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Most practitioners readily recognize the final judgment rule as a cornerstone of appellate practice. We understand that the rule, now embodied in Rule 3(a) of our appellate
rules, allows appeals to be taken as a matter of right1 only from "final orders and judgments."2 But the final judgment rule is more than a rule of appellate practice; it has important ramifications for lawsuits at the district court level. Specifically, the final judgment rule requires that a money judgment be final before it can be enforced through a writ of execution or one of the other post-judgment writs allowed by our civil rules. Unfortunately, as illustrated by the following example, the district court ramifications of the rule do not seem to be as well understood as the rule's appellate court ramifications.
Our firm was recently retained by an out-of-state bank to try to set aside a $5.5 million default judgment that had been entered against the bank in a state court proceeding. The
default judgment against the bank was not a final judgment in that it did not adjudicate all of the claims asserted by all of the parties in the case and had not been certified as a final
judgment under Rule 54(b) of the civil rules.3 Despite this fact, while our motion to set aside the default judgment was pending before the district court, our opposing counsel proceeded with efforts to collect the default judgment by executing on the bank's assets. When we advised opposing counsel that it was improper to execute on a non-final judgment and requested that he voluntarily cease his execution efforts, he denied our request by quoting the following provision of Rule 62(a):
Execution or other proceedings to enforce a judgment may issue immediately upon the entry of the judgment, unless the court in its discretion and on such conditions for
the security of the adverse party as are proper, otherwise directs.
When preparing our motion to quash opposing counsel's execution efforts, I mistakenly believed that the rules themselves would contain language allowing us to demonstrate
that opposing counsel's reliance upon Rule 62(a) was misplaced. However, the desired answer was not to be found in the rules themselves. Rule 54(a) got us frustratingly close, in that it
purports to define the term "judgment" "as used in these rules [as] includ[ing] a decree and any order from which an appeal lies." From my perspective, this definition
is ambiguous at best in that its use of the word "includes" rather than "means" or "includes only" would allow opposing counsel to argue that, as used in
Rule 62(a), the term "judgment" includes, but is not limited to, final judgments.
Fortunately for our client, the desired answer had been provided by the Utah appellate courts. In Cheves v. Williams, 993 P.2d 191 (Utah 1999), the Utah Supreme Court unequivocally stated that a final judgment was necessary before a judgment creditor could execute on the judgment:
Rule 62(a) provides that "[e]xecution or other proceedings to enforce a judgment may issue immediately upon the entry of the judgment." Utah R. Civ. P. 62(a).
Rule 69(a) then provides that "[a] writ of execution is available to a judgment creditor to satisfy a judgment or other order requiring the delivery of property or the payment of
money by a judgment debtor." Id. 69(a). The obvious implication of both these provisions is that there exists a previously issued final judgment not stayed pending
appeal. Cf. Redding & Co. v. Russwine Constr. Corp., 417 F.2d 721, 727 (D.C. Cir. 1969) (noting that "[a]n execution ordinarily may issue only upon a final judgment").
Id. at 204-05 (emphasis added). Similarly, in D'Aston v. Aston, 844 P.2d 345 (Utah Ct. App. 1992), the Utah Court of Appeals stated that "[i]t is
undisputed that a writ of execution may only be issued on a 'final' judgment ...." Id. at 349 (emphasis added). These precedents thus stand for the general propositions that appealability and enforceability go hand in hand and that, consequently, a non-final money judgment is neither appealable nor enforceable.
Even though the foregoing case law allowed us to refute opposing counsel's arguments for continuing with his efforts to execute on the non-final default judgment, I submit that
practitioners' understanding of these important legal principles would be greatly improved by enacting clarifying amendments to our rules of civil procedure. One suggestion would be to
amend the first sentence of Rule 54(a) to read as follows: "'Judgment' as used in these rules means a decree and any order from which an appeal lies." (emphasis added) In
my mind, an even better amendment would be to define "judgment" by expressly referencing the final judgment rule of Rule 3(a) of the appellate rules. My specific suggestion:
"Unless otherwise clearly indicated, the term 'judgment,' as used in these rules, means a final decree, a final order, or a final judgment within the meaning of Rule 3(a) of the Utah
Rules of Appellate Procedure."
Another possible approach to clarifying our rules would be to amend Rule 62(a), as well as other applicable rules,4 so as to specifically
require a final judgment or a final order. Because a practitioner reviewing our rules to decide whether she can execute on a non-final default judgment or a non-final summary judgment may
locate Rule 62(a) but may well overlook Rule 54(a)'s controlling definition of "judgment," I would recommend that we take the "belt and suspenders approach" and enact
clarifying amendments to both rules.
Footnotes
1. Rule 5(a) of the appellate rules allows a party to petition the appellate court for permission to appeal from a non-final or interlocutory order or judgment.
2. Rule
3(a) contains an exception to the final judgment rule that allows non-final judgments to be appealed if "otherwise provided by law." An example of a non-final judgment that is
appealable as of right is an order denying a motion to compel arbitration; Section 78-31a-19 of the Utah Arbitration Act expressly makes such an order appealable. See Pledger v.
Gillespie, 982 P.2d 572, 576 (Utah 1999). It should also be noted that neither the appellate rules nor the civil rules expressly define a final judgment. By negative implication, Rule 54(b) of the civil rules defines a final judgment as "any order or other form of decision, however designated, which adjudicates ... all the claims [and] the rights and liabilities of ... all the parties." The Utah Supreme Court has stated that "[a] judgment is final when it ends the controversy between the parties litigant." Salt Lake City Corp. v. Layton, 600 P.2d 538, 539 (Utah 1979).
3. Rule 54(b) gives a district court discretion to certify a non-final or interlocutory order or judgment as a final judgment in limited circumstances. To be eligible for
certification, the case must involve more than one claim for relief and/or multiple parties (i.e., more than the normal one plaintiff and one defendant), and the order or judgment in
question must completely adjudicate one of the multiple claims or all of the claims involving one of the multiple parties. The court must also expressly determine that there is no just
reason for delaying the entry of the requested final judgment and must expressly direct the entry of the same. See Kennecott Corp. v. Utah State Tax Commission, 814 P.2d 1099 (Utah 1991).
4. These rules would include, at a minimum, Rule 69 (covering writs of execution) and Rule 64D (covering writs of garnishment).
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