 30-day clock contained in Appellate Rule 3(c)(2).  N.C. R. App. P. 3(c)(2) (notice of appeal is due within 30 days “after service upon the party of a copy of the judgment if service was not made within that three day period” prescribed by N.C. R. Civ. P. 58).

We blogged about Manone at the time of its release, warning practitioners that Manone could be a ticking bomb for appellate practitioners who sought to rely on Appellate Rule 3(c)(2). See also Kennedy v. Ramirez (N.C. Ct. App. 2012) (finding appeal untimely because “once plaintiff received actual notice of the 1 June 2012 order, “the portion of Rule 3(c) requiring service pursuant to Rule 58 was not applicable to her.”) This was particularly true because “actual notice,” as defined by Manone, is not “actual notice” to the attorney who has entered an appearance in the case.  Instead, “actual notice” occurs whenever anyone in the attorney’s firm (i.e., another attorney, paralegal, secretary, receptionist, or other support personnel) becomes aware that the judgment has been entered.  It makes no difference if the attorney assigned to the case does not have actual notice.

Magazian applied Manone’s “actual notice” precedent to hold that the September 20, 2013 judgment was functionally served by email on Wednesday, September 25, 2013, which meant that the appeal clock started ticking.

Several blog readers have already noted there are only 30 days in September, and that the appellant did not receive the email until five days after the judgment was entered.  So why wasn’t the Magazian appellant’s notice of appeal—filed October 25, 2013 —timely under N.C. R. App. 3(c)(2)?

Well, the Magazian court extended Manone by holding that the three-day “service” period of Appellate Rule 3(c)(2) applies when an attorney only receives “actual notice” of the judgment, and when counting the three days, the Court excludes weekends and court holidays.  Because two of the five days between entry of the judgment and actual notice of the judgment fell over the weekend, the Magazian court determined that actual notice was received within three business days of the entry of the judgment, and Rule 3(c)(2) did not apply.

The Court’s decision in Magazian, like Manone, adds an additional layer of complication to Civil Procedure Rule 58 and Appellate Rule 3 that the drafters likely never intended.  A look at the history of the Rules suggests as much.

Over twenty years ago, a prior iteration of N.C. R. Civ. P. 58, in conjunction with Appellate Rule 3, required that notice of appeal be filed within 30 days of the trial court’s rendering or announcement of a judgment.  Because when a judgment is “rendered” is not always clear-cut, the appealing parties and the courts often found it difficult to determine exactly when a notice of appeal was required to be filed.  In 1993, Rule 58 was amended to provide that a notice of appeal deadline does not begin to run 1) until 30 days after the trial court’s filing of a signed, written order, and 2) only if the judgment is served with proof of service in accordance with Rule 5 within three days of the filing of the judgment.  Rule 58 further states that when its service requirements are not met, the deadline for post-judgment motions under Rule 50, 52, and 59 are tolled “for the duration of any period of noncompliance with this service requirement.”  Because these amendments were intended to simplify the process for calculating the notice of appeal deadline, it seems reasonable to require a non-appealing party to comply with Rule 58’s service requirements if it wants the opposing party’s 30-day window for appealing to begin to run.

By reading into Appellate Rule 3 a broad “actual notice” component that excuses a party’s noncompliance with Rule 58, Manone reintroduced some amount of uncertainty into the process of calculating the notice of appeal deadline.  Magazian appears to take Manone one step further.

I am concerned with the effect these decisions may have on even earnest rule-followers going forward.  Indeed, why did the Magazian court analyze whether the admittedly ineffective service was within Rule 58’s three-days because of the “weekend and holidays” provision of Rule 6?  In other words, why inquire whether service of the judgment was timely under  Rule 58 when the court had already decided that “service” was not proper “service” under Rule 58 and Appellate Rule 3 at all?

Moreover, I remain deeply troubled by the Court of Appeals’ earlier decision in Manone.  Jettisoning the formal service requirements of Appellate Rule 3 and Rule 58 in favor of an “actual notice” requirement invites manipulation.  An appellee might think, “Why should I properly serve the judgment if by doing nothing I can introduce uncertainty into my opponent’s notice of appeal deadline?”  Alternatively, it is not uncommon for a prevailing party to send a “courtesy copy” of the judgment by email before sending the service copy, perhaps the next day.  But what if the courtesy copy is sent three days after the judgment is entered, and the service copy is sent the next day—four days after the judgment was entered?  While the certificate of service would state that service was not made until four days after entry of the judgment, under Manone, the parties and the courts are not bound by the appellee’s certification.  Rather, the Court—and the appellant—must determine whether actual notice occurred before the date listed on the certificate of service.

Finally, even if the Court of Appeals was correct in holding that Appellate Rule 3 and Rule 58’s service requirements are effectively optional, why not at a minimum give the appealing party a full 30 days from its actual notice of entry of the judgment to file its notice of appeal when proper service is never made?

Unfortunately, Manone and Magazian have taken different paths.  Therefore, I repeat the warning this blog issued after Manone.

 It is safer not to rely on Appellate Rule 3’s extra time when service is not completed within three days.  Instead, file your notice of appeal within thirty days of the filed-stamp date on the judgment.

If you need to strike out Appellate Rule 3(c)(2) to remember this warning, I will let you borrow my red pen.

I am interested to know your thoughts about Manone and Magazian.  Do you have an alternative solution to this problem?  Let me know in the comments below!

–Beth Scherer

(P.S.–Thanks to everyone who emailed and called me about this decision.)

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2 Responses to "Notice of Appeal Perils: Further Proof that You Should Ignore Appellate Rule 3(c)(2)"

  • Matt Leerberg
    July 3, 2014 - 3:48 pm Reply

    I had hoped that Manone would be limited to its facts, but I now agree with Beth that we should all just treat our Notice of Appeal deadline as the filed date of the Judgment plus 30 days.

    I think this line of cases is a natural outgrowth of the concern for fairness arising from the Huebner fact pattern: on what legal ground may an appellate court decline to hear an appeal when the appellant knowingly waited three years to file its notice of appeal? I see three possible solutions, in addition to Beth’s proposal:

    1. Allow the appeal as timely. Because proper service of the judgment starts the clock, the notice of appeal was timely. The onus of proper service of a judgment is on the prevailing party in the trial court. If that party fails to comply with Rule 58, then it is exposing itself to an indefinite risk of appeal at any time.

    2. Decline to hear the appeal under a laches theory. The plain text of Appellate Rule 3 suggests that the “3-years-later” notice of appeal is sufficient to confer jurisdiction on the appellate court. Once the court has jurisdiction, however, it can impose a sanction whenever an “appeal was taken or continued for an improper purpose, suhc as to harass or to cause unecessary delay….” See Appellate Rule 34(a)(2). Dismissal of the appeal is one sanction available to the court. See Appellate Rule 34(b)(1). This approach would vest the appellate court with jurisdiction but would allow that court to decide, on a case by case basis, what circumstances make it “unfair” for a party to pursue an appeal “late.”

    3. Amend Rule 3 to provide a hard limit for filing a notice of appeal. As Beth notes, Rule 58 has its own “tolling” provisions applicable to post-trial motions. In short, the clock for post-trial motions does not begin to run until the Rule 58 service requirement is met, “provided however that no time period . . . shall be tolled longer than 90 days from the day the judgment is entered.” You could envision a revision to Appellate Rule 3(c)(2) along those lines: “[A] party must file and serve a notice of appeal: . . . (2) within thirty days after service upon the party of a copy of the judgment if service was not made within that three day period, but no later than 90 days from the day the judgment is entered; . . . .” This is the classic “split the baby” approach, putting some pressure on the prevailing party to comply with Rule 58’s service requirements to start the appellate clock, but some pressure on the appellant to keep track of the trial court docket so as not to miss a filed-but-not-served judgment. In the exceptional case, of course, where there is good cause for the appellant failing to appeal within 90 days (such as active concealment by the prevailing party), the appellant could file a petition for writ of certiorari and explain those circumstances (and hope the court would be sympathetic).

    I think I prefer the first option. Rule 58 already imposes a duty on the prevailing party. Why not make that party bear the negative consequences of non-compliance with that duty?

    –Matt

  • Beth Scherer
    July 3, 2014 - 4:36 pm Reply

    I tend to agree that the Court needs to put the onus on appellees to comply with the Rules. It’s hard to enforce the rules against appellees– appellees want appeals to be dismissed, and so that is not a viable sanction against them. Leaving an open-ended appeal deadline for noncompliance would certainly put some pressure on appellees to comply with the rules.

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